Business models and planning

Maryland entrepreneurs who are thinking about starting a new company need to begin by writing a business plan. One of the most important parts of writing such a plan is establishing a business model.

A business model identifies a number of key components of the company, including the business strategy and what processes and information should be kept confidential. The business model also addresses how viable the concept for the venture is. It examines the demand for the product or service, the competition, how the product or service will be marketed, and what competitive advantages the business might have. A business model considers aspects like pricing and customer base and comprises about one-third of the total business plan.

The process of developing the business model and the decisions that need to be made while developing it will all help with writing the business plan. Over time, a business model may change. Market needs, the product or service the company offers, or technology may all lead to the need for revisions.

People who are forming a business may also wish to consult an attorney who has experience with advising startups. An attorney may be able to assist on issues ranging from entity formation to important contracts. For example, the business owner may wonder whether it is better to form a partnership, a limited liability company or a corporation. There may be questions about paperwork, tax obligations and hiring practices if the small business employs anyone even in a part-time or temporary capacity. Establishing a relationship with an attorney early on may also be a good practice for a company because it may need to periodically seek legal advice on various issues that arise.

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