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.
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.”