11. Business plan vs business model
Many people ask, "what's the difference between a business plan and a business model or system?"
A business plan is like a giant flashlight: it shows you the future and what's ahead of you (3-5 years).
A business system, on the other hand, is the car that allows you to move forward.
A plan doesn't have to deal with present reality, although it should tell you how to deal with future reality. A plan is only your best estimate as to what reality will be like, and it's a description of what you intend to do in that future reality.
A system deals with reality, and with the present.
A plan usually has a lot of assumptions; a system usually has no assumption. Every element that is part of the system has been tested in the real world.
Your car, for example, is a system. You absolutely need to know that everything works smoothly before you take the highway! If a part of your car wasn't reliable, then your life would be in danger -- and of course nobody wants to put their own lives in danger.
In business, there are also many dangers. This is why you need to have a system that you KNOW will work flawlessly -- especially the critical processes.
A business plan is like a giant flashlight: it shows you the future and what's ahead of you (3-5 years).
A business system, on the other hand, is the car that allows you to move forward.
A plan doesn't have to deal with present reality, although it should tell you how to deal with future reality. A plan is only your best estimate as to what reality will be like, and it's a description of what you intend to do in that future reality.
A system deals with reality, and with the present.
A plan usually has a lot of assumptions; a system usually has no assumption. Every element that is part of the system has been tested in the real world.
Your car, for example, is a system. You absolutely need to know that everything works smoothly before you take the highway! If a part of your car wasn't reliable, then your life would be in danger -- and of course nobody wants to put their own lives in danger.
In business, there are also many dangers. This is why you need to have a system that you KNOW will work flawlessly -- especially the critical processes.
posted by Super Peter at 10:38 PM
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