I get a lot of questions about planning and one of the most common errors I find is that people get mixed up between strategic pans and business plans.
In my opinion, a good forward looking business needs both. The reason is that one cascades from the other, but people get confused and talk about strategic plans when they really mean business plans.
That’s why I created an easy to understand business planning process flowchart which you can download for free.
It explains what the difference is, but also, how one flows from the other.
So, what is the difference?
A strategic plan is a big picture story of where you want your business to go.
A business plan cascades from that and tells the story of what you need to do within a much shorter timeframe to help you get to the big picture.
A strategic plan is a long term direction-setting document. It typically covers a period of 5 to 10 years, and because of the timeframe is not as detailed in it’s actions. Based on less precise assumptions and with an objective of describing your ultimate goals, it does not contain detailed step by step objectives.
Typically, it identifies your key stakeholders (you, your partners if you have any, and key other stakeholders such as closely involved family or investors) and their objectives. The strategic plan would certainly define your vision, mission and values so that you set the description of what your business will be like when you “arrive.” Then through a series of analytical processes looking at where you are now, a number of strategies are generated to “bridge the gap” between where you are and where you want to go.
These strategies will tend to be broad, directional strokes like “we will increase the rage of our products to meet all segments of our market,” or “geographically we will be able to service anyone living in western Europe.”
A business plan is a far more detailed analysis and document. It takes the strategies arising from your strategic plan and carves them into more predictable timeframes – typically one to 2 years (some say up to 5). Since the timeframe is shorter, the assumptions can be more accurate and the options more predictable (hence my preference for the shorter timeframes of 1 to 2 years).
The business plan may include a marketing plan, or a more detailed marketing plan may be generated as a result of the business plan.
The business plan will consist of a series of goals and objectives achievable within the shorter timeframe, but helping to move your business towards the longer term strategic goals, and following the strategies from the strategic plan. It will contain a number of goals, objectives and action plans about operations, marketing, human resources, and finances.
In my opinion any business needs both. If, as some people say, all you need is a business plan, then how do you stay true to your ultimate vision and consistently head toward its attainment year after year? With a series of short term business plans, you could be zig-zagging inefficiently. If you try to write longer term business plans, how do yu avoid making imprecise assumptions where you can’t predict what will happen after 2 or more years?
Nevertheless, you may be ready to prepare a business plan – and hit that constant problem of not having enough time.
Well I say just do it.
When you have the time, write your strategic plan, and then cascade your periodic business plans from it. But for now, just do it, write a plan – it’s far better than flying by the seat of your pants.
If you don’t have enough time – check out my One Day Business Plan online training course. Follow the video lessons and download the workshop worksheets so that you follow through and create your business plan in one day. Get over to my website and click on the Products page.