What is the difference between a business model and a business plan?
The concepts of business model and business plan are very complementary and interdependent.
What is a business model?
Also called the economic model, a company’s business model defines the way in which the company will be able to generate profits and thus be profitable. The business model defines:
- The product / service offering and the needs it meets.
- Target clientele (individuals / professionals, age groups, geographical location, socio-professional categories).
- The company’s expected profit.
The business model therefore highlights the basic elements of your commercial and financial studies. It can be developed simply thanks to the business model Canvas, a synthetic analysis grid that is widely used today to formalize a company’s financial model.
What is a business plan?
It is a file that aims to present the project of setting up or taking over a business in its entirety.
We are also talking about a business plan. It is very helpful in explaining your project to third parties (partners, associates, etc.) and crucial to obtaining funding.
The development of your company’s business model will therefore help you develop your business plan. Many elements of your business model should actually be included in your business plan.
What are the components of a business plan?
The business plan generally begins with a synthetic and engaging presentation of your business project: summary. In a summary of one or two pages, it is a matter of making your readers want to go further in the presentation of the detailed elements set out in the business plan.
If there is strictly no model, the business plan consists of at least 3 parts:
- A presentation of the project manager and the structure to be created.
- The business model and the commercial strategy.
- An inventory of the human and material needs necessary for the operation of the future business and an economic forecast.
Part 1: the project manager and the company
In this part you can talk about what motivates you to create a company, but above all must highlight your strengths: education, skills, experience … You can also talk about your partners or partners, if you start with more persons. The legal status chosen to set up your business should also be mentioned in this section.
Part 2: the commercial strategy and the business model of the company
This second part presents:
- Your product and service offer.
- An analysis of the market in which you want to position yourself (supply and demand, customers in your catchment area, competition in the market, development and trends in the sector, etc.).
- Your positioning to capture market share (commercial strategy, communication and marketing, etc.).
Part 3: the economic forecast
This is the financial aspect of your business creation. This last part is actually much more framed and formalized than the previous ones. It must contain:
- An initial financing plan that distinguishes between sustainable needs (investments and working capital needs) from sustainable resources (share capital or personal contribution, partners’ current accounts, if necessary, equipment grants and loans).
- An expected income statement that describes the expected expenses and income.
- A monthly cash flow plan.
- A 3-year financing plan.
- The calculation of your break-even point corresponding to the level of turnover to start making money.
3 tips to develop your business plan
A good business plan should be easy to read and allow the reader to quickly understand the contours of your project. You therefore need to produce a neat and well-structured, concise, clear, accurate and selling document.
A nice and well-structured presentation
The presentation should be neat to arouse interest and make your interlocutors want to go further. The business plan should be logically organized into parts and bases. The titles should also be meaningful so that the reader of the business plan can quickly understand what he finds in each part. A simple and easy to understand style, without jargon or ambiguous expression, will make the file easier to read.
A concise, yet comprehensive document
There are no specific rules for the number of pages in a business plan. However, think of your readers who will not necessarily have much time to devote to your project. You can gather all the supporting documents in one additional file so as not to burden the file. If necessary, your interlocutor can refer to it for more information.
An engaging file
Do not forget that your goal through the business plan is to convince your interlocutors. Therefore, you need to present your project from its best angle and do not forget to highlight your strengths and your motivation to create or take over the business. You need to put all the opportunities on your side to promote the success of your business.
Succeed at your business plan
Would you like to be followed step by step in the development and monitoring of your business plan? CCI Nice Côte d’Azur offers you tailored support, which includes 1 “diagnosis” meeting to take stock of your project and 7 individual meetings to validate all stages of your business plan.
This support can be provided face-to-face or externally over a maximum period of 6 months.