Start your business out on the right foot with a good business planning strategy
Thinking of starting a business? Discover the difference between a business model and a business plan. Taking steps to determine how you set up and execute your business ideas can help in the success of your new venture.
There are many types of business models that you could adopt. Some examples are:
- Retailer (brick and mortar or online)
- Social enterprise
- Subscription-based (setting up contracts for ongoing purchases)
- Freemium (offering something free but upgrades must be purchased)
These business models are just some of the different ways that you can set up your business to make a profit. What you need to define is how you're going to make a profit and which business model would be best suited to achieve this profitability. Here are some of the areas you will need to consider when drafting your business model:
- What products and services will you offer, at what price and to whom?
- Who will be your partners and suppliers?
- How will you supply your offerings to your customers?
- What are your costs
Using a business model tool can help you visualize and define your value proposition (how your product or service will meet the needs of your clients). Your business model may need to change over time as customer demands and expectations change.
Once you have determined how your business will become profitable, you can then add your business model to your business plan. The business plan provides an overview of the feasibility of your business and how you plan to implement your business model. The business plan may include:
- What your marketing strategy will be
- Who your competitors are
- What your financial projections look like
- Your plans for business operations and human resources
Having both a business model and business plan may help you explain to investors how your business will work as well as your strategy for the future of your business. Sample business plans and business model templates are available to help you make sure you are not overlooking any important areas when planning your business.