Investors love entrepreneurs who understand their business model, and can describe it accurately. And when they meet entrepreneurs that can't, it is often a sign that the management team needs strengthening - at a minimum.
In my mind, a "business model" reveals the structure of the profit engine that underlies the venture. Most ventures, almost by definition, project high growth rates and substantial profits over some time frame. In reality, the ability to estimate growth based on revenue for a new venture is low. There are many, many variables that go into a new venture that make such predictions tenuous at best.
However, it should be relatively straightforward to build a business model that reveals how the business plans to make money.
How much will the product sell for? (Is that price competitive in the marketplace using comparable data? If it is a new service, what will it be displacing and therefore what should the price be, etc.)
How much will the product cost to produce? What other structural costs are inherent in the business? Are they verifiable with sales, fixed, or some combination?
How much cash is needed to launch the venture and to achieve cash flow break-even? When does the venture need the money? (Can we invest in tranches and therefore reduce some risk as we gain knowledge?)
What are the critical elements in achieving success? Can we test to find out if these estimates are achievable? (Are we planning for the lowest customer acquisition cost the industry has ever seen? And if so, what happens if we are wrong? Are there ways to figure this out before we commit all of the resources?)
A well thought out business model can then be used to scale projections, again based on comparable experience. However, total value of projections is vastly less important than a well planned model.