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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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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
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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
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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.
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The difference between a strategic plan and a business plan.
Every business needs a strategic plan. Every business needs a business plan. It’s knowing precisely what each plan entails and when that plan can be of most use that makes the difference between these two essential documents.
Let’s start by defining the purpose behind each type of plan. This can help both budding entrepreneurs and veteran CEOs avoid the mistake of pursuing the wrong kind of plan at the wrong time in the growth cycle of their companies.
The Strategic Plan
As we have noted before, a strategic plan “is a written document that points the way forward for your business.” The focus of a strategic plan can include (but isn’t limited to):
- Expanding business operations
- Reaching into new market segments
- Solving organizational problems
- Potential restructuring a business
By staying focused on your original purpose, goals, and objectives, 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.
A strategic plan serves as a roadmap for determining what will likely lie ahead for your business in the next 3-5 years, while also including a series of actions or activities that can turn strategy into operational reality.
Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more
The Business Plan
Generally speaking, a business plan is needed when a company is in its earliest phase of growth. This plan offers a description of how your business will operate, its objectives for growth and financial success, and how it aims to get there. Essentially, it articulates the why behind a business. Key elements include:
- Executive summary and mission statement
- Projected staffing and equipment needs
- Short- and long-term marketing strategy
- Financial statement, including anticipated startup expenses and capitalization
- Outline of management structure and operational processes
A business plan “is a broader, more preliminary document that sets your course when your company may still be nothing more than a twinkle in your eye,” notes BDC of Canada. This plan “not only accurately summarizes what your business is all about, but why it’s a viable proposition.”
Strategic Business Planning
Strategic planning is the systematic process for developing an organization’s direction. This includes pinpointing objectives and actions required to achieve that future vision, and metrics to measure success.
A business plan, as described by the Center for Simplified Strategic Planning, Inc., aims to define “the initial goals and objectives of the company, its structure and processes, products and services, financial resources [and] all of the basics that go into forming a company ” and getting it up and running.
TAB offers its members a different kind of approach— strategic business planning . It’s the basis for business owners to achieve their vision, which they will then communicate to stakeholders in a strategic business plan and program.
Action steps embodied in a strategic business plan include:
- Understanding your business. Assess where your business is today. Review core business information and revisit your vision, mission statement, and core values.
- Analyzing your strengths, weaknesses, and threats. Conduct a SWOT analysis to evaluate where your business is operating at peak efficiency and where organizational weaknesses (and threats from competitors) might stunt future growth.
- Defining objectives and set goals. Drill down into specific objectives that will help you achieve your vision—everything from developing new marketing strategies and launching a new product to re-allocating key financial resources.
- Putting the plan in action . Take action steps to translate the plan from paper to reality. Break tasks down into small steps, assign a responsible party to be accountable for each task, and establish a schedule for reviewing your overall plan on a regular basis.
As we enter into a new year, strategic business planning is more urgently needed than ever before. Want to learn more? Register for our free TAB white paper, “4 Step Guide to Strategic Planning.”
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Business plans vs. strategic plans.
What sets a business plan apart is its singular focus on market and operational feasibility. In contrast, a strategic plan clarifies the long term direction of the organization; most business plans look at a shorter period of time, typically 2-3 years, and drills down thoroughly how the work will get done and dollars will be earned.
Business plans typically take more resources, both internal and often external (in the form of consulting assistance) to develop the kinds of operational and financial analysis necessary to fully test the feasibility of business venture or an organization as a whole.
It gets down to specifics about who the customers will be, what they will pay (with research backing that up), what marketing will be needed to reach them, who the competition will be, and how the finances will work out, in detail.
The feasibility part of the business plans means that it’s entirely possible that the idea you seek to develop is not feasible, at least not with your current set of assumptions.
While strategic plans in theory have that escape clause also, rarely is it used. Finally, a credible business plan has to include who (the skilled managers) who will carry it out. It’s not a business plan if it doesn’t include the people who will implement it.
The above is a graphic from our colleagues at Social Impact Architects laying out some of these differences for the social sector.
- Copyright © 2014 Rolfe Larson Associates
- Social Impact App , find social enterprises nearby and online
- Venture Forth! endorsed by Paul Newman of Newman’s Own
Resources for Starting a Business
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Ultimate Business Planning Guide with Updated Resources
Complete Business Planning Guide with Extensive Resources Copyright Carter McNamara, MBA, PhD. NOTE: Your business plan should be highly customized to your current organizational situation. Thus, using a generic business plan template could completely misrepresent the needed focus of your business plan. (This step-by-step manual is a complement to the topic How to Start Your …
Learn Strategic Thinking from Napoleon
Biographers of Napoleon Bonaparte talk about his ability to size up a situation with a single coup d’oeil,(pronounced koo-DOY), meaning “a stroke of the eye” or “glance.” Napoleon was so knowledgeable about his strategic situation—the landscape, the enemy, available technology, similar situations from the past—that he could understand and respond quickly to ever- changing circumstances. …
Strategic Planning Facilitator: Guiding the Planning Process
Strategic Planning: The Crucial Role of a Facilitator The goal of strategic planning should be to produce a Plan that is 1) relevant, realistic, and flexible; 2) with a very high likelihood of being implemented; 3) in order to achieve the purpose of the planning, e.g., a purpose to evolve to the next stage of …
Mistakes Made by Strategic Planning Facilitators
Here’s a list of the biggest mistakes that I have seen made by strategic planning facilitators over the years: 1. Not getting sufficiently trained on how to do facilitating, e.g., planning the meeting, goals, ground rules, which techniques to cultivate complete participation, doing interventions, managing conflict 2. Not learning a variety of strategic planning models, …
Strategic Thinking in the Age of LinkedIn
LinkedIn founder and triple billionaire Reid Hoffman has two endearing mannerisms that reveal the way he sees–and reasons with–the strategic environment. First, he peppers his statements with the word so. Almost a verbal tic that would grate on a speaking coach like the overuse of the dreaded uh … but he uses it more like …
Avoid the Silicon Valley Syndrome!
Guest blog from my colleague, Adam Brock, Director of Social Enterprise at Joining Vision and Action (formerly JVA Consulting): How can a well-meaning startup avoid “Silicon Valley Syndrome” and actually use a social startup to create real value for society? Every era has an industry that epitomizes its values. At the turn of the 20th …
Develop Your Strategic Intuition
The best decision-makers in chaotic “fog of war” conditions seem able to call on intuition – knowing what to do without knowing why or how they know.
Free Online Program to Learn Strategic Planning Facilitation
The Consultants Development Institute is offering a complete, online series to teach how to facilitate strategic planning for any type of organization. The series Facilitating Strategic Planning includes a pro bono Audit Track with unlimited enrollment. In that Audit Track, you get free access to all of the courses, tools, assignments, and discussion forums with …
Moneyball: The Role of the Chief Strategy Officer
Paul DePodesta – role of the Chief Strategy Officer for the Cleveland BrownsPaul DePodesta was recently named the Chief Strategy Officer by the Cleveland Browns of the National Football League. This is significant because, as any fan of Moneyball knows, Mr. DePodesta has spent his career in the sport of baseball, not football. This matters …
50 Tips and Tools for Effective Strategic Thinking Skills
To engage in strategic thought, you must think and reflect on the big picture—on the diverse players and forces in your competitive environment. Anticipate the future. Use your right brain for intuition and wisdom, and your left for planning. As Isaac Newton said, “Truth is the offspring of silence and meditation.” Here are 50 tips …
To Learn Strategy, Know History
When you are faced with the most important and strategic decision of your life, where can you go for wisdom? Can you find insight in a book of history? Facing a world in crisis, John F. Kennedy did just that. Generally, we learn skills by trying something, failing, and trying again until we get it …
Execution Trumps Strategy
The results are in – Execution trumps strategy. Your business plan may have great strategies, but it will be a great failure if executed poorly. So just hire the right people, right? Turns out the answer is not what you think. At least according to a recent Harvard Business Review Article. Five Myths About Effective …
Is Balance Possible?
Now here’s a frank perspective: Balance doesn’t work. So don’t even try. Accept the fact that the only way to really make something happen is to go “full out” at it, with everything you have.
B Corp As A Competitive Edge?
Last week, I attended a celebration for B corps in Colorado. These are for-profit companies certified by a nonprofit called B Lab for achieving social and environmental goals along with business ones. What I noticed differently from other discussions among B Corps in the past, was a stronger focus not only on this vibrant community …
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What is the Difference Between a Business Plan and a Strategic Plan?
Strategic Planning Expert
By M. Dana Baldwin, Senior Consultant
We often get questions asking what the difference is between a Business Plan and a Strategic Plan. The first difference is there is a significant difference in intent. A Strategic Plan is focused on improving a company’s performance, exploiting opportunities and building market share. A Business Plan is most often used at the beginning of a company’s existence to define the initial goals and objectives of the company, its structure and processes, products and services, financial resources, staffing/talent needs and all of the basics which go into forming a company and getting it functioning.
Elements of this plan usually include:
1. What products and services the company will offer to the marketplace.
2. What types of customers the company will target
3. What skills and capabilities the company will need to compete effectively and where the company will obtain those skills and capabilities
4. Determining trends in the marketplace, and the characteristics of the market segments the company will initially pursue
5. Developing how you will sell into the market segments you are intending to pursue. What demographics will you target? What are their buying behaviors? How will competition likely react to your company entering these markets?
6. What will your costs be in each of the parts of the company? How will you fund them during the start up phase? What are your first and second year projections for revenues and expenses? How will you make a profit?
Usually a business plan is an overall guide to setting up your business, although some will use it as a more detailed one year plan based on the Strategic Plan. Often there is considerable overlap between the two plans inasmuch as they will often cover similar ground. Generally, however, we envision a business plan as the blueprint for setting up your company and getting it started, and a strategic plan as the ongoing game plan to continually improve market share, volume and profitability.
The intent of a strategic plan is to develop a much more targeted vision of where you want to take your business in the future and how you will accomplish your strategies, goals and objectives, once the business is established and ongoing. Strategic planning is the 30,000 foot view of where we take the company. In your strategic planning, your focus turns more toward looking at the current situation, analyzing what your strengths and weaknesses are, determining how best to build on your strengths and avoid being trapped by your weaknesses.
You will look for your strategic competency, which we define as a sustainable competitive advantage built on the skills, processes and knowledge contained within your company.
By building on your strategic competency, making it better and even more effective as a sustainable competitive advantage, you will improve the opportunities to excel as a company, gaining market share and profitability.
All of the elements of strategic planning, starting with your current situation, working through the analyses of your company, your markets, competition, opportunities and finding out where you may have gaps between your current performance and where you should be in the future, lead to the development of logical, attainable (yet ambitious) strategies which will head you toward winning a higher market share and better profits.
M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at [email protected] .
© Copyright 2009 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution
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