Tag Archives: Alexander Osterwalder

Challenge: Can You Tell a Business Model from a Business Plan?

What’s the difference between a business model and a business plan? It depends on who you ask. Business plan means a lot of different things to different people, and so does business model. I’ve complained occasionally about confusing terminology, but I guess it’s just the way things are. There are similar problems with strategic plan, annual plan, etc.

What I really don’t like is people saying “don’t do a business plan; do a business model instead.” My favorite definition of the business model is the excellent book Business Model Generation, by Alexander Osterwalder and Yves Pigneur. And that’s very compatible with business planning. I’ve already incorporated the business model canvas into three business plans I’m working on right now, as a good framework for thinking. To me, the difference between business model and business plan is just the semantics. They are different words for the same thing. It’s a lot like the difference between business plan, strategic plan, operations plan, annual plan, etc: depends on who’s talking at the time.

So, because of so much confusion around this subject, I did this quick (three-minute) video explaining how I see them working together:

And, in case you don’t know the business model idea, here’s an even quicker (two minutes) video explaining that:

And, just in case you don’t see the two videos here, this are the links back to the source:

Business model canvas explained

Business model and business plan