Ep42: Business Model Canvas Vs Business Plan

BMC-Business Plan Afropreneur POdcast Web

Driving home from one of Startup Grind Lagos’s meetup we had a discussion with one of the participating entrepreneurs which evolved into an interesting argument and now, an Afropreneur topic: Business Model Canvas vs Business Plan.

Why do we need business plans?

Why not stick with a Business Model Canvas (BMC)?

When should Business plans be drafted?

Who needs to see the business plan?

So what is the difference between a BMC and a Business Plan? The difference is the level of detail!

A business plan can reach up to 70 pages (I seriously advise against this. Keep it to 35 max.) and a business model canvas can be completed in just 1 or 2 pages!

A business plan and BMC are both road maps to guide you through your business and give you a clear vision and mental representation of your business. We think both are necessary depending on the circumstance. They both prepare you for your industry, your market and future challenges.

We advise entrepreneurs to always write their business plans it take you through a journey of discovery. A discovery based on research and assumptions. While writing business plans you are forced to tinker the idea behind the business, the business model and other factors. This leads to some level of improvement and refinement on the original idea. Often times, investors would ask you for this document as it is a proof that you have thought through the business and if you did not get discouraged after writing it, it means you believe in the idea (It increases the chances of investment especially for entrepreneurs who do not have strong oratory skills to express their ideas).

The Business model canvas requires less time, it gives you the structure of a business plan but with more specific details and flexibility. A BMC is a Business plan summarized in one or two pages. It is easy to read, easier to write and understand. Investors may prefer this document at an elevator pitch as it is very brief yet informative. It is a great guide especially when writing business plans.

So what would we choose between the BMC and Business Plan? This will always depend on the audience. We would prefer to use the BMC to brainstorm through a business model, however, if we were to approach investors then we have to write a business plan.

Listen to our conversation below:

Resource:

Business Plan

Business Model Canvas

If You Enjoyed the Show

Please leave a comment below. If you want to hear more from The Afropreneur Podcast including and beyond the podcasts, join the enewsletter mailing list.

In case you missed it, last time we discussed something interesting: When should a business evolve? Catch up by clicking the link.

Sharing is Caring 🙂

Share

Comments

  1. I am interested in the training on how to effectively do a business plan

  2. I wish to know more about the business plan, because I’m into business but didn’t write mind yet….

    • Afropreneur Admin : August 3, 2017 at 7:35 am

      Hello! We intend to organise a training/webinar on this. Once plans are finalised you’ll be informed.

  3. Hi guys, great topic and really excited about what you’re doing. Just adding my two cents to your discussion on which one is more important. Each has its own importance but really depends on when it used. Each is required at different stages of the entrepreneurial journey with the Business Model Canvas (BMC) being more relevant at the dream up or ideation stage and the Business Plan (BP) at the start-up, ramp-up, scale up and expansion stages of the business life cycle. A Business Plan (BP) is simply a tools that entrepreneurs use to articulate and explain in detail their ‘validated’ business model as depicted by their BMC after several iterations. The BP also explains how the entrepreneur intends on executing their discovered winning business model and how it creates, delivers and captures value for all intended stakeholders. At the dream up stage, the BMC is the primary tool that entrepreneurs use to capture and document how different the building block connect to each other to create value for stakeholder of the business and is also primary tool in the lean start-up process.

    • Afropreneur Admin : August 3, 2017 at 7:38 am

      Quite apt! We appreciate your comment and contribution.Would you be interested in sharing your wealth of knowledge with us by writing an article on this?

Leave a Reply

%d bloggers like this: