Week 7 E-Commerce, Business Model? How Does it Differ From a Business Plan?

Week 7 E-Commerce
Name
Institution
Week 7 E-Commerce
A business model refers to the tool through which a firm is able to generate or make a profit. The business model falls within a business plan describing how a firm has positioned itself in the value chain within the industry. In this way, it classifies the firm’s relationship with its suppliers, customers, and shareholders in a bid to generate profits. On its part, a business plan describes a document that projects the firm’s strategy, as well as the expected financial performance for the coming years. The business plan shows exactly how the firm is going to make the profits described in the business model over a period of time (Milady, 2014, p. 74).
Angel investors refers to individuals, mostly prosperous business people who put their personal funds into a business that has potential to succeed. Angel investors mainly put their money in a business at its initial stages while they may also offer advice, as well as business experience. The amount that angel investors put into a business range from 25,000 dollars to 100, 000 dollars or even more, but they also expect a good return. On the other hand, venture capitalists denotes firms or companies that choose to invest in an already successful existing business. These are firms with professional investors where the money originate from various sources such as other companies, individuals, and also from foundations. Venture capitalists take shares in the firm and have a say in the running of the business (become part of the board) and expect high returns. They invest large amounts of money mainly ranging from 500,000 million dollars or 1 million dollars or more (Landstr’’m & Mason, 2012, p. 28).
Websites are costly to maintain because there is a need to update them often, make changes, and corrections where necessary. Ideally, e-commerce websites are never fully completed, they are always in a state where they keep being built and rebuilt. Some of the factors that increase cost includes the fact that codes have to be debugged, tests and repairs need to be conducted on the hyperlinks, and overall database maintenance. Additionally, basic administrative duties or usability issues required on a particular website such as products and pricing need updating (Manuel, Dearnley & Walton, 2009). Finally, the cost is high because the web team including programmers, designers, as well as business managers need to be hired and paid to keep everything...