Business Model
Business Model refers to how a business creates value, delivers value, and earns money from customers.
In Filipino MSME terms: ito yung “paano kumikita ang negosyo” — your strategy for making profit.
A business model explains what you sell, who you sell to, how you deliver it, and how you earn from it.
Why Business Model Matters
For Filipino MSMEs, having a clear business model helps you:
- Understand your revenue streams — saan talaga nanggagaling ang kita
- Improve profitability — by focusing on what works
- Stand out from competitors — through unique value
- Plan for growth — scaling becomes easier with a clear model
- Attract investors or partners — they want to see how you make money
Many small businesses operate without a defined model, leading to inconsistent income or unclear direction.
Common Business Models for Filipino MSMEs
- Retail Model — buying products and selling them at a markup
- Service Model — earning from skills (freelancers, salons, repair shops)
- Subscription Model — recurring payments (gyms, coaching, SaaS)
- Food Service Model — selling meals, snacks, or beverages
- Commission Model — earning a percentage from sales (agents, brokers)
- Online Marketplace Model — selling through Shopee, Lazada, TikTok Shop
- Franchise Model — using a proven system for a fee
Example / Context
Example 1 (Carinderia):
Your business model is selling cooked meals at a markup, earning from volume and repeat customers.
Example 2 (Online Seller):
You buy items wholesale and sell retail online. Your model depends on fast shipping and competitive pricing.
Example 3 (Freelancer):
You earn from service fees per project, per hour, or per package.
Example 4 (Laundry Shop):
You earn per kilo of laundry, with optional add-ons like express service or delivery.
Related Terms
FAQs
1. Why do small businesses need a business model?
It helps you understand how you earn money, what makes you different, and how to grow sustainably.
2. Can a business have more than one model?
Yes. For example, a gym can earn from memberships (subscription) and personal training (service).
3. What is the simplest business model?
Retail — buying low and selling high — is the most common and simplest for MSMEs.
4. How do I choose the right business model?
Choose one that fits your skills, resources, target market, and long-term goals.