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Business plan vs. business model - examples

Find out the difference between a business plan and a business model. Find out how they influence each other. In this article you will find this and more practical information related to this topic.
philip-samchuk
Filip Samczuk
Author of the article
Published
March 22 2023
Reading time
8 minutes
business model canvas diagram
Table of contents

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 model canvas

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:

  1. Description of product/service (scope of offer);
  2. Personnel and other key resources;
  3. Location;
  4. Customer Profile (customer segments);
  5. Market analysis;
  6. Competitive analysis;
  7. Sales (distribution channels) and marketing (advertising campaign plan);
  8. SWOT analysis;
  9. Description of financial assumptions (cost structure and revenue plan);
  10. Financial projections (balance sheet, income statement, cashflow).
structure of the business plan

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.

completed business model canvas

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.

sample business plan cover sheet

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.

need a business plan? we'll be happy to help

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.

About the author

philip-samchuk
Filip Samczuk
For 12 years, he has provided substantive support to entrepreneurs in realizing their dreams of starting or growing a business. He advises on obtaining financing, business development and legal issues. Privately a fanatic of sports, travel and history of the 20th century.
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