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Business Plan Vs. Business Model: What’s The Difference?

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The Business plan is a document presenting the company’s strategy. Business planning is creating a marketing or customer retention strategies, whether it’s about developing new products/services and generating new sources of income.

The business model refers to how the company creates and gives value to the customer. The business model concept is commonly used in management activity as a way to analyze and understand the business logic of a company. Once the business model is created and detailed, there is a basis for developing the business plan.

Business Plan Vs. Business Model What’s The Difference

The Business Model

Essentially, the business model is how the company plans to generate revenue. how to create Customer Value.  bring revenue and profit to the company. The franchise is a business model, such as portals, content providers, virtual stores, and so on. In the case of traditional business, the business model is simple and does not require detailed explanations: the restaurant sells food, the shopkeeper sells vegetables, sells hotels, etc. In the case of digital businesses, more details are needed on how revenue is generated.

A business model must meet three criteria levels: be simple, relevant, and easy to understand. The emphasis on business models is on how the company generates value for the customer and differentiates itself from the competition.

Business Plan

A business plan is a communication tool that provides a detailed overview of the whole business. It is based on the business model, explaining what resources are needed in terms of activities, equipment, personnel, and the implementation of the business model. All business plan is the one that presents the marketing strategy, the ways to attract and retain customers, who are the competitors and how the competition in the market will be approached. Also, the business plan details financial aspects, start-up costs, investment objectives, sales forecasts. The structure and content of the business plan differ depending on the type of business and people who are going to read it (management team, investors, bankers, etc.).

In short, the business plan supports the business model and explains the steps needed to reach the goals set in the business model, so any modification of the model will cause changes in the business plan.

Both the business model and the business plan should be seen as dynamic and not static, so that, depending on changes in the market and the overall business evolution.

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