Business Model vs. Business Plan

A business model is a crisp and structured outline of the business proposal on how to create and capture value. This is a short and less time-consuming strategy artefact that is put to test and evolved.

A business plan is a detailed artefact capturing tactics and proposals to gain business matching to the business model – primarily meant to woo investment. A business model is created before a business plan and is referred back for detailed business plan creation.

The main components of a business model define the key elements for doing business like partners, customers, cost, revenue, value proposition etc. that are more scalable than rigidly fixed. The key ingredients of a business plan are three to five years of revenue projections.