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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 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 fulfills.
  • The target clientele (individuals/professionals, age groups, geographical location, socio-professional categories).
  • The profit that the company expects.

The business model therefore highlights the fundamental elements of your commercial and financial studies. It can be developed quite simply thanks to the Business Model Canvas, a synthetic analysis network 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 company in its entirety.

We also talk about a business plan. It is very useful for explaining your project to third parties (partners, associates, etc.) and essential for 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: the 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 that appear 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 a financial forecast.

1st part: the project manager and the company

In this part, you can talk about what motivates you to create a business, but above all you must emphasize your strengths: education, skills, experience… You can also talk about your business partners or business partners if you start with several people . The legal status chosen to set up your business must also be mentioned in this section.

Part 2: the commercial strategy and the company’s business model

This second part presents:

  • Your product and service offer.
  • An analysis of the market you want to position yourself in (supply and demand, customers in your catchment area, competition on 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 sustainable needs (investment 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 for developing your business plan

A good business plan should be easy to read and allow the reader to quickly understand the outlines of your project. You must therefore produce a neat and well-structured, concise, clear, precise and selling document.

A nice and well-structured presentation

The presentation must be neat to arouse interest and make your interlocutors want to go further. The business plan should be logically organized into parts and sub-parts. The titles must 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 terms, 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 about your readers, who will not necessarily have a lot of time to devote to your project. You can collect all supporting documents in an additional file so as not to weigh down the file. If necessary, your interlocutor can refer to it for more information.

An engaging file

Don’t forget that your goal through the business plan is to convince your interlocutors. You must therefore present your project from its best angle, not forgetting to highlight your strengths and your motivation to create or take over the company. You must put all the odds on your side to promote the success of your business.

Succeed with 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 remotely over a maximum period of 6 months.

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