Before start your own business, you need to make sure that your project is feasible and that you are on the right track. For this, you need to have a well thought out business model and business plan. However, it is not uncommon for these two documents to be confused! Do you know the difference between the two?
How to distinguish the business model from the business plan?
The business model and the business plan are both constructed documents upstream of the creation of your company. These two concepts are often confused but are not synonymous.
the business model it is the business model of your business. It is thanks to your business model that we understand how you will generate income and make your turnover.
the business plan complete the business model by explaining how to achieve this result.
It is usually the complementarity of these two documents that confuses many.
How to find your business model?
There are a multiplicity of business models, it all depends on the concept of your business. To begin with, you usually have to ask yourself the question “who pays for the product or service you offer?”.
The answer may seem obvious when dealing with a buy/resell business. However, the exercise becomes more complex when it comes to, for example, a service platform. Some will link buyer/seller and get paid on a percentage of the sale. Others will offer a platform with two services, a paid service for professionals to finance a free service for individuals.
The construction of the business model therefore depends entirely on the activity that will be carried out.
How to create a business plan?
The business plan is the document that presents the strategy you will adopt to carry out your project. The more comprehensive and well thought out it is, the more likely it is to convince potential investors or partners.
To build the business plan, you have to ask yourself several questions again. Does your product or service meet the needs of the market? What competing products or services are already on the market? What are their strengths, their weaknesses?
So, of course, you need to integrate your business model to reassure investors about your project’s profitability.
Don’t forget, it’s all about building a fluent and logical speech. Your business plan must convince your listeners of the reliability and feasibility of your project. If this is your first time doing this exercise, lean on a business plan template.
Diving deep into the entrepreneurship pool can seem daunting to the uninitiated. If you have any questions, you can consult the guide for entrepreneurs to enlighten you on the different steps to take.
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