What is a Business Model
Wikipedia: A Business Model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
Boomy Tokan: A Business Model is the way a business will use the resources at their disposal to create products that add value to their chosen market and to generate a profit.
One of the major advantages of creating a business model is the clarity it gives the business owner. It provides a picture of the business in one sheet of A4 paper.
The business model covers the following 9 areas:
- Customer Segments
- Value Propositions
- Channels
- Customer Relationships
- Revenue Streams
- Key Activities
- Key Resources
- Key Partnerships
- Cost Structure
Alexander Osterwalder created a business model canvas that you can find here Alex Osterwalder
What is a Business Plan
Boomy Tokan: It is the documented, scaled up version of a practiced process
My idea of a business plan is to document a tried and tested process. It is what the lean startup people call ‘testing your hypothesis’ by creating an MVP (Minimum Viable Product), making sales and then drafting the scalable version.
Hope it helps!