what's the difference between business plan and business model

The Differences Between a Business Plan & Business Model

Small Business
Business Planning & Strategy
Business Plans
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What is a strategic business plan, business plan vs. business model.

The Importance of a Business Plan
The Chief Elements of Business Models

Every successful business starts with a concept, a plan and a product or service that customers are willing to pay money to obtain. Business strategies are never conducted in a vacuum, however, and for a business to be successful, there must be a business plan and a business model generated. These two terms are unfortunately used interchangeably, but in reality, they are two very different documents that cannot exist without one another. It is essential that a business owner understand the use of a business model vs a business plan.

Business Plan vs. Business Model

At its simplest, a business plan is a written description of the future of a business. It's a document that not only gets a business concept on paper but also outlines the people and steps that will be involved to lead the business to success. The business plan is where you discuss the industry and the need for a particular product or service, the business structure and how you will achieve success.

The business plan also talks about the market in which the business will operate, lays out the competition and what the plans are to position the business as a leader. Lastly, the business plan lays out the ever-important financial plan, discussing things such as income and cash flow, loans and obligations and when and how investors can expect to see a return.

A business model, on the other hand, is a business's rationale and plan for making a profit. If the business plan is a road map that describes how much profit the business intends to make in a given period of time, the business model is the skeleton that explains how that money will be made. A model covers everything from how a company is valued within an industry to how it will interact with suppliers, clients and partners to generate profits.

There are several different kinds of business models. A software company, for instance, might be based on a subscription model, which generates revenue from customers that renew subscriptions annually for a license to use the software. An example of an accessories model would be a razor company or computer printer company that guarantees future income through the sale of razor blades and printer cartridges.

Interdependence

While it's true that a business plan and business model are two separate documents, the reality is that the business plan cannot live without the business model. While a business plan can describe the structure of a business's financial goals, the business model explains how the money will flow - from customer generation to marketing to sales, and finally, to customer retention. The business model must have room to grow and adapt. Consequently, if the business model changes, so must the business plan.

The Need to Adapt and Change

One of the most prominent examples of a business model changing is currently occurring in the computer software industry. About 10 years ago, the way to purchase software programs was to go to the store and buy a CD-ROM to download the application and license to your computer. Today, the advent of cloud-based subscription services makes it possible for customers to download software and renew licenses remotely over the internet.

This transition to the Software as a Service (SaaS) subscription model has caused many businesses to change their plans. Companies affected by this shift include computer companies that no longer need to build machines with CD-ROM drives in them and software companies that no longer need to make or sell software in physical form.

As a result, software companies have had to change their business plans, including costs and infrastructure costs for cloud storage and bandwidth, as well as maintain a cloud operations team 24 hours a day, seven days a week. These ongoing efforts can increase costs and reduce margins, but they're a necessary adaptation to changing customer needs and market technology with the new business model.

The Business Plan Shop: Business Model Vs. Business Plan
Wikipedia: Business Model
Harvard Business Review: What is a Business Model?
Entrepreneur: An Introduction to Business Plans

John began his 25-year career in the editorial business as a newspaper journalist in his native Connecticut before moving to Boston in 2012. He started fresh out of college as a weekly newspaper reporter and cut his teeth covering news, politics, police, and even a visit from a waterskiing squirrel. He went on to work in the newsrooms of several busy daily newspapers, and developed a love for detailed storytelling, focusing on the lives and diverse tales that all people have to offer. Moving on to the business arena later in his career, John worked as a managing editor for a healthcare publishing company and a technology software firm. He’s used his background in broadcast journalism as a webinar moderator, voice-over specialist, and podcast narrator. John also holds a master’s degree as an elementary school teacher and spent 10 years working with and tutoring students of various ages and backgrounds, including multilingual students and students with special needs of all ages.

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Business Model Vs Business Plan – What is the Difference?

Do you want to know the difference between a and a business plan? If YES, here is a detailed comparison and analysis and how each is used. A business plan and a business model look amazingly similar like two peas in a pod, but they are equally different, just like two peas in a pod. They are both part of each other but play different roles thus making the line between them seem dim.

A business plan and a business model both contain , customer retention strategy, revenue generation strategies, and overall, they are used to outline the vision of the company. So what then differentiates a business plan from a business model and how can you make a clear distinction of both?

Business Model Vs Business Plan

What is a business model.

A business model is a company’s outlined plan for making profit. It identifies the products or services the business will sell, the target market it has identified , and the expenses it anticipates. A business model also shows the destination of the business, how it is meant to work, and what it is meant to become.

A business model ascertains how your business makes money. It identifies the services that your customers value and shows how funds are generated for the services your business renders to your customers. A small business can have more than one method of generating income, and it is the duty of the business model to simplify the money process by focusing on the largest income generator.

For instance, a gas station sells gas to customers, but it also provides other services such as a car wash, lube station, etc. The business model only recognizes the majority income generator, which is the sale of gas. Therefore, the business model will reflect the sale of gas to the customer, which generates income at the time of the customer’s purchase.

The business model summarily simplifies and makes revenue-generation easy to understand by focusing on the key generator, highlights exactly how you intend to acquire, retain, and service your customers. The business model can come in different distinct models like:

Franchise model
Direct sales model
Advertising model
Subscription based model
Lowcost model
Freemium model
Affiliate model
Production model

The business model is basically at the center of the business plan, as it describes how the company is positioned within its industry’s value chain, and how it organises its relations with its suppliers, clients, and partners in order to generate profits. The business plan translates this positioning in a series of strategic actions and quantifies their financial impact.

What is a BUSINESS PLAN

A business plan is a formal written document that contains business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. A business plan acts like a GPS. It shows you the roadmap of how you intend to get to your destination as a business person.

It highlights the market opportunities you want to take advantage of, the existing competition, the strength and experience of your team, a detailed description of the products and services you intend to offer, and a roadmap that shows exactly how you intend to execute your plans in the market.

A business plan is a document presenting the company’s strategy and expected financial performance for the years to come.

The business plan provides the details of your business. It takes the focus of the business model and builds upon it. It explains the equipment and staff needed to meet the details of the business model. It also explains the marketing strategy of your small business, or how your business will attract and retain customers, and deal with the competition.

Furthermore, the business plan explains the financial stability of your small business at a particular point in time, as well as in the forecasted future. Overall, the business plan supports the business model and explains the steps needed to achieve the goals of that model

The business plan pays close attention to your goals, projects the cash flow, profits or losses, and ultimately shows how long and what would be required to enable the business break-even.

A sample structure of a business plan is seen below:

Executive Summary
Business Description
Service or Product Line
Market Analysis & Strategies
Organization & Management
Funding Request
Financial Assumptions
Financial Projections

Differences Between a Business Plan and a Business Model

Some of the major differences between a business plan and a business model are outlined thus;

A business model aims at highlighting the profit making potentials of a business, while a business plan highlights every aspect of the business.
The business plan explains in details the steps needed to achieve the goals of your business model.
Another difference is that business plans are usually written at the beginning of a business or a business initiative, while a business model is relevant at any time, and can be written at any time.
Again, business models are less expensive to put together, and may represent a fictional future goal. As a goal, they may be both complete and entirely unprofitable or even infeasible, quite unlike your business plan.
A business model is centered around Value; while business plan is centered around Resources. The business plan thus lays out how to manage these resources over time to materialize the business model, grow and scale the business.
A model explains how you will make money: for example, by selling advertising, by earning a commission, by adding a markup to services, working with partners, selling direct, charging by the hour, with additional services, etc. While a business defines specific activities, it includes timeframes, budgets, owners, dependencies and impact.

What is the difference between Business Model and Business Plan?

It’s very common to make confusion on what’s the difference between Business Model and Business Plan. But, in fact, they are similar only in name. Their functions and purposes are quite different and, actually, complementary. While the business model refers to a one-page representation of how a company creates, delivers, and captures value, the business plan is an in-depth description on a long textual document form about how your company is structured and plan to achieve strategic and financial objectives. This business plan is a document that contains every data of the business – usually including its model. Let’s separate them both, to make it simple.

Business Model Definition

Your company’s business model is all about the way a company creates, delivers, and captures value. For example, a restaurant franchise is a business model. A Software-as-a-Service is another one. A razor-and-blade , a subscription company , a Freemium internet tool, a e-commerce marketplace . Each of that is a business model, with its own peculiarities. What it’s commonly mistaken with the business plan is not the business model itself. It’s, indeed, the business modeling tool . And this tool provides a base to design a business model. It’s, in fact, by modeling your business through this kind of tool that you’ll be able to identify your they main construction blocks of a business, who they relate to each other and combine to form a unique strategy. It’s with the business model tool that you may identify the key resources for your business to succeed, which key activities it must perform, who it has to interact with, and by which means and channels . Usually, this business model tool is a framework, made up of a single page, that allows you to recognize your own business under several perspectives. According to the type of business, you may take a look at different modeling options, such as Business Model Canvas , Value Propositions Canvas, Lean Canvas , and others. Each of them fits a different purpose. For example, if your business is brand new, the Business Model Canvas is likely to be the better option. On the other hand, for early validation of your startup, the Lean Canvas must be the most appropriate. And, to pivot your product, it’s a good idea to check the Value Proposition Canvas. In short, if you aim to understand your business better, from inside, or make predictions for growing your venture, then your need to work on your business model, not make a business plan. So, now, let’s check what the business plan is for.

Business Plan Definition

A business plan is a written document that contains detailed information of the business, product/service, market, and the entrepreneur vision for the company’s future. It is basically the most accurate portrait of the field, products and services, customers, competitors, suppliers, all the operational and financial goals of the company, its marketing and sales strategy. Its purpose is to display the strengths and weaknesses of the business and to project the gains and losses of the organizations, in order to identify the viability and sustainability of the idea. The business plan is often a long document, made up of several pages. In general, it contains:

Table of Contents;
Executive Summary;
Business and product/service description;
Market analysis;
Competitive Analysis;
Marketing Plan;
Operational and Management Plan;
Financial Plan;
Supporting data and documents.

The goal of the business plan is to determine whether your idea is sustainable or not. It also shows the weaknesses to be repaired, as well as the strengths to be potentialized. It is a kind of script, to reduce the chance of failure. The business plan is a core document if you are looking for partners, in order to demonstrate profitability. Its focus is, indeed, to provide executives, investors, and any other stakeholders a full overview of the business. So, it is especially important when you are seeking loans, sources of financing, and investments. It is the best way to demonstrate that your business is trustworthy and solid enough for credit.

Business Model vs Business Plan

the difference between Business Model and Business Plan lies in key points like how they should be developed, where should the focus be, how to organize ideas and what are their main objectives.

Business Models and Business Plans are important documents to help you plan and organize your business strategy. It can be either a document for early-stage companies that need to validate hypothesis or big companies that need to plan ahead, capture investment or even make an IPO .

difference between business model and business plan important elements

Whatever the case is, it is very important to understand that these are different terms, with different purposes and have different tools to develop them. To summarize here, the key terms that are commonly confused between each other:

difference between business model and business plan - key terms

Business model – provides a rationale for how a business creates, delivers and captures value, and examines how the business operates, its underlying foundations, and the exchange activities and financial flows upon which it can be successful. Business Plan – a formal document that typically describes the business and industry, market strategies, sales potential, and competitive analysis as well as the company’s long-term goals and objectives. Revenue Model – Outlines the ways in which your company will make money (e.g. revenue streams). Did you better understand the difference between Business Model and Business Plan? Comment below!

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Business Model Vs Business Plan: What’s The Difference

Sculpting success in the realm of commerce hinges on two critical blueprints: the business model and the business plan . As if peering through a dual-lens, one unveils the anatomy of value creation, while the other charts a course for achieving it. This isn’t about mere documents; it’s the lifeblood of strategic foresight and operational vision.

Here’s the crux: although they waltz together in strategic symbiosis, these entities each spin a unique narrative of your venture’s voyage. One sketches the architecture of your enterprise, laying bare the revenue streams and value proposition.

The other, a meticulous roadmap, presents meticulous market analysis, financial projections, and the operational plan set to navigate the turbulent tides of commerce.

By journey’s end, you’ll not just differentiate between the two but harness their combined power.

Delve into concepts like competitive advantage, customer segmentation, and scalability. Decode the mesmerizing narrative behind a robust strategic planning foundation. Sales forecasting, funding requirements, investor pitch decks.

The differences between business model vs business plan


	A framework for creating economic value and capturing a portion of that value.	A formal document detailing a business’s objectives, strategies, target market, and financial forecasts.
	To define how a company creates, delivers, and captures value in economic, social, cultural, or other contexts.	To guide management in running the business and to persuade external parties, like investors, to fund the business.
	– Value proposition – Customer segments – Channels – Revenue streams – Cost structure	– Executive summary – Market analysis – Organization and management plan – Sales strategies – Financial projections
	Typically more flexible, subject to adjustment as the company grows or market conditions change.	Tends to be a more rigid document, often used for a specific purpose, like seeking investment or a bank loan.
	Primarily internal; used by founders and management to understand and operate the business.	Both internal management and external stakeholders, including investors, banks, and potential partners.

The business model is the foundation of a company, while the business plan is the structure. So, a business model is the main idea of the business together with the description of how it is working.

The business plan goes into detail to show how this idea could work. A business model can also be considered the mechanism that a company has to generate profits. At the same time, the business plan also does its part in being the way a company can present its strategy. It is also used to show the financial performance that is expected for the near future.

Comparing how business models and business plans work to help you in different ways is important. A business model can help you be sure that the company is making money. It helps to identify services that customers value. It also shows the reciprocation of funds for the activity that a business renders to its customers.

Any business can have different ways of generating income, but the goals of the business model should aim to simplify the money process. It does this by focusing on the large income generators.

So, we now understood that a basic business model is a gateway to show how an organization is functioning. A business plan is a document that shows the strategy of an organization together with the expected performance details.

We can find the details of a company when we check its business plan. What it does is offer more info about the business model. It does this by explaining the teams needed to meet the demand of the business model. It explains the equipment needed, as well as resources that need to be obtained to start creating. Explaining the marketing goals, and how the business is going to attract and retain more customers over the competition , will be part of the model.

Another interesting thing when it comes to comparing business models and business plans is that they cannot function without each other. Just remember this, the business model is going to be the center of the business plan.

Business plan

When comparing using a business model versus a business plan, we also need to understand each one better to draw some final conclusions. One of the first goals of a company could be to define its business model.

The business plan is going to be the detailed part that includes all the information and steps like Mayple’s marketing plan template, organization, products or services, sales plan, business proposal for investors , and so on. Some useful questions that you can use when developing your business plan are:

What do we have now?
What do we want to have in the future?
What do we need in order to be there?

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Business plan vs. business model - examples

Business plan vs. business model - introduction

Are you looking for information on business plans and business models? If so, you are in the right place. From the following article, you will learn whether there is a business plan, what a business model is and the difference between them. You will also gain knowledge on how to build a business plan or business model and where to look for examples.

Business plan - what is it.

A business plan is a document describing a planned business venture. Depending on your assumptions and needs, it can be a very short study (a few pages), or it can be several hundred pages long. What connects elaborate business plans with generalized ones is the structure (table of contents). Most business plans consist of elements such as:

Description of product/service (scope of offer);
Personnel and other key resources;
Customer Profile (customer segments);
Market analysis;
Competitive analysis;
Sales (distribution channels) and marketing (advertising campaign plan);
SWOT analysis;
Description of financial assumptions (cost structure and revenue plan);
Financial projections (balance sheet, income statement, cashflow).

Business model - an example

There are many different types of business models, and each is designed to generate revenue and make profits in different ways. A business model in this sense is nothing more than a way to make money (generate income).

Here are some common types of business models:

Direct selling - involves selling products or services directly to customers.
Subscription (subscription) - customers pay a set fee to use a product or service for a specified period of time.
Freemium - offers free use of basic features of a product or service, but fees are charged for more advanced or expanded features.
E-commerce - is based on the sale of products over the Internet and mainly concerns online stores.
Licensing - The owner of a product or service charges a fee to allow other companies to use its technology or know-how.
Franchise - the business owner allows other entrepreneurs to use his name, brand, products or services, and in return collects royalties and/or a share of the revenue.
Crowdfunding - involves raising funds from a number of people via the Internet in exchange for stocks, shares or other benefits.
Institutional customers (B2B) - involves providing products or services to companies, institutions and organizations, instead of consumers (B2C).
Network marketing (network sales) - involves selling products through a network of distributors who receive a commission for each unit sold.

It is worth remembering that many companies use combinations of different business models to increase their revenues and profits.

Business model written out on a piece of paper - business model canvas and lean canvas

Business model (business model) equally often refers to a form of business plan captured on a single sheet of paper (business model template). The most popular business models in this sense are business model canvas (otherwise known as the Osterwalder model) and lean canvas.

On our blog you will find a dedicated article discussing the above models in detail. Their purpose is the so-called validation of the business model, i.e. verification that we have the right resources and action plan to succeed in the market.

Osterwalder's model consists of the following elements:

Customer segmentation;
Value proposition;
Customer Relations;
Key Resources;
Key Activities;
Key business partners;
Cost structure;
Revenue structure.

When creating a business model, it is important to consider all the factors mentioned above. Analysis of these elements (business model analysis) at the initial stage of business planning, will increase the chance of success. When you put the developed model into practice, it will become clear to what extent your assumptions were correct. The purpose of the business model canvas is to clearly present the most important elements of the business on a single sheet of paper.

Business model of the enterprise - an example

To get a better idea of the specifics of the business model canvas version, take a look at the example below. At the same time, remember that creating business models is not a simple task, and if you have no experience in this, it is worth taking advice from specialists.

Business plan - an example

Sample business plan you can download for free from our website. This is a study of a fictitious Polish company that sells apples to international markets. The business plan was developed in a basic (standard) version and is available in English. Remember that a professional business plan is best developed from scratch, taking into account the specifics of your business and the criteria on the expectations of the recipient of the document (form, level of detail, etc.). You can find a downloadable business plan on the home page under the "download sample business plan" button. If you have any problems, please contact us.

Business plan vs. business model - differences

A business plan and a business model are two different documents that are often used to describe and plan a business activity.

A business plan is a detailed description of a business strategy that includes information on the product or service, business goals, ways to attract customers, marketing, financial plan, personnel management and much more. A business plan is usually a detailed roadmap that helps entrepreneurs prepare for starting a business or growing an existing business.

A business model describes the overall way a company will generate revenue and make money. A business model consists of several key elements, such as customer segments, value proposition, distribution channels, revenue sources, cost structures, etc. The business model helps entrepreneurs understand what actions need to be taken to make the company profitable and financially sustainable.

In short, a business plan is a detailed description of a plan of action, while a business model is a description of how a business will operate and generate profits. A business plan is often based on the business model and helps entrepreneurs understand how best to use the business model for their specific goals.

When to make a business plan and when to make a business model?

A traditional business plan and a business model are two different tools that are used to plan and run a business. The choice of which tool is more appropriate depends on the goals and needs of the business.

A standard business plan is usually a long, detailed document that describes business goals, strategies, marketing activities, finances, operational plans and many other issues related to running a business. A business plan is especially useful when an entrepreneur plans to start a new business that requires a large financial investment and long-term planning.

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A business model, on the other hand, is a simplified version of a business plan that focuses on the main elements of a business, such as revenue, costs, sources of income and value offered to customers. The business model is more focused on a fast and flexible approach to business planning and is useful for companies that want to test different business ideas quickly and efficiently.

In summary, a traditional business plan is appropriate when an entrepreneur plans to start a new business or enter a new market, while a business model is useful for companies that want to test new business ideas or changes in their strategy. Ultimately, the choice between a traditional business plan and a business model depends on the individual needs and goals of the business.

How business plan and business model flow into each other

The business plan and business model are closely related and influence each other. The business plan defines the company's overall strategy and describes what goals it wants to achieve and what actions it will take to achieve them. The business model, on the other hand, focuses on how the company generates revenue and makes money.

The business plan influences the business model because it defines the goals the company wants to achieve, as well as how it wants to operate in the market. It plans what products or services it wants to offer, what markets it wants to target, what the costs and revenues will be, and what the marketing and sales strategies will be. These elements directly influence the selection of the appropriate business model.

On the other hand, the business model affects the business plan because it determines how the company will make money. The business model determines how the company generates revenue, what its sources are, what its costs are, what its profit margins are and what its financial projections are. All of these elements influence the company's long-term planning and decisions about its development.

image shows people working on a business plan

A business model in the sense of a lean canvas or business model canvas indicates the most important actions to be taken based on the resources at hand. It is a specific, shortened version of the traditional business plan. To a greater extent, it shows the real value brought to the market by the entrepreneur. It also indicates the key activities to be performed or a model for establishing cooperation with customers from different groups.

It is also worth noting that the business plan and business model are documents that are constantly changing and evolving. Companies are constantly adapting their business models to changing market trends, and improving their business plans to account for changing market and financial conditions.

Business plan vs. business model - summary

When you're thinking about starting a business or growing your company, it's a good idea to start by developing a business plan or business model.

In each case, issues such as real customer needs (customer problems), ways to attract potential customers, a service or product that is a value proposition (unique selling proposition), positioning against competitors or expected revenue streams and cost calculations should be analyzed.

Both a business plan and a business model are useful tools for planning and monitoring business development. It is a professional presentation of your offer as well as all relevant elements that can affect the company. In addition, these documents can be useful in obtaining external financing. You will find many articles on this subject on our blog.

Questions and answers

What is a business plan.

A business plan is a document that describes a business idea and how to implement it. Typically, it is a document that includes, among other things, a description of the products or services, a marketing plan, a competitive analysis, a financial plan, and an operating strategy.

What is a business model?

A business model is a description of how a company generates profits. It describes the organizational structure, ways to attract customers, production or service delivery processes, ways to manage costs and growth strategy.

What are the similarities between a business plan and a business model?

Both a business plan and a business model are documents that are designed to help develop and practically implement a business idea.

What are the differences between a business plan and a business model?

A business plan is a more detailed document that describes a specific plan for the company's operations, including a description of products or services, a marketing plan and a financial plan. A business model focuses more on the organizational structure and ways to generate income. A business plan describes a specific business project, while a business model outlines the overall strategy for running the business based on key resources and the environment.

Are a business plan and business model essential to running a business?

A business plan and business model are needed for any company that wants to succeed. A business plan is a detailed document that allows you to plan your activities and minimize risks. A business model allows you to plan ways to generate income and attract customers. The development of these documents is advisable so that the company can operate effectively and grow from the beginning.

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Private investor test, complete guide: write your own company's business plan step by step, how to check subsidies for companies - a simple guide, subsidy for one-person companies, business plan of a renovation company, potrzebujesz wsparcia przy tworzeniu biznesplanu lub modelu biznesowego.

Difference Between A Business Plan And A Business Model

A business plan and a business model are both different and similar. They’re largely said to be distinct, but are still a part of each other, making the clear meanings of both to become confusing to a lot of people.

Both a business plan and a business model encompass your marketing strategies, customer retention strategy, your revenue generation strategies, and overall, they both pay critical attention to the vision and the concept/company itself.

So what then differentiates a business plan from a business model and how can you make a clear distinction of both?

See Also: The Difference Between A Feasibility Study And A Business Plan

Business Model Vs Business Plan

What a business model is.

A business model is a key framework for summarising or highlighting the key elements of your business plan. It shows the destination of the business, how it is meant to work, and what it is meant to become.

Franchise model
Direct sales model
Advertising model
Subscription based model
Lowcost model
Freemium model
Affiliate model
Production model

And much more.

A business model is usually a simple verbal description of the business or a one-page visual representation of the business in the form of a business model canvas.

In essence, the way you deliver your products and/or services to your customers is what defines your business model.

See Also: The Difference Between Sales And Marketing

What A Business Plan Is

A business plan is like a GPS. It shows you the roadmap of how you intend to get to your destination, which then defines the business model. It highlights the market opportunities you want to take advantage of, the existing competition, the strength and experience of your team, a detailed description of the products and services you intend to offer, and a roadmap that shows exactly how you intend to execute your plans in the market.

The business plan pays close attention to your goals, projects the cash flow, profits or losses, and ultimately shows how long and what would be required to enable the business break-even.

A sample structure of a business plan is seen below:

Executive Summary
Business Description
Service or Product Line
Market Analysis & Strategies
Organization & Management
Funding Request
Financial Assumptions
Financial Projections

See Also: The Difference Between A Business Plan And A Business Proposal

To Sum It Up

While a business plan shows the process, journey, and key elements that project how the business will be successful, the business model acts as the destination, by highlighting the key element that guarantees exactly how the business will generate sales, revenues, and ultimately retains customers.

What are your thoughts on the difference between a business plan and a business model? Let me know by leaving a comment below.

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thanks stan, when ask to write a business plan, is it advisable to start with our business model or should be included.

Hi Abdulwahab,

The business model is more conclusive than procedural.

You should have that after the business plan is complete.

Thank you for asking.

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Distinguishing the Difference- Business Model vs. Business Plan

Lauren Christiansen

Entrepreneurs have many factors to consider before they start a business. They have to decide who their target customers are, as well as how to utilize ean effective business strategy to reach them. Moreover, every new business must determine how they want to generate revenue while taking into consideration external economic and market conditions. Business plans and business models can be utilized as road maps for opening and running a successful business. Here are the differences between business models and business plans, and why both are important.

What is a Business Model?

Ongoing Competitive Advantage The advantages of utilizing the company's services/products as opposed to the competition's
Innovation Factor The propensity to innovate and grow
Pitfall Avoidance The ability to avoid problems and address risk
Graceful Exit A company's ability to scale back or exit the market if key revenue objectives are not met or conditions change
Sales Performance Model A set of sales and marketing processes that improve a company's ability to generate revenue
Profit Model How a company generates revenue streams
Market Attractiveness How the product/service is positioned within its niche market
Unique Value Proposition The value that potential customers will gain from utilizing a company's product/services

What is a Business Plan?

Background information on the business
A step-by-step sales and marketing plan
Definition of the organization's structure and various internal departments
Description of how internal departments operate and what their objectives are
Defines current financial assets and strategy for finding investors
Includes specific financial strategies and goals
Describes how the organization will achieve goals/objectives
Describes who the target market is
Defines roadblocks/problems and how to overcome them

Business Plans vs. Business Models

A business model is how a company positions itself within their industry and market. It describes how the company organizes its relationships with supply chains and clients to generate profit. In short, business models are used to describe how a company chooses to make money and bring value to customers. On the other hand, a business plan is a written document including a series of strategic actions utilized to make the business model work. It is a detailed explanation of how the company will operate, what each department will do, and how it plans to sell and market their product. Think of a business model as a human body and a business plan as the organs. The human body cannot function properly if one or more organs shuts down. Similarly, if there is not a specific set of strategies implemented to meet revenue goals and maintain operations, a business cannot function. In other words, there cannot be a successful business model without a detailed plan to make it work. To summarize, creating a business model is a gateway that demonstrates how a business is functioning within its industry and market. A business plan is a documented set of strategies that are necessary to make the business model work.

Examples of Business Models

Some types of business model plans include- 1. Model of Production Businesses that create a service or product and sell it are utilizing a production model. Large or small businesses must ensure that enough profit is generated to cover the cost of production. For example, a bakery has to sell enough products to cover the costs of ingredients, equipment, rent, and advertising. 2. Advertising-Supported Revenue Model This business model strategy focuses on advertising as the primary method for generating revenue. For example, a television network may generate revenue by selling advertising slots for businesses to run ads during commercial breaks. 3. Multi-Level Marketing Model Multi-level marketing (MLM) models are based on commission or distribution. MLMs create their own sales force by recruiting distributors to sell their products, who then find other distributors to sign up underneath them to sell products. This process is repeated indefinitely. The company acts as a middle man between buyer and seller, taking a cut every time a product is sold or if a distributor signs up to sell. Famous examples of MLM-based models include Mary Kay, Senegence, Amway, and Scentsy. 4. Razor Blade Model This model generates profit by selling a low-cost product that needs to be replaced regularly. For example, the razor company, Gillette, can always rely on the fact that razors won't last forever. Because clientele will continue to come back every few months needing new razors, the brand will continue to generate profit. 5. Platform Business Model This is a newer type of business model that creates value by facilitating exchanges online between buyers and sellers. To illustrate, Airbnb is a vacation rental online marketplace for people who want a place to stay (buyers) and people who want to rent out their property (sellers). Airbnb generates revenue by taking a percentage of the sale of each rental property.

In summary, a business model is a company's foundation and a business plan is a company's structure. The foundation is the company's mission and how it operates, the structure contains the various components and strategies that make the foundation possible. Business models and business plans are dynamic in that external factors may force a company to change strategies or adapt a different revenue model. Because of their dynamic nature, models and plans need to be reviewed regularly to reassess their value and effectiveness.

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PITCH DECK DESIGN
PITCH REVIEW & COACHING
PITCH DECK PORTFOLIO
CLIENT TESTIMONIALS
STARTUP PITCH DECK
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STARTUP FUNDING GUIDE
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THE IGNITE BLOG

by Stacie Sterren
What is a Pitch Deck

Whether you’re a first time founder, a hopeful entrepreneur or a serial startup guru, you’ve likely pondered “What is the difference between a pitch deck and a business plan?” Which one came first? Why would you use a pitch deck over a business plan? Or, why would you use a business plan over a pitch deck? Are business plans archaic? Is a pitch deck just a pretty business plan? What works best for your startup? And at what time? Do you even need either one? These are important questions. Especially when your time is limited as you are building and growing your company.

Before we can answer these questions, let’s talk about what a pitch deck and a business plan are.

THE BUSINESS PITCH DECK

A pitch deck is a presentation that contains 10-20 slides. The pitch deck presentation is either sent to investors as a pdf to get them interested in taking a meeting with the entrepreneur, or used as a visual aid during a live presentation to either investors or other audiences like pitch competitions. Sometimes pitch decks are used for both.

A pitch deck is meant to share information about your business. Who does it serve and why, the size of the market, your special sauce and how you will win in that space. It lays out clear go to market strategies, and delves into some detail on future opportunities. It relies on your research of your industry and understanding of your business’ plan for launch and growth. The pitch deck helps an investor see where you are, where you are going and enables them to decide if they want to help you get there. The goal of a pitch deck is to score an in-person meeting or to kick off the conversation with an investor about joining your funding round.

10-20 slides
Highly Visual
Used to Get Investors Attention

THE BUSINESS PLAN

A business plan is a fully researched 10-100 page document. The document is used to store and convey in detail your business’ plans for the next 1,3, 5 years. The business plan lays out the research you’ve done in your industry and competitors. It discusses your sales, marketing, and operational plans. It takes into account your financial analysis, assumptions on growth and success, and lays out a map of where your company will be and how it will get there.

The business plan goes into detail on the management team and what unique skills they bring to the table. The document usually includes a significant number of charts, depictions and pictures. But it relies heavily on text to convey the information. The business plan is used as a document that is shared with potential investors for them to use as a reference point when deciding whether or not to invest in your company. It is often used in a due diligence step in the funding process. The goal of a business plan is to lead you and your team members down the path of success over the next few years, and to show an investor how you plan to be successful with their investment.

10-100 Pages
Highly Text-Based
Used to Get Investor Buy-in

Which Came First, the Pitch Deck or the Business Plan?

The business plan is a longstanding document that has been been used in the building and planning and funding of businesses for quite some time. Possibly as long as businesses have been a thing. If you can believe that. It is a basic document really, it is the plan for the enterprise which you are setting out on.

To ensure that you are successful, you should carefully plan how you will be successful, and make those decisions based on thorough research. You need to understand your customers and their problems as well as your competitors and their weaknesses. Before the existence of Venture Capital firms and other now widely available forms of equity funding, banks gave out loans to businesses to help them get started. But in order to choose who to give the loans to, they needed to make sure that they would be able to pay those loans back. A business plan was required to convey to the banker the viability of the venture. It has been a staple ever since. Banks still require business plans for loan applications today. Some request or accept pitch decks too, but not usually instead of the business plan.

It is not clear who put together the very first pitch deck, or since exactly when investors have been looking for the pitch deck, but we can deduce a few things from history. Venture Capital firms really started to gain traction as a viable source of funding during or right before the tech boom of the 90’s. They played a big role in bank-rolling the launch and growth of many 90’s startup companies. Back then, it took a lot of capital to set up the infrastructure needed to start a large tech company. Websites needed to be built and coded, infrastructure (like servers, mainframes & networking components). They needed to be purchased and set up and run and maintained.

But, online companies looked nothing like traditional businesses. Like a restaurant or a manufacturer–it was all a little too uncertain and risky for banks to give out loans. So, venture capitalists and angel investors filled the void. They offered funding in exchange for equity.

The Beginning of the Business Pitch Deck

I imagine in the beginning these groups read the full business plans of potential deals. But as the venture capitalists got more busy, received more applications, and more and more founders looked to equity instead of debt financing, they likely couldn’t read a whole business plan for every applicant. One pagers and executive summaries helped, but even these were tiresome text-heavy documents to read through all day long. There was a need for a shorty, easier to digest document.

In comes graphic design tools for the masses. Microsoft PowerPoint was invented in 1987, and grew in it’s popularity through the 90’s. The appeal of PowerPoint was that you could use it to project a visual aid as you spoke to your audience. This meant they could see additional information, charts and pictures that provided more context to your speech. So founders started using these technologies when pitching to investor during those initial meetings.

Somewhere along the line, the ease and visual nature of the Slide Deck merged with the long-form business plan. And founders started sending visual documents created in PowerPoint and other slide deck design tools to investors before they met them.

So which came first the pitch deck or the business plan? The pitch deck is a child of the business plan. The business plan came first, then the pitch deck.

Why You May Not Need Both a Pitch Deck and a Business Plan

All of that said, today you may not need both a pitch deck and a business plan. It depends on your business stage and what your goals are. A business plan is a thorough document that contains “the plan” itself. If you have “the plan” itself written down in a variety of documents or sources of information than you may not need an official business plan document in the traditional sense. And at least not a 100 page one.

If you are looking to work with a pitch deck designer, it may be advantageous to have a full or partial business plan. Your pitch deck designer will most likely not assist you with business decisions and strategies. Rather, they will work with you–the expert–to tell your plan, ensure it is compelling to the investor audience, and well designed and visually appealing. You need to have a concept. And likely need to have done some level of research into your industry and competitors to work with a designer on your deck. But, you needed that anyway just to be an effective founder.

When You Need a Business Plan and Not a Pitch Deck

If Seeking Debt Financing: Banks still review business plans, so you will need a business plan if you’re looking to get any kind of loan from a bank.
When Raising Over $500K: If you’re raising a lot of money, you better have a plan for what you’re going to do with it. Investors will be doing due diligence, be prepared.
When You Have Co-founders / Co-owners: When you have several cooks in the kitchen, it is helpful to have a written and agreed upon plan to make sure everyone stays on track and executes the way you intended. This should be a living document that is updated over time and as things change.

When You Need a Pitch Deck and Not a Business Plan

When You are Seeking Equity Funding: If you’re looking for funding from venture capitalists, angel investors or saavy friends and family, you need a clear pitch deck.
If You’re Networking with Investors: Not ready to get investment now, but have the opportunity to network with investors? You should have a pitch deck ready. First impressions are important, especially when building influential relationships.
When Your Pitch in a Competition: In the startup community there are a lot of pitch events and competitions designed to give founders a chance to get exposure and practice pitching their company. You definitely need a pitch deck.
When You Are Seeking CoFounders: If you’re looking for cofounders, there is no better way to convey to them your concept, and the value you can bring to the table than through a pitch deck.
When You Apply to an Accelerator: Many accelerators require a pitch deck in order to apply. They use the deck to evaluate your company and decide whether or not you should join the next cohort.

Which is More Important, the Pitch Deck or the Business Plan?

In can be argued that the pitch deck is more important than the business plan, because it is likely to actually be seen by others. If you don’t have a good business pitch deck, you won’t get the opportunity to talk in more detail with potential investors. You won’t excite and evangelize the startup community and your early team around the company’s growth. And, it may ruin your ability to connect with key mentors and partners that could catapult your startup business.

That said, with no plan, the pitch deck will not work. Investors see pitches day-in and day-out. They can sense a snake-oil salesman, an impossible tech product, and an unprepared founder from a mile away. If you don’t know your stuff, then the best pitch may help you get the meeting, but it won’t help you get funding. But today, the plan doesn’t have to be in the form of a traditional text-based business plan.

I hope this has helped you to better evaluate the differences between pitch decks and business plans. And help why you might choose to develop one or each of them for your startup. If you’re building your pitch deck, I strongly encourage you to work with pitch deck experts. We evaluated different options for getting your pitch deck designed here (including DIY, all the pros and cons).

Stacie Sterren

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Business Plan vs. Business Proposal

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on February 27, 2023 Updated on August 18, 2024

A business plan and a business proposal are similar documents. In fact, in some cases the terms can be used interchangeably, such as when both aim to attract investment.

But generally speaking, a business proposal tends to have broader scope, and this handy guide lays out precisely how these two common terms differ.

Feature	Business Plan	Business Proposal
Purpose	Outlines a company's mission, vision, and means to achieve its goals.	Proposes a specific project or solution to a client or potential partner.
Audience	Investors, stakeholders, financial institutions, and internal team.	Potential clients, partners, or businesses.
Content	Executive Summary Company Description/Overview Products/Services Offered Market Analysis Marketing and Sales Strategies Operations and Management Financial Plan Appendices	Introduction Problem Statement Proposed Solution Pricing Timeline Terms and Conditions Conclusion
Duration	Generally, long-term. Speaks to the company's overall direction.	Usually short-term, addressing a specific project or need.
Focus	Comprehensive view of the business, including strategies, resources, and financial projections.	Focuses on a particular problem or need and the solution the company offers.
Use	To guide the company's direction and attract investments or loans.	To secure a contract, partnership, or client engagement.
Update Frequency	Periodically, as the company evolves or when significant changes occur in the market or industry.	As needed for different clients or projects.
Format	More detailed and structured. May have appendices with additional information.	Typically more concise, tailored to the client or project.

What is a Business Plan?

A business plan is a detailed document laying out how the business will function and develop in its first few years. The key is the “plan” part of the name, as it will specify how you will launch, gain customers, operate, make money, and, with any luck, expand.

Yet what many first-time business owners seem to forget is that a business plan is not a static document. The initial version is based largely on assumptions, supported by research. But as you run your business you’ll learn what works and what does not and make endless tweaks to your plan.

Thus, creating a business plan is not a one-time action – it’s a dynamic and continuous process of crafting and adapting your vision and strategy.

Components of a Business Plan

A business plan is generally much more detailed and broader than a business proposal, and has several elements :

Executive Summary
Company Description/Overview
Products or Services Offered
Market Analysis
Marketing and Sales Strategies
Operations and Management
Financial Plan
What is a Business Proposal?

A business proposal is created in connection to a specific business deal being offered by one party to another. As mentioned, when you take a business plan to an investor, you’re proposing a business relationship, so in this case a business plan and a business proposal are much the same.

But a business proposal could also be for others purposes, including:

Bringing on a partner
Proposing a management contract to a person you want to hire
Proposing a business relationship with a potential customer
Proposing a partnership with another company
Suggesting a deal to a member of your board of directors

A business proposal may offer specific terms for the potential relationship, or it may be just about the benefits the relationship will bring, with terms to be negotiated later. Essentially, it’s a sales tool to get people or companies to do business with you in some way.

Business proposals can be structured in various ways, but usually, they’ll include a summary of what your company can offer, a scope of the work to be done together, and sometimes, a price quote or a proposed structure of the business relationship.

Clearly, a business plan and a business proposal are similar – and can even be one and the same. At the same time, they can also serve very different purposes. Unlike a business plan, a business proposal can have a variety of aims and thus does not have a “one size fits all” structure.

Whichever one you need, be sure to take your time with the research and writing so your business has the best chance for success.

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Business Model Vs Business Plan – What is the Difference?

By: Author Tony Martins Ajaero

Home » Starting a Business » Choose a Business Model

Do you want to know the difference between a <a class="wpil_keyword_link" title="Business model" Business model and a business plan? If YES, here is a detailed comparison and analysis and how each is used. A business plan and a business model look amazingly similar like two peas in a pod, but they are equally different, just like two peas in a pod. They are both part of each other but play different roles thus making the line between them seem dim.

A business plan and a business model both contain <a class="wpil_keyword_link" title="marketing strategies" marketing strategies, customer retention strategy, revenue generation strategies, and overall, they are used to outline the vision of the company. So what then differentiates a business plan from a business model and how can you make a clear distinction of both?

Business Model Vs Business Plan

What is a business model.

A business model is a company’s outlined plan for making profit. It identifies the products or services the business will sell, the target market it has identified, and the expenses it anticipates. A business model also shows the destination of the business, how it is meant to work, and what it is meant to become.

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Franchise model
Direct sales model
Advertising model
Subscription based model
Lowcost model
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Affiliate model
Production model

What is a BUSINESS PLAN

A business plan is a document presenting the company’s strategy and expected financial performance for the years to come.

The business plan pays close attention to your goals, projects the cash flow, profits or losses, and ultimately shows how long and what would be required to enable the business break-even.

A sample structure of a business plan is seen below:

Executive Summary
Business Description
Service or Product Line
Market Analysis & Strategies
Organization & Management
Funding Request
Financial Assumptions
Financial Projections

Differences Between a Business Plan and a Business Model

Some of the major differences between a business plan and a business model are outlined thus;

A business model aims at highlighting the profit making potentials of a business, while a business plan highlights every aspect of the business.
The business plan explains in details the steps needed to achieve the goals of your business model.
Another difference is that business plans are usually written at the beginning of a business or a business initiative, while a business model is relevant at any time, and can be written at any time.
Again, business models are less expensive to put together, and may represent a fictional future goal. As a goal, they may be both complete and entirely unprofitable or even infeasible, quite unlike your business plan.
A business model is centered around Value; while business plan is centered around Resources. The business plan thus lays out how to manage these resources over time to materialize the business model, grow and scale the business.
A model explains how you will make money: for example, by selling advertising, by earning a commission, by adding a markup to services, working with partners, selling direct, charging by the hour, with additional services, etc. While a business defines specific activities, it includes timeframes, budgets, owners, dependencies and impact.

What is the Difference Between Business Model Vs Operating Model?

Two essential terms often take center stage in business strategy and management: the business model vs operating model . Understanding the distinction between these two key concepts is like having a compass in the corporate wilderness.

In this article, we’ll explore the differences between the business model vs operating model , shedding light on their unique roles and why their alignment is critical for business success. So, let’s begin on this journey to unravel the secrets behind these fundamental frameworks that shape how organizations operate and thrive.

What is Business Model?

A Business Model is a strategic framework that outlines how a company creates, delivers, and captures value. It serves as a blueprint for how a business operates and generates revenue. Essentially, a business model defines the core aspects of a company’s approach to doing business , including its target customer segments, the value it provides to customers, the channels through which it reaches them, and how it monetizes its offerings while managing costs. It is a fundamental concept that helps businesses plan and execute their strategies effectively.

What is Operating Model?

An Operating Model is a comprehensive and detailed plan that defines how an organization structures and manages its internal operations to execute its business model effectively. It serves as the operational backbone of a company, guiding the day-to-day activities, processes, and resources required to deliver on the promises made by the business model.

The operating model addresses various aspects, including organizational structure, processes and workflows, technology and tools, the skills and competencies of employees, and governance and decision-making mechanisms. It ensures that the company’s internal workings align with its strategic goals and objectives, allowing for the efficient execution of its business model.

In essence, while the business model focuses on what the company does to create and capture value in the market, the operating model focuses on how the company does it, emphasizing the practical and operational aspects of running the business successfully .

Differences between Business Model Vs Operating Model

The differences between a Business Model and an Operating Model lie in their focus, scope, and purpose within an organization. Here’s a breakdown of these distinctions:

Business Model: A business model’s primary focus is on the business’s strategic aspects. It answers fundamental questions about how a company creates, delivers, and captures value. This includes defining target customer segments, the value proposition, revenue sources, and cost structure. It sets the direction for the organization’s overall strategy and positioning in the market.

Operating Model: The operating model, in contrast, is primarily concerned with the tactical and operational aspects of how a company functions internally. It outlines the processes, workflows, and resources required to execute the business model effectively. It deals with the “how” of running the business day-to-day.

Business Model: The business model provides a high-level view of the business and its interactions with the external environment. It defines the overarching strategy and the key components that shape the company’s value proposition and revenue generation.

Operating Model: The operating model delves into the granular details of internal operations. It covers organizational structure, processes, technology, people, and governance. It provides the nuts and bolts of the company’s strategic objectives.

3. Purpose:

Business Model: The purpose of a business model is to set the strategic direction for the organization. It helps answer questions like “What business are we in?” and “How do we create value for our customers and stakeholders?” It guides product development, pricing, market positioning, and revenue generation decisions.

Operating Model: The operating model’s purpose is to ensure that the organization can effectively implement the strategies defined by the business model. It focuses on optimizing internal operations, resource allocation, and efficiency to deliver on the promises made by the business model.

4. Time Horizon:

Business Model: The business model typically has a longer time horizon and is relatively stable. It may evolve over time but usually at a more strategic and gradual pace.

Operating Model: The model can adapt and change more frequently and rapidly to respond to internal and external factors. It is often adjusted to enhance efficiency, meet changing customer needs, or take advantage of emerging technologies .

5. Audience:

Business Model: The audience for the business model includes top-level executives, investors, and strategic decision-makers who need to understand the overall direction and positioning of the company.

Operating Model: The operating model interests operational managers, process designers, and employees responsible for executing the day-to-day activities and ensuring the company’s operational efficiency.

In summary, while the business and operating models are critical for an organization’s success, they serve different roles and address different aspects of the business. The business model sets the strategic vision and direction, while the operating model defines how that vision is implemented through detailed operational planning and execution.

Importance of Business Model and Operating Model Alignment

Business and operating model alignment is important because it helps organizations achieve their strategic goals. When a company’s business model and operating model are aligned, all of the company’s resources and processes work together to deliver value to customers. This can lead to several benefits, including:

Increased efficiency and productivity: When employees understand the company’s business model and how their role contributes to it, they can make decisions and take actions aligned with the company’s overall goals. This can lead to increased efficiency and productivity across the organization.
Improved customer satisfaction: When a company’s business model and operating model are aligned, the company is better able to deliver products and services that meet the needs of its customers. This can lead to improved customer satisfaction and loyalty.
Reduced costs: When a company’s business model and operating model are aligned, the company can eliminate waste and duplication of effort. This can lead to reduced costs and improved profitability.
Increased agility and responsiveness to change: When a company’s business model and operating model are aligned, the company can better adapt to changes in the market and competitive landscape. This can help the company to maintain a competitive advantage.

Here are some examples of how business model and operating model alignment can lead to success:

A company that sells software on a subscription basis needs to have an operating model that is designed to support recurring revenue and customer retention. This might include having a dedicated customer support team and a process for regularly updating the software.
A company that sells physical products online must have an operating model designed to efficiently fulfill orders and deliver products to customers. This might include having a well-designed warehouse and shipping system.
A company that provides consulting services needs to have an operating model that is designed to deliver high-quality services to clients on time and within budget. This might include having a team of experienced consultants and a process for managing projects effectively.

Overall, business model and operating model alignment are essential for organizations that want to be successful in the long term. When a company’s business model and operating model are aligned, the company can deliver value to customers, achieve its strategic goals, and maintain a competitive advantage.

Let’s look at a real-world example to understand the significance of aligning business and operating models.

Case Study: Amazon

Amazon’s success can be attributed to its business and operating model alignment . Its business model is based on providing a vast selection of products to a global customer base, often at competitive prices. Amazon captures value through its Prime membership program, where subscribers pay an annual fee for benefits like fast shipping, streaming, and more.

Amazon has developed a highly efficient operating model to support this business model. It has invested heavily in technology, automation, and logistics to ensure speedy deliveries. The company’s extensive network of fulfillment centers, advanced algorithms for inventory management, and cutting-edge robotics all contribute to its ability to meet customer expectations.

Understanding the difference between business model vs operating model is essential for anyone involved in business strategy, management, or entrepreneurship. These two concepts, while interconnected, serve distinct purposes. A business model defines how a company creates and captures value, while an operating model outlines how the organization executes its strategy internally.

Alignment between these two models is essential for success. A well-aligned business and operating model can increase efficiency, customer satisfaction, and profitability. Conversely, misalignment can result in operational challenges and financial strain.

So, whether you’re launching a startup, leading an established organization, or simply looking to enhance your business acumen, remember that your business and operating models play integral roles in achieving your objectives. Strive for alignment, and you’ll be better equipped to navigate the complexities of the business world.

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Teacher-turned online blogger, Shirley is a full-time backyard homesteader based in Virginia. When she doesn't have her face buried in a book or striding in her garden, she's busy blogging about simple life hacks of the daily life. Shirley hold's a BA in commerce from University of California.

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Business Model vs. Business Plan: What Is the Difference?
Business Model Vs Business Plan: What's the Difference?
What is the difference between Business Model and Business Plan?
The difference between a business model and a business plan by Ingrid
A complete Guide on Business Model vs Business Plan
Business Model Vs. Business Plan: When And How To Use Them

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Business Plan vs. Business Model: What is the Difference?
A business model is the foundation of any business idea; it basically outlines how the concept offers value and potential for growth. Essentially, a solid business model ensures that the business will make money. A business plan, on the other hand, is the business owner's plan to put that model into action. It's much more detailed and ...
Business Model vs. Business Plan: What's the Difference?
Business models are descriptions of how a business plans to deliver products and services to customers. They focus on specific sales funnels, marketing strategies and similar areas. In contrast, business plans are more comprehensive explanations of every facet of a business.
Business Plan vs Business Model: Key Differences Between Them
The major difference is that a business plan is a detailed document outlining the company's objectives, strategies, and financial projections. In contrast, a business model is a conceptual ...
The Differences Between a Business Plan & Business Model
A business model, on the other hand, is a business's rationale and plan for making a profit. If the business plan is a road map that describes how much profit the business intends to make in a ...
Business Model Vs Business Plan
A business model is centered around Value; while business plan is centered around Resources. The business plan thus lays out how to manage these resources over time to materialize the business model, grow and scale the business. A model explains how you will make money: for example, by selling advertising, by earning a commission, by adding a ...
Business Model vs Business Plan: Key Differences Between Them
Business Plan Development: Once the business model has been validated, entrepreneurs can use it as a starting point to develop a detailed business plan. The plan will expand on the core elements ...
What is the difference between Business Model and Business Plan?
While the business model refers to a one-page representation of how a company creates, delivers, and captures value, the business plan is an in-depth description on a long textual document form about how your company is structured and plan to achieve strategic and financial objectives. This business plan is a document that contains every data ...
Business Model Vs Business Plan: What's The Difference
Both internal management and external stakeholders, including investors, banks, and potential partners. The business model is the foundation of a company, while the business plan is the structure. So, a business model is the main idea of the business together with the description of how it is working. The business plan goes into detail to show ...
Business plan vs. business model
In short, a business plan is a detailed description of a plan of action, while a business model is a description of how a business will operate and generate profits. A business plan is often based on the business model and helps entrepreneurs understand how best to use the business model for their specific goals.
Difference Between A Business Plan And A Business Model
A business plan and a business model are both different and similar. They're largely said to be distinct, but are still a part of each other, making the clear meanings of both to become confusing to a lot of people. Both a business plan and a business model encompass your marketing strategies, customer retention strategy,
Distinguishing the Difference- Business Model vs. Business Plan
Conclusion. In summary, a business model is a company's foundation and a business plan is a company's structure. The foundation is the company's mission and how it operates, the structure contains the various components and strategies that make the foundation possible. Business models and business plans are dynamic in that external factors may ...
Business model vs. business plan
If the business plan is a road map that describes how much profit the business intends to make in a given period of time, the business model is the vehicle that gets you there. A model covers ...
The difference between a business model and a business plan
A business plan is a formal written document that includes a description of the business you want to run, your business goals, and the plan for reaching those goals. A business plan is a detailed document that contains sections such as: Marketing Plan, Startup Expenses and Capitalization, Management and Organization, Products and Services, and ...
Strategic Plan vs. Business Plan: What's the Difference?
The biggest difference between a strategic plan vs. a business plan is its purpose. Existing companies use the strategic plan to grow their business, while entrepreneurs use business plans to start a company. There is also a different timeframe for each plan. Generally, a strategic plan is conducted over several years while a business plan ...
Pitch Deck vs. Business Plan: The Differences and Uses of Each
A business plan is a fully researched 10-100 page document. The document is used to store and convey in detail your business' plans for the next 1,3, 5 years. The business plan lays out the research you've done in your industry and competitors. It discusses your sales, marketing, and operational plans.
7 differences between a business plan and business model canvass
The client (external) is the primary focus of the right side of the BMC, whereas the business is the primary focus of the left side of the canvas (internal). Around the value proposition, which is the exchange of value between your firm and its customers, internal and external elements come into play. 7 differences between a business plan and ...
What is a business model canvas vs business plan?
Difference Between a business plan and a business model canvas. A business plan is more like a writing document that's shown in detail the mission, vision, goals of a startup or company while a business canvas is a simple pictorial representation of questions that assist you in clarifying your idea. You create a business model, then a ...
Business Plan vs. Business Proposal: What is the Difference?
In Closing. Clearly, a business plan and a business proposal are similar - and can even be one and the same. At the same time, they can also serve very different purposes. Unlike a business plan, a business proposal can have a variety of aims and thus does not have a "one size fits all" structure.
Business Model Vs Business Plan
Some of the major differences between a business plan and a business model are outlined thus; A business model aims at highlighting the profit making potentials of a business, while a business plan highlights every aspect of the business. The business plan explains in details the steps needed to achieve the goals of your business model.
What is the Difference Between Business Model Vs Operating Model?
A business model defines how a company creates and captures value, while an operating model outlines how the organization executes its strategy internally. Alignment between these two models is essential for success. A well-aligned business and operating model can increase efficiency, customer satisfaction, and profitability.
Business plan vs business case: what's the difference?
The business plan is based on a series of hypothesis, action plans, and a long-term calendar. Contrastingly, a business case is concrete - mainly because it's aimed at creating a short-term gain for the business with a well defined return on investment. To sum-up: a business plan is a strategic document, whereas a business plan is a tactical one.

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