Difference between business model, business plan, business case
The business model, business plan and business case are three important documents that are closely related and complementary. They each have their own functions and objectives, but they complement each other when it comes to creating and running a successful business. To better understand the differences and relationships between these three concepts, it is helpful to place them in the context of the whole business and consider their respective roles in business development.
The business model
A well-developed business model describes in detail the services or products offered, the target markets, the cost structures and the resources required. An example would be a fast-food franchise concept that is sold to franchisees and lives on their profits. Or consider a company that develops a time-tracking app and generates revenue by selling subscriptions.
Often the business model goes hand in hand with a business model canvas, a visual representation of the business idea that summarises all the important aspects on one page. The business plan, on the other hand, builds on the business model and fleshes out the business goals and strategies. While the business model relates to the whole company, the business case focuses on a specific project or investment within the company and checks that it is in line with the overall objectives.
The business plan
The plan also highlights the competitive situation by analysing the competition and identifying what makes your business different. The products or services offered are described in detail, and forecasts are made for the company's turnover and development. The business plan has the important task of convincing potential investors, business partners and lenders of the company's prospects for success and future viability.
Unlike the business model, which outlines the basic idea, the business plan is a comprehensive and well-thought-out presentation of all aspects of the company or start-up. The business model is the solid foundation on which the business plan is built and developed. It not only conveys the core idea, but also details the entire process that will lead to commercial success.
The business case
A business case is usually prepared at an advanced stage of a company's development. It is used when existing companies need to make investment decisions or when new projects need to be assessed for suitability and profitability. The business case helps entrepreneurs or project managers determine whether a project or investment makes sense and contributes to the company's overall goal.
The business case is like a clever detective, examining every detail of a project or investment to ensure that it is in line with the business model and the company's objectives. In doing so, it helps to keep the business focused and to use resources efficiently.
The chronological order
This is followed by the creation of the business model canvas, a concise and clear representation of the business idea. This document acts as a compass, presenting the core elements of the business model in an easy-to-understand and compact form.
With a solid foundation in place, the detailed and comprehensive business plan begins. This is designed to convince potential investors, partners and financial institutions of the company's viability and prospects for success.
Once the business is successfully established and growing, new investment or project ideas will emerge to be integrated into the existing business model. A business case is developed for each of these ideas to support decision making and ensure that each project is in line with the company's overall objectives. This creates a dynamic and synergistic interaction between these key elements, paving the way for success. Once the business is successfully established and growing, new investment or project ideas will emerge to be integrated into the existing business model. A business case is developed for each of these ideas to support decision making and ensure that each project is in line with the company's overall objectives. This creates a dynamic and synergistic interaction between these key elements, paving the way for success.
The timing and interaction of these three elements is critical to a successful and forward-looking organisation. Understanding the differences and similarities between the business model, business plan and business case will enable project managers and entrepreneurs to use their resources efficiently, make informed decisions and realise the full potential of their business idea.