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Companies need business and strategic plans

Companies need business and strategic plans
Janet Arrowood

What’s the difference between a business plan and strategic plan? A business plan constitutes an essential part of the process of starting a business. Existing businesses develop strategic plans. 

Every business should have, and regularly update, a business plan. Once a business is established, both strategic and business plans are needed.

According to the Center for Simplified Strategic Planning, a strategic plan focuses on improving performance, exploiting opportunities and building market share.  A business plan is most often used at the beginning of operations to define the initial goals and objectives of the company, its structure and processes, products and services, financial resources, staffing and talent needs and all of the basics that go into creating a company and getting it running.

Your business plan should provide a detailed guide to how you plan to set up and manage your operations and include the who and what.

The who of the plan explains:

Who manages the business.

What makes this person or team qualified.

Who’s the competition and what differentiates your company from them.

Who’s your market? How large is it? Where is it located? What does this market want and how will you meet those wants?

The what of the plan explains:

What goods and services you provide.

How you provide these goods and services.

How your goods and services meet customer needs and expectations.

Your strategic plan provides a guide to where you want to take your business as it grows and details your goals and how you expect to achieve them.

A strategic plan takes into account your current situation. You perform a strengths, weaknesses, opportunities and threats (SWOT) analysis to determine how to build on your strengths and manage your weaknesses. The strategic plan takes the business plan and expands on the initial roadmap to detail the how.

The how explains:

Your goals for the next one, two, five and 10 years.

Your expansion plans over those periods.

Expected changes in your market and how to accommodate those changes.

Your approach to growing your market.

Your customer outreach efforts.

The resources you need to reach your goals.

What might interfere with attaining your goals.

Metrics and approaches you use to measure success and growth.

The bottom line? If you plan to start and grow a business, you need both business and strategic plans. Each has a distinct purpose. Each is a living document. Understanding their differences and roles will ensure you stay on track to achieve success.

Companies need business and strategic plans