Other Tips Besides Digital Marketing : The Difference Between A Business Plan And A Business Model

 

It is a fact that the majority of start-ups fail. This is really sad considering that some Zimbabwean entrepreneurs would have sacrificed some money set aside for things like children’s school fees to start a business. The entrepreneurs would have hoped that the new business will succeed, produce income and enable them to replace the fees. In this blog post fortunately I will help increase the possibility of your start-up success by clearing the confusion associated with two important aspects of starting a business namely a business model and a business plan. I usually emphasize the importance of digital marketing to a new business but today I will share more. So continue reading it may turn out that the blog post is exactly the piece of information you have been waiting for as an entrepreneur.

 A business plan and a business model are two different

 things. Though they are complimentary tools they are

 different. This is important because you would not

 want to use the wrong tool for the job. Carpenters and other

 artisans know very well the importance of  the right tool for the

 right job in contributing to the quality of the job and its timeous

 finish. If you attempt to use a spanner where you should be

 using a screw drive you can even damage your work.  This is

 exactly one of the reasons why many start-ups fail. Its not

 always about capital but also about

 knowledge. People use wrong tools for the job because they

 do not know the difference between the tools ! You

 shall know (knowledge) the truth and the truth

 will set you free.

So what is the difference between a business model and a

 business plan ? A business model is simply a discussion

 about how you make money. So if you sell

 farm produce like tomatoes, you will be buying tomatoes from

 a farmer at some costs, you will be adding value to the

 tomatoes like packaging at another cost and

 you will be selling it at a price. That should end up making you

 a profit on the sale of those tomatoes. That is your business

 model. Multiply that by 500 tomato

 packets and now you got a business.

A business model is quite different from a business plan. A

 business plan is a goal with a series of steps to achieving that

 particular goal. But as an early stage company your goal

 might be to uncover or refine your business model. So in your

 business model you might have a suspicion that selling a

 certain grade of tomatoes to a certain customer segment with

 a certain set of marketing plans is going to work. Your

 business plan will then say over the next three months you

 will have these particular tests to determine what grade, what

 customer segment and what marketing plan should really be

 used.

So both a business model and a business plan are important

 but you must know how they operate differently. To do justice

 to this topic I should also draw your attention to the Business

 Model Canvas because it is the latest idea that is being used

 successfully at leading entrepreneurship centers like Silicon

 Valley USA (home to Facebook, Google, Apple) and in

 business studies and entrepreneurship degree programs at

 leading universities across the world.

A business model canvas is a template for developing new or

 documenting existing business models. It has nine parts as

 follows;

(1) Value proposition 

  What are you building and for who ?

(2) Customers 

 Who are my customers and why do they buy ?

(3) Channels 

How does your product get from your company to your customers ?

(4) Customer Relationships 

 How do you get, keep and grow customers ?

(5) Revenue model 

How does the company make money from each customer segment ?

(6) Key resources 

 What are the most important assets required to make the business model work ?

(7) Key partnerships 

 Who are the key partners and suppliers needed to make the business model work ?

(8) Key activities 

 What is it you need to be really good at ?

(9) Cost structure 

What are the costs to operate the business model ?

You do not need to reinvent the wheel in order to become a

 successful entrepreneur. Using these ideas by other people

 proven to work can be a game changer for your small

 business and your life. 

Consider also opportunity costs. This simply mean you will

 loose more by trying to figure out everything by yourself

 instead of adopting brilliant ideas by experts. It can be wiser

 to even hire one to help you so that you can achieve good

 results timeously. The business model canvas has nine areas

 that have questions.  Are you able to answer them all by

 yourself ? I kind of doubt it.

Lets consider therefore number (4) Customer Relationships –

 How do you get, keep and grow customers ? What ever you

 are producing or creating you do need someone to buy it

 because your enterprise needs income to cover its costs and

 pay off its debts so that it survives. Your marketing must be

 best and the best marketing must include digital or online

 marketing like social media marketing, search engine

 optimization etc. You might be focusing more on the opposite

 which is offline marketing like flyers, banners, print

 newspapers but please consider the following comparison it

 might be eye opening.

You may ask but I do not know about digital marketing ?

 Fortunately, now there is a way for you to use digital

 marketing in your new business even if you do not have the

 knowledge of digital marketing yet. 

P.S To learn more about this amazing opportunity please click LEARN MORE.