Task 3: Business plans and models
What is a business plan?
In simple terms, a business 'plan' is the planned future objectives and strategies that will hopefully lead to achieving said objectives set out in a document form. A business plan is extremely important, needed in order to present the company's strategy and expectations for the financial performance of the business in the near (or potentially far) future. Business plans do not need to be written extremely formally, or include lots of complicated business related jargon and phrasing; all a good plan needs to do is describe the current position and state of the company, plus what the ideal place for the business to be in in the future, how it will work then and how you intend to get the company from where it is now to where you want it to be. Plans like this can be made for multiple varying purposes, either just to simply have an idea of where you want to be heading towards and how, or to be shown to external people like banks or other potential investors in order to give them confidence in you and your business, encouraging them to be more likely to invest their money (for more professional uses, the plan should be longer in length when compared to the more personal purposes)
In simple terms, a business 'plan' is the planned future objectives and strategies that will hopefully lead to achieving said objectives set out in a document form. A business plan is extremely important, needed in order to present the company's strategy and expectations for the financial performance of the business in the near (or potentially far) future. Business plans do not need to be written extremely formally, or include lots of complicated business related jargon and phrasing; all a good plan needs to do is describe the current position and state of the company, plus what the ideal place for the business to be in in the future, how it will work then and how you intend to get the company from where it is now to where you want it to be. Plans like this can be made for multiple varying purposes, either just to simply have an idea of where you want to be heading towards and how, or to be shown to external people like banks or other potential investors in order to give them confidence in you and your business, encouraging them to be more likely to invest their money (for more professional uses, the plan should be longer in length when compared to the more personal purposes)
To make the process simpler, a business plan can be split up into seven steps, each explaining different parts of the business and ideas for how to achieve success with it. These steps are as follows, each flowing on from each other in an easy to look at document: 'executive summary', 'business overview', 'sales and marketing', 'operations and resources', 'staff and management team', 'planning' and 'finances'.
What is a business model?
A business model can be described as how the company creates value for itself while delivering their products and/or services for its customers. There are many different types of business models a company can decide to use and follow, depending on the type of product or service it wants to provide and how they want to provide it, with the most common including Production, Advertising, Commission, Subscription, Accessories and Freemium - each of these models unique in their own ways. Similarly to business plans, these models are often seen split up into nine different detailed components, as to ensure that the model chosen is as affective for the business as it can be. These components all together make up a complete business plan, and are as follows: 'value propositions', 'customer segments', 'channels', 'customer relationships', 'revenue streams', 'key resources', 'key partners', 'key activities', and finally 'cost structure'.
What is meant by the term 'sustainable business model'?
In order for a business model to be considered sustainable, it ideally should be one that is able to deliver, create and capture value for all of the stakeholders attached to it. On top of this however, it must be able to achieve this without depleting any of the capital (resources) it relies on to do so - if any of the social, economic or natural capital is depleted, the business model is not a sustainable one.
References:
Business Plan - https://www.startupdonut.co.uk/business-planning/write-a-business-plan/essential-guide-to-writing-a-business-plan
Business Plan & Model - https://l4creativeenterprise.blogspot.com/2019/10/the-business-plan-and-business-model.html
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