Business model vs Business plan

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Is there a difference between a business plan and a business model? Yes!

Read on to see how business planning is a sub-set of your business model.

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Business model vs Business plan

  1. 1. BUSINESS MODEL VS BUSINESS PLAN
  2. 2. What is a business model?
  3. 3. The proprietary method used to acquire, service, and retain customers
  4. 4. Example of Popular Business Models <ul><li>Franchise Model </li></ul><ul><li>Low Cost Model </li></ul><ul><li>Advertising Model </li></ul><ul><li>Subscription Business Model </li></ul><ul><li>Direct Sales Model </li></ul><ul><li>AND MANY OTHERS </li></ul>
  5. 5. Let’s look at Wal-Mart Stores <ul><li>Low Cost Model </li></ul><ul><li>“ Always Low Prices” tagline </li></ul><ul><li>Net Profit of US$13.4bn in 2009 </li></ul><ul><li>Their stores include discount stores, super centers and neighborhood markets </li></ul>
  6. 6. Equally important is a Business Plan…. What is a business plan? A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals What does it contain? Executive summary, business description/overview, market research, operations plan, financial plan and project management plan, marketing plan etc
  7. 7. Let’s investigate the first three items in a plan.. What is an executive summary? Typically a 1-2 page document that summarizes the whole business plan for the reader to efficiently and quickly understand the overall business idea What is a business description? Highlights the business type, proposed business location(s), products/services offered, unique value proposition What is market research? Entails target market, SWOT analysis, market size, market positioning, survey results and risks analysis
  8. 8. Let’s investigate the next 4 items in a plan… What is an operations plan? Typically entail manufacturing and production information, facilities, inventory, distribution and maintenance/service What is a financial plan? Discusses required funding, cash-flow projections, income and balance sheet statements, scenario/sensitivity analysis What’s in a project management plan? Team experience/skills, staff hiring requirements/plans, organizational structure and key project milestones What’s in a marketing plan? Marketing strategy, marketing channels, marketing budget, marketing milestones and marketing working structure
  9. 9. So, why prepare a business plan anyway? <ul><li>To get funding from investors or banks </li></ul><ul><li>Guides management in achieving goals </li></ul><ul><li>Thus, VERY IMPORTANT FOR ANY BUSINESS. </li></ul><ul><li>It also communicates the business model to potential investors or management </li></ul>
  10. 10. You know the sayings……. <ul><ul><li>“ If you fail to plan, you are planning to fail” </li></ul></ul><ul><ul><li>“ If you don’t have a plan, you will end up working for someone who does” </li></ul></ul><ul><ul><li>“ It's not the plan that is important, it's the planning” </li></ul></ul>

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