--- title: A Simple Definition for a ‘Business Model’ description: The term business model is used loosely to describe how a business operates, but what is it as its simplest? Our CEO, Natalie Foley, breaks it down into simple terms and describes how a business model --- [![Peer Insight](https://blog.peerinsight.com/hubfs/PeerInsight_September2019/Images/peerinsight_logo_white.png)](https://peerinsight.com/) - [ABOUT](https://peerinsight.com/about/) - [SERVICES](https://peerinsight.com/services/) - [TOOLKIT](https://peerinsight.com/toolkit/) - [BLOG](https://peerinsight.com/blog/) - [TEAM](https://peerinsight.com/team/) - [CAREERS](https://peerinsight.com/career/) - [CONTACT](https://peerinsight.com/contact/) [![Peer Insight](https://blog.peerinsight.com/hubfs/PeerInsight_September2019/Images/peerinsight_logo_white.png)](https://peerinsight.com/) - [ABOUT](https://peerinsight.com/about/) - [SERVICES](https://peerinsight.com/services/) - [TOOLKIT](https://peerinsight.com/toolkit/) - [BLOG](https://peerinsight.com/blog/) - [TEAM](https://peerinsight.com/team/) - [CAREERS](https://peerinsight.com/career/) - [CONTACT](https://peerinsight.com/contact/) # A Simple Definition for a ‘Business Model’ by [Natalie Foley](https://blog.peerinsight.com/blog/author/natalie-foley) | [business models](https://blog.peerinsight.com/blog/tag/business-models), [consumer goods](https://blog.peerinsight.com/blog/tag/consumer-goods), [entrepreneurship](https://blog.peerinsight.com/blog/tag/entrepreneurship), [innovation](https://blog.peerinsight.com/blog/tag/innovation), [innovation strategy](https://blog.peerinsight.com/blog/tag/innovation-strategy), [Product and Service Development](https://blog.peerinsight.com/blog/tag/product-and-service-development), [product development](https://blog.peerinsight.com/blog/tag/product-development), [venture acceleration](https://blog.peerinsight.com/blog/tag/venture-acceleration), [Ventures](https://blog.peerinsight.com/blog/tag/ventures) The term business model is used loosely to describe how a business operates, but what is it as its simplest? Our CEO, Natalie Foley, breaks it down into simple terms and describes how a business model develops around a consumer need and evolves quickly through testing that de-risks concepts. ![](https://blog.peerinsight.com/hubfs/Imported_Blog_Media/RIC_2017-1024x791.png) **[Here’s how](https://peerinsight.com/ventures/)** we developed a new-to-the-world athletic apparel company: - We first uncovered needs by going directly to our customers in the market - athletic apparel stores and their homes - to observe and learn about pain points directly. - From there, service concepts were tested by going back out to the customer and getting their feedback in a co-creative way, including testing for early signals on how much and how a customer might be willing to pay for the concepts. - We landed on an experience and a business model to test with it. We identified KPI’s and structured an in-market experiment (pre-beta) that felt real to the customers, who were actually paying on a subscription basis. - After 2 months of testing with a scrappy lo-fi operational model, we paused to reflect on the learnings. This helped us de-risk the commitment to a subscription-based revenue model, increased our knowledge of operational complexities, and built our confidence to continue testing the venture at even higher-fidelity. Do you have a business model that’s still coming into focus? Are you interested in experimenting with new business models at your organization, but not sure where to start? Drop us a line at**[nfoley@peerinsight.com](mailto:nfoley@peerinsight.com).** --- > Also, see more examples of our work to test and launch new business models on our Peer Insight**[Ventures page](https://peerinsight.com/ventures/).  ** # About Us Peer Insight helps organizations ignite growth by uniting design, business, and entrepreneurship. [info@peerinsight.com](mailto:info@peerinsight.com) ![VOSB](https://blog.peerinsight.com/hubfs/PeerInsight_September2019/Images/vet-owned-300x300.png) # Find Us **Washington, D.C.** 717 D Street NW 2nd Floor Washington, DC 20004 (202) 506-3804 **San Francisco** 595 Pacific Ave 4th floor San Francisco, CA 94133 (336) 430-5403 # Get in Touch For project inquiries, contact [Clay Maxwell](mailto:cmaxwell@peerinsight.com) or [Tim Ogilvie](mailto:togilvie@peerinsight.com) For media inquiries, contact [Natalie Foley](mailto:nfoley@peerinsight.com) We respect your privacy. - [Privacy Policy |](https://peerinsight.com/privacy-policy/) - [ Terms & Conditions](https://peerinsight.com/terms-and-conditions/) - - -