business canvas vs business plan

Business Plan vs. Business Model Canvas: What’s the Difference?

The main difference between Business Plan and Business Model Canvas is that a business plan is like a detailed story about your business, while a business model canvas is a simple visual chart.

Before we move to more differences, let’s first understand Business Plan and Business Model Canvas:

• Business Plan : A business plan is like a roadmap that shows how a business will work and grow. It includes goals, strategies, and how money will be used.
• Business Model Canvas : A business model canvas is a simple chart that shows how a business creates, delivers, and captures value. It helps understand how all the pieces of a business fit together.

Now, let’s get to Business Plan vs Business Model Canvas:

Major differences between Business Plan and Business Model Canvas

So, these are the main differences between the entities.

• Budgeting vs. Financial Planning
• Brief vs. Debrief
• Branding vs. Marketing

You can see other “differences between…” posts by clicking here .

If you have a related query, kindly feel free to let me know in the comments below.

Business Plan vs Business Model Canvas Explained

6 min. read

Updated May 10, 2024

It might be stating the obvious, but planning and preparation are keys to success in business.

After all, entrepreneurs put in hard work to develop their product, understand the market they plan to serve, assess their competitive landscape and funding needs, and much more.

Successful business owners also take time to document their strategies for guiding the growth of their companies. They use these strategies to take advantage of new opportunities and pivot away from threats.

Two common frameworks for documenting strategies – the business model canvas and the business plan – are also among the easiest to get confused.

Though they can complement each other, a business model canvas and a business plan are different in ways worth understanding for any entrepreneur who’s refining their business concept and strategy.

Let’s start by digging deeper into what a business model canvas is. 

• What is a business model canvas?

You may have heard the term “business model” before. Every company has one. 

Your business model is just a description of how your business will generate revenue. In other words, it’s a snapshot of the ways your business will be profitable.

Writing a business plan is one way of explaining a company’s business model. The business model canvas takes a different approach.

A business model canvas is a one-page template that explains your business model and provides an overview of your:

• Relationships with key partners
• Financial structure
• And more…

While the business model is a statement of fact, the business model canvas is a strategic process—a method for either documenting or determining your business model.

It’s meant to be quickly and easily updated as a business better understands what it needs to be successful over time. This makes it especially useful for startups and newer businesses that are still trying to determine their business model.

You can think of a business model canvas as a condensed, summarized, and simplified version of a business plan. It’s a great way to quickly document an idea and get started on the planning process.

The business plan is a way to expand on the ideas from the canvas and flesh out more details on strategy and implementation.

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Components of a Business Model Canvas

The simplest way to think about your business model canvas is to map it out visually. A business model canvas covers nine key areas:

• Value proposition : A company’s unique offering in the market and why it will be successful.
• Key activities: The actions that a company takes to achieve its value proposition.
• Customer segments : The types of people or businesses that are likely to want a company’s products or services.
• Channels : How a company reaches customers through marketing and distribution efforts.
• Customer relationships: How a company interacts with customers and maintains important relationships.
• Revenue streams: The ways in which a company makes money.
• Key resources: The assets such as property, equipment and staffing that a company needs to perform its key activities.
• Key partners: The relationships with suppliers, vendors, customers and other stakeholders a company must maintain in order to be successful.
• Cost structure: The major drivers of company expenses that will need to be tracked and managed.

[Want an even simpler alternative? Try downloading our free one-page plan template and start building your plan in less than 30 minutes.]

To get a better sense of how a business model canvas documents business strategy, consider a company like Netflix. The streaming company’s business model is based on generating subscription revenue through its content library and exclusive content.

If Netflix executives were to create a business model canvas, it would map out how the company leverages key resources, partnerships, and activities to achieve its value proposition and drive profitability. The business model is the destination.

The great thing about a business model canvas is that you can quickly document business ideas and see how a business might work at a high level. As you do more research, you’ll quickly refine your canvas until you have a business idea you think will work.

From there, you expand into a full business plan.

• What is a business plan?

If a business model canvas captures what a company looks like when it’s operating successfully, then a business plan is a more detailed version along with a company’s blueprint for getting there.

Think of your business plan as a process of laying out your goals and your strategies for achieving them.

The business plan is more detailed, and changes over time. It examines each aspect of your business, from operations to marketing and financials.

The plan often includes forward-looking forecasts of a company’s projected financial performance. These are always educated guesses. But these forecasts can also be used as a management tool for any growing business.

Comparing actual results to the forecast can be a valuable reality check, telling a business if they’re on track to meet their goals or if they need to adjust their plan.

A business plan is also a must for companies hoping to receive a bank loan , SBA loan , or other form of outside investment . Anyone putting up funds to help you grow will want to see you’ve done your homework.

So a business plan is how you not only prepare yourself, but also show your audience that you’re prepared.

Components of a business plan

While there are several different types of business plans meant for different uses, well-written plans will cover these common areas:

• Executive summary : A brief (1-2 pages) overview of your business.
• Products and services : Detailed descriptions of what you’re selling and how it fills a need in the market.
• Market analysis : Assessing the size of your market, and information about your customers such as demographics (age, income level) and psychographics (interests, values).
• Competitive analysis : Documenting existing businesses and solutions your target customers are finding in the market.
• Marketing and sales plan : Your strategies for positioning your product or service in the market, and developing a customer base.  
• Operations plan : Describing how you will run the business from day to day, including how you will manage inventory, equipment, and staff.
• Organization and management team: Detailing the legal structure of the business, as well as key members, their backgrounds and qualifications.
• Financial Plans : Business financials that measure a company’s performance and health, including profit & loss statements, cash flow statements and balance sheets. Effective financial plans also include forward-looking sales forecasts and expense budgets.

How a business plan and business model canvas inform business strategy

Avoid the trap of using the two terms interchangeably. As we’ve shown, the two have different focuses and purposes. 

The business model canvas (or our one-page plan template ) is a great starting point for mapping out your initial strategy. Both are easy to iterate on as you test ideas and determine what’s feasible.

Once you have a clearer sense of your idea, you can expand the canvas or one-page plan into a business plan that digs into details like your operations plan, marketing strategy, and financial forecast.

When you understand how – and when – to use each, you can speed up the entire planning process. That’s because the business model canvas lays out the foundation of your venture’s feasibility and potential, while the business plan provides a roadmap for getting there.

The work of business planning is about connecting the dots between the potential and the process.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• How both inform your strategy

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Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

• The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
• The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
• The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
• The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
• The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
• It’s easier to edit and can be easily shared with employees and stakeholders.
• The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
• The business model canvas can be used by large corporations and startups with just a few employees.
• The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
• You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
• The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
• A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

There are different customer segments a business model can target and they are;

• Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
• Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
• Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
• Diversified: A diversified market segment includes customers with very different needs.
• Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

• Personal assistance: you interact with the customer in person or by email, through phone call or other means.
• Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
• Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
• Automated services: this includes automated processes or machinery that helps customers perform services themselves.
• Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
• Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

• Owned channels: company website, social media sites, in-house sales, etc.
• Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

• Transaction-based revenue: made from customers who make a one-time payment
• Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

• Asset sales: by selling the rights of ownership for a product to a buyer
• Usage fee: by charging the customer for the use of its product or service
• Subscription fee: by charging the customer for using its product regularly and consistently
• Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
• Licensing: customer pays to get permission to use the company’s intellectual property
• Brokerage fees: revenue generated by acting as an intermediary between two or more parties
• Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

• Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
• Problem-solving: finding new solutions to individual problems faced by customers.
• Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

• Human (employees)
• Financial (cash, lines of credit, etc.)
• Intellectual (brand, patents, IP, copyright)
• Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

• Strategic alliance: partnership between non-competitors
• Coopetition: strategic partnership between partners
• Joint ventures: partners developing a new business
• Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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FAQs About the Business Model Canvas

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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A Better Way to Think About Your Business Model

• Alexander Osterwalder

How Nespresso used a simple business model canvas to change face of the coffee industry.

The business model canvas — as opposed to the traditional, intricate business plan — helps organizations conduct structured, tangible, and strategic conversations around new businesses or existing ones. Leading global companies like GE, P&G, and Nestlé use the canvas to manage strategy or create new growth engines, while start-ups use it in their search for the right business model. The canvas’s main objective is to help companies move beyond product-centric thinking and towards business model thinking.

• Alexander Osterwalder is cofounder of Strategyzer.com , a company that builds practical tools for business strategy and innovation. Together with Yves Pigneur, he invented the Business Model Canvas and co-authored the international bestsellers  Business Model Generation  and  Value Proposition Design .

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Business Model vs Business Plan What’s the Difference?

Free Business Model Canvas Template

• January 2, 2024

The idea of starting a business comes easier than actually starting a business, isn’t it? Business plan, business model, marketing, and whatnot.

Are you confused between a business plan and a business model? Worry not many entrepreneurs started with just an idea without knowing anything about business terminologies.

Business plans and business models are sometimes mistakenly interchanged. Although they sound similar, they are not the same. Let’s see what they mean, their differences, and their types.

Here are the points we are going to go through:

• What Is A Business Model
• What Is A Business Plan

Types Of Business Models

Types of business plans, what is a business model.

A business model  is a mechanism that directs how you create, deliver, and attain value in the market; it’s the profit-generating plan of your company. Simply put, it’s how you sell your product to make money.

• Defining your offerings
• Identifying and describing your target audience
• Stating your sales strategy
• Predicting expenses along the way

Don’t find customers for your products, find products for your customers. – Seth Godin

What Is A Business Plan?

A business plan is a document that outlines your entire business operations. From product launches to setting milestones to planning an exit strategy, it includes every step of your business journey. It says what a company does, its vision and goals, and its strategies to achieve them.

• Executive summary
• Company Overview
• Mission statement
• Vision statement
• Problem statement
• Products and services
• Market analysis
• Customers analysis
• Competitors analysis
• SWOT analysis
• Marketing and sales plan
• Operations plan
• Financial plan

There are online business plan tools that help you to write business plans in a standardized format which helps the whole business ecosystem to understand the business.

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• Business Model: Your business model focuses on optimizing the internal and external operations of your company to earn maximum profits. It explains your relationship with dealers, distributors, service partners, customers, and target audience.
• Business Plan: Conversely, your business plan focuses on how you set goals , create strategies, make predictions, and manage labor to sustain and scale your business . It also outlines your relationship with your customers, competitors, industry, and the market.

Adopting The Right Business Model(s) Helps You:

• Gain A Competitive Edge: Incorporating a unique business model amazes your audience and attract them to be your first-time customer. It also provides you with a competitive edge over other companies in your industry.
• Ensure Sustainability And Scalability: A business model pushes an entrepreneur to have monthly updates and what exactly your next month should look like. Most businesses get close due to poor financial management, which is why a business model is required. From economic storms to any unexpected difficulties, a business model ensures both sustainability and scalability.
• Inspires Trust In Investors: Investors know what is the failure rate of any small business , which is why incorporating a business model will give a sense of security. They will also know that you have a strategy and what is your profitability expectations from the upcoming years.

Writing A Great Business Plan Helps You:

Test the viability of your business idea:

A business plan defines the target audience and their willingness to pay for your product or service. This way your business idea will get the validation of whether to go ahead with it or not.

If you have no idea about how to write a business plan , worry not, Upmetrics – the business planning software is here to the rescue!

Acquire Funding:

If you want funds from banks, investors, or other parties, then you will require proper financial goals, plans, and projections. So, an ideal business plan will help you out with impressing investors.

Plan For Exit:

The business plan includes strategies and a timeline to accomplish any task, which helps in planning the exit of your business too. While handing over your business or closing it directly, meeting the financial goals is also important, which are very specific in the business plan.

Some of the other advantages of writing an ideal business plan are:

• Identify market gaps and threats
• Organize and plan business processes
• Forecast financial estimates and market trends
• Create strategies to achieve objectives

While Adopting A Business Model, You:

First, consider the scalability of your business, then measure the value you offer. List down your competitors, segment your customers, see the market potential, and then choose a business model.

Here are other points to consider:

• Aim to receive validation from prospective customers
• Modify assumptions to match customer preferences
• Focus on the current financial position

While Creating A Business Plan, You:

Answer a few questions first like where you think your business will be in 10–15 years, what is your expected income, or what are your projections.

• Aim to find factual information through research
• Support assumptions through data from customer analysis
• Focus on the current and future financial position

How many business models there can be since new models are created all the time? Here are some of the most recognizable business models:

• Brick-and-mortar
• Bricks-and-clicks
• Razor and blade
• Subscription
• Advertising

If you feel none of the above business models suits your vision, you can build a custom business model for your company via business planning software.

As your business grows, it is advisable to modify your business model to accommodate the changes in the economy, customer buying behavior, industry trend, etc.

Nine Key Elements

• Customer Segments: Who are you selling your product to? Identify the top three revenue-generating segments in the market.
• Value Proportion: How are you solving your customer’s problems? Describe the product or service you are offering.
• Revenue Streams: How do you receive payments for your offerings? Think advertisements, direct sales of products, etc. List your top three revenue streams.
• Channels: How do you reach your customers and sell your offerings? Think stores, wholesalers, door delivery, etc.
• Customer Relationships: How do you communicate with your customers? How do you offer support? Think self-service, personal assistance, telephonic support, etc.
• Key Activities: What are your daily business activities? State the activities that are vital for operating your business.
• Key Resources: What do you need to run your business? List all the physical, financial, intellectual, and human resources you need. For instance, a SaaS company needs human expertise, equipment, etc.
• Key Partners: Who are your business partners ? What are their responsibilities? What are the only activities they can do?
• Cost Structure: What are your key costs? Considering your activities and resources, list your important expenses. Do you follow a cost-driven structure or a value-driven one?

• Traditional business plan : This is a detailed 40-page business plan. It is ideal if you want to record all your business activities without leaving anything up for assumption.
• Lean business plan: A lean business plan is half the size of a traditional business plan and is common among most modern-day businesses.
• SBA business plan: SBA business plan This is a specific business plan that banks and investors require you to submit if you are looking for funding.
• Startup business plan: A startup business plan includes all the steps you need to take before and during establishing your startup.

Planning To Grow Your Business?

Although some functions of a business model and a business plan do overlap, you cannot replace one with another. Both focus on different outcomes and are must-haves in your business arsenal.

Planning to run a company requires you to use online business plan tools to maximize your chances of success. Try Upmetrics for your business, and join 110K entrepreneurs who trusted us.

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About the Author

Riya Shah is a skilled content writer experienced in various areas of writing, currently working with Upmetrics. Fascination with reading led her to be a writer. Highly creative, focused, imaginative, and passionate. Read more

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Business Model Vs Business Plan: What’s The Difference

Sculpting success in the realm of commerce hinges on two critical blueprints:  the business model and the business plan . As if peering through a dual-lens, one unveils the anatomy of value creation, while the other charts a course for achieving it. This isn’t about mere documents; it’s the lifeblood of strategic foresight and operational vision.

Here’s the crux: although they waltz together in strategic symbiosis, these entities each spin a unique narrative of your venture’s voyage. One sketches the architecture of your enterprise, laying bare the revenue streams and value proposition.

The other, a meticulous roadmap, presents meticulous market analysis, financial projections, and the operational plan set to navigate the turbulent tides of commerce.

By journey’s end, you’ll not just differentiate between the two but harness their combined power.

Delve into concepts like competitive advantage, customer segmentation, and scalability. Decode the mesmerizing narrative behind a robust strategic planning foundation. Sales forecasting, funding requirements, investor pitch decks.

The differences between business model vs business plan

The business model is the foundation of a company, while the business plan is the structure. So, a business model is the main idea of the business together with the description of how it is working.

The business plan goes into detail to show how this idea could work. A business model can also be considered the mechanism that a company has to generate profits. At the same time, the business plan also does its part in being the way a company can present its strategy. It is also used to show the financial performance that is expected for the near future.

Comparing how business models and business plans work to help you in different ways is important. A business model can help you be sure that the company is making money. It helps to identify services that customers value. It also shows the reciprocation of funds for the activity that a business renders to its customers.

Any business can have different ways of generating income, but the goals of the business model should aim to simplify the money process. It does this by focusing on the large income generators.

So, we now understood that a basic business model is a gateway to show how an organization is functioning. A business plan is a document that shows the strategy of an organization together with the expected performance details.

We can find the details of a company when we check its business plan. What it does is offer more info about the business model. It does this by explaining the teams needed to meet the demand of the business model. It explains the equipment needed, as well as resources that need to be obtained to start creating. Explaining the marketing goals , and how the business is going to attract and retain more customers over the competition , will be part of the model.

Another interesting thing when it comes to comparing business models and business plans is that they cannot function without each other. Just remember this, the business model is going to be the center of the business plan.

Business plan

When comparing using a business model versus a business plan, we also need to understand each one better to draw some final conclusions. One of the first goals of a company could be to define its business model.

The business plan is going to be the detailed part that includes all the information and steps like Mayple’s marketing plan template, organization, products or services, sales plan, business proposal for investors , and so on. Some useful questions that you can use when developing your business plan are:

• What do we have now?
• What do we want to have in the future?
• What do we need in order to be there?

Business Model

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Business Plan vs Business Model Canvas

• Paul Foster
• April 29, 2013

Why do most business owners create a business plan?   The vast majority reluctantly prepare one as a requirement to get financing.

Is a business plan a good management tool?   I don’t think so.

I will agree that preparing a business plan can help a business owner think strategically about their business. A business plan will also provide some structure as it requires a business owner to document their current assumptions and guesses about the future of their business.

Compared to ‘doing nothing’, the business plan process is valuable.  But I think the Business Model Canvas developed by Alexander Osterwalder is an option worthy of consideration for existing small business owners. The Business Model Canvas was developed to be used in conjunction with the Lean Startup methods that are described very well in Steve Blank’s Harvard Business Review article I mentioned last week.

Here are the reasons why I think the Business Model Canvas is a better fit for existing small business owners rather than a business plan:

1)     It’s more visual – Most business owners I know think visually. Planning their strategy seems to work better moving sticky notes around a wall than writing out a ten page document.

2)     It’s more dynamic – The business plan is a static document, but the business model canvas evolves as the business owner experiences the world around them.

3)     It’s about actions as well as thinking – The activity of ‘validating’ the static guesses is more about actions and experiences than just thinking. While thinking is important, I find the following statement to be more applicable: “You can’t think your way into a new way of acting, but you can act your way into a new way of thinking.” The experiential learning obtained from ‘getting out of the building’ and validating assumptions is key.

4)     It’s about key activities more than results – A business plan usually includes a projected income statement.  Income Statements report the results after the activity of business takes place.  Business owners need to focus on activities in order to get better results.

Since the Business Model Canvas is not a common tool in the business owners’ toolbox, you probably haven’t seen one in action.  It’s a pretty good guess that your business plan hasn’t seen much action lately either!  My guess is that a more visual, more dynamic, more action focused and more activity driven tool would be valuable to business owners.

In true Lean Startup fashion, as of today, I am accepting that my above statement is just a guess or hypothesis only in my mind. Now should I write that statement down into my business plan and file it away or should I go out and validate my hypothesis with some real small business owner customers?

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How to Build a Product Roadmap Based on a Business Model Canvas

Could you list all of the key building blocks you need to develop, manage, maintain, market, and sell a product on a single sheet of paper? With the business model canvas, you can! Using the business model canvas approach is a great way to force yourself to focus on the most strategically important elements of your product. As the name suggests, the typical use case for this tool is to outline the fundamental building blocks of a business, but it also can work really well for a product.

Today we’ll show you how the business model canvas works and how you can use it to come up with a high-level product strategy.

What is a Business Model Canvas?

As you can see from the sample example below (thanks, Strategyzer.com), a business model canvas is a one-page summary describing the high-level strategic details needed to get a business (or product) successfully to market.

The categories or buckets contained in a canvas can be customized. But most will look similar to the one here—covering such key areas as:

• The product’s value propositions (what it does and promises)
• Customer segments (who it’s for)
• Key activities (the steps the team must complete to make it successful)
• Key resources (what personnel, tools, and budget the team will have access to)
• Channels (how the organization will market and sell it)
• Customer relationships (how the team will support and work with its customer base)
• Key partners (how third parties will fit into the plan)
• Cost structure (what it costs to build the product as well as how to sell and support it)
• Revenue streams (how the product will make money)

If you think about it, that’s a fairly comprehensive set of building blocks you’ll need to think through for your product before you begin developing it. There will certainly be additional factors that’ll affect your strategy, but if you can fill in these high-level details—which, as you can see, should fit comfortably on a single page—you’ll have a useful strategic guide for developing your product roadmap.

Why Should I Use a Business Model Canvas to Develop a Product Roadmap?

Okay, but why? What’s the benefit of building a business model canvas (or the, even more, stripped-down variation, the lean canvas) to guide my product roadmap ?

There are plenty of reasons. But simply put, you can think of a business model canvas as a mission statement for your product roadmap. It’s a handy reference you can refer to, to make sure your roadmap always reflects all the strategic elements needed for your product’s success.

Tweet This: “Think of a business model canvas as a mission statement for your product roadmap.”

Our co-founder Jim Semick has a couple of great short videos explaining the business model canvas concept, which you can check out in the player below.

As Jim explains, here are a few of the benefits of using a business model canvas to think through product strategies:

1. You can use a business model canvas to roadmap quickly.

You can use this canvas approach in just a few hours (and as Jim says, you can even do it with sticky-notes).

This way, rather than trying to write out every detail about your product plan beforehand, you can just document the highlights—and then you can get rolling translating the canvas into your product roadmap.

2. A business model canvas will be more agile.

One problem with the old structure of documenting a business model—the traditional business plan—was that it was almost always inaccurate as soon as the author finished drafting it.

These meaty plans included detailed cost estimates, revenue projections going years into the future, and long-term plans for growing the staff. How could any of that remain accurate for long?

In product terms, you can think of the business plan as resembling an MRD (Market Requirements Document). It’s long, detailed, and probably mostly untrue by the time it’s done.

But because you can put a canvas together so quickly, it will much more accurately reflect your strategic thinking and your company’s current reality. And if things change, it’ll be easier than a long and detailed plan to adjust. This brings us to Jim’s third benefit…

3. Business model canvas roadmaps allow you to pivot as needed.

If you build a business model canvas to guide your business roadmap , and something happens that forces you to re-prioritize or pivot your product , it will be a lot easier to update this short, high-level document than it would be if you had some monster MRD or business plan to tear apart and edit.

With a one-page business model canvas acting as the strategic undergirding for your roadmap, you’ll always be able to quickly spot any items or plans that need updating whenever priorities change or new realities demand that you adjust your approach.

How Can I Use A Business Model Canvas to Guide My Product Roadmap?

The alexa example.

Let’s talk through a hypothetical example, using Amazon’s Echo device (“Alexa”) as our guide.

Imagine that as they were talking through what belonged in the “Revenue Streams” bucket of the business model canvas, Amazon’s Echo team came up with three sources of revenue to start with:

1) Selling Echo devices.

2) Using the device to sell other stuff as customers ask it to connect to the Amazon marketplace. (“Alexa, please add laundry detergent pods to my shopping cart.”)

3) Licensing Echo’s proprietary speech-recognition technology to other businesses.

Now, if the Echo product team put these on their business model canvas, they’d know that they need to make room for budget, time, and resources on their product roadmap for all of these revenue streams.

Another Hypothetical Example of the Business Model Canvas: Channels

Or think about the Channels bucket in the business model canvas. If your team was building out a canvas, maybe you’d have several ideas for reaching customers:

1) The in-house sales team. 2) Affiliate partners. 3) Word-of-mouth advertising from users.

It’s easy to write. But how are you going to translate that “word-of-mouth” strategy into an actual plan?

Maybe you’ll need to budget time and resources for developing things right into your product that make it easier for users to share their experiences with friends, such as a handy tool to help them tweet about it. Maybe you’ll even want to include an “Invite a friend” feature that lets users easier send a trial license to friends, or a couponing feature that offers some reward to a user who brings in two more users.

The point is, your business model canvas can serve as a great strategic reminder of the things you’ve determined are important enough to make it onto your product roadmap .

So you can always look back and see immediately—it’s just one page, after all—if you’re still working on all of the essential elements of your product, or if you’ve inadvertently strayed from them and gotten lost in the wrong details.

That’s why we’re big proponents of the business model canvas approach to guiding your product roadmap .

Do you have an opinion about using the business model canvas approach for developing and documenting your product’s strategy? Feel free to share them in the comments section.

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Business plan, case, model, or canvas?

While related, business plans, business cases, business models, and business model canvases are very different things that serve different purposes. What to use when?

Let me first explain what is what.

A business plan

A business plan is a detailed description of how you plan to start and grow your business. Typically it is a plan for a time period of 1 to 3 years. It details what the organization plans to do. That is, what the cost structure will be, the expected revenues, and how you will go about the execution. As you can imagine, writing such a plan requires a lot of data. Data often does not exist when the service is novel or when you are just starting the innovation journey for a new offering. Nevertheless, most investors ask for a business model before they are willing to invest in a start-up. For some useful dos and don’ts, including templates, go here .

A business case

A business case explains why it is worth exploring an opportunity. It is the justification for a proposed project. Making the case why spending money figuring out how to address a problem or going after an opportunity makes sense. This terminology is more used in project management than entrepreneurship. In sum, it explains why the organization should fund the adventure. Our hands-on approach will help you create a business case for your project in just a few weeks. More than you want to know about writing a business case can be found here .

A Business model

A business model explains how a new service or company is going to generate revenues and serve its customers. There are various standard models, such as a fee-for-service, razor-blade, or subscription models, see here for nine commonly used models .  Combinations of these models are of course possible too. Please beware that the business model is not cast in stone. It takes most start-ups about two years, to figure out which business model works best for them.

A business model canvas

A business model canvas is an abbreviated one-page overview that provides a snapshot picture of a start-up. It sketches who the start-up targets as clients. What the benefits are of the provided solution. How customers will be reached etc. All these topics are subject to change in the early phases of a start-up. Therefore, the canvas is meant as a snapshot. A picture that requires periodic if not constant updating. More on the business model canvas, including templates, can be found on Strategyzer.com .

Throwing business plans out of the window?

In the entrepreneurship community, business plans are no longer in vogue, because most start-ups lack the data to write an accurate and truthful plan. Instead, entrepreneurs are now using the business model canvas, especially in the early stages of their start-up. The canvas is part of the lean start-up methodology . Following this methodology, a start-up is a series of experiments to collect data and figure out what actually works. The business model canvas helps to ensure these experiments are aligned. It also ensures all the necessary components that will be needed to run the business are being addressed.

What about organizations, should they abandon the business plan too?

Not so fast I would say. Companies have a huge advantage over start-ups. They have experience. Many of the innovation projects a company undertakes are variations on a theme. If that is the case for your project, new product, or new service, you should dig up the data on these previous projects and undertakings. Those experiences provide useful information that will help you plan the future and write your business plan. After all, if the data is there, you should use it to learn valuable lessons from the past. Stand on the shoulders of giants if you can!

However, if the project entails venturing into novel territory, then it will be a waste of time to write a business plan. You will lack the data necessary to make meaningful projections about the future.

The business model canvas is most suited to address changes and uncertainties, however, it does not provide sufficient information to get approval for your project.

While helpful at the start, the business model canvas or variations made for organizations alone will be insufficient. Most organizations require you to create a business case, as a justification, before an investment can be made in your innovation project.

Planning for the future

In sum, whether it is a case, plan or canvas, all these templates enable teams to plan for the future. They describe why it is worth the time and effort to explore an opportunity, how (new) clients will be served, and what it will take to get there. The more data you have, the more elaborate and detailed you can – and should- make your plans. If you have data from similar experiences in the past - or if you have sufficient data on your present endeavor - that you can use to extrapolate and project the future, write a business plan. A plan that not only justifies your project but also provides targets for the execution.

If you don’t have such data, start with a light version. Use the business model canvas to start collecting necessary data. If you wonder how, consider signing up for one of our support plans .

A final note

Whether you ask - or are asked- to create a canvas, write a case, or draft a business plan, you need the knowledge and tools to do so. While not overly complex, there are dos and don'ts that can save your project or business from failure. Many professionals - physicians, lawyers, and engineers - are trained to practice your trade, not in the business aspects of your profession. Creating a business case provides an excellent opportunity to get engaged in the business side of your organization.

Getting your project set up properly will save you a lot of time and money down the road, in the execution of your project.

Creating a business case can be a challenge if you have to Google your way through on your own. I have seen many innovators wasting a lot of their valuable time trying to figure out what template to use, what information to add, and where to find the relevant data. Consider signing up for one of our support plans,   if you want to get results 3x faster and with a 5x higher chance of success.

Related blogs:

• Prioritizing in uncertain times
• Business Model Innovation
• How to differentiate between good and superior business case proposals?
• It takes more than a business case to get your innovation project approved

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A complete Guide on Business Model vs Business Plan

• August 19, 2020
• Entrepreneurship Venture Capital Funding

Introduction

Business Model and Business plan are interrelated to each other. Lets see a brief difference between business model vs business plan. Business Model acts as a centre for the business plan .

A business model is a framework used to design and depicts how a business might create and capture value. The business plan is a document explaining how a business might become profitable.

A business model is made to be tested while a business plan’s primary goal is to gain investments. If I talk about stages, designing a business model comes first, then we create a plan.

This plan describes strategies involved to build the business and match the plan with the business model.

In this blog, I will start with the difference then some key considerations involving why we should opt, how to write, and some examples of business models and business plans.

We would also be covering components of the business model that can be used while designing a business model canvas. The business model canvas is a tool which helps you to understand a business model in a clear and structured way.

What are the main differences between the business model and the business plan?

Most entrepreneurs start with a strong vision to work on a perfect ideal plan. Instead of chasing an ideal plan, begin with a written description. This description should include who you are, what your ideas are, and why you are in that particular business.

Let’s take an example: If you are selling jewellery online, e-commerce is your business model. Your business plan is to sell jewellery.

Business Plans can be long and time-consuming. So, we need to format the plan properly. A business plan is a document containing detailed future projections such as tactics, goals to cover.

Business Models are structured proposals of a business containing an outline that is easy and less time-consuming. A one-page business model explains how an organization is working with the main idea.

This makes a business model fast, concise, and portable. I will discuss the critical difference from two perspectives:

• External resources including stakeholders, investors, and other parties
• Internal resources including top management, owners, and shareholders

External Resources: Business model vs Business Plan?

If you want to attract investors and grow your business through external resources, a detailed plan is needed. This allows investors to understand the several parts of your business.

If I talk about the main ingredient of a business plan is a set of projections for three-five years. The interests of investors depend on whether your business model is scalable or not.

While investors will also want to know what kind of business model you want to build. The main idea is to show your business future projections and to address the kind of resources needed to get there through a business plan.

So, for external subjects to know about your business and invest in it, the business plan is the best tool.

Internal Resources: Business plan vs Business model?

To understand your business, a business model is one of the most effective. For instance, in a start-up phase, the business model canvas and the lean startup canvas are the most suited.

Each of those tools will help you to build a different kind of business. If you want to understand or design a business model that can help you grow, the business model frameworks are the most suited, vs business plan.

According to   Alan Gleeson , who is the General Manager of Palo Alto Software, Ltd recently answered the difference between business model & business plan in a guest post on TechCrunch : –

“It is worth clarifying the business model vs business plan. A business plan details the business opportunity in a document whereas a business model represents a one-page visual representation or a simple verbal description”.

So if you are a technology-based startup who is looking to raise venture capital, then your business plan should focus on the Venture Capital with a PowerPoint slide deck and an executive summary.

However, if you are a coffee shop looking for a modest investment then the information should include a simple business plan.

Modern business planning is agile, flexible, concise, and more about goal setting than bound physical documents.

This planning process brings numerous benefits for the entrepreneur, such as an ability to look at the operations, to ensure internal focus and cash flow management.

• Business Model Canvas vs Business Plan

Business Model Canvas and Business Plans are useful for an organization to grow. It depends on which stage of the project your company is working in.

Let us discuss the difference between the two and when they should be prepared for the growth of the business.

Business Model Canvas and Business Plan serve a very different purpose. If you are still checking and testing out different ways to roll out your business, BMC is the right place to start.

But, if you are looking for a loan from a bank or an investment for your business, a BMC is inadequate. Rather you should have a business plan. Business Model Canvas helps you, the founder, to figure out the business model and design it accordingly.

Business Plan is for an external stakeholder to analyze your business. The Business Model Canvas functions as a guide. It helps in quick communication between the owners of the business and its stakeholders.

So, let’s take an example of a startup business to understand it clearly. In the startup world, everything is highly changeable. Your business model or target audience can be changed in a month after you started.

And, can you imagine, you spent 3-5 weeks to write a full Business Plan & now you need to rewrite it again because some of the core points have changed? So, for a Startup business model canvas is highly preferred.

If you’re working on a project for more than one year and you’re thinking of asking for funding to an investor, you should work hard to write a great business plan, including an investor pitch.

• Business Model
• Purpose of Business Model

Business Models are necessary for the smooth functioning of every organization. They help in maintaining a close relationship with the customer.

Business Models focus on customer feedback that includes the problems and needs of the customers once the product or service is distributed to them.

How to write a Business Model?

A good Business Model describes the marketing, operations, and distribution strategies of a company. It also includes the analysis of the organizational structure and amending them to sustain a competitive edge.

1. Operational Outline- Design a pictorial view of business operations on a flip chart with circles and labels.

Define the interrelation between them to promote sales, distribute products, target customers, and revenue generation for your team as shown below.

2. Formatting Business Model – Format your business model on a template. You can include the details about different types of customers and how your products and services are valuable to them.

Prepare the total cost incurred for production, employees, and material. Further, prepare a  list of suppliers and partners involved in your business.

3. Operational Business Model – Adopt the “Bricks and Mortar” Business Model to attract local customers who want to choose the products and services provided by your store.

If the customers are from different geographical regions, then target the audience through the Internet. Also, plan to utilize company resources and maintain business profits. Focus on getting new customers and potential risks or threats to the business.

4. Additional Add up Values – Recognize the different methods for serving your customers with products and services. Maintain customer relations based on various segments and target potential customers.

Business Model Example

Let us discuss the different Business Model Examples in different segments.

1. Advertising- Advertising model includes content creation and displaying it in the visual form of advertisement to the readers and viewers. Examples are YouTube, New York Times.

2. Affiliate- Affiliate model uses links embedded in the content through the internet. Examples are TopTenReviews.com, TheWireCutter.com.

3. Brokerage- Brokerage models are mainly used by real estate agencies that involve brokerage transaction fees levied either to the buyer or seller or both by the brokers. Examples are century 21, Orbitz.

4. Crowd sourcing- A large number of people are contributing content for your site in exchange for access to other content. Examples are YouTube, Dell.

5. Freemium- Freemium provides free primary services and charges for premium services. Examples are LinkedIn, Mail chimp.

6. Franchise- Franchise is selling a methodology for starting and running a business. Examples are McDonald’s, Allstate.

Check Your Business Worth And Get The Highest Price For Your Business

Components of business model  canvas.

There are different components and elements of a business model. These are known as the main building blocks of a business which provides information regarding customers, finance, infrastructure & offers related to business.

1. Customer Segments- It defines the customer according to the segment based on the products and services offered to them.

2. Value Propositions- These add up the value to the products and services offered to the customer based on their performance, brand status, design, costing, accessibility, and newness.

3. Distribution Channels – They act as a medium between the customer and the organization. A quick, easy, and the most efficient channel is always for the distribution of products and services.

4. Customer Relationships- It helps in maintaining customer relationships according to segments to achieve financial success and stability.

5. Revenue Streams – This strategy provides a way in which a company can engage its customers to buy its products and services.

6. Key Resources- Key resources such as human, financial, intellectual, and physical provide value to the customers.

7. Key Activities – Relevant Key activities are necessary for every business as they help in maintaining revenue streams to make an efficient business model.

8. Partnerships- Partnerships with high-quality suppliers and partners reduce the risks to maintain efficient and streamlined operations.

9. Cost Structure – Cost structure is the total cost that will be incurred for the establishment of a particular business.

Business Model Canvas  

Business Model Canvas is a pictorial representation that provides a brief idea about your proposed business. They also include a visualizing description of business models and their values.

Business Model Canvas comprises all business components such as customer segments, value proposition, revenue streams, channels, Customer relationships, Key resources and activities, Partners, and Structure of Cost.

Business Plan

Purpose of the business plan.

The main purpose of a business plan is to focus on achieving business goals, secure outside financing, mapping growth, and including the right talent for the organization.

It acts as a blueprint for expanding and running a business in the right direction at every step. It also prepares for the future with clarity about the goals and achievements.

Every company should adopt a business plan as it acts as a decision-making tool by formatting the business goals and its intended audience.

How to write a business plan?  

Business Plan provides a road map for the growth and success of every business. It also helps to find investors and business partners. It  includes some components as

1. Executive Summary- It is the brief of the business plan that includes mission and statement, primary information, products and services, location, and employees.

2. Company Description- This includes detailed information about a company such as customers, business problems, nature of products, and services catered.

3. Market Analysis- It helps in understanding the target market, its trends, the potential for growth in the existing market.

4. Organization and Management- This depicts the organizational chart with vision and mission regarding the department and functioning of the company.

5. Marketing and Sales- Marketing involves different marketing strategies required in the business while the sales are responsible for covering the return on investments.

6. Funding Requests- Funding requests can be online or in a substantial manner.

7. Appendix and Glossary- Every business should provide appendix and glossary for the supporting documents and references to the data.

• Business Plan Examples

Let us discuss some business plan examples in the different sections of the business.

• Construction and Engineering
• Travel and Transport sector
• Hotels and Hospitality
• Children’s Education
• Computers and the Internet
• Consulting, Health, and Beauty
• Food and Farming, Medical and Healthcare
• Personal Services, Non-Profit Organizations
• Manufacturing and Online business.

For instance, let us consider a business plan for the Manufacturing sector. The manufacturing is mainly adopted by the companies who want to start new manufacturing, production, or fabrication business.

This plan helps in knowing the business profile and description, detailed investor information, risk factors involved. It also includes products, and services to be used, market research, sales and marketing strategies, operations, and financial analysis.

Types of Business Plan  

There are various business plans adopted by organizations depending on their nature of business.

1. Startup Business Plan- It is for the enterprises that want to start their business. This mainly includes market evaluations, products and services provided, financial analysis, and projected management team.

2. Internal Business Plan- These plans describe the operational costs and profitability, the company’s actual position, marketing, hiring, and technical costs.

3. Strategic Business Plan- This plan includes the company’s goals in the form of implementation schedule, objectives, and critical success factors and how to achieve them.

4. Feasibility Business Plan- It consists of the description of products and services, required capital, and target demographics.

5. Operations Business Plan- They are part of internal plans that include the company’s main operations with employee responsibilities.

6. Growth Business Plan- This plan provides an in-depth description of the proposed growth plan and investment for its potential investors.

So, the difference between a Business Model and a Business Plan is that they are both parts of an effective Strategic Planning process. A business model is all about VALUE!

What value are you creating, whom are you creating this value for, how are you delivering this value to said target?A great business plan is contingent on RESOURCES – time, infrastructure, manpower, technology, competences & capital.

They both help a business to grow. Using the right one means that your company can have a clearer process and better products and services.

As I said above, the business model is like a destination, and the planning is how you will reach your destination. So, let me add that the planning I recommend isn’t just a map or a route; it’s a GPS, real-time traffic and weather information.

And in that analogy, the business model is the destination. Hence, having an effective Strategic Plan is a powerful business advantage that dramatically increases the odds of success.

Alcor private equity and Venture capital firm  also empowers founders and businesses to grow their companies at all stages.

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Startup Roadmap”  - Full or Lean Business Plan Decision

Just like a roadmap, a business plan helps ensure you get to your intended destination. From our decades of experience working with thousands of startup business owners, we at SCORE have learned that a business plan can smooth the path to success and help protect you from the risk of failure.  The data is very clear.  According to a study reported by Small Business Trends, entrepreneurs who have business plans are twice as likely to obtain capital and more likely to grow than entrepreneurs who do not.

But the biggest benefit of a business plan is the thinking you’re forced to do while creating it. You will get new ideas that will make your business even better. You will figure out ways to overcome potential obstacles along the road to startup. You will identify alternate routes you can take if things don’t work out quite as you expected.

This is the fourth in a series of columns that provide several helpful business topics for the new small business.  It is based on one of SCORE’s recent projects called “Startup Roadmap” and outlines every step in starting a business.  A SCORE mentor may use this program to help you reach your goal smoothly.

Fortunately, writing a business plan no longer involves spending months crafting a 60-page document. There are easier, faster, and more visual approaches you can use to help you make decisions, calculate numbers and get your ideas down on paper if you don’t want to use a traditional business plan. My first suggestion is to be aware of the two main approaches and choose between these options for doing a plan. 

When starting out on a trip, some people prefer to pack light, with just a carry-on and a basic itinerary. Others like to bring guidebooks and pack several suitcases to prepare for every eventuality. This analogy applies to business planning. Whichever camp you fall into, there’s a business planning method for you. 

Let us take a closer look at the traditional business plan and the Business Model Canvas so you can select the right planning method for you .  

The Traditional Business Plan  is a thoroughly detailed written document that can span dozens of pages. It typically includes the following sections:

• Executive Summary : A one-page overview summing up your business, product/service, marketing plan, management team, operations, and financial projections.
• Company Description : A description of your business, its products/services, your goals, and your market
• Products and Services : A more in-depth description of your products/services, what problems they solve for customers, and what makes them unique.
• Marketing Plan : A detailed description of your industry and competitors, your unique value proposition, your target customers and how you will reach them, and your distribution channels.
• Operational Plan : Explains the daily operations of your business, including location, equipment, employees, and processes.
• Management & Organization : Description of your management team and/or key employees and their expertise.
• Startup Expenses & Capitalization : Explains how much it will cost to open your business and how much capital you will need.
• Financial Plan : Detailed projections of your financial goals using financial statements to show how you will use capital and when your business will break even.
• Appendices : Backup information or documentation to support the other sections of your plan.

The Business Model Canvas  (sometimes called the Lean Canvas for startups) also emphasizes that a key to starting and building a successful business is planning. The rationale is that sometimes, a business plan is required, but it’s not always the answer to creating a successful business.  Sometimes, you need to think lean.

Some sources suggest that all that is needed is to use a one-page approach but most important is to:

• Determine the key categories of starting, testing, and growing your business.
• Identify your target customers and what you need to do to get them to buy from you.
• Recognize your customers’ problems and how your product or service will solve them.
• Communicate the value propositions that set you apart from your competition.
• Test your solutions and get valuable feedback.
• Determine your cost structure and revenue streams.

Just like a roadmap, a business plan helps ensure you get to your intended destination.  After this planning, you should know how much it will cost to get your business off the ground, whether you have enough savings to fund it on your own, or whether you’ll need some type of additional financing to get started. (Additional financing doesn’t necessarily mean bank financing; it could include borrowing against your personal assets, using credit cards, or borrowing from friends and family.)  My next column will focus on the topic of finding funding.

Finding Funding for Your New Business Your options in finding Funding for Your New Business

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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A Simpler and Better Alternative to the Business Model Canvas Template

Posted november 3, 2022 by noah parsons.

If you’re looking to quickly document your business idea, but don’t want to take the time to develop a complete business plan, you’ve probably come across the Business Model Canvas. The Business Model Canvas was developed to solve the two key problems with business plans—they take too long to write and are difficult to update.

However, the Business Model Canvas introduces its own problems and can often give you an incomplete picture of your business. That’s why we’ve developed a one-page business plan template. It can help you spend even less time creating a flexible, much more useful snapshot of your business roadmap.

So, which planning format should you use? Let’s explore the pros and cons of the Business Model Canvas and introduce you to the basics of the one-page plan to help you decide.

What is the Business Model Canvas?

If you’re new to the Business Model Canvas, here’s a quick definition:

The Business Model Canvas is a one-page overview of a business’s strategy and business model. It’s intended to be used by startups and founders who are trying to identify a business model that will work for their business. The Business Model Canvas is intended to provide all of the structure of a business plan, without the inconsistencies and vagaries of “back of the napkin” business idea sketches.

Here’s what the Business Model Canvas template looks like:

Pros of the Business Model Canvas

The core purpose of the Business Model Canvas is to demystify the business planning process. It removes the need for a traditional, text-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. Here are a few key benefits that come with this template.

Visualize your plan

The structure of the Business Model Canvas ditches a linear structure in favor of a cell-based template. This is done to encourage you to build connections between every element of your business from the start. Rather than writing out disjointed expenses, value propositions, and potential customers — you work through them side-by-side and can easily reference previous sections as you develop them.

Faster to create

Now, you do have limited space to leverage with the Business Model Canvas. That’s really the point, as this is meant to be a faster and easier plan to create. Even the size of each cell is designed purposefully. 

For example, the problem takes up a larger section of the page, but your solution and metrics are each half the size. This tells you, without detailed instruction, that you need to take a deep and extended dive into potential issues and explore as many current alternatives as possible. But your solution and data measurements should be streamlined and purposeful in relation to those issues that you’ve uncovered.

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The layout of the Business Model Canvas is also useful for you, your team, and any third parties to visualize your business model . It showcases the framework of your business and helps connect the dots between business components, without needing to have intricate knowledge. It’s a useful visual to kick off any discussions about elements of your business and an easy visual to work with during pitch or strategy discussions.

Cons of the Business Model Canvas

Unfortunately, the Business Model Canvas template doesn’t work for everyone.

As my team and I have worked with entrepreneurs over the years (and we’ve worked with thousands), we’ve consistently found that the Business Model Canvas can be difficult to understand without substantial training. It’s also difficult to read, especially for people who aren’t familiar with the format. 

It’s difficult to adapt into a full business plan

There will likely come a time when you need to pitch to investors or seek out funding. At that point, lenders and investors may expect to see a traditional business plan that provides greater detail regarding the functions and financials of your business. A one-page Business Model Canvas may be beneficial to provide as an introduction to your business — but you’ll need to back it up with a full exploration of milestones, startup and operational costs, potential revenue streams, marketing activities, and financial forecasts.

By starting with a Business Model Canvas, you’ll potentially need to start over when developing a full business plan. This is due to the formatting and simplified sections of the Canvas. Yes, they are beneficial to use when exploring an idea, but difficult to expand on when actually executing them.

No room for validation

Regardless of what your business does, it’s critical that it’s solving a real problem for customers. If your products and services don’t fill a need, customers will never walk in the door. Known as validation, it’s an element that is lacking within the building block style of the Business Model Canvas.

Yes, this one-page setup helps you connect disparate pieces of your business plan, but it can also encourage you to make those connections when they don’t exist. For example, you may have outlined a problem and a few current solutions. Based on the structure of the Canvas, you work through your own solution, value proposition, and potential marketing channels. Then you start trying to tackle your customer segments and realize that you’re struggling to actually define them.

Rather than arriving at this issue earlier, and setting out to validate if your idea is attractive to anyone, you’re suddenly met with the need to find a target market that has the problem. This leads to the next issue with the Business Model Canvas.

No focus on product/market fit

The core issue is that the Business Model Canvas doesn’t focus on making sure a business is solving a real problem for their customers. People like to call this “ product/market fit .” In other words, customers (the market) don’t have a reason why they need the product the business is selling.

In our experience, if a company can’t find a good product/market fit, it will almost certainly fail.

Why is the lack of product/market fit such a killer for businesses? Well, when a customer is shopping for something, they’re looking to solve a problem or fill a need. A good business offers products and services that help people solve their problems and fulfill their desires.

For example, Mailchimp helps customers easily send email newsletters. A hair salon helps people achieve the style that they’re looking for. Restaurants give people not only the kind of food they’re looking for, but a specific experience—think upscale dining, or a hip and trendy bakery.

If a business doesn’t solve a real problem for potential customers, it’s going to have a very hard time attracting customers. Just think for a moment, do you shop for things that you don’t need or want?

It’s not that a business needs to solve a completely unique problem. In fact, competition is actually a good thing . But, businesses do need to have a unique take on a customer’s problem. 

Unfortunately, the Business Model Canvas doesn’t directly address product/market fit even though it’s such a critical issue.

Our solution — a one-page business plan

Instead of forcing the Business Model Canvas to solve the problem of product/market fit, we took a new approach and created an alternative to the Business Model Canvas Template. We call it a one-page business plan and it’s a core part of growth planning , a better way to plan and grow a business.

If you want to get started right away, download the one-page business plan template now. Or, read on to learn about what we changed and how to use the template.

What is a one-page business plan?

The one-page business plan format takes the best of the Business Model Canvas template and makes it easier to use and easier to read. It can be completed in under an hour and delivers three things that entrepreneurs need in their planning process: 

1. Focus 

Instead of developing a lengthy, traditional business plan, the one-page plan requires entrepreneurs to focus on the key drivers of their business and find a strategy that will truly bring success.

2. Simplicity

Anyone can start using the one-page business plan template without any training or business background. And, anyone can easily read it and understand it.

3. Flexibility

Successful planning is all about revising your ideas as you try and learn new things. The one-page business plan template is easy to update and tweak as you go.

What is in the one-page plan?

The one-page plan has 12 elements, including: 

• Identity: A one-sentence overview of your business.
• Problem: What problem are you solving for your customers?
• Solution: What’s your solution to the problem? Describe your products and services here.
• Target Markets: Who are your customers?
• Competition: Who are your competitors and what alternative solutions do your customers currently buy and use?
• Sales Channels: How will you sell your products and services to your customers? 
• Marketing Activities: What are the key activities or approaches that you’re going to use to reach your customers? What’s your pricing or cost structure?
• Revenue Streams: How are you going to make money? 
• Expenses: What are your key expenses when you’re running your business?
• Milestones: What is your roadmap to test and start your business?
• Team: What are the key roles that you need in your business to be successful?
• Partners & Key Resources: Do you need to work with other businesses to make your business work?

Together, these elements provide a comprehensive overview of a business and its strategy. A one-page business plan focuses up-front on finding product/market fit by helping entrepreneurs identify the key problem they’re solving for their customers and how their solution fills their customers’ needs.

Here’s what it looks like:

With the one-page business plan, we kept the concept of “value proposition” because we think it’s important to have a one-line overview of what you do. This is somewhat similar to a tagline that explains what you do in as simple and concise a way as possible.

But, instead of focusing on “customer relationships,” as the Business Model Canvas does, we replaced it with sections to describe your “problem worth solving” and your “solution.” Since making sure you have a solid understanding of your customers’ needs and the problems they have is so critical to business success, including these sections as the foundation of the one-page business plan makes sense.

The one-page business plan also pairs the problem and solution boxes with sections to describe the target market and competition . These four sections together form the core of your business idea: What you’re doing, who you’re doing it for, and what the competition looks like.

How to use your one-page business plan

When you sit down to write your one-page business plan, I encourage you to move through it quickly. Try and finish your first draft in under 30 minutes. Write bullet points instead of sentences. Then take a step back and see if it makes sense. 

Share your one-page business plan with key partners, friends, and family and see if it makes sense to them. If you need to make changes, it’s fast and easy since you’re just editing a single page. If you need more step-by-step guidance, we have a series of articles that will walk you through the process.

When you’ve completed your one-page business plan, you now have the building blocks for a more detailed business plan —if you need one.

At this stage, however, your one-page business plan is really just a set of assumptions—it’s your best guess at who your customers are and what they want. We’ll just call this early version of your one-page plan your “guess.”

Now, you need to go out into the world and actually talk to your potential customers and make sure your “guess” is correct—sometimes this is called idea validation . Do your potential customers have the problem or need that you think they have? What do they think of your solution? Will they be willing to pay you?

In this article on market research , I go into more detail about how to actually talk to your potential customers.

As you talk to people, come back to your one-page business plan and review and revise it. After a couple of rounds of this, you’ll have a plan for a business that has a good chance of success. It’s a good idea to get a business plan review meeting on your calendar each month, so you’re always reviewing and changing your plan as you go.

Download a one-page business plan template— a better alternative to the Business Model Canvas

You can download the one-page business plan template here for free. Project it on a whiteboard and fill it in, or just print it out and work on it from there. You can also use sticky notes to add your ideas instead of filling them in just with a pen or pencil. 

Or check out LivePlan’s Pitch feature . It really is the fastest way to get started. Plus, you can share a private link to it with key stakeholders, or export it to PowerPoint to easily present it to investors or other stakeholders. 

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Lean Canvas vs. Business Model Canvas

table of contents

Uncovering the strategic blueprints for success.

Two frameworks are significant in strategic business planning for mapping out business strategies - the Lean Canvas and the Business Model Canvas. These models cater to different stages of business development and various market complexities. They are essential tools for entrepreneurs, business developers, and strategic managers.

In this article, we'll compare the nuances of each framework and help you select the one that best aligns with the unique trajectory of your business. Let's explore these strategic blueprints to understand their application and impact on business success.

The Business Model Canvas: Your business blueprint

The Business Model Canvas, conceptualized by Alexander Osterwalder, is a comprehensive framework that allows organizations to detail, design, and differentiate their business model. It consists of nine essential components:

Key Partners : The network of suppliers and partners that support the business. Key Activities : The most important activities in executing the company's value proposition. Key Resources : The assets required to offer and deliver the previously mentioned propositions. Value Propositions : The collection of products and services that create value for a specific customer segment. Customer Relationships : The types of relationships a company establishes with specific customer segments. Channels : The means through which a company communicates its propositions to its segments. Customer Segments : The different groups of people or organizations an enterprise aims to reach and serve. Cost Structure : The costs involved in operating the business model. Revenue Streams : How a company makes income from each customer segment.

People use the Business Model Canvas to gain a holistic view of their operational and strategic blueprint, ensuring every aspect of the company aligns with its core value proposition and market demands.

The Lean Canvas: A startup's strategic compass

The Lean Canvas, adapted from the Business Model Canvas by Ash Maurya, is specifically tailored for startups and entrepreneurs navigating the uncertain terrains of new ventures.

It focuses on rapid iteration based on direct feedback, emphasizing problem-solving and innovation. The Lean Canvas modifies four of the Business Model Canvas's components to concentrate on: Problem : Identifying the top problems faced by the customer segments. Solution : Proposing solutions to the problems identified. Key Metrics : Measuring the success of the solutions. Unfair Advantage : Something that cannot be easily copied or bought.

These changes underscore the startup's need to quickly find a product-market fit, pivot in response to learning, and use unique strengths to carve out a competitive edge.

Lean Canvas vs Business Model Canvas: Main differences

Introducing a comparative lens, let's navigate the nuanced distinctions and shared pathways between the Business Model Canvas and the Lean Canvas.

While the Business Model Canvas and the Lean Canvas share a structural foundation, they diverge in several key aspects that reflect their distinct purposes:

Target audience focus

The Business Model Canvas is designed with a broader spectrum of businesses in mind, from startups to established enterprises, whereas the Lean Canvas specifically targets startups and entrepreneurs facing high uncertainty.

Approach to market

The Business Model Canvas assumes a certain level of understanding and stability in the market. In contrast, the Lean Canvas is predicated on the assumption that the market is unknown and needs to be discovered or created.

Emphasis on risk

The Lean Canvas places a significant emphasis on identifying and mitigating risks early on, mainly through its focus on problems, solutions, and unfair advantages. The Business Model Canvas, while also considerate of challenges, is more focused on exploiting known opportunities.

Flexibility and adaptation

The Lean Canvas encourages continuous adaptation and pivoting, making it highly dynamic and responsive to change. The Business Model Canvas, though adaptable, is generally used for more stable business environments where changes are less frequent and drastic.

How to choose and implement the right canvas

When selecting between the Lean Canvas and the Business Model Canvas, consider your business's maturity, market understanding, and the nature of the challenges you face:

Startups and entrepreneurs : The Lean Canvas is your ally in the early stages of business development. Its focus on problems, solutions, and rapid iteration makes it ideal for those still exploring their market fit and value proposition. Check out Miro's Lean Canvas template .

Established businesses and scale-Ups : The Business Model Canvas suits businesses with a clear view of their market, customers, and value propositions. It helps refine, articulate, and expand upon the strategies that have propelled your business. Check out Miro's business canvas template .

Implementing your choice

1. Understand your audience : Tailor the canvas to your team and stakeholders' specific needs and understandings.

2. Engage in collaborative workshops : Use Miro to brainstorm , share insights, and build your canvas in real time.

3. Embrace iteration : Both canvases are living documents. Revisit and revise them as you gather more insights and data.

4. Convert insights into actions : Use the canvas as a springboard for strategic decisions and innovation across your business operations.

Conclusion: Crafting your path forward

Both the Lean Canvas and the Business Model Canvas are helpful tools for creating and refining your business's approach to adding value. Choosing between them depends on your business's stage, objectives, and obstacles you want to address. By selecting the most suitable framework for your needs and embracing a continuous learning and adaptation culture, you can lead your business toward long-term success and innovation. Get started with Miro and map out the future of your business. Happy strategizing!

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Business Plan vs Business Model Canvas: A Shift We Can All Learn From

Launching a Business

The Old Model :  Create a business plan of at least 25 pages.  Fill it with tidy market research. Put in detailed plans – all the way down to 3 years of proforma financials. Find an investor. Build the product or service – the more features the better. Hire marketing and sales. Then go into the market and sell, baby, sell. Cross fingers. Hope for the best.

The New Model: Sketch your preliminary ideas on a business model canvas , capturing your initial hypotheses about 9 key business elements. Put them on post it notes and be prepared to change them. Test them by getting out of the building and in front of your target market. Be curious. Listen hard. Learn fast and either validate, improve, or toss out your initial hypothesis. Update the canvas with your new insights. Repeat, over and over again, as needed to get to the point where your hypotheses hold together and your customers concur. Start with the leanest version of your product (minimal viable product). Sell some, listen, improve.  Once you finally have a model that works – then and only then – build the company around it.

Clearly there is much more involved in either approach – but I think you get the idea. Two different approaches, two different philosophies, two different outcomes.

The motivation for creating a business plan is to think things through thoroughly so as to execute well and avoid some of the risks associated with new ventures. The paradox is that this planning, while it avoids early failure, promotes ultimate failure. It likely contributes to the 50% failure rate of new ventures. By the time you have planned, secured funding, produced, marketing and sold – much time, money and energy is invested. Most likely, the market has shifted. You’ve hedged a big bet that you are right. Sometimes you are, and sometimes not so much.

The business model canvas approach feels uncertain and risky. It’s hard to risk failing early with an idea and then sticking with it through multiple iterations. Even more so when you are emotionally invested in it – you cringe when others don’t see the possibility that you do. Yet learning what works and what doesn’t early means that you no longer invest precious resources into what doesn’t work – and sooner rather than later. You instead divert (or pivot) into what does. If you listen and observe, you begin to craft a product or service that resonates – and ultimately sells. You shape a business model that works, that is resilient and has longevity – and are much more poised for long term success.

What applies to start-up businesses has great parallels to each of us. While we want to create a foolproof, locked down plan for our lives and our careers, that approach is fraught with peril. While we may want to avoid failure, trying some things out on a small scale (some of which will fail) can be both informative and freeing. We learn from them – we discover what works and what does not. We also learn that we can survive failure, dust ourselves off and begin anew. When we are adaptable, rather than getting locked into a plan conceived many years ago, we can find fresh opportunities. And as with start-ups, perhaps the biggest long term failure is being wedded to a plan that no longer works for us.

More to explore

Is Managing Today a Set-Up for Failure?

What I Got Wrong About Being Right

Six Strategies to Improve Your Change Agility

Can You Be Grateful, Gloomy, and Grouchy at the Same Time?

One response.

Fail fast! This has been on my mind a lot lately. Too often I overthink an approach, unwilling to be embarrassed in front of customers or prospects. I think this reduces the number of home runs, or– at minimum– delays them substantially.

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Lean Canvas vs Business Model Canvas: Which Should You Choose?

Marta Skowron

UI/UX Designer

15 April 2020

To choose between lean canvas vs. business model canvas, you need to know the difference between them.

Both lean and business model canvas are visual representations of the reality in which your business operates. But, unlike the traditional business plan, they are sketches. You need to update them as you grow your business and learn. 

The lean and business model canvas allows you to capture your business model on a single page. The main difference between them is that lean canvas zeroes in on solving a problem. Meanwhile, the business model canvas centers around selling a specific product.

In the post below, we explain this difference in more detail. After reading, you should be able to decide between lean canvas vs. business model canvas.

What is a business model canvas?

Source: Wikimedia Commons

Business model canvas is a visual template that helps entrepreneurs document an existing business model or develop a new one. Alexander Osterwalder created it in 2005, based on his academic work on business model ontology.

The business model canvas was designed with startups in mind. It quickly became an alternative to the traditional business plan which wasn’t agile enough to accommodate newly emerging companies.

The revolutionary thing about the business model canvas was that it allowed entrepreneurs to capture a business model on a single page. This made business planning simpler and more structured.

The 9 elements of the business model canvas, with examples from Google:

Key partners , e.g. Adsense network partners

Key activities , e.g. manage massive IT infrastructure

Key resources , e.g. IT infrastructure, intellectual resources

Value Propositions , e.g. free search engine, targeted ads

Customer Relationships, e.g. dedicated sales for large accounts

Customer segments , e.g. internet users, developers

Channels , e.g. global sales and support team

Cost structure , e.g. sales & marketing costs, admin costs

Revenue streams , e.g. ad revenues

Advantages of the business model canvas:

Defines key activities that generate value and revenue for the business.

Encourages strategic relationships with clients and partners.

Enables testing of an existing business model against the market.

Disadvantages of the business model canvas:

It doesn’t accommodate businesses in very early stages of development.

Enables risky assumptions within the business model, without offering a clear way to verify them.

Focuses on the end-shape of the business without defining the strategy to get there.

What is a lean canvas?

The lean canvas is a variation of the business model canvas for lean startups. It was created by Ash Maurya who became concerned with risky assumptions enabled by the business model canvas.

In his own words: “M y approach to making the canvas actionable was capturing that which was most uncertain, or more accurately, that which was most risky. ”

Operating under high uncertainty is the main challenge for most startups. The lean canvas helps to solve this problem by framing business ideas as hypotheses at first. Additionally, it encourages focusing on the problem as the starting point for building a business.

This allows entrepreneurs to stay vigilant and adjust their business model as they grow, learn and iterate the product.

The 9 elements of the lean canvas, with examples from the Uber London

Problem, e.g. difficult to find a cab when you need it

Solution, e.g. guaranteed fast pick-up from your location

Key metrics, e.g. apps installed, journeys booked

Unique value proposition, e.g. taxi service, but cheaper, easier and safer

Unfair advantage, e.g. high brand awareness

Channels, e.g. friend referrals

Customer segments, e.g. young, internet-savvy Londoners and tourists

Cost structure, e.g. marketing, PR

Revenue streams, e.g. 25% of fare based on route and idle time.

Advantages of the lean canvas

It focuses on understanding the problem that the business is trying to solve.

Restrains the “solutions” box, encouraging simple and easily testable ideas.

Proposes key metrics to evaluate whether the business is moving in the right direction.

Accounts for uncertain conditions, assumptions, and incomplete data.

Disadvantages of the lean canvas

Overemphasizes the internal focus without accounting for the surrounding ecosystem.

Limits strategic thinking (as Ethan Mollick put it, by “focusing on what customers want today, rather than trying to see ahead into the future.”).

Lacks the “Resources” box which may lead to unrealistic product ideas.

The differences between lean canvas vs business model canvas

When Ash Maurya adapted the business model canvas for lean startups, he spotted four boxes that, according to him, weren’t crucial for startup founders. He replaced them with those that made more sense for lean startups.

Adding the “Problem” and removing the “Key Partners” box

Charles Kettering once said that “a problem well stated is a problem half-solved.” Ash Maurya also believes that identifying the problem should be the starting point for any business.

Many startups fail not because they can’t deliver the product, but because they misunderstand the problem they’re solving. The lean canvas makes sure the problem identification is a crucial step in the process.

Meanwhile, Maurya decided to take out the “Key partners” box. Even though he recognizes the need to create business partnerships, he says that “when you are an unknown startup with an untested product, pursuing key partnerships from day one can be a form of waste.”

With the lean approach, looking for partners comes later. The first concern is understanding the problem.

Adding the “Solutions” and removing the “Key Activities” box

The “Solutions” box in the lean canvas is small on purpose. This is aligned with the lean startup approach to MVP: developing a simple solution and checking if it works.

Incorporating “Solutions” (in plural!) in the lean canvas prevents entrepreneurs from blindly following their first idea. Having it as a part of the lean canvas makes it subject to verification - just like any other part of the business model.

At the same time, the “Key Activities” box from the original business model canvas was removed. That’s because key activities should derive from the “Solutions,” after they have been tested and validated through the MVP.

“Key metrics” instead of “Key Resources”

Key metrics were introduced to the lean canvas to give business owners a way to tell whether they’re on the right track. 

Initially, startups may be drowning in all kinds of data and numbers. It’s important to discern which of them are important and indicative of growth. Using the wrong (or too many) metrics as signs of growth can lead to enormous waste.

Noah Kagan even said: “A startup can only focus on one metric. So you have to decide what that is and ignore everything else.”

Why were the “Key Resources” removed? Ash Maurya argues that in the digital age, new-product development isn’t as resource-demanding as it used to be. On top, some of the key resources can also fall into the “unfair advantage” box.

“Unfair advantage” instead of “Customer Relationships”

An unfair advantage in business is the shield against copycats and plagiarism. It’s the part of the business model that’s so unique and contextual that it’s extremely hard to replicate.

When Ash Maurya added this box to the lean canvas, he was aware that few startups find their unfair advantage straight away. On day one, this box can be blank. But over time, it should inspire business owners to look for their unfair advantage that makes their solutions hard to copy.

This box took the place of “Customer Relationships” in the business model canvas. That’s because startups don’t usually strategize their first relationships with clients. Rather, raw interactions emerge through customer interviews, product tests, and feedback.

Lean canvas vs business model canvas: which should you choose?

Both lean and business model canvas have advantages and disadvantages. Which one you’ll choose depends mostly on the angle from which you approach business.

Lean canvas is a simpler approach, focusing on solving one problem at a time. It can be used even when you’re starting from scratch and helps you brainstorm solutions. It’s a good way to start if you want to identify a problem first - and derive your product from that.

Business model canvas tends to work better when you’ve validated your initial hypotheses and already have a product. If your questions focus on how to make that product more profitable (or improve it in other ways), a business model canvas may be a good solution. It also gives you a more complete picture of your business model.

In other words, you could say that lean canvas focuses more on what of your startup, while the business model canvas digs deeper into the how.

Regardless of which one you choose, remember to update it over time. As your startup and the ecosystem around it change, your task as an entrepreneur is to learn from those changes

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Business Model Canvas vs Idea Plan (Planning Tool Comparison)

• by Stefan Vucicevic
• September 10, 2023
• 12 shares 12 0 0
• 5 minute read

Table of Contents Hide

Business model canvas: what is it and when to use it, idea plan: flexible tool for laser-sharp focus, idea plan vs business model canvas: articulating business problem, taming costs: who did it better, final verdict: idea plan vs business model canvas.

In today’s post, we look at two canvas templates for creating a one-page business plan: Business Model Canvas and Idea Plan. Both tools are built to help business founders set the foundations of their business venture for lasting success, but each has its own unique traits. So let’s see how Business Model Canvas stacks against Idea Plan.

Once you read this post, you’ll know:

• How Business Model Canvas and Idea Plan differ
• When Business Model Canvas is a good choice for your business
• Pros of using Idea Plan
• How Idea Plan aligns with first-time startup founders

Business Model Canvas is a planning tool that helps you put together all the blocks of your business and see how feasible it is. It’s one of the best-known business planning tools, created by Alexander Osterwalder, and it’s been tried and tested by many businesses over the years.

Plus, it has been the inspiration for many other tools, as business experts worked to improve the shortcomings of the initial BMC and adapt it to the fast market of today.

Visual in nature, Business Model Canvas is a cost-effective way to get started, as you set out to lay the foundations of your new business venture. Think of it as a step-by-step sketchbook of your business. All you need is a sheet of paper and you can get right down to business.

But besides the ease of use and the visual allure, Business Model Canvas is a great concept as it helps bring clarity to your business idea. It allows you to connect the dots between different parts of the business. Then you can align internally and externally on what the next steps should be. And, finally, you can monitor the execution, as you will have a go-to reference point when things don’t go according to the plan.

In short, the Business Model Canvas has you looking at the following segments of your business:

• Key Partners
• Key Activities
• Key Resources
• Value Propositions
• Customer Relationships
• Customer Segments
• Cost Structure
• Revenue Streams

The idea is that these nine pillars are the essence of your business. And so when you define them, you’re set up for early success, as you have a clear point of reference and know what to focus on.

Idea Buddy’s Idea Plan is another visual tool for planning your business, which accompanies founders as they build their venture from scratch.

But while the Business Model Canvas has you focusing on nine pillars right away, Idea Plan brings an added layer of prioritization. It allows you to focus on four central tenets of your business — Problem (Why), Solution (What), Customers, and Product first.

Once you think through these four elements, you can move towards the ‘outer’ layer. There you will work on defining the remaining 10 blocks, including:

• Competitors
• Distribution
• Startup costs
• Revenue streams
• Running costs

For a first-time founder or less experienced startup owner, building a business with Idea Plan is a lot less overwhelming. The reason being it combines prioritization on key areas with a greater dose of granularity.

Whereas Business Model Canvas has nine blocks altogether, Idea Plan offers four key blocks and 10 elements. That helps break complex and unpredictable business elements down into more manageable business areas.

Idea Plan explainer video

Now that we’ve seen a broad difference between Business Model Canvas and Idea Plan, let’s have a closer look at how each addresses two essential business elements: business plan and costs of funding.

The biggest difference between Idea Plan and Business Model Canvas is the focus both tools place on the problem.

Under Business Model Canvas, the Problem block per se doesn’t exist but instead sits somewhere within the Value or Customer segments. For more experienced business owners, who might already have a good idea about the problem they’ve set out to solve, this is a lightweight approach.

At the same time, Idea Plan places the business problem at the center of the business plan, as an element on its own. For first-time founders, especially the ones who are in dynamic industries, the Problem is at the core of the business.

So being able to isolate and re-examine the Problem at hand is a good starting point for the less experienced business owners. That’s why Idea Plan’s take on the problem-defining works better for new founders.

Keeping track of costs is crucial for startup success, especially if you lack funding. And most startups do, at least initially. That’s why costs are part of both Business Model Canvas and Idea Plan, but are again, addressed differently.

On the first one, costs are placed within a single element. However, a closer look at this section shows that the BMC speaks about different types of costs. But again, for someone who’s just starting out, being able to break down costs exactly into small bits can help get far.

On the other hand, Idea Plan breaks costs into two major segments — initial investments and running costs. This might look like a tiny add-on, but this clarity in planning initial costs helps reformulate the idea right in its infancy, if needed.

Knowing the initial costs can assist business owners in focusing on the essential funds first. After that, they can start building on top of that.

Again, first-time founders need assistance and guidance, and the ‘closer’ look of Idea Plan helps build the business plan with greater feasibility.

In today’s market, there is very little place for a cookie-cutter approach. The same goes for a business plan — some founders benefit from a rough sketch of the idea, whereas others prefer more guidance and flexibility as they build their business.

While Business Model Canvas is a robust model that covers key business elements, Idea Plan offers more guidance and helps with prioritizing.

In short, if you’ve started a business before and know the basics, you will benefit from Business Model Canvas. It breaks down your business in an easy-to-grasp way.

On the other hand, if you’re a first-time founder, or want to have more guidance, especially early in the business building process, Idea Plan’s one-page business plan will work better for you. Plus, it comes with industry-based guides and editable templates that cover the most popular business ideas. That way you can start building your business right away with a suite of reliable content by your side.

Ready to flesh out your business? Try Idea Plan for free and fix any shortcomings in your business plan on time .

Stefan Vucicevic

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• Best term policy
• Best for seniors
• Best for military members
• Best for higher policy limits
• Best for guaranteed acceptance
• Best for waiting periods
• How we review no exam life insurance

Best No Exam Life Insurance Companies of June 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Many life insurance companies offer no-exam life insurance, which has the obvious appeal of skipping medical exams. For some people, it's a great option, but keep in mind that this type of life insurance policy will still require some information about your medical history. 

Our Top Picks for the Best No Exam Life Insurance

• Best term life policy: Ethos Life
• Best for seniors: AARP Life Insurance
• Best for military members: USAA Life Insurance
• Best for higher policy limits: Prudential Life Insurance
• Best for guaranteed acceptance: Mutual of Omaha Life Insurance
• Best for waiting period: AAA Life Insurance

How we rate no exam life insurance companies »

Compare No Medical Exam Life Insurance Plans

No medical exam life insurance is particularly good for people seeking insurance later in life, forfeiting death benefit amounts and paying higher premiums to qualify. As such, the best no exam life insurance should have high age eligibility without too much compromise on coverage and costs.

Policies included in our guide on the best no medical exam life insurance insure people up to 85 years old. Read on to learn more.

Best term policy: Ethos

Apply for life insurance online in just a few minutes with Ethos' simple application. No medical exams are required. Just answer a few health questions—many customers enjoy same-day coverage!

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. 100% online application process, quotes in minutes
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Coverage starts immediately once approved
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Term policies renewable up to age 94 for qualifying applicants
• con icon Two crossed lines that form an 'X'. No conversion options to turn term policies to whole life for no exam policies
• con icon Two crossed lines that form an 'X'. Whole life policy limits are lower

Ethos Life accepts applicants up to age 65 with a 100% online application process, and limits are as high as $2 million. 

Ethos Life asks a few basic medical questions, but coverage is effective immediately once approved. In addition, every customer buying policies like this from Ethos Life is eligible for a 30-day look period, which is another way to say you can cancel and get your money back in the first 30 days with no penalties.

• Health questions: Yes
• Coverage limits: Up to $2 million
• Waiting period: May apply
• Unique feature: Instant quotes available with a streamlined online application

Read our Ethos Life Insurance review here.

Best for seniors: AARP

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No medical exams required
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Specialized life insurance coverage for older adults
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No medical exams required, guaranteed coverage available
• con icon Two crossed lines that form an 'X'. AARP membership is required for purchase
• con icon Two crossed lines that form an 'X'. Only small policies available
• con icon Two crossed lines that form an 'X'. Coverage may be based on medical questions and history

AARP Life Insurance caters to senior clients for insurance and many other financial products. Older adults between 50 and 74 may qualify as long as they are AARP members. Term policies are available with limits up to $150,000 in most states. Montana and New York residents may be eligible for up to $100,000. Whole life policy limits max out at $25,000.

Whole life policies can be issued without any health exams or medical questions. The term policies, on the other hand, may ask some health questions.

• Health questions: For term life policies, but not whole
• Coverage limits: Up to $150,000
• Unique feature: No medical exam policy caters to older adults

Read our AARP Life Insurance review here.

Best for military members: USAA

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Affordable pricing starting with $12/month on some policies
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. May offer coverage to military members other companies won't cover
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers term and permanent life insurance options
• con icon Two crossed lines that form an 'X'. 2 year waiting period for full benefits on some policies
• con icon Two crossed lines that form an 'X'. May focus on death benefits only more than other companies
• con icon Two crossed lines that form an 'X'. All permanent policies are underwritten and serviced by other companies, not by USAA
• USAA offers life insurance for the military, veterans, and the public.

USAA Life Insurance is typically associated with military members and their immediate family members, but its insurance products are available to anyone. Pricing is lower, payouts are higher, and customer service is strong. Of course, these services are only available to military and qualifying family members. For the children of a deceased military member to use any USAA products, the military member would need to be signed up before their death.

Guaranteed whole life policies are available in 49 states, excluding Montana. USAA life insurance coverage is available from $2,000 to $25,000 with no medical exam or questions. Applicants who want higher coverage limits can explore medical exam policy options with a licensed agent.

• Health questions: No
• Coverage limits: Up to $25,000
• Waiting period: Two years
• Unique feature: Below-market product costs available for military members and qualifying family

Read our USAA Life Insurance review here.

Best for higher policy limits: Prudential

Offers aggressive financial plans.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available in all 50 states (New York residents may have different plans)
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can withdraw money to pay for nursing home bills due to severe illness or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable agents who can walk you through your options
• con icon Two crossed lines that form an 'X'. Financial returns are limited
• con icon Two crossed lines that form an 'X'. Limited policy options for seniors and other groups who might struggle to find life insurance

The aggressive financial plans offered by Prudential may appeal to many younger buyers and those with a stable income. However, those with lower income or buyers who aren't sure about the financial system may be more hesitant to engage with Prudential. Like many other industry giants, Prudential is working to change this perception.

Prudential Life Insurance  offers up to $3 million in coverage for term life policies. Adults up to 60 years old are eligible for coverage with a short application involving some medical questions. For younger applicants, conversion options may also be available later to make term policies into whole life policies. However, due to the higher limits, Prudential's application process may also be longer.

• Coverage limits: Up to $3 million
• Unique feature: High expert and customer rankings with a trusted provider

Read our Prudential Life Insurance review here.

Best for guaranteed acceptance: Mutual of Omaha

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. diverse whole and term life insurance options
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong financial ratings and company history
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Wide range of riders to customize plans
• con icon Two crossed lines that form an 'X'. online applications not available for term applicants
• con icon Two crossed lines that form an 'X'. May not provide strong investment options for retirement

Mutual of Omaha Life Insurance has high financial stability and customer satisfaction ratings across different types of insurance. Guaranteed life policies are available for adults between the ages of 45 and 85. In New York state, the age range is 50-75. Policies can be as small as $2,000 in most states and as large as $25,000 with no health questions or medical exams.

Mutual of Omaha's no medical exam policies have a graded death benefit. If you die within two years of the policy start date, the company will not pay the full policy. Instead, it delivers 110% of the premiums paid. The Mutual of Omaha website boasts same-day payouts on most policies. Policies for children are also available.

• Age: 45-85 (50-75 in New York State)
• Unique feature: Company website lists same-day payment on most claims

Read our Mutual of Omaha Life Insurance review here.

Best for waiting periods: AAA

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Large life policies available for term customers
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Substantial discounts available for AAA members
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong financial ratingSome members may qualify for discounts if combining home and auto policies
• con icon Two crossed lines that form an 'X'. Only small whole life policies to cover a maximum of $25,000
• con icon Two crossed lines that form an 'X'. Non-members may not get competitive rates

AAA Life Insurance  offers immediate death benefits for qualified applicants between 18 and 75. In other words, once your policy starts, you are eligible for the full policy benefit. Policies are available with limits as low as $25,000 and as high as $500,000. While a medical exam is not required, health questions are.

AAA offers term policies with limits as high as $500,000. For a whole life policy, the limit is $25,000. But applicants can add a rider doubling the payout for accidental death coverage. Younger people have no waiting period for benefits. For applicants over age 45, AAA pays out 130% of the premiums paid up to the date of death for the first two years.

• Coverage limits: Up to $500,000 term/$25,000 whole
• Waiting period: Applies after age 45
• Unique feature: Death benefit available regardless of the cause of death

How to Choose the Best No Medical Exam Life Insurance Company

The number of life insurance providers can be overwhelming and paralyzing. Asking friends and family about their life insurance policy and using guides like ours can be a great first step toward finding your policy. 

However, guides and recommendations can only go so far in helping you decide which no medical exam life insurance company is best for you. You'll need to take factors like age, medical history, and your financial goals into consideration when you make your decisions. A qualified insurance professional may be able to help you crunch your numbers and find the best policy. 

Coverage Amount

The most important, and most obvious, consideration when choosing a life insurance policy is the payout your loved ones will receive. The coverage you need will often depend on why you want life insurance. If your main goal is to make sure your final expenses are covered, than you'll have plenty of options. However, if you have long-term goals in mind, you may want to consider other life insurance options. 

It's worth noting that no exam life insurance often has limited death benefits, so your options will be limited. 

Policy Type

Generally speaking, most no exam life insurance fits into two types of life insurance policies: simplified issue and guaranteed issue.

Simplified issue : This is ideal for people who want life insurance but have a moderate health condition that may bar them from other insurance options. It's worth noting that some simplified issue life insurance providers enforce graded death benefits, withholding access to your full death benefits for a few years.

Guaranteed issue:  Guaranteed issue life insurance is for older people looking for final expense coverage, which includes funeral and burial expenses. It limits applicants to those who are 50 and above.

Premiums for no medical exam life insurance are generally higher as applicants tend to be high-risk and requirements are lower. You'll want to keep this in mind as you sort through quotes.

Customer Service

You should peruse customer reviews on websites like Trustpilot and the Better Business Bureau while shopping for a life insurance company. You should note how helpful and accessible a company's customer service team is and any issues with receiving payouts. Unresponsive insurance companies are the last thing that anyone wants to deal with after the passing of a loved one.

Why You Should Trust Us: How We Reviewed the Best No Exam Life Insurance

The coverage and riders offered are vital parts of our evaluation. We also look at the speed of payouts, customer satisfaction, and financial strength ratings. All of these factor into the immediate and long-term performance of the life insurance companies we review.

If you're looking for more information about a specific life insurer, our reviews offer a deep dive into individual policies, riders, and more. The same considerations are used for all competitors to ensure readers have the edge to make informed decisions in an ever-changing market.

See our insurance rating methodology for more details.

Best No Medical Exam Life Insurance FAQs

Most life insurance policies have some waiting period, whether it's a few weeks or longer. However, no medical exam life insurance is sometimes available with no waiting period, and you also have the option to purchase temporary coverage in the interim before your policy takes effect.

There are alternatives to a new medical exam life insurance policy. Insurance agents can quote you medical exam policies if you're denied a no medical exam option. An experienced agent may be able to assess your application before starting the process to avoid official denials. If you're concerned about premium limits, you can explore options like IUL ( indexed universal life ) for permanent life insurance that increases your benefit as long as you make premium payments.

The highest amount of life insurance you can get without a medical exam is lower than what you could get with a medical exam. Guaranteed-issue policies that don't require medical exams typically top out at $25,000 or $50,000 in coverage, while standard life insurance policies can offer millions in coverage.

You'll have to decide whether you prefer a whole or term policy based on your situation if you're getting no medical life insurance. A term policy has an expiration date, and extensions or conversions to a whole life policy are not guaranteed. If anything, your rate may be higher if you try to convert your policy. The insurer looks at you just as it would any other applicant of your age, health, etc. A whole life policy locks in premiums and payouts.

Yes, you can really get life insurance without a medical exam, but your options will be different. That's because you'll need to choose a guaranteed issue policy — a specific type of insurance that lets you bypass the medical exam requirement — and it will probably cost more than a regular policy including a medical exam.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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