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- Strategic planning vs business planning: how they’re both key to success
Any thriving hospitality business needs thorough planning to make sure it succeeds. If you’ve heard the terms business planning and strategic planning, you might think they’re interchangeable, but they’re actually two distinct things companies need at different times for continued success.
The biggest difference is that business plans are mostly used when you are starting to build a business so you can quickly and smoothly create your vision. Strategic planning is what existing companies use to grow and improve their businesses.
If you’re looking for a career in hospitality management, it’s important to know the difference between the two and how to use them to best effect. In this article, we’ll go over what strategic planning and business planning are and how they are important to running a successful hospitality business.
We’ll also look at how you can learn to harness different planning methods and get the skills needed to develop your career.
A business plan is one of the first things a fledgling business will draft. Alternatively, it can be used to set business goals when launching a new product or service.
The business plan will usually look at short-term details and focus on how things should run for around a year or less. This will include looking at concepts such as:
- What the business idea is
- Short-term goals
- Who your customers are
- What your customers need
- What investment or financing you will need to start your business
- How you make revenue
- What profitability to expect
- How you can appeal to potential shareholders
- What the short-term operational needs of the business are
- What the company’s values are
- What the budget is for different parts of the business
This means market analysis and research are vital when you are making a business plan.
What are the objectives of business planning?
The primary objective of a business plan is to have all the main details of your business worked out before you start. This will give you a roadmap to use when you launch your business or when you start offering a different product or service.
For example, if you wanted to become an event planner and open your own event planning business, your plan might include how to get funds to rent an office and pay staff.
A strategic plan is where you set out the company’s goals and define the steps you will need to take to reach those goals.
A strategic plan would include:
- What current capabilities the company has
- Making measurable goals
- A full strategy for business growth
- How the company’s values, mission and vision tie in with the services and products the company intends to offer
- Who in the organization will handle certain roles
- What the timeline is for reaching certain goals
- A SWOT analysis, looking at the strengths, weaknesses, opportunities and threats in the company
- Examining the external environment for factors that will affect your company using a PEST (political, economic, social and technological) analysis
A strategic plan can be a long-term blueprint. You might find you use basically the same strategic plan for several years.
What is the objective and strategy of planning?
The aim of a strategic plan is to provide a tool that allows you to improve your business, grow the company, streamline processes or make other changes for the health of your business. Strategy implementation and meeting strategic objectives should generally lead to growth.
What is the difference between business planning and strategic planning?
There are a few major differences between strategic planning and business planning, which are outlined below.
Scope and time frame
A strategic plan is usually long-term, typically covering at least two to five years. By contrast, a business plan usually covers a year or less, since this is roughly how long it usually takes for a business to become established.
A business plan focuses on starting a business in its early stages. A strategic plan is used to guide the company through later stages. Put simply, the business plan is about direction and vision, while the strategic plan focuses on operations and specific tactics for business growth.
A strategic plan will be presented to stakeholders and employees to make sure everyone knows what is going on in the company. This will help reassure everyone with a stake or role in the business.
By comparison, a business plan will often be shown to investors or lenders to help show the business idea is worth funding.
Flexibility and adaptability
A strategic plan typically has more flexibility. This is because it is meant to be in place for a longer period of time and the company should already be established. There is more leeway for refining strategy evolution, while your business plan should remain stable.
Similarities between business planning and strategic planning
Both of these activities will require some of the same analytical components, such as market analysis, financial projections and setting objectives you can track. Of course, both also require you to be highly organized and focused to ensure your business model or strategy development is appropriate for your business.
When to use strategic planning vs business planning
As we’ve already mentioned, you’ll generally use a business plan when you’re setting up a business or moving in a new direction. This will dictate much of the day-to-day running of a business. You would use strategic planning when you want to work on growth and drive innovation.
Can a business plan be used for strategic planning?
No, a business plan and a strategic plan are two different concepts with specific goals. While a business plan outlines short or mid-term goals and steps to achieve them, a strategic plan focuses on a company’s mid to long-term mission and how to accomplish this.
If you want to prepare for success, you need to make sure you are using the right type of plan.
Integrating strategic planning and business planning
While the two plans are different, you may end up using them together to ensure optimal success. As with any type of management role, such as hotel management , strategic and business plan management requires effective communication between different departments.
This includes different strategy managers as well as strategic and operational teams. You also need to make sure that, when you are using either plan, you find the right balance between flexibility and strict adherence to the plan. With strategic planning, this means constant strategy evaluation to assess your tactics and success.
Can strategic planning and business planning be used simultaneously?
In many hospitality careers , you’ll want to juggle growth and new directions, so you could end up using both planning types. However, it’s most common for the two to be distinct. This is because you’ll generally be using a business plan only when you are starting a new venture.
What are the career prospects in strategic and business planning?
There are plenty of options for what you can do if you have skills in strategic planning and business planning. Almost every management role will require these planning skills, including how to write strategic planning documents and measure success.
If you want to work in the hospitality sector, you could look into hotel planning and other careers with a business management degree . These will enable you to grow and nurture a business, but there is also a lot of scope to start your own business. Great planning skills can give you a real competitive advantage.
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What skills do I need for a career in planning?
If you want to work in planning and management, you should work on various skills, such as:
- Analytical skills
- Risk assessment knowledge
- Market analysis and forecasting
- Team management
- Communication, both written and verbal
What qualifications can help with a career in strategic planning or business planning?
If you want to work in hotel planning and management, the most common route is to get a hospitality degree from a well-respected hospitality school in Switzerland . This will help you get the skills and knowledge you need to properly plan businesses as well as handle the execution of these plans.
Business degrees also teach you many transferable skills, such as good communication with your strategy team or data analysis, that you can use in almost any role in hospitality. They can also reduce the need to work your way up through the hospitality industry.
How can hospitality school help with planning careers?
Attending hospitality school can help you learn skills dedicated to hospitality as well as more general management, business and planning skills. This includes everything from how to handle a team to specifics such as hotel revenue management strategies .
If you find a hospitality school offering professional hospitality internships , you’ll also get experience in managing hotels and hospitality venues, helping you leap ahead in your career.
Hospitality degrees to kickstart your career
Our international business course combines leading industry expertise with essential internships to provide an exceptional foundation for a thriving career in the hospitality industry.
Both strategic and business planning are vital to build and grow a business. While business planning focuses on setting up the business and handling investment, vision and overall goals, strategic planning concentrates on growing the business and processing operational efficiency and resource allocation on a longer-term basis.
If you want to learn how to develop a hotel business plan or manage a hospitality venue, one of the best ways to get started is to study for a hospitality degree. This will give you hands-on experience of the strategic planning process or business management as well as the skills you need to succeed.
Photo credits Main image: Westend61/Westend61via Getty Images
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What is the difference between a business plan and a strategic plan.
It is not uncommon that the terms ‘strategic plan’ and ‘business plan’ get confused in the business world. While a strategic plan is a type of business plan, there are several important distinctions between the two types that are worth noting. Before beginning your strategic planning process or strategy implementation, look at the article below to learn the key difference between a business vs strategic plan and how each are important to your organization.
Definition of a business plan vs. a strategic plan
A strategic plan is essential for already established organizations looking for a way to manage and implement their strategic direction and future growth. Strategic planning is future-focused and serves as a roadmap to outline where the organization is going over the next 3-5 years (or more) and the steps it will take to get there.
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A strategic plan serves 6 functions for an organization that is striving to reach the next level of their growth:.
- Defines the purpose of the organization.
- Builds on an organization’s competitive advantages.
- Communicates the strategy to the staff.
- Prioritizes the financial needs of the organization.
- Directs the team to move from plan to action.
- Creates long-term sustainability and growth impact
Alternatively, a business plan is used by new businesses or organizations trying to get off the ground. The fundamentals of a business plan focus on setting the foundation for the business or organization. While it looks towards the future, the focus is set more on the immediate future (>1 year). Some of the functions of a business plan may overlap with a strategic plan. However, the focus and intentions diverge in a few key areas.
A business plan for new businesses, projects, or organizations serves these 5 functions:
- Simplifies or explains the objectives and goals of your organization.
- Coordinates human resource management and determines operational requirements.
- Secures funding for your organization.
- Evaluates potential business prospects.
- Creates a framework for conceptualizing ideas.
In other words, a strategic plan is utilized to direct the momentum and growth of an established company or organization. In contrast, a business plan is meant to set the foundation of a newly (or not quite) developed company by setting up its operational teams, strategizing ways to enter a new market, and obtaining funding.
A strategic plan focuses on long-term growth and the organization’s impact on the market and its customers. Meanwhile, a business plan must focus more on the short-term, day-to-day operational functions. Often, new businesses don’t have the capacity or resources to create a strategic plan, though developing a business plan with strategy elements is never a bad idea.
Business and strategic plans ultimately differ in several key areas–timeframe, target audience, focus, resource allocation, nature, and scalability.
While both a strategic and business plan is forward-facing and focused on future success, a business plan is focused on the more immediate future. A business plan normally looks ahead no further than one year. A business plan is set up to measure success within a 3- to 12-month timeframe and determines what steps a business owner needs to take now to succeed.
A strategic plan generally covers the organizational plan over 3 to 5+ years. It is set with future expansion and development in mind and sets up roadmaps for how the organization will reach its desired future state.
Pro Tip: While a vision statement could benefit a business plan, it is essential to a strategic plan.
A strategic plan is for established companies, businesses, organizations, and owners serious about growing their organizations. A strategic plan communicates the organization’s direction to the staff and stakeholders. The strategic plan is communicated to the essential change makers in the organization who will have a hand in making the progress happen.
A business plan could be for new businesses and entrepreneurs who are start-ups. The target audience for the business plan could also be stakeholders, partners, or investors. However, a business plan generally presents the entrepreneur’s ideas to a bank. It is meant to get the necessary people onboard to obtain the funding needed for the project.
A strategic plan provides focus, direction, and action to move the organization from where they are now to where they want to go. A strategic plan may consist of several months of studies, analyses, and other processes to gauge an organization’s current state. The strategy officers may conduct an internal and external analysis, determine competitive advantages, and create a strategy roadmap. They may take the time to redefine their mission, vision, and values statements.
Alternatively, a business plan provides a structure for ideas to define the business initially. It maps out the more tactical beginning stages of the plan.
Pro Tip: A mission statement is useful for business and strategic plans as it helps further define the enterprise’s value and purpose. If an organization never set its mission statement at the beginning stages of its business plan, it can create one for its strategic plan.
A strategic plan is critical to prioritizing resources (time, money, and people) to grow the revenue and increase the return on investment. The strategic plan may start with reallocating current financial resources already being utilized more strategically.
A business plan will focus on the resources the business still needs to obtain, such as vendors, investors, staff, and funding. A business plan is critical if new companies seek funding from banks or investors. It will add accountability and transparency for the organization and tell the funding channels how they plan to grow their business operations and ROI in the first year of the business.
The scalability of a business plan vs. strategic plan
Another way to grasp the difference is by understanding the difference in ‘scale’ between strategic and business plans. Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan. It is often followed by departmental and marketing plans that work from the Strategic Plan.
Smaller and start-up companies typically use only a business plan to develop all aspects of operations of the business on paper, obtain funding and then start the business.
Why understanding the differences between a business plan vs a strategic plan matters
It is important to know the key differences between the two terms, despite often being used interchangeably. But here’s a simple final explanation:
A business plan explains how a new business will get off the ground. A strategic plan answers where an established organization is going in the future and how they intend to reach that future state.
A strategic plan also focuses on building a sustainable competitive advantage and is futuristic. A business plan is used to assess the viability of a business opportunity and is more tactical.
I agree with your analysis about small companies, but they should do a strategic plan. Just check out how many of the INC 500 companies have an active strategic planning process and they started small. Its about 78%,
Strategic management is a key role of any organization even if belong to small business. it help in growth and also to steam line your values. im agree with kristin.
I agree with what you said, without strategic planning no organization can survive whether it is big or small. Without a clear strategic plan, it is like walking in the darkness.. Best Regards..
Vision, Mission in Business Plan VS Strategic Plan ?
you made a good analysis on strategic plan and Business plan the difference is quite clear now. But on the other hand, it seems that strategic plan and strategic management are similar which I think not correct. Please can you tell us the difference between these two?. Thanks
Thank you. I get points to work on it
super answer Thanking you
Hi. I went through all the discussions, comments and replies. Thanks! I got a very preliminary idea about functions and necessity of Strategic Planning in Business. But currently I am looking for a brief nice, flowery, juicy definition of “Business Strategic Planning” as a whole, which will give anyone a fun and interesting way to understand. Can anyone help me out please? Awaiting replies…… 🙂
that was easy to understand,
Developing a strategic plan either big or small company or organization mostly can’t achieve its goal. A strategic plan or formulation is the first stage of the strategic management plan, therefore, we should be encouraged to develop a strategic management plan. We can develop the best strategic plan but without a clear plan of implementation and evaluation, it will be difficult to achieve goals.
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What is Strategic Business Planning?
The importance of strategic planning, the strategic planning process, six strategic planning examples, elements of strategic planning implementation.
Strategic Business Planning 101
Operating without a strategic plan is like sitting in the passenger seat of your own business. You see it accelerate into overdrive and pass one milestone after another. Eventually, however, you helplessly watch as it swerves aimlessly or, worse, crashes and burns.
Strategic planning puts you behind the steering wheel. It serves as a roadmap that defines the direction a company must travel, and that helps leaders prepare for potential roadblocks. Companies and markets without this foundation and foresight are far more likely to get lost, stuck, or wrecked.
Strategic planning is a systematic process for developing an organization’s direction. It also articulates the objectives and actions required to achieve that future vision, and outlines metrics for measuring success.
By helping you refocus on your foundational purpose, your goals, development and your opportunities, strategic planning reintroduces you to “the big picture.” It’s the basis for business owners to achieve their vision, which they communicate to stakeholders in a strategic business plan and program.
It’s common to confuse a strategic plan with a business plan, which is used to start a business, obtain funding, or direct operations and generally covers one year.
A strategic plan, on the other hand, is about high-level thinking and generally looks at 3 to 5 years. It can be created at any time and should be regularly revisited. Key points to review the plan include whenever a company begins a new venture (like launching a new product), if the economy or competitive landscape changes, or when new regulations or trends affect the business environment.
Taking the time to identify exactly where your business and your executive team are headed (and how you’ll get there) can help mitigate the risks associated with business growth. In fact, the strategic planning process can fuel long-term success by bolstering these five key areas:
Having a clear picture of your company’s future, plus a roadmap to get there, allows your company to be far more proactive. Rather than constantly reacting to outside forces beyond your control, you can strategically make moves designed to help you achieve your long-term objectives.
Strategic planning can even help you anticipate unfavorable scenarios before they happen and take precautions to avoid them. You can keep up with market trends and avoid common industry pain points.
Every company has a finite amount of human and financial resources. By defining exactly what activities are needed to achieve objectives, a strategic plan helps you assess costs and means to allocate resources in the most efficient way.
CEOs must be selective about which new opportunities they invest in and which they avoid. The strategic planning process makes it clear when to spend and when to pass.
The business landscape changes at a rapid pace. CEOs must contend with new government regulations, shifting workforce demographics, technological advances such as Facebook, and economic uncertainty. A strategic plan puts these challenges into perspective.
The process of reviewing your company’s strengths, weaknesses, and opportunities can help you rise above tricky situations. You’ll be prepared to respond to a competitor’s new product launch, a technology upgrade on your production floor, or an unhappy customer base. This degree of foresight can result in increased profitability and market share.
The strategic plan is essential for communicating your vision to investors, managers, and employees. It ensures that all key stakeholders are on the same page, rather than struggling (perhaps inadvertently) against one another.
Even more than building consensus, the strategic planning process can improve performance. As an example, it may generate ideas for restructuring to help employees reach their full potential. Sharing realistic goals and metrics for measuring them also motivates employees to keep up their efforts.
Running a business is a tumultuous endeavor; many CEOs are familiar with the feast-famine, boom-bust cycle. And organizations that don’t have a solid foundation—like the one a strategic plan provides—are the most likely to struggle.
According to a TAB Pulse Survey , business owners who say they have a high-quality strategic plan are much more likely to forecast sharp increases in profits and sales revenue over the next year than are owners who lack a plan.
How do you build a strategic business plan? There are many different frameworks you can use, but generally the planning process addresses four considerations.
Understand Your Business
Assess where your business is today. This includes reviewing core business information (such as key financial documents), and writing or revisiting your vision, mission statement, and core values. Do they still resonate with your vision? Changes in circumstances, leadership, or the marketplace may require you to rethink the core of your business from time to time. Take time for serious reflection to come up with something truly meaningful. You may also seek input from your staff, business owner advisory board, or a business coach. When writing these core business documents, ditch the jargon. What is the most idealistic version of your business? What are your most ambitious goals? What is the grandest vision for what your company could be?
Analyze Your Strengths, Weaknesses, and Threats
A SWOT analysis is a tool for critically evaluating your company's Strengths, Weaknesses, Opportunities, and Threats. It can provide insight into where your business should focus its marketing efforts, give you a better understanding of your industry and customers, clue you into your competitive advantages, and give you a heads-up on potential threats to your growth. Examples of the types of questions you might ask during the SWOT process include:
- What do we do well?
- What do our customers identify as our strengths?
- Which emerging trends can we capitalize on?
- Who are our competitors under-serving?
- What are the most common complaints we receive?
- What outdated technologies do we use?
- What external roadblocks are in the way of our progress?
- What are our competitors doing that’s different?
Even if you’ve done a SWOT analysis in the past, it’s useful to do another as part of the strategic planning process. Don’t love the SWOT method? Skip ahead to the next section to learn about a few alternatives.
Define Objectives and Set Goals
Drill down into specific objectives that will help you achieve your vision. These might include things like launching a new product, trying different marketing strategies, re-allocating financial resources, or improving employee culture. Also, determine the specific initiatives required to meet the big-picture goals. Setting goals is only effective if you actually meet them, so you must also establish how you’ll measure success. Key Performance Indicators (KPIs) are the specific metrics you’ll track to determine progress on goals. KPIs can include things like percentage of market share, customer acquisition cost, and average support ticket resolution time.
Put the Plan into Action
Objectives are future focused, so now you need short-term action steps. Unlike goals, tasks should take only a few days or weeks to complete. Break down tasks into the smallest possible steps. Keep asking yourself, “What needs to happen before we can take this next step?” For example, a goal of “upgrade aging equipment” could be broken down into individual tasks like “research suppliers,” “make appointments with reps at the next expo” and “purchase equipment.” Assign a responsible party to each task, set deadlines for completion, and create accountability. Finally, establish a timetable for reviewing your strategic plan (at least once a quarter). Regularly tracking and analyzing your plan ensures you’ll stay on track and make progress toward your goals. Ask hard questions during these reviews to avoid continuing on with an outdated plan.
SWOT is perhaps the most common tool used in the strategic planning process, but it’s not right for everyone. Some critics think it’s too limited in scope and doesn’t encourage deep analysis. That’s why business advisors have created several alternatives, each with its own structure.
- A SOAR analysis is a common, more positive twist on SWOT. It stands for Strengths, Opportunities, Aspirations, and Results, and the goal is to use appreciative inquiry to focus on what works, rather than perceived weaknesses or potential threats.
- NOISE stands for Needs, Opportunities, Improvements, Strengths, and Exceptions. This solution-focused process looks at what works and what should improve, and also encourages you to explore opportunities you didn’t realize existed.
- The Five Forces framework examines competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. It can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in, and how companies can position themselves for success.
- Hambrick and Fredrickson’s Strategy Diamond framework consists of five essential parts that together should form a unified whole: Arenas, Vehicles, Differentiators, Staging, and Economic Logic. It’s intended to serve as a concise way to show how the parts of an organization’s strategy fit together.
- STEEPLE is an acronym for Social, Technological, Economic, Environmental, Political, Legal, and Ethical—and each is an external factor you’ll judge using this tool. (There are several similar variations on this external-focused model, including PEST and STEEP).
- A CORE assessment uses a strictly financial perspective to craft a business strategy and long-term plan. It looks at a company's capital investment, site, ownership involvement, risk factors, and exit strategy.
A strategic plan is useless if it sits on a shelf-collecting dust. That’s why implementation is perhaps the most critical step of the planning process. It’s what turns strategies and plans into actions and successes. The plan is the what and why, but implementation is the equally important who, where, when, and how.
Strategic plans fail for many reasons, including lack of ownership or confusion about the plan among stakeholders, lack of accountability or empowerment, not tying strategy to budgeting, not linking employee incentives to strategy.
Success hinges on a quality implementation plan. It starts with the top brass, who should take responsibility for spearheading execution. It’s essential, however, that all stakeholders are involved.
Start by assessing whether you have the appropriate and sufficient budget, people, resources, content and systems in place to execute on the plan. Shore up any weaknesses before trying to put the plan in motion.
As with most things, communication is key. Educate stakeholders about why the company participated in strategic planning, how the plan and specific objectives support the company’s mission and values, and how employees’ day-to-day work affects the company’s success.
Establish responsibility for tasks to the appropriate parties, a scorecard for tracking and monitoring progress, and a performance management and reward system.
Educate managers on how employee work translates into meeting goals, and regularly check in with them on progress. In fact, it should become the norm to hold structured performance conversations throughout the entire company.
Hold quarterly strategic reviews to monitor progress and make small or big adjustments as needed. During annual reviews, revisit all elements of the plan. Conduct new assessments and adjust objectives and KPIs accordingly.
Strategic planning should be an essential part of any company’s decision-making process. No matter how large or successful your organization is, TAB’s StratPro® process can help you to excel when faced with tomorrow’s business challenges.
The StratPro® process provides an effective framework for transforming your personal vision of your company into a clear and concise road map that will help to guide your organization’s response to every new challenge and opportunity.
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Business Plan Vs Strategic Plan Vs Operational Plan—Differences Explained
5 min. read
Updated October 27, 2023
Many business owners know and understand the value of a business plan. The business plan is a key component of the startup and fundraising process and serves as a foundation for your organization. However, it only tells part of the story. To get the whole picture and have a framework on which to build your business you also need a strategic plan and an operational plan.
- What is a business plan?
In its simplest format, a business plan describes the “who” and the “what” of your business. It lays out who is running the business and what the business does. It describes the products and services that your business sells and who the customers are.
- What is a strategic plan?
A strategic plan looks beyond the basics of a business plan to explain the “how”. It explains the long-term goals of the business and how it expects to achieve those goals over the long term. A strategic plan explores future products and services that your business might offer and target markets that you might expand into. The plan explains your strategy for long-term growth and expansion.
- What is an operational plan?
An operation plan zooms into the details of your business to explain how you are going to achieve your short-term goals . It is the “when” and “where” of your planning process. The operational plan covers the details of marketing campaigns, short-term product development, and more immediate goals and projects that will happen within the next year.
- What is the difference between a strategic plan and a business plan?
First, let’s look at the difference between a business and a strategic plan. For review:
A business plan covers the “who” and “what” of the business. The strategic plan gives us long-term goals and explains “how” the business will get there, providing a long-term view.
In broader terms, the business plan tells us who by showing us:
- Who is running the business? What makes them qualified? What do they bring to the table that adds value?
- Who is the competition? What do they offer and what makes you different?
- Who is your customer? How big is the market? Where are they? What do they want and how will you give it to them? Also, how will you connect with your market?
The business plan answers the “what” by telling us:
- What the business provides and how it’s provided.
- Product, services, and operations are all explained so that readers understand how customer needs are met.
The strategic plan, on the other hand, outlines long term goals and the “how”, focusing on the following:
What’s your biggest business challenge right now?
- Where will the business be in 3, 5, or even 10 years?
- How will you expand to offer different products and services over time?
- Will your market and industry change over time and how will your business react to those changes?
- How will you grow your market and reach new customers?
- What needs to happen so you can achieve your goals? What resources do you need to get there?
- How will you measure success? What metrics matter and how will you track them?
So, your business plan explains what you are doing right now. Your strategic plan explains long-term aspirations and how you plan to transition your business from where it is today to where you want it to be in the future. The strategic plan helps you look more deeply into the future and explains the key moves you have to make to achieve your vision.
- What is the difference between strategic planning and operational planning?
While strategic planning looks at the long term and explains your broad strategies for growth, an operational plan looks at the short term. It explains the details of what your business is going to do and when it’s going to do it over the next twelve months or so. An operational plan covers details like:
- What activities need to happen to achieve your business goals?
- When will each activity take place, who will do it, and when do you need to reach specific milestones?
- How will your business operate? What suppliers will you work with? When do you need to have them in place?
- What marketing campaigns will you run and what will they cost?
- What investments will you make in your products and services this year?
The bottom line, your operational plan is the short-term action plan for your business. It’s the tasks, milestones, and steps needed to drive your business forward. Typically an operational plan provides details for a 1-year period, while a strategic plan looks at a 3-5 year timeline , and sometimes even longer. The operational plan is essentially the roadmap for how you will execute your strategic plan.
- How to use your business plan for strategic development and operations
A great business plan can encompass both the basic plans for the business, the long-term strategic plan, and the near-term operational plan. Using a lean planning method, you can tackle all three phases of planning and make the process easy to review and revise as your business grows, changes, and adapts.
Start with a simple plan
The lean planning methodology starts with a simple, 30-minute business plan that outlines the fundamentals of your business: who you are, what you are doing, and who your customers are. It’s a great way to provide a brief overview of your business.
Expand your plan
From there, you can expand your plan to include your longer-term strategy. Adding greater detail to elements of the plan to explain long-term goals, milestones, and how your products and services will change and expand over time to meet changing market conditions.
Finally, your lean plan will cover financial forecasts that include monthly details about the short-term revenue and expenses, as well as longer-term annual summaries of your financial goals, including profitability and potential future loans and investments.
- Use your business plan to manage your business
Regardless of the type of plan, you are working on, you need a team of players on hand to help you plan, develop, and execute both the operational and strategic plans. Remember, your business needs both to give it a clear foundation and a sense of direction. As well as to assist you with identifying the detailed work that has to happen to help you reach your long-term goals.
Learn how LivePlan can help you develop a business plan that defines your business, outlines strategic steps, and tracks ongoing operations. You can easily share it with your team and all of the right stakeholders, explore scenarios and update your plan based on real-world results. Everything you need to turn your business plan into a tool for growth.
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan.
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What is the Difference Between a Strategic Plan and a Business Plan?
Unfortunately, these two terms are often used interchangeably, and they should not be. Even worse, many consultants pass off what is really a business plan when an organization is really seeking a true strategic plan. In their simplest terms, a Strategic Plan is the organization’s way to communicate its direction, plans, and goals. Whereas, a Business Plan is a written document describing the company’s core business activities, objectives, and how it will achieve its goals. So what does this really mean for your organization? How do these documents really differ in form and application? Let’s take a look.
A business plan is more focused than a strategic plan, it should be a detailed report on the operations of the core business activities of the business or nonprofit. These efforts should outline everything from production to sales. It should include detailed information on costs, sales figures, suppliers, customer data, etc. A few things can be incredibly helpful in developing a business plan that are not typically seen in a strategic plan, one that we like to utilize in business plans is customer personas. Customer Personas allow us to gain an understanding of what type of person purchases our product or service and provides general information about how they make those purchases, where or who influences those purchases, etc. It’s a good idea when utilizing a persona to identify the different groups interested in your product or service and then to build the personas around those groups. As an example, imagine an Executive Director of a museum that is a potential client of NMBL Strategies, we would then source profiles on several Executive Directors and build a persona around them, average age, gender, social media profiles, who they engage with on social, where they gather information from, who sits on their board, and who reports to them. By building as detailed of a profile as possible we have a better chance of building a relationship with them and eventually developing them into a client.
It’s not to say that client personas couldn’t be in a strategic plan, in some instances we have clients that want to know this information, but it isn’t as common to get this granular in a strategic plan. Likewise, we may create the client profiles as a part of a strategic plan, but applying them to a sales process is unlikely to occur. Ideally, within the business plan, you can use these personas to identify who is purchasing, how big that group is, how you will reach them, and your sales conversion percentage.
There are other examples of how a business plan is more focused, but the customer personas give a good idea of the depth between the two documents.
Want to learn more about developing customer personas? Check out our blogs on developing personas:
How to Develop a Strategy to Differentiate Your Nonprofit
Business Journal Executive Panel: 15 Ways to Up Your Brand’s Social Media Game
The Number One Thing You Need to Know to Survive the 5 Year Mark With Your Small Business
Higher Level/More Visionary
Just as the business plan is more focused, the strategic plan is high-level and more visionary. Perhaps the best example of this is the Strategic Positioning section of a strategic plan. At NMBL, we continue to grow and adapt to create new best practices. We’ve currently adapted our strategic visioning portion of the strategic planning process to include six pieces, mission, vision, and elevator pitch were always a part of our process here. In the last several months, we’ve added Initiatives, Commitment, and Toolkit to this group, or in other words, what we do (initiatives), why we do it (commitment), and how we do it (initiatives). Turning this into a graphic to cover these six sections gives a very holistic view of the high level of the organization. These items may be mentioned in a business plan, but are unlikely to be part of the development of a business plan (meaning these should be developed prior to engaging in a business plan). Or looked at another way, after going through a strategic plan an organization may develop a business plan for one of their initiatives. This is actually a great way of looking at how you can utilize a business plan and strategic plan together.
Learn more about ensuring your plan is more visionary through these stories:
What are Mission and Vision Statements
Why Vision Based Strategic Planning Matters
3 Reasons Nonprofits Struggle and How to Avoid Them
Best of Both Worlds
We’ll be the first to admit, our Strategic Plans include more of a business plan than almost any other we see in the industry. We do this because we believe that if we leave something too high level it is unlikely to be utilized, understood, or become anything more than a document on a bookshelf. In fact, we find there are five primary reasons why a strategic plan never gets executed (being too high level is one of the most common reasons for non-execution). In an effort to make the strategic plan more executable, our planning sections create a lot of detail around how an organization will operate.
If undertaking both plans, it is highly recommended an organization start with the strategic plan, develop the 30,000 foot view before identifying the details of the business plan. The good news is there should be a lot of overlap, and if you do undertake both, the business planning portion should go a lot quicker because you already have a lot of the information at your disposal.
Does your organization need help to determine what is the right plan for you? Think you need a business, strategic, or both plans? Reach out to NMBL Strategies today to find out how we can help you get from strategy to execution.
About NMBL Strategies
NMBL Strategies seeks to empower small businesses, nonprofits and public-private enterprises through trusted consulting partnerships. Our consultants have real world experience and significant tenure within their fields and are able to deliver the best and most strategic return on investment. We strive to grow our business with the same dedication and decisiveness we offer to our broad range of clients.
NMBL Strategies is a strategic, decisive partner trusted to deliver the best ROI when needed most.
Strategic planning: the basics
Creating a strategic plan is a key component of planning for growth. It will help prepare a realistic vision for the future of your business and in doing so can maximise your potential for growth.
- The purpose of strategic planning
- The three key elements of strategic planning
- Getting started with strategic planning
- Build your plan on solid strategic analysis
- What a written strategic plan should include
- Strategic planning and ownership
- Implementing a strategic plan
A strategic plan should not be confused with a business plan. A business plan is about setting short or mid-term goals and defining the steps necessary to achieve them. A strategic plan is typically focused on mid to long-term goals and explains the basic strategies for achieving them.
2. The purpose of strategic planning
The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
Strategic planning and growing businesses
Taking the decision to grow a business means embracing the risks that come with growth. Spending time on identifying exactly where you want to take your business - and how you will get there - should help you manage those risks and take charge of the growth process.
As your business becomes larger and more complex, strategy formulation will need to become more sophisticated. To do this, you might want to start collecting and analysing a wider range of information about your business - both about how it operates and about how conditions are developing in your current and potential markets.
The difference between strategic planning and writing a business plan
The process of strategic planning is about determining the direction in which you want to take your business. By contrast, the purpose of the business plan is to provide the detailed route map that will take you in your desired direction.
Effective strategy development requires a shift in focus from day-to-day concerns to your broader and longer-term business options.
3. The three key elements of strategic planning
Developing a strategy for business growth requires you to deepen your understanding of the way your business works and its position relative to other businesses in your markets. As a starting point, you need to ask yourself the following three questions:
- Where is your business now? This involves understanding as much about your business as possible, including how it operates internally, what drives its profitability, and how it compares with competitors. Be realistic, detached and critical.
- Where do you want to take it? Here you need to set out your top-level objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and your source of competitive advantage over your rivals in the marketplace?
- What do you need to do to get there? What changes will you need to make to deliver on your strategic objectives? What is the best way of implementing those changes? What changes to the structure and financing of your business will be required and what goals and deadlines will you need to set for yourself and others in the business?
While the second question is at the heart of the strategic planning process, it can only be considered usefully in the context of the other two.
You should balance your vision for the business against the practical realities of your current position. You need to take into account the implications of any changes, such as increased investment in capital and other resources. A strategic plan needs to be realistically achievable.
4. Getting started with strategic planning
As with any business activity, the strategic planning process itself needs to be carefully managed. Responsibilities and resources need to be assigned to the right people and you need to keep on top of the process.
Who to involve
Try to find people who show the kind of analytical skills that successful strategic planning depends upon. Try to find a mix of creative thinkers and those with a solid grasp of operational detail.
Don't try to do it all yourself. Take on board the opinions of other staff - key employees, accountants, department heads, board members - and those of external stakeholders, including customers, clients, advisers and consultants.
How to structure the process
There is no right or wrong way to plan the process of strategic planning, but be clear in advance about how you intend to proceed. Everyone involved should know what is expected of them and when.
Consider holding a series of weekly meetings with a strategy team before delegating the drafting of a strategy document to one of its members. Or you might decide to hold strategy brainstorming sessions - which might involve seeking contributions from a broader range of employees and even key customers.
Getting the planning document right
It's important to get the process right. But don't neglect the outcome - it's also important to make sure you capture the results in a strategic planning document that communicates clearly to everyone in your business what your top-level objectives are. Such a document should:
- reflect the consensus of those involved in drafting it
- be supported by key decision-makers, notably owners and investors
- be acceptable to other stakeholders, such as your employees
5. Build your plan on solid strategic analysis
Strategic planning is about positioning your business as effectively as possible in the marketplace. So you need to make sure that you conduct a thorough analysis of both your business and your market.
There are a range of strategic models that you can use to help you structure your analysis.
A SWOT analysis identifies the internal and external factors that are favourable and unfavourable to achieving a business goal:
- Strengths - attributes of the business that can help achieve the objective
- Weaknesses - attributes of the business that could be obstructive to achieving the objective
- Opportunities - external factors that could be helpful in achieving the objective
- Threats - external factors that could be obstructive to achieving the objective
PESTLE breaks the business environment down into the following components:
- Political - e.g. changes to taxation, trading relationships or grant support for businesses
- Economic - e.g. interest rates, inflation and changes in consumer demand
- Social - e.g. demographic trends or changing lifestyle patterns
- Technological - e.g. the emergence of competing technologies or productivity-improving equipment for your business
- Legal - e.g. changes to employment law or to the way your sector is regulated
- Environmental - e.g. changing expectations of customers, regulators and employees on sustainable development
The Five Forces model aims to help businesses assess how competitive a market is. The model looks at:
- your customers' bargaining power - the higher it is (perhaps because there is a small number of major buyers for your product or service) the more downward pressure on prices and revenue they will be able to exert
- your suppliers' bargaining power - the ability of suppliers to push prices up (for instance if you rely on a single firm) can impact significantly on costs and profitability
- the threat of new competitors entering your market or industry - more businesses competing makes it more difficult to retain market share and maintain price levels
- the threat of customers switching to newer products and services
- the level of competition between businesses in the market - including the number and relative strength of the businesses and the cost to customers of switching between them
6. What a written strategic plan should include
There is no set blueprint for how to structure a strategic plan, but it is good practice to include the following elements:
- Analysis of internal drivers - corresponding to the strengths and weaknesses of a SWOT (strengths, weaknesses, opportunities and threats) analysis.
- Analysis of external drivers - this should cover factors such as market structure, demand levels and cost pressures, all of which correspond to the opportunities and threats element of a SWOT analysis.
- Vision statement - a concise summary of where you see your business in five to ten years' time.
- Top-level objectives - these are the major goals that need to be achieved in order for your vision for the business to be realised. These might include attracting a new type of customer, developing new products and services, or securing new sources of finance.
- Implementation - this involves setting out the key actions (with desired outcomes and deadlines) that will need to be completed to attain your top level objectives.
- Resourcing - a summary of the implications your proposed strategy will have on your business' resources. This will reflect financing requirements, as well as factors such as staffing levels, premises and equipment.
You may also want to consider adding an executive summary . This can be useful for prospective investors and other key external stakeholders.
7. Strategic planning and ownership
Growing a business can pose some considerable personal challenges to the owner or manager, whose role can change dramatically as the business grows.
Effective strategic planning involves challenging the way that business has been done up to this point. It may be that decision-making in some areas will be handed to others, or that processes which have worked well in the past will no longer fit with future plans.
It can be tempting for owners or managers to overlook alternatives that are uncomfortable for them personally. However, utilising the options open to you will underpin the healthy growth of your business.
Examples of issues that tend to get overlooked by growing businesses include:
- The future role of the owner - for example, it may be in the best interests of the business for the owner to focus on a smaller number of responsibilities, or to hand over control to someone with greater experience.
- The location of the busines s - most small businesses are located close to where the owner lives. But as a business grows it may make sense to relocate the business to be closer to greater numbers of customers or skilled employees.
- Ownership structure - growing businesses in particular should ensure that they get this right. The more a business grows, the more sophisticated it needs to be about meeting its financing needs. In many cases, the best option is for the owner to give up a share of the business in return for equity finance - but this can be emotionally difficult to do.
It is the owner of the business who decides the strategic plan. Growing a business is not something done 'at all costs'. However, an honest assessment of the options allows for any decisions made to be as informed as possible.
8. Implementing a strategic plan
The strategic plan needs to be implemented, which is a process that requires careful planning.
The key to implementing objectives identified in the strategic plan is to assign goals and responsibilities with budgets and deadlines to responsible owners - key employees or department heads, for example.
Monitoring the progress of implementation and reviewing it against the strategic plan will be an ongoing process. The fit between implementation and strategy may not be perfect from the outset and you may find it necessary to tweak your plans as you progress.
Monitoring implementation is the key. Using key performance indicators (KPIs) and setting targets and deadlines is a good way of controlling the process of introducing strategic change.
Your business plan is another important tool in the implementation process. The business plan is typically a short-term and more concrete document than the strategic plan and it tends to focus more closely on operational considerations such as sales and cashflow trends. If you can ensure that your strategic plan informs your business plan, you'll go a long way to ensuring its implementation.
Remember that strategic planning can involve making both organisational and cultural changes to the way your business operates.
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Strategic Planning in Business
Table of Contents
What is business strategic planning, the strategic planning process in 3 steps, what is a business strategic plan, key components of a business strategic plan, business strategic plan example, strategic plan vs. business plan.
Strategic planning is key for success in business. By planning strategically for the future, a business can achieve its goals. It’s easier said than done, but the more you know about strategic planning, the better chance you have at succeeding.
Business strategic planning is the process of creating a business strategy and an accompanying business strategic plan to implement a company’s vision and achieve its goals over time. The main goal of strategic planning is to take a company from its current state to its desired state through a series of business actions.
The business strategic planning process usually consists of defining business goals, doing a SWOT analysis to assess the company’s business environment and developing a business strategy. The leadership team is in charge of business strategic planning, as it has a very important impact on the overall direction of a company.
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Strategic planning is very important, but it doesn’t need to be overly complex. Let’s simplify this process by breaking it down into three simple steps.
1. Set Business Goals
A business goal is simply an accomplishment that a company wants to achieve in the short, medium or long term. Business goals can take many forms such as increasing sales, revenue, customer satisfaction levels and brand positioning, among many other things.
2. Conduct a SWOT Analysis
The goal of a business strategy is to leverage the strengths of a business and minimize the impact of its weaknesses. Those two things are internal factors. The strengths of a company can become competitive advantages that can lead to business growth. There are many types of business strengths and weaknesses such as scale, speed, or R&D, just to name a few.
Threats and opportunities refer to external factors such as competitors or an untapped market. A successful business strategy considers all of these factors to define how a product or service will be created, marketed and sold, and a SWOT analysis is a great starting point.
3. Develop a Business Strategy & Strategic Plan
Once you’ve completed your SWOT analysis, you can create a business strategy that’s designed to help position your company in the market. Your business strategy guides how you produce, market and sell your product or service based on internal and external analysis.
Then, you’ll need a strategic plan to explain how you plan to execute that business strategy. To oversee the execution of a business strategic plan, managers need to manage time, costs and tasks. ProjectManager is a project planning tool that allows managers to plan, schedule and manage their team’s work. Plan your work with professional tools such as Gantt charts, kanban boards, task lists and calendars. Then track your progress in real time to stick to your strategic plan. Get started for free.
A business strategic plan is an implementation plan that’s meant to turn a business strategy into action items that can be executed over time. Business strategic plans are usually executed over the course of 3-5 years.
How to Develop a Strategic Plan
To develop a strategic plan, you should ask yourself the following three questions.
- Where Is the Business Now? Gather as much information on your business as possible including internal operations and what drives its profitability. Compare the business to competitors and note the similarities and differences in detail. This isn’t a day-to-day operational study, but a broader look at the business in context to itself and its environment. But don’t go crazy; stay realistic in terms of your business goals. Be detached and critical in your analysis.
- Where Do You Want to Go? Now it’s time to decide what your top-level objectives are for the future. Start with a vision statement , objectives, values, techniques and goals. Look forward to five years or more to forecast where you want the business to be at that time. This means figuring out what the focus of the business will be in the future. Will that focus differ from what it is now, and what competitive advantages do have you in the marketplace? This is where you build the foundation and initiate changes.
- How Can You Get There? Once you know where you are and where you want to go, it’s time to plan. What are the changes to the structure, financing, etc., necessary for the business to get there? Decide on the best way to implement those changes, the timeframe with deadlines and how to finance it. Remember, this is looking at the business at large, so consider major endeavors such as diversification, existing growth, acquisition and other functional matters. A gap analysis can be a big help here.
Once you’ve answered the above questions and have a way to achieve the long-term goals laid out in the strategic plan, the next step is making sure you have the right person to manage all of its moving parts. They must be analytical, a creative thinker and able to grasp operational detail.
That doesn’t mean the strategic plan is led by one person. It’s best to not do it alone; seek other opinions. The people in your organization, from bottom to top, are all great resources to offer perspectives from their standpoints. Don’t forget to take in the advice of stakeholders, including customers, clients, advisors and consultants.
To create a strong strategic plan, one must first have a strong understanding of the business that is to expand. How does the business work? Where does the business stand in relation to competitors in the marketplace? A strategic plan is built on the bones of the following foundational elements:
- Mission Statement: The mission statement describes what your company does.
- Vision Statement: The vision statement explains where your company expects to be in the future.
- Core Values: Guiding principles that shape your company’s organizational culture.
- Business Objectives: Consider using the SMART goal-setting technique . This simply means setting up specific, measurable, attainable, relevant and time-bound objectives that your company wants to achieve.
- SWOT Analysis: External and internal factors that make up your company’s business competitive environment.
- Action Plan: A plan outlining steps that will be taken to achieve the business objectives of your organization.
- Financials: A section that shows the financial performance expectations, the budget and the resources that will be required to implement the action plan.
- Performance Measurements: Performance indicators that will be used to measure the effectiveness of the action plan.
Never forget to check your strategic plan against reality. In addition to being achievable, it must be practical for your business environment, resources and marketplace.
Now let’s look at a simple business strategic plan example. This is a strategic plan for a small construction company.
1. Mission, Vision & Core Values
- Mission Statement: To build residential spaces that provide wellbeing for our clients.
- Vision Statement: To offer the best construction experience for our clients and expand our brand throughout the globe.
- Core Values: Sustainable innovation and respect for the environment.
2. Business Objectives
- Business Objective 1: Grow operating margin from 15% to 20% over the next year.
- Business Objective 2: Reduce operating costs by 5% over the next quarter
- Business Objective 3: Increase the number of new contracts generated by 10% over the next year
3. SWOT Analysis
- Strengths: Available financing, brand visibility and know-how.
- Weaknesses: Lack of PPE, human capital and expertise in construction areas such as plumbing, electrical work and masonry, which requires subcontractors.
- Opportunities: Lack of environmentally-friendly construction companies in the market.
- Threats: Larger construction companies compete for contracts in the area.
4. Action Plan
- Business Objective 1: To grow operating margin, new employees with plumbing, electrical work and masonry experience will be hired to cut down subcontractor costs. This must be done by the end of the first quarter.
- Business Objective 2: To reduce operating costs, the company will acquire property, plant and equipment. By doing this, the company will no longer rent equipment from third parties, which will reduce operating costs significantly in the medium and long term.
- Business Objective 3: To increase the number of new contracts generated, the leadership team will invest more in the PR, marketing and advertising departments. The company will also invest in key positions for the construction bidding process such as contract estimators.
- Financials: This section will explain in detail what are the costs associated with the work items in the action plan as well as the expected financial benefits for the company.
Our free strategic plan template helps leadership teams gather important information about their business strategy, which makes it the perfect tool to start shaping a strategic plan for your business or project.
A strategic plan is a type of business plan, but there are distinctions between the two. Whereas a strategic plan is for implementing and managing the strategic direction of a business, a business plan is more often the document that starts a business.
A business plan is used primarily to get funding for the venture or direct the operation, and the two plans target different timeframes in business history. A strategic plan is used to investigate a future period, usually between three-to-five years. A business plan is more routinely a year out.
A Different Intent
A strategic plan offers a business focus, direction and action to help the business grow from the point it presently resides to a greater market share in the future. A business plan, on the other hand, is more focused on offering a structure to capture and implement ideas that initially define a business.
With a strategic plan, existing resources are prioritized to increase revenue and return on investment. The business plan is different in that it’s seeking funding for a venture that doesn’t yet exist. Where a strategic plan is building a sustainable competitive advantage in the future, a business plan is designed to take advantage of a current business opportunity.
So, a strategic plan is communicating direction to teams and stakeholders in order to achieve future goals. A business plan isn’t talking to staff, which is likely nonexistent or minimal at this point. It’s speaking to banks and other financial supporters.
Strategic planning, like any planning, requires keeping a lot of balls in the air. That means having the right tool to plan, monitor and report on all the various tasks and resources. ProjectManager is online project management software that gives you control over every aspect of creating and implementing a strategic plan. Try it today with this free 30-day trial.
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Business plan vs Strategic Plan - What You Must Know
Like everything else in life, the nature of business mandates a plan in place to follow and measure. This is one of the key elements of a startup or even a business division within an organization that is expanding or diversifying. It has every resource element and needs to be mapped out for the business, including projected milestones for the future. However, every business strategist needs to know that there are some subtle differences between what constitutes a business plan, and the several differences it has with a strategic plan. A deep dive into the elements that comprise each also explains the outcomes they eventually hope to achieve.
Meet The Business Plan
A business plan is essentially what the name suggests. A plan to start and run a business or a new entity of an existing business, usually either an expansion in a newer region or a diversification into a new market. Business plans may be created for internal reference purposes or external funding purposes, with the latter being the common usage. Business plans form the basis of all business strategies and decisions made at the ownership level in an organization. The most essential components of a business plan include:
Organizational Plan - This is basically the core. It includes the mission and vision statement, the market in which the company plans to operate. It also includes relevant research into the market potential of the business, based on which it will be funded or sponsored. The rationale of the business’ growth, and time frames related to all of them.
Financial Plan - Cash is king, and so is the balance sheet. Financial plans include some of the most important elements of the entire business plan and include elements like projected cash flow statements, capital requirements, a summary of projected overheads, projected balance sheet including assets and liabilities, income and expense statements. Consider this the central nervous system of the business plan, because it spans almost everything the business hopes to achieve.
Sales and Marketing Plan - We mentioned “almost” everything above for this very reason. Sales and marketing form the other significant component of the business plan. These include sales forecasts and overheads, marketing and brand management summaries and market share projections that the business hopes to achieve within a time frame.
Business plans, by their nature, are fairly comprehensive and overarching. They form the basis of the existence of the business, or the rationale for investments in the business. But what of the actual operations? About walking the talk in the business plan? The actionable?
The Actionables- A Strategic Plan
Strategic plans constitute the basis of operations and responsibilities within the business. Strategic plans lay the paths out for each member of the organization to follow, and define the functional outline and the key outcomes for every project and process within the business. This goes onto define the operations and their outcomes within the organization, its departments, and its employees. The only common element it shares with the business plan is the vision of the organization, and for obvious reasons - vision guides strategy, which in turn, guides operations of the business.
Why A Strategic Plan Is Crucial to The Organization
One word - synchronization. A robust and well laid out strategic plan creates the much-needed sync between teams and their objectives. It provides a guide for daily operations alongside the focus and direction that teams often need to get the job done, on time and on budget. Combine all of these together in one large network and you begin to see the actual value of a strategic plan in the business- a grand orchestration of departments, teams, and individuals using the resources allocated to them to achieve the key performance indicator that they are responsible for.
Elements to Consider in a Strategic Plan
If you’re tasked with creating a strategic plan for your business, you will need to incorporate certain components that will ensure that the stakeholders are aligned completely to the organization’s goals and objectives. These include:
Vision and Values - The vision statement is the most important component of the strategic plan, as well as the most overarching. It propels the organization towards established goals and the values that every employee and stakeholder must incorporate.
Goals - These are short, medium or long term, depending on the scope of the strategic plan. They provide the much-needed context for the organization to undertake initiatives that meet the vision while maintaining the values.
Guiding Principles - More often than not, organizations face crossroads where they need to decide which steps to take next, in order to reach their vision. Principles are included in strategic plans to align teams towards the vision when faced with a dilemma and form a critical part of strategic planning.
Action Plans - A sum of key initiatives, processes, and projects that are required to be performed on a pre-determined periodic basis in order for the goal to be accomplished. These also include the time frames for each and the responsible stakeholder for each of the options. They usually follow the DACI format for each action (Driver, Approver, Contributor, Informed)
SWOT Analysis - The quintessential component, the Strength, Weaknesses, Opportunities and Threats analysis of the strategic plan lends context to all business actions vis-a-vis the external environment of the business. This includes competitors, market forces and conditions, identification of internal and external threats and several other factors.
Learning All About Strategic Planning
If business is war, a strategic plan is the terrain map in the hands of the general based on which the entire army fights to win. It is crucial, therefore, to acquire the necessary skills and certifications for employment as a business strategist who would be entrusted with creating it. Know more about how to become a successful and sought after business strategist today!
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