What is the difference between a business model and a business plan?

A business model describes how a company creates, delivers, and captures value, while a business plan outlines the company's strategy and operations.

A business model is essentially a blueprint for how a business operates. It outlines the methods by which the company creates, delivers, and captures value. This could be through the products or services it offers, the customers it targets, or the resources it utilises. The business model is a conceptual structure that supports the viability of a company and explains how it operates, makes money, and how it intends to achieve its goals.

On the other hand, a business plan is a formal written document that includes detailed plans for the strategies and operations of the business. It typically includes information about the company's mission, vision, and objectives, as well as detailed plans for marketing, finance, and operations. A business plan is often used to secure funding or guide the company's strategy over a certain period.

While both are crucial for a business, they serve different purposes. The business model is more about the 'big picture' of how the company operates and makes money, while the business plan is a more detailed roadmap of where the company is going and how it plans to get there. The business model can be thought of as the foundation upon which the business plan is built.

In essence, the business model is the 'what' and the 'why', while the business plan is the 'how' and 'when'. Both are necessary for a successful business, but they each offer a different perspective on the company's operations and goals.