A data model is the design of which entities (clients, jobs, invoices, tasks) a company tracks in its system, which fields it records for each of them, and how those entities connect to each other. It's the blueprint every database app is built on - much like a building's plans come before construction itself.
A good data model for a business system can usually describe the whole operation as one connected whole: a client has jobs, a job has tasks and invoices, an invoice has line items and a payment status. That makes it possible to answer questions a pile of separate tables can't - like how much a client has actually earned the company over the past year, across every job.
The mistake companies most often make is designing a data model only for today's needs and not planning for growth. A good model, on the other hand, can add a new kind of record (like a complaint or a service visit) without needing to rebuild everything from scratch.
Related: A data model that grows with the team, Custom CRM without a developer, Migrating from Excel or Notion.