The transformation of an idea into a viable business requires steps that are indispensable, such as the model and business plan. Many entrepreneurs confuse these two terms and it is therefore necessary that they understand the differences, similarities and at what stage of the business they should develop it.
Businesses start and end in the market. In general, this cycle consists of the creation of an idea by the entrepreneur, which evolves to a concept Business model. After that, the work team is built and elaborated the business plan to raise funding. This step is essential for the creation of the company and consequent product development.
Business model it is the representation of how the business generates and delivers value to customers. It is an identification of resources, skills and partnerships in order to determine how the entrepreneur will create something of value with their idea. This method is essentially visual and strategic used during the validation and feasibility testing of ideas.
Business plan is a detailed document that describes all the steps that involve and are part of the business. That is, the entire business is thoroughly described, from the product description to the strategies to be taken to solve problems that will inevitably arise. It is associated with what the entrepreneur does or will do at a stage after the validation and consolidation of ideas.
These two processes have different characteristics. However, they have an important similarity: both contribute to the transformation of mere ideas into businesses with great potential for success.
business model vs. business plan
As explained in the definition, a business model it is a more visual and practical document. It is designed for anyone to understand the business in question more generally. On the other hand, a business plan it is a detailed document that proves the viability of the business to the entrepreneur himself and to future ones involved in it.
Generally, companies have only one business plan while they can have multiple business models, especially if they have multiple projects within the same business.
O Business model It should be developed further to business plan, serving as an aid in the development of the latter. For this reason, a company must have both a model as a business plan well defined.
While a business model can be replicable by several companies in different areas, the business plan is unique in each of the companies. This is because legal, accounting, procedural aspects are not common among companies.
Another difference between these two concepts is the format of the documents. a business model it can be easily changed and quite fast since there are no dependencies between topics. Already one business plan changes are no longer so frequent, nor is the process easy since there is a connection to the various topics covered.
Creating a new business from scratch is a complex process. It is important that the entrepreneur first understand all the concepts surrounding this area, in order to avoid possible problems that may occur in the future. Through the elaboration of a good Business model followed by the preparation of business plan, it will have more confidence about the potential of your business and, consequently, it will transmit more confidence to potential investors, customers, suppliers, partners or any other environment.