Future business owners in Michigan know that business planning plays an essential role in opening and operating a successful company. Something not always considered, however, is creating a working model of the product or service in order to test consumer demand. Business planning and business models: How are they different?
A business model is created based on information gathered by conducting research about a potential service or product. This can be done by showing a working product to others in order to gain feedback, by conducting surveys about product demand and by reading others’ experiences with similar products or services. This allows a business owner to make initial assumptions about how his or her product will perform and gain knowledge about how it may actually be accepted by consumers. While this can delay the opening of a business, it also gives future owners a better idea of how their companies may perform overall.
A business model is not necessary when writing a business plan. However, the information gathered by finding a working model can bring plans to life. At the end of the day, it is fairly easy to write down one’s wishes for how a company should operate and the goals one wishes to achieve, but having information from testing and research can help in addressing problems in the plan before a company is up and running.
Business planning takes time and effort, and building a business model can increase that time. While predicting the future of a company is not entirely possible, it is possible to gain an idea of how things will turn out by finding a working business model, which may make any delays in opening worth the wait. As a company grows, both a business plan and model can be adjusted, at anytime, in order to satisfy consumer demand and business expansion. Legal assistance is available to Michigan business owners and newly inspired entrepreneurs to ensure protections are in place at every stage of opening and operating a company, including the initial planning stages.
Source: azcentral.com, “Don’t just create a fantasy plan — build a business model“, Sidnee Peck, March 30, 2015