A business model outlines how a company creates, delivers, and captures value. It describes the products or services offered, the target market, and the revenue streams. Common types of business models include subscription, freemium, and direct sales, each with unique strategies for generating income. Understanding a business model is crucial for entrepreneurs and investors, as it helps assess the viability and sustainability of a business. A well-defined business model can lead to competitive advantages and long-term success, while a poorly structured one may result in financial difficulties or failure in the market.