The difference between a business model and a business plan lies in the function and complexity of each ; while the business model shows a general idea of how your company will operate, the business plan is the detailed explanation of how that idea will be implemented so that it actually materializes.
If you like analogies, here's one: the business model is the description of a dish on a restaurant menu, which tells you what it contains so you're encouraged to try it.
The business plan , on the other hand, is the recipe with which the dish is prepared, each ingredient, procedure and utensil necessary.
The first step in starting a business is to create a model that explains, justifies and graphically shows the elements and how they will work together . Then, it is time to detail the procedure that explains how the brand will be developed.
In this sense, the business model should phone leads be the foundation on which the business plan is based, although, in reality, this is not always the case.
Both are important because, in order to understand your idea, communicate it to your partners or justify a new product, you will need a business model. Now, to carry out that idea, you have to delve into the method and put together the plan.
What are the business models? Examples
Depending on what you sell, business models can be divided into 4 groups. These are:
1. Product or service
Is your offering a physical or digital item? Or are you marketing an activity that requires the presence and time of a worker to be performed? If the former, your model is a product. If it's more like the latter, you have a service model.
Examples : selling clothes (product) or producing videos for social networks (service).
2. B2B or B2C
When what you offer is aimed at solving the needs of another organization, we talk about B2B (business to business), but if your creation will be marketed directly to solve the needs of individuals, you have a B2C (business to consumer) model.
Examples : a company that organizes training for corporations (B2B) and a company that rents bouncy castles for children's parties (B2C).
3. P2P
It refers to the way of doing business as an intermediary between two users ( peer to peer): a supplier of products or services and the end consumer. You achieve this by managing a personalized service center or, much more commonly, a digital platform.
Examples : an application to find language teachers or a marketplace for sales between individuals.
4. Saas
When you offer software as a service that typically replaces the functions of one or more people in an organization, we're talking about a SaaS model.
Examples : a human resources and recruitment application or an e-commerce platform ( such as Tiendanube ) that allows you to create your own online store without needing technical knowledge.
Boost your brand by creating your own online store.
Continuing with the classification of business models, there is another division that depends on how you sell your products or services. In this category, we can distinguish 7 types:
1. Direct sales
The most basic way to market an idea: you give your product or service directly to the consumer, without stores or intermediaries. How do you do this? Through personal contacts or referrals.
Examples : someone who makes cakes to sell to acquaintances or who does carpentry work and sells chairs to order.
2. Brick and cement
This refers to businesses that have a store or physical location. This was one of the most popular options (until the next item on this list came along).
Examples : a hardware store or a dance academy.
3. E-commerce
With the arrival of the Internet, many physical businesses migrated to a larger showcase: the entire world. Whether through an online store or a marketplace , e-commerce is the best option for a large number of people to learn about your idea and buy your products or services.
Examples : the website of a supermarket chain or one of the stores created with Tiendanube.
4. Advertising
If you use your products or services as a means to market third-party advertisements, you have an advertising business model .
This can be as traditional as generating content to showcase digital campaigns, or managing influencers to sponsor brands.
Examples : a financial news site featuring stock brokerage ads or an Instagram personality who recommends fitness products.