Your business model underpins your business plan. You need to develop a business model before you can draw up a business plan. However, you may not want or need to draw up a formal business plan (see Academic insight 14.1). Developing a fl exible business model using the New Venture Creation framework takes a fraction of the time it takes to write up a formal business plan. Th ere is no point in formalizing frameworks and documenting plans unless they help in the planning process or are needed to help communicate those plans to the wider group of stakeholders in your venture. It is all a question of both the scale of the venture and nature of the stakeholders you wish to communicate with. Small-scale ventures may not need detailed or formal plans, but many providers of fi nance still expect them. Nevertheless, while you may not always need to write a formal business plan you will still need to strategize - to think about the future, analyse your options and develop strategies. Developing your business model and writing it down as a business plan allows you to crystallize your business idea and to think systematically through the challenges you will face before you have to deal with them.
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