Strategic Plans vs. Business Plans: What's the Difference?
The above metrics are staggering, we often hear about numerous types of plans, but what is the difference between a good business plan and strategic plan?
This is a question that can leave many people scratching their heads. This is partly owing to the fact that there can be considerable overlap between the two plans. In fact, we often see (and create) strategic business plans for our clients that are just starting up their businesses.
In this article, we go over elements of a strategic plan vs a business plan.
What is a strategic plan?
A strategic plan includes the company’s vision, mission, values. It should also includes your goals, objectives, strategies and actions and performance measures. The strategic plan identifies strategies and actions that the business will use to meet (or exceed) its objectives (check out this article on developing a strategic plan for more information).
There are many benefits to a strategic plan including:
Involving internal and external stakeholders in the process (doing the right work) creating advocacy for the program
Promotes stability and innovation
Provides a clearly defined direction/line of sight
Assists with planning for assessment, prioritization, budgeting, and resourcing
Better prepare the program to evolve with changes
Shows staff what goals they are achieving, they are not just a role
Promotes buy-in, ownership and engagement
Encourages communication and team building
As a side note some businesses have multiple strategic plans to address various departments of the business, but we would caution against this practice as there can be misalignment to the business' mission, values and overall vision. HR and IT departments take the cake on this, On average, 66% develop a strategy that does not align with the organizations Strategic Plan! (If you are experience this, strategic consultants can help your business get back on track!)
What is a business plan?
A business plan helps you define who you are, describe your business, and document how you will be profitable. It often specifies the organizational vision, values and strategies. Hence, a business plan often includes elements of the strategic plan, but it also includes a marketing plan, financial plan, an operational plan as well as competition analysis and your business’ competitive advantages. It reviews and explains every area of the business.
It is a document that is created often when a business is starting up, but it shouldn't be limited to startups. A business plan is a powerful document that many mature organizations can use to benchmark progress and verify the feasibility of business venture/ an organization as a whole. They should be adapted on a continuous basis.
There are many benefits to a business plan including:
Clarity on how to grow the business
Stakeholder and investor satisfaction
Measure whether you are accomplishing your goals, objectives and strategies
Ability to respond to changing markets
Managed risk, costs, timeframes and quality
Knowing where you stand and where you are going
Increased likelihood of success
Finding performance gaps
Understanding your floating line
Whether you need a Strategic Plan, Business Plan or Strategic Business Plan, our team can help. Having developed these for Ministries, Municipalities and large scale private sector clients, our team is what you need if you need a plan.