Business models are developed
by visualizing all of the "working parts" that make up a business. A traditional business plan, on the other
hand, is most often a formal, written document that provides details about how
an entrepreneur intends the business to operate.
Learning to develop a sound
business model helps ensure that everything that is critical to the success of
the business is in place and working in harmony.
Developing the business model
depends fundamentally on engaging real customers very early in the creation of
the business so we have a better chance of offering what the market really
One of the biggest benefits I
have seen from using business modeling over writing a traditional business plan
is that it allows for adaptation. We use
what we learn from the very beginning of the start-up to make changes in our
business model as we uncover who our customers really are, what they really
want, and how best to put everything in place to ensure that we deliver what we
promise to them.
This process is known as
"pivoting" the business model.