difference between strategic planning and business planning

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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.

Target Audience

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.

10 Comments

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 - What You Must Know

Like everything else in life, the nature of business needs a plan in place to follow and measure. Crafting a strategic roadmap isn't just a suggestion—it's a necessity.

This is one of the key elements of a startup or even a business division within an organization that is expanding or diversifying. It has every resource element and needs to be mapped out for the business, including projected milestones for the future.

However, every business strategist needs to know that there are some subtle differences between what constitutes a business plan, and the several differences it has with a strategic plan. Let’s walk through the different elements that comprise each and understand the outcome each aims to achieve.

Introducing The Business Plan

A business plan is exactly what the name suggests— a plan to start and run a business or a new entity of an existing business; usually either an expansion in a newer region or a diversification into a new market. Business plans are mainly created for internal reference purposes or external funding purposes, with the latter being the common usage. They form the basis of all business strategies and decisions made at the ownership level in an organization. The most essential components of a business plan include:

Organizational Plan - This is the core of a business plan, and it includes the mission and vision statement, along with the market in which the company plans to operate. This plan also encompasses thorough market research to gauge the potential of the business, crucial for securing funding or sponsorship. It articulates the rationale behind the business's growth trajectory, outlining clear timelines for achieving milestones along the way.

Financial Plan - A robust financial plan is the bedrock of any successful business venture, where cash flow reigns supreme, and a meticulously crafted balance sheet serves as the ultimate scorecard. A financial plan includes some of the most important elements of the entire business plan and includes elements like projected cash flow statements, capital requirements, a summary of projected overheads, a projected balance sheet including assets and liabilities, and income and expense statements.

Remember to regard this as the central nervous system, for it permeates and influences almost every aspiration the enterprise hopes to attain.

Sales and Marketing Plan - We mentioned “almost” everything above for this very reason. Sales and marketing form the other significant component of the business plan. These include sales forecasts and overheads, marketing and brand management summaries, and market share projections that the business hopes to achieve within a time frame.

Business plans are indeed comprehensive and all-encompassing. They form the basis of the business's existence or the rationale for investments in it. But what about translating these plans into action? How do we ensure that the sky-high goals set forth are actually achievable?

The Actionables- A Strategic Plan

Strategic plans constitute the basis of operations and responsibilities within the business. These plans lay the paths out for each member of the organization to follow and define the functional outline and the key outcomes for every project and process within the business. A strategic plan goes on to define the operations and their outcomes within the organization, its departments, and its employees. The single thread connecting strategic planning with the business plan is the vision of the organization, and for obvious reasons— vision serves as the guiding light for strategy formation, which, in turn, directs the day-to-day operations of the business.

Why A Strategic Plan is Crucial to The Organization

In a word— synchronization. A robust and well-laid-out strategic plan establishes the much-needed sync between teams and their objectives. Not only that, it also provides a guide for daily operations alongside the focus and direction that teams often need to get the job done, on time and within budget. When all these components are integrated into a cohesive network, the true value of a strategic plan emerges—a seamless and grand orchestration of departments, teams, and individuals using the resources allocated to them to achieve the key performance indicator that they are responsible for.

Elements to Consider in a Strategic Plan

When tasked with creating a strategic plan for your business, you will need to incorporate certain components that will ensure that the stakeholders are aligned completely with the organization’s goals and objectives. These include:

Vision and Values - The vision statement is the most important component of the strategic plan and the most overarching. It propels the organization towards established goals and the values that every employee and stakeholder must incorporate.

Goals - These are short, medium, or long-term, depending on the scope of the strategic plan. They provide the much-needed context for the organization to undertake initiatives that meet the vision while maintaining the values.

Guiding Principles - Often, organizations face crossroads where they must decide which steps to take next, to reach their vision. Principles are included in strategic plans to align teams towards the vision when faced with a dilemma and form a critical part of strategic planning.

Action Plans - A sum of key initiatives, processes, and projects that are required to be performed on a pre-determined periodic basis for the goal to be accomplished. These also include the time frames for each stakeholder responsible for each option. They usually follow the DACI format for each action (Driver, Approver, Contributor, Informed)

SWOT Analysis - The quintessential component, the Strength, Weaknesses, Opportunities, and Threats analysis of the strategic plan lends context to all business actions vis-a-vis the external environment. This includes competitors, market forces and conditions, identification of internal and external threats, and several other factors.

Read This - SWOT Analysis: How to Strengthen Your Business Plan

Here’s a table highlighting the main differences between a Business Plan and a Strategic Plan with a focus on the key components of each—

Learning All About Strategic Planning

In all businesses, a strategic plan serves as the foundational blueprint, akin to a meticulously drawn map for a general. It provides the essential guidance and direction needed for the entire organization to navigate toward success. It is crucial, therefore, to acquire the necessary skills and certifications for employment as a business strategist who would be entrusted with creating it. Know more about how to become a successful and sought-after business strategist today!

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Business Plan Vs Strategic Plan Vs Operational Plan—Differences Explained

Noah Parsons

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:

• 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.

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• 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.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Business Plan vs Strategic Plan: Key Differences Explained

A highly reliable that helps businesses launch and grow. We have been serving in the business for almost Being in the business world and unaware of the critical difference between a Business plan and a strategic plan can leave you navigating the business poorly. As both terms aren’t the same, therefore every company needs to have both types of plans, and it is crucial to know the differences between them so you can make the most out of both plans.

You can even hire a professional business plan writer from a company like BPlanwriters to develop an exceptional plan. Our company is ten years and have helped over 500+ business clients. We offer expertise and strategic advice to businesses regardless of industry and provide solutions that may help companies grow by leaps and bounds. We can assist you with strategically manage your organization and its operational processes, or provide technology consulting services.

Now, let’s learn the essential distinctions between the two types. However, a business and a strategic plan are inversely important for thriving in an ever-changing business landscape.

In the business plan, the writer describes the foundations of a company, its founders, its capabilities, the industry and market areas in which it runs, how it generates revenues and its financial projections. In contrast, a strategic plan assesses the current environment of a business, both internally and externally. It sheds light on future goals and targets and describes the strategies for implementing and executing them.

What is a Business Plan?

A business plan explains how a company brings profit and runs day-to-day operations, including its budget and resources. A business plan is essential for a new venture or startup, such as entering a new market, launching a new product or purchasing great equipment. It highlights how and what could be expected time duration to make a return and profits.

The target audience is generally the bankers, investors or partners, and the purpose is to persuade them to invest or grant you the money.

Here are the 5 Key Functions of a Powerful Business Plan

Identifies or explains the objectives and goals of your organization. Coordination with human resource management and determines operational requirements. Secures funding for your organization. Evaluates potential business prospects. Creates a framework for conceptualizing ideas

Key Components of a Business Plan

• Executive Summary
• Company Description
• Market Analysis
• Organization and Management
• Marketing and Sales Strategies
• Financial Projections
• C. Role of a business plan in guiding overall business operations

What is a Strategic Plan?

Compared to a business plan, a strategic plan explains “how the company goals can be achieved or defines the actions it takes to get there, going beyond the fundamentals of a business plan. The document examines potential future offerings from your company regarding goods and services and potential new markets.

The audience is your team. Ultimately, its essential purpose is building alignment and decision-making ability to prepare your company for tomorrow.

Hire our Strategic Business Plan writer to develop a plan that will include a series of actions or activities to drive your current business state into the most progressive one.

Components of a Strategic Plan

Here are the components that complement strategic plan.

• Vision Statement
• Mission Statement
• SWOT Analysis
• Goals and Objectives
• Action Plans

Knowing the Difference Between Strategic Planning and Business Planning

Below, we have shared a few major differences between strategic planning and business planning that will help you understand about both phenomena “how a business plan works and can be useful to run a business or a new entity of an existing business, as well as “how great impact of a strategic plan could be on long-term success and growth”.

Scope and time frame

A strategic plan is generally a long-term plan which covers at least two to five years. On the other hand, a business plan covers a year or about six months since this is roughly how long it usually takes for a business to stabilize.

When it comes to focusing, a business plan mainly focuses on establishing a business at its early stages. Meanwhile, a strategic plan guides the company for later stages. Having said that the business plan is about direction and vision, while the strategic plan focuses on operations and specific tactics for uplifting the existing business.

Stakeholders

A strategic plan will be shown to stakeholders and employees to ensure everyone knows what is happening in the company which eventually help reassure everyone with a stake or role in the business.

Comparatively, a business plan will often be presented to investors or lenders that helps in showing off the business idea as worth funding.

Flexibility and adaptability

A strategic plan has more flexibility than a business plan. This is because it is meant to be in place for long run, and the company should already be established. The evolution of your approach can be refined more freely, but your company plan should stay the same.

All in all, a business plan explains a current business or a specific new project, while a strategic plan talks about how you want to change your company to grow or be prepared for the future. These are a few differences among a business plan and a strategic plan needed to understand every business owner before taking initiative for a successful venture.

Are you looking for a reliable business consultancy partner to take your business to the next level? Reach out to BPlanWriters! With many years of experience and a track record of more than 100 satisfied clients, we are your go-to experts in launching and growing businesses. Our team provides tailored expertise and strategic advice, delivering comprehensive solutions that cater to companies across all industries.

Whether you need help with a franchise business plan or investor business plan or are seeking a top-notch E2 business plan writing service , we are available to provide you with the best and most affordable business plan writing cost . Let BPlanWriters be the driving force behind your business success – partner with us today to unlock your business full potential!

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Business Plan Vs Strategic Plan: What’s the Difference?

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Strategic and business plans are both different sides of the same coin! Some entrepreneurs use it interchangeably but they have a significant difference.

Now the question might arise, when to use which, and what is the difference, right?

Worry not—we’re here to guide you through it all. In this article, we’ll learn the differences between a business and a strategic plan, understand their meanings, and know how to use them effectively.

So, let’s kick-start this journey by exploring a business plan vs. strategic plan . Get ready to unlock everything about both!

What is a Business Plan?

A business plan is a written document that outlines a company’s goals, timeline, finances, and strategies for achieving them. It provides a roadmap for the future of your business.

Generally, it includes sections such as an executive summary, company description, market analysis, products & services, financial plan, and much more. Your business plan is a must-have document when it comes to securing funds for your business.

Okay! And what about the strategic plan?

What is a Strategic Plan?

A strategic plan is a document that communicates an organization’s vision, mission, and core values. It focuses more on specifics about how a business will operate and generate profits.

Strategic plans are typically long-term documents, covering a period of three to five years or more, and are used to guide decision-making and resource allocation within the organization.

Key Difference Between a Business Plan and Strategic Plan

It was all about the basic definition of business and strategic plan. Now, let’s compare them side-by-side to understand their use case, and how they are distinct from each other:

Level of detail

A business plan is usually considered a granular and in-depth document. It outlines the tactics and actions necessary to achieve operational objectives. Business plans are usually 15-30 pages long .

A strategic plan typically provides a high-level overview of the organization’s goals and the strategies to achieve them without going deep into the business operations. Strategic plans are generally 10-15 pages long, but the length depends on various factors of the business.

Time horizon

A business plan focuses on a shorter time frame, often one to three years, and is more operational. It focuses on things like product development, marketing strategies, financial projections, etc.

A strategic plan answers the questions related to a longer time frame, usually five or more years. It sets the direction of the company for the future by mentioning the mission, vision, and objectives.

Audience and use

A business plan is primarily used to attract investors, bankers, or partners for securing funding or partnership.

Whereas, internal members, such as senior management or a board of directors, use a strategic plan to guide decision-making.

A business plan explains all the sections like market analysis, products & services, management team, target market, sales & marketing strategies, financial projections, and more.

While a strategic plan has a vision statement, mission statement, core values, action plans, and more. Some of the strategic planning models are SWOT analysis , PESTLE (political, economic, social, technological, legal, and environmental) analysis, Porter’s five forces, and more.

Entrepreneurs and startups use business plans to create a strategy to build a successful business. It is used for assessing how marketable a business idea is and also helps them gauge how they can get the funding to turn this idea into reality.

Established companies use the strategic plan to give them a clear direction for where they want the company to change or develop.

For instance, decisions like changing the products they provide or moving into a nonprofit can be made with the help of a strategic plan.

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Now that we know the key differences between strategic and business planning, let us understand the common pitfalls. 

Common Pitfalls in Execution

Despite the benefits of business planning as well as the strategic planning process , organizations often face many challenges in their strategy implementation. Here are some common pitfalls:

Disparity between strategy and execution:  Without effective execution, even the strategic plan that is the most well-crafted may fail to give results.

Lack of alignment:  Failure to align the business plan with strategic objectives often results in missed opportunities and misallocation of resources.

Inadequate marketing analysis:  Insufficient analysis of external factors leads to missed opportunities or strategic blind spots that can cause more harm to a company.

To overcome these challenges, organizations need to foster a culture of communication, continuous improvement, and collaboration.

The Bottom Line

There is no one-fits-all solution when it comes to this decision! Choosing between a business and a strategic plan solely depends on the needs & objectives of your business.

Moreover, know this planning is not a one-time process! As your business evolves and external factors change, you will need to revise your plans accordingly.

A business and a strategic plan are crucial for guiding any organization to success. By using both methods effectively, businesses can navigate uncertainties, achieve steady growth, and grab opportunities in a constantly changing business world.

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Frequently Asked Questions

Which comes first, strategy or business plan.

Before making a business plan, you should create a strategic plan. A business should know all its long-term growth goals before actually defining how to reach them.

So, first, create a strategic plan, then a business plan, and then edit both of them when needed according to the circumstances.

Can a business plan be used for a strategic plan?

No, both are different. While a business plan details the operational and financial aspects of a business, a strategic plan defines goals and the strategies to achieve them. Therefore, serving different purposes, a business plan can not be used to make a strategic plan.

Is there a sample business plan or strategic plan template available online?

Yes, there are many sample business plans and strategic plan templates available online. You can find such templates on:

• Upmetrics – An AI-powered business plan software
• Small Business Administration Website
• SCORE business plans

Do I need both a business and strategic plan?

Yes, both a business plan and a strategic plan are essential for a company’s growth. A business plan focuses on the initial stages of a business, aiming to get it started. In contrast, a strategic plan focuses on the business’s distant goals and strategies to achieve them.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

Reach Your Goals with Accurate Planning

The magazine of Glion Institute of Higher Education

• 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.

Business planning

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.

Strategic planning

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.

Stakeholders

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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If you want the skills and insider knowledge to guide a business from inception to expansion, our courses provide expert teaching and real-world experience.

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:

• Decision-making
• Analytical skills
• Risk assessment knowledge
• Market analysis and forecasting
• Team management
• Communication, both written and verbal
• Organization

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.

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Business Plan vs. Strategic Plan: What’s the Difference?

by Ken D. Foster | Jul 26, 2023 | Business

A business plan and a strategic plan are both essential frameworks for any type of business. Whether you want to start your business or grow your existing one, formulating these plans is necessary to achieve your business goals.

A business plan and a strategic plan serve different purposes and focus on various aspects of a business. In this article, let’s explore the differences between the two.

Table of Contents

What Is a Business Plan?

A business plan is a comprehensive framework that outlines a company’s vision, mission, and goals, as well as how they plan to achieve them. It is usually created when starting a new business or making significant changes to an existing business.

A business plan helps business owners and management to stay focused on their objectives.

What Is a Strategic Plan?

A strategic plan, on the other hand, is a long-term, high-level framework that outlines a company’s strategic direction and goals. It focuses on defining a company’s vision and implementing strategies to achieve it. A strategic plan is made for an extended period, usually five years.

A strategic plan is developed by a company’s owners, top-level executives, and board members.

Difference Between Business Plan and Strategic Plan

Here are the differences between a business plan and a strategic plan.

Key Elements of a Business Plan

• Company Description: Detailed information about a company’s history, mission, and objectives.
• Executive Summary: A concise overview of the entire business plan, highlighting the most critical points.
• Products (Or Services): A description of the product or services offered by a company. 
• Market Analysis: Analysis of the target market, industry trends, and competitors.
• Marketing and Sales Strategy: An overview of how a company intends to market and sell its products.
• Operational Plan: Details about the day-to-day operations, resources, and logistics.
• Financial Projections: Forecasted financial statements, including revenue, expenses, and cash flow.

Key Elements of a Strategic Plan

• Vision and Mission: Detailed information about the purpose and aspirations of a company. It should also include the core values of a company. 
• SWOT Analysis: An assessment of a company’s strengths, weaknesses, opportunities, and threats.
• Strategic Goals: The objectives that a company aims to achieve in the long term. The goals set should be specific and measurable. 
• Strategic Initiatives: The actions a company should undertake to achieve its strategic goals. Make sure to also formulate the Key Performance Indicators (KPIs) to track progress. 
• Resource Allocation: Identifies the necessary financial, human, and technological resources for implementing the goals. 

A business plan is a comprehensive framework that provides a detailed roadmap for the entire business, while a strategic plan is a high-level framework that focuses on defining the long-term direction and objectives of the company. Both plans are vital for business success and should complement each other to make a company achieve its goals.

If you want help to frame a business plan or strategic plan for growing your company, book a coaching session with Ken D Foster . Ken has over 35 years of experience in personal and business development. He can help you define your company’s vision and accelerate its growth.

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Difference Between Business Plan & Strategic Plan

William E Rothschild once said, "What do you want to achieve or avoid? The answers to this question are objectives. How will you go about achieving your desired results? The answer to this, you can call strategy." These words provide a nearly exact description of the difference between a strategic plan and business plan.

Business Plan

The business plan provides a written tour of your business' operations. This plan identifies the business' models, missions and objectives. It then takes the reader through the staffing, location, marketing and financing requirements that are needed to meet those objectives, according to Indeed Career Guide. The business plan examines the business' potential for success, the competing industry and the business' competitive advantages. In a detailed and organized manner, it reviews and explains every area of the business.

Strategic Plan

The strategic plan identifies the steps, or strategies, that the business will use to meet, if not exceed, its objectives, as explained by 1000 Ventures. The strategic plan can focus on the entire business or specific areas of the business, such as consumer marketing, customer retention and product introduction. As a result, businesses can have many strategic plans to address various areas of business.

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Profit & loss budgets vs. income statements, business plan vs. business strategy, the importance of a business plan, new year business marketing plan & annual strategy goal update, what is the relationship between the business plan, marketing plan & sales plan, common misconceptions.

Business traditionalists often explain that business plans are used for new companies and strategic plans are used for established companies. This is untrue. The difference between strategic plans and business plans is not related to the age of the company. Mature businesses often review their business plans annually to benchmark financials and verify that the business is on course to success.

Business plans are used, at every business-maturity level, to obtain loans, secure partnerships and attract the interest of corporate executives. Similarly, strategic plans can be used by young businesses to develop competitive advantages, solidify operations and secure customer satisfaction. These plans are also beneficial in securing investors because they clearly define the steps and procedures that will be taken to achieve the defined results.

Connections and Dependencies

The boundaries of the strategic plan are defined by the contents of the business plan. The objectives within the business plan not only define the desired results, but the timeframe in which the results should be achieved. It tells the amount of resources, staff and finances that are available. The strategies are developed around those criteria while introducing new areas and information that is needed to attain the desired results.

Adapting to Change

Entrepreneur suggests that small business owners should continually review and update their business plan to stay abreast of constant changes and emerging trends. Regular review of your business plan will help you to judge your business success, identify necessary changes and resolve issues before they develop into disasters. A regular business plan review will also help you to develop strong business forecasts for your business, especially when the information is updated monthly.

As you adjust your business plan, you must also make the necessary adjustments to your strategic plan. While a complete overhaul of strategies is unnecessary, it may be necessary to refine certain areas so that they remain in the scope of the business plan. For instance, if you change the financial structure within the business plan to include a decrease in marketing expenses, the marketing strategies may require expenditure adjustments to remain within the new budget.

• Entrepreneur.com: Updating Your Business Plan
• 1000 Ventures: Business Strategy: Tactics to Beat Your Competition
• Decision Innovation: Strategy Quotes Related to Decision Making
• Indeed Career Guide: Strategic Plan Vs. Business Plan: What's the Difference?
• Think Exist: Strategy Quotes

Strategy vs. Plan: Understanding the Key Differences

When it comes to achieving success, whether in business, personal growth, or any other area, it’s essential to understand the difference between a strategy and a plan. These terms are often used interchangeably, but they serve different purposes and play unique roles in reaching goals. In this post, we’ll explore the key differences between strategy vs plan, how they work together, and offer practical tips for aligning the two effectively.

Strategy vs Plan: Definitions

A plan and strategy are not the same thing, and understanding the differences is crucial to effective decision-making. Let’s delve into the definitions of these terms.

What is a Strategy

Strategy is your long-term vision. It sets out the broad, overarching goals and helps position you or your organization competitively. It answers the big questions like “what” you want to achieve and “why” it matters. Essentially, a strategy provides a roadmap, guiding the direction and making sure that efforts and resources are aligned with the desired outcomes.

A strategy is crucial for providing direction and ensuring all efforts are aligned with long-term goals. It sets the stage for detailed planning by outlining what needs to be achieved and why it matters. Whether in business, personal development, or any other area, having a clear strategy helps you navigate uncertainties and focus on what truly matters.

Key characteristics of a strategy

• Long-term vision : Strategies are focused on long-term goals. They’re not about what you’ll do next week or next month, but rather where you want to be in several years.
• Broad goals : A strategy outlines broad, overarching goals rather than specific actions. These goals set the direction for your efforts.
• Competitive positioning : In business, a strategy often involves figuring out how to stand out from competitors. This could mean offering something unique, targeting a specific market, or using your strengths to your advantage.
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• Guiding framework : Strategies provide a framework for making decisions. They help ensure that every action you take moves you closer to your big-picture goals.

Examples of strategy

• Business : A company might have a strategy to become the leader in sustainable products. This could involve investing in green technologies, adopting eco-friendly practices, and promoting sustainability as a core value.
• Military : A country’s defense strategy might focus on maintaining strong air power to ensure security and deter potential threats.
• Personal : An individual might develop a strategy to become a top expert in their field. This could include continuous learning, networking, and sharing knowledge to build a strong reputation.

What is a Plan

A plan is a detailed outline of the steps you need to take to achieve a specific goal. It breaks down your strategy into actionable tasks, specifying what needs to be done, how it will be done, and when it should be completed. Essentially, a plan is your roadmap for turning big-picture ideas into concrete actions.

A plan is essential for translating your strategy into action. By following a well-structured plan, you can manage your time effectively, stay organized, and make steady progress toward your objectives. Whether you’re managing a project, organizing an event, or planning your daily tasks, a clear plan is your roadmap to success.

Key characteristics of a plan

• Detailed steps : A plan provides a clear, step-by-step guide on how to accomplish your goals. It breaks down the big tasks into smaller, manageable pieces.
• Short to medium-term focus : Plans are often designed to be completed over weeks, months, or a few years. They are more immediate than long-term strategies.
• Specific actions and timelines : Plans include detailed instructions and set deadlines for each task. They outline who will do what, when, and how.

Examples of plans

• Project management : A project plan outlines the tasks, deadlines, and resources needed to complete a project. It might include timelines, milestones, and responsibilities for team members. Get more Project Plan Templates and Project Schedule Templates .
• Event planning : An event plan details all the logistics for hosting an event. This includes the schedule, venue, catering, guest list, and any other specifics needed to ensure the event runs smoothly. Learn more about Event Planning .
• Daily routines : A daily plan lists the tasks you need to accomplish each day. It helps you manage your time effectively and ensures you stay on track with your larger goals.

Key Differences Between a Strategy and Plan

While a strategy and plan are closely related and often work together, they serve different purposes and operate on different levels. Here’s a breakdown of the key differences:

How to Choose Between a Strategy and Plan

Choosing between a strategy and a plan depends on the context, the nature of your goals, and the stage of your project or initiative.

Determine your time frame and scope

• Choose a Strategy if you need to set a long-term vision and overarching goals. Strategies are about where you want to go in the future and why it’s important.

Example : A startup looking to disrupt the tech industry with innovative solutions over the next five years.

• Choose a Plan if you need to outline specific actions and steps to achieve immediate or short-term goals. Plans are about how to get things done in the near future.

Example : A company planning the launch of a new product within the next six months.

Identify your focus and purpose

• Choose a Strategy if your focus is on defining broad objectives and setting the overall direction.

Example : A non-profit organization aiming to expand its impact on global education over the next decade.

• Choose a Plan if your focus is on detailing specific tasks, timelines, and resources needed to accomplish a particular goal.

Example : A non-profit organizing a fundraising event next month, detailing logistics, roles, and schedules.

Assess the level of detail needed

• Choose a Strategy if you need to establish high-level goals and a guiding framework for decision-making.

Example : A corporation developing a strategy to enhance sustainability practices across all operations.

• Choose a Plan if you need to create a detailed roadmap with specific steps and timelines.

Example : The same corporation planning specific initiatives like reducing carbon footprint by 20% in the next year.

Consider flexibility and adaptability

• Choose a Strategy if you need a flexible framework that can adapt to changing circumstances and guide long-term decisions.

Example : A business strategy that allows for pivoting based on market trends and technological advancements.

• Choose a Plan if you need a concrete execution roadmap that outlines precise actions and deadlines.

Example : A project plan for developing a new software application, with detailed phases and milestones.

Evaluate measurement and evaluation needs

• Choose a Strategy if you want to measure overall progress toward broad, long-term goals.

Example : Measuring the success of a five-year strategy to expand into international markets by tracking overall market share growth.

• Choose a Plan if you need to evaluate the completion of specific tasks and milestones.

Example : Tracking the completion of each phase of a construction project against the planned schedule and budget.

Practical Steps to Decide

• Define your goal : Clearly understand whether your goal is long-term and broad or short-term and specific.
• Analyze the context : Consider the context in which you are operating. Are you setting a vision for the future or implementing immediate actions?
• Consult stakeholders : Discuss with team members or stakeholders to understand their perspectives and needs.
• Review resources : Assess the resources available, including time, budget, and personnel, to determine whether you need a high-level strategy or a detailed plan.

How Do Strategy & Planning Relate to One Another?

Strategy and planning are closely related, working together to help individuals and organizations achieve their goals. While they serve different purposes, their relationship is complementary and interdependent. Here’s how they connect and support each other:

Strategy sets the direction

Strategy provides the overall direction and long-term vision. It defines where you want to go and why it’s important. Without a clear strategy, efforts can become scattered and unfocused.

Example : A company’s strategy might be to become a leader in renewable energy solutions. This broad goal guides all future decisions and efforts.

Planning details the path

Planning breaks down the strategic vision into actionable steps. It outlines how to achieve the strategic goals through specific actions, timelines, and resources. Plans provide a detailed roadmap for reaching the strategic objectives.

Example : To achieve the strategy of leading in renewable energy, the company might create a plan to develop new solar technology, invest in research and development, and enter new markets within the next two years.

Strategy informs planning

The strategy informs the planning process by setting the priorities and providing a framework for what needs to be accomplished. It makes sure that the plans are aligned with the overall goals and direction.

Example : If a strategy prioritizes customer satisfaction, the plans will focus on enhancing customer service, improving product quality, and gathering customer feedback.

Planning implements strategy

Planning is the execution phase where the strategic vision is translated into specific actions. It involves creating detailed plans that outline the steps needed to achieve the strategic goals.

Example : A detailed marketing plan might include launching a new advertising campaign, hosting events, and leveraging social media to reach new customers, all aligned with the strategy to expand market presence.

Feedback loop and adaptation

There’s a continuous feedback loop between strategy and planning. As plans are implemented, the results provide insights that may lead to adjustments in the strategy. Similarly, changes in strategy may require updates to the plans.

Example : If market research reveals a new trend, the company might adjust its strategy to capitalize on this trend, and subsequently update its plans to include new product developments and marketing efforts.

Monitoring and evaluation

Both strategy and planning involve monitoring and evaluation. The success of a strategy is assessed by the overall progress toward long-term goals, while the success of a plan is measured by the completion of specific tasks and milestones. This dual evaluation ensures that both the strategic vision and the detailed plans are on track.

Example : Regular reviews might show that the company is on track to become a market leader in renewable energy (strategy) by successfully launching new products and entering new markets (plan).

How to Streamline Planning and Strategizing with Creately

Creately is packed with features that make planning and strategizing efficient and effective.

Extensive template library

Creately offers a comprehensive library of templates that cater to various planning and strategizing needs. These templates serve as a starting point, saving you time and ensuring you include all necessary elements.

• Strategic planning templates : SWOT analysis, PEST analysis, balanced scorecard
• Project planning templates : Gantt chart, project timeline, work breakdown structure (WBS)
• Business planning templates : Business model canvas, lean canvas, financial projections
• Marketing planning templates : Marketing plan, customer journey map, competitive analysis matrix
• Process mapping templates : Flowcharts, swimlane diagrams, value stream mapping

Collaborative workspace

Creately’s collaborative features allow multiple users to work on the same document simultaneously, making it easy to gather input, discuss ideas, and make real-time updates.

• Real-time collaboration : Team members can edit and comment on diagrams at the same time.
• Sharing options : Easily share documents via links or invite collaborators directly.
• Feedback and annotations : Use comments and annotations to provide feedback and discuss changes.

Drag-and-drop interface

The intuitive drag-and-drop interface makes it easy to create and customize diagrams. This feature is particularly useful for those who may not have advanced technical skills but need to create professional-looking plans and strategies.

• Ease of use : Quickly add, move, and adjust elements on your diagram.
• Customization : Modify shapes, colors, and text to fit your specific needs easily with the quick toolbar.

Built-in visual collaboration tools

Improve brainstorming and strategic discussions with visual tools that help teams think creatively and stay aligned.

• Mind maps : Create mind maps to brainstorm ideas and organize thoughts.
• Kanban boards : Visualize tasks and workflows to manage projects and processes efficiently.
• Flowcharts : Map out processes and decision flows to clarify strategies and plans.

Understanding the differences between strategy and plan is key to success. A well-defined strategy provides the vision and direction, while a detailed plan translates that vision into actionable steps. By recognizing the unique roles of each and ensuring they are effectively integrated, you can achieve your goals with greater clarity and efficiency. Balancing strategy and planning, and continuously aligning them, is the cornerstone of successful execution in any endeavor.

Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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The Alternative Board Blog

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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Related posts, seasonal swot analysis: reevaluating strengths, weaknesses, opportunities, and threats, unlearning conformity: how to overhaul old business paradigms, top 3 strategic musts for the coming year, 5 “must-have” elements of a strategic plan, what does the future of remote work look like, tips on future-proofing your business, what can predictive analytics do for your business, subscribe to our blog.

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The Difference Between a Plan and a Strategy

Setting strategy should push your organization outside its comfort zone.

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Planning is comforting but it’s a terrible way to make strategy, says Roger Martin , former dean of the Rotman School of Management at the University of Toronto. In contrast, setting strategy should push your organization outside its comfort zone – if you’re doing it right.

“Plans typically have to do with the resources you’re going to spend. Those are more comfortable because you control them,” Martin explains. “A strategy, on the other hand, specifies a competitive outcome that you wish to achieve, which involves customers wanting your product or service. The tricky thing about that is that you don’t control them.”

Key topics include: strategic planning, competitive strategy, risk management, innovation, and travel and tourism industry.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Watch the original HBR Quick Study episode: A Plan Is Not a Strategy (June 2022)
• Find more episodes of the HBR Quick Study series on YouTube .
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org

ANNOUNCER: HBR On Strategy .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. Today, we bring you a conversation with one of the world’s leading thinkers on strategy – Roger Martin, former dean of the Rotman School of Management at the University of Toronto.  In this episode, you’ll learn the difference between strategy and planning AND how to escape the common traps of strategic planning. Martin says starting with a plan is comforting to many of us, but it’s a terrible way to make strategy. His episode, called “A Plan is Not A Strategy,” originally aired as part of the HBR Quick Study video series in June 2022. Here it is.

ROGER MARTIN: This thing called planning has been around for a long, long time. People would plan out the activities they’re going to engage in. More recently, has been a discipline called strategy. People have put those two things together to call something strategic planning. Unfortunately, those things are not the same, strategy and planning. So,  just putting them together and calling it strategic planning doesn’t help. What most strategic planning is in the world of business has nothing to do with strategy. It’s got the word, but it’s not. It’s a set of activities that the company says it’s going to do.

We’re going to improve customer experience. We’re going to open this new plant. We’re going to start a new talent development program. A whole list of them, and they all sound good, but the results of all of those are not going to make the company happy because they didn’t have a strategy. So, what’s a strategy? A strategy is an integrative set of choices that positions you on a playing field of your choice in a way that you win. So, there’s a theory. Strategy has a theory. Here’s why we should be on this playing field, not this other one, and here’s how, on that playing field, we’re going to be better than anybody else at serving the customers on that playing field.  That theory has to be coherent. It has to be doable. You have to be able to translate that into actions for it to be a great strategy. Planning does not have to have any such coherence, and it typically is what people in manufacturing want– the few things they want, to build a new plant, and the marketing people want to launch a new brand, and the talent people want to hire more people– that tends to be a list that has no internal coherence to it and no specification of a way that that is going to accomplish collectively some goal for the company.

See, planning is quite comforting. Plans typically have to do with the resources you’re going to spend. So we’re going to build a plan. We’re going to hire some people. We’re going to launch a new product.  Those are all things that are on the cost side of businesses. Who controls your costs? Who’s the customer of your costs? The answer is, you are. You decide how many square feet to lease, how many raw materials to buy, how many people to hire.  Those are more comfortable because you control them. A strategy, on the other hand, specifies an outcome, a competitive outcome that you wish to achieve, which involves customers wanting your product or service enough that they will buy enough of it to make the profitability that you’d like to make. The tricky thing about that is that you don’t control them. You might wish you could, but you can’t. They decide, not you. That’s a harder trick. So that means putting yourself out and saying, here’s what we believe will happen. We can’t prove it in advance, we can’t guarantee it, but this is what we want to have happen and that we believe will happen. It’s much easier to say, I’ll build a factory, I will hire more people, et cetera, than I will have customers end up liking our offering more than those of competitors.

The tricky thing about planning is that while you’re planning, chances are at least one competitor is figuring out how to win. When US air carriers were busily planning what routes to fly and da-da-da, there was this little company in Texas called Southwest that had a strategy for winning. And at first, that looked largely irrelevant because it was tiny. What Southwest Airlines was aiming for was an outcome.

What they wanted to be is a substitute for Greyhound, a way more convenient way to get around at a price that wasn’t extraordinarily much greater than a Greyhound bus. Southwest said, everybody else is flying hub and spoke. They have hubs, and they fly hub and spoke. We’re going to fly point to point so that we don’t have aircraft waiting on the ground because you only make money when you’re in the air.

We’re going to only fly 737s, one kind of aircraft, so that our gates are set up for those, our systems are set up for those, our training, our simulations are set up. We’re not going to offer meals on the flights because we’re going to specialize in short flights. We’re not going to book through travel agents. We’re going to encourage people to book online because that’s less expensive for everybody and more convenient. So, their strategy ended up having a substantially lower cost than any of the major carriers so that they could offer substantially lower prices.

Because it had a way of winning, it got bigger and then bigger and then bigger and then bigger and bigger and bigger and bigger until it flies the most passenger seat miles in America. The major carriers were not trying to win against one another. They were all playing to play, as I say. They were playing to participate, maybe buy more planes, get more gates, maybe grow some, not having a theory of here’s how we could be better than our competitors.

And that was fine until somebody came along and said, here’s a way to be better than everybody else for this segment. And so that segment then goes. It’s gone. And the main playing to play players have to share a smaller pie that’s left over after Southwest takes whatever share it wants.

If you’re trying to escape this planning trap, this comfort trap of doing something that’s comfortable but not good for you, how do you start? The most important thing to recognize is that strategy will have angst associated with it. It’ll make you feel somewhat nervous because as a manager, chances are you’ve been taught you should do things that you can prove in advance.

You can’t prove in advance that your strategy will succeed. You can look at a plan and say, well, all of these things are doable. Let’s just do those because they’re within our control. But they won’t add up to much. In strategy, you have to say, if our theory is right about what we can do and how the market will react, this will position us in an excellent way.

Just accept the fact that you can’t be perfect on that, and you can’t know for sure. And that is not being a bad manager. That is being a great leader because you’re giving your organization the chance to do something great. The second thing I do is say, lay out the logic of your strategy clearly. What would have to be true about ourselves, about the industry, about competition, about customers for this strategy to work?

Why do you do that? It’s because you can then watch the world unfold. And if something that you say is in the logic that would have to be true for this to work is not working out quite the way you hoped, it’ll allow you to tweak your strategy. And strategy is a journey, what you want to have as a mechanism for tweaking it, honing it, and refining it so it gets better and better as you go along.

Another thing that helps with strategy is not letting it get overcomplicated. It’s great if you can write your strategy on a single page. Here’s where we’re choosing to play. Here’s how we’re choosing to win. Here are the capabilities we need to have in place.

Here are the management systems. And that’s why it’s going to achieve this goal, this aspiration that we have. Then you lay out the logic, what must be true for that all to work out the way we hope. Go do it, and watch and tweak as you go along.

That may feel somewhat more worry-making, angst-making than planning, but I would tell you that if you plan, that’s a way to guarantee losing. If you do strategy, it gives you the best possible chance of winning.

HANNAH BATES: That was Roger Martin — Professor Emeritus and former Dean of the Rotman School of Management at the University of Toronto. That video is part of the HBR Quick Study YouTube series – short takes on big topics in business and work. It was edited and produced by Scott LaPierre, with video and animation by Dave Di Iulio, Elie Honein, and Alex Belser. More HBR Quick Study videos can be found on YouTube or HBR.org. HBR On Strategy will be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. In the meantime, we have another curated feed that you should check out: HBR On Leadership . And visit us any time at HBR.org, where you can subscribe to Harvard Business Review and explore articles, videos, case studies, books, and of course, podcasts, that will help you manage yourself, your teams, and your career. This episode of HBR On Strategy was produced by Anne Saini, and me, Hannah Bates. The show was created by Anne Saini, Ian Fox, and me. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Anne Bartholomew, and you – our listener. See you next week.

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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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• Key Differences

Know the Differences & Comparisons

Difference Between Planning and Strategy

In business, one might come across with the terms planning and strategy, end number of times. Planning is the basic function of management that tries to take a peep into the future. On the other hand, strategy is one of the components of planning and is also known as interpretative planning. The two terms have different meanings and usage in the business world. So, have a glance at the article that explains the difference between planning and strategy.

Content: Planning Vs Strategy

Comparison chart, definition of planning.

Planning is an organized process of thinking in advance about a future action. It means the preparation of the plan, i.e. the sequence of steps which will help in achieving organizational objectives. Planning is among the five management functions apart from organizing, controlling, motivating & leading and decision-making.

Planning is a future-oriented activity that takes place in routine decisions of a family, a friend group, a college, government and most importantly, in business management. It requires good judgment skills to choose which action is to be done earlier or later to avoid overlapping in actions.

Planning process

Planning needs goal setting for which planning needs to be done. After that, alternative courses of action are found, and finally, deciding which plan will lead to your destination successfully. It doesn’t mean that everything will go according to your plan, or it may also happen that the plan may fail midway, so the second list of plans is also prepared, which act as a complementary plan to the original plan if it fails, for achieving the goals successfully in the limited time.

The creation of complementary plans is also a part of the planning procedure. Planning needs to be flexible in nature so that any change can be done if required by the organization. With the help of planning, an organization can exercise control over the action, i.e. whether everything is going as per plan or not.

Video: Planning

Definition of Strategy

The strategy is a master game plan designed to achieve the objectives of an organization. It is a mix of competitive moves and actions made by the top-level management for the accomplishment of goals successfully. They are dynamic and flexible in nature. Strategies are based on practical experiences, not on theoretical knowledge, i.e. they are realistic and action-oriented activities. It requires deep analysis of the managers on any move or action, implementation timing, the sequence of actions, outcome, competitors’ reactions, etc.

In the business world, corporate strategies are made for the expansion and growth of entities, which include mergers, diversification, divestment, acquisition and many others. Strategies are made according to the present situations and conditions prevalent in the business environment, but it can’t be said that they are perfect because of the changing needs and demands of the people; strategies may fail.

Moreover, the market scenario will take an unexpected turn any time in the blink of an eye, and nothing lasts forever. Therefore the organization has to be ready for such unpredictable changes and develop a strategy for overcoming these situations. So, the organisation’s corporate strategy combines proactive and reactive strategies.

Video: Business Strategy

Key Differences Between Planning and Strategy

The major differences between Planning and Strategy are as under:

• Planning is anticipation and preparation in advance for uncertain future events. The strategy is the best plan chosen among the various alternatives for accomplishing objectives.
• Planning is like a map for guidance, while strategy is the path which takes you to your destination.
• Strategy leads to planning, and planning leads to programs.
• Planning is future-oriented, whereas Strategy is action-oriented.
• Planning takes assumptions, but Strategy is based on practical experiences.
• Planning can be for short-term or long-term, depending upon the circumstances, unlike Strategy, which is for the long term.
• Planning is a part of the managerial process. Conversely, Strategy is a part of decision-making.

Planning is a forethought of what is to be done in future, but Strategy is a blueprint of what you want to be and where you want to be. Both Planning and Strategy are made by the top-level managers as they know the mission and vision of the organization clearly, so they will make their plans and strategies to take a step forward towards their mission and vision. Planning is preventive in nature, whereas Strategy is quite competitive, but both aim at the optimum utilization of scarce resources.

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UCHENDU I. M. WOGU says

March 29, 2017 at 8:11 pm

Good explanation!!

Arun Kumar says

May 19, 2017 at 10:13 am

Thank you for sharing.

Dr. C. H. Rao says

December 21, 2017 at 7:03 pm

Very explicitly detailed and easily understood

Behailu says

March 27, 2019 at 1:20 pm

Good clarification!!

mikael ahmad says

May 25, 2019 at 4:19 pm

thanks for your effort.

Mohammad Halla says

June 14, 2019 at 5:42 pm

simply explained as insprational as any knowledge seeker requires to delve deeper. thank you so much

Kamaraj says

December 4, 2021 at 10:17 pm

Good comparison and examples

Denise says

June 12, 2022 at 9:56 pm

Great comparisons and examples. Simplified and made easy to understand

muhdin says

December 13, 2022 at 8:23 pm

really a good explanation

REYNALDO R CABILIN says

August 29, 2023 at 9:11 am

Thank you for your answer.

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