business plans vs strategic plans

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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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• 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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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 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 plans vs. strategic plans.

What sets a business plan apart is its singular focus on market and operational feasibility. In contrast, a strategic plan clarifies the long term direction of the organization; most business plans look at a shorter period of time, typically 2-3 years, and drills down thoroughly how the work will get done and dollars will be earned.

Business plans typically take more resources, both internal and often external (in the form of consulting assistance) to develop the kinds of operational and financial analysis necessary to fully test the feasibility of business venture or an organization as a whole.

It gets down to specifics about who the customers will be, what they will pay (with research backing that up), what marketing will be needed to reach them, who the competition will be, and how the finances will work out, in detail.

The feasibility part of the business plans means that it’s entirely possible that the idea you seek to develop is not feasible, at least not with your current set of assumptions.

While strategic plans in theory have that escape clause also, rarely is it used. Finally, a credible business plan has to include who (the skilled managers) who will carry it out. It’s not a business plan if it doesn’t include the people who will implement it.

The above is a graphic from our colleagues at Social Impact Architects laying out some of these differences for the social sector.

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Strategic Plan vs Business Plan – Which Matters More for Leaders?

By Jibility Co-Founder Chuen Seet

In the world of business, strategic planning and business planning are two terms that are often used interchangeably. However, they are not the same thing . Strategic planning is a long-term planning process that helps a company define its vision, mission, and objectives. Business planning, on the other hand, is a short-term planning process that helps a company define its goals and strategies to achieve those goals.

Both strategic planning and business planning are important for leaders, but which one matters more? In this blog post, we will explore the differences between strategic planning and business planning and why strategic planning should be a top priority for leaders.

What is a Strategic Plan?

A strategic plan is a long-term plan that outlines a company’s vision, mission, and objectives. It is a comprehensive plan that guides a company’s actions over the next three to five years. A strategic plan helps a company identify its strengths, weaknesses, opportunities, and threats ( SWOT ) and develop strategies to capitalize on its strengths and opportunities while mitigating its weaknesses and threats.

A strategic plan helps a company create a roadmap for the future. It outlines the company’s goals and objectives, the strategies it will use to achieve those goals, and the metrics it will use to measure its progress. A strategic plan helps a company stay focused and aligned with its vision and mission.

What is a Business Plan?

A business plan is a short-term plan that outlines a company’s goals and strategies for the next year or two. A business plan helps a company define its products or services, target market, competition, marketing strategy, sales strategy, and financial projections. It is a tactical plan that helps a company achieve its goals in the short term.

A business plan helps a company allocate its resources effectively. It outlines the company’s budget, cash flow, and profit and loss projections. A business plan helps a company make informed decisions about its operations and investments.

Strategic Plan vs Business Plan: Which Matters More for Leaders?

Both strategic planning and business planning are important for leaders. However, strategic planning takes priority because it provides the long-term vision for the company. A strategic plan helps a company stay focused on its mission and vision and guides its decisions over the long term.

Business planning is important for day-to-day operations, but it is not a substitute for strategic planning. A company that only focuses on short-term goals and tactics may miss out on long-term opportunities.

If you are a leader, it is important to have a strategic plan in place to help you stay focused on your mission and vision, and guide your decisions over the long term. It will help you anticipate future trends and challenges and prepare for them. So, invest the time and resources to create a comprehensive strategic plan for your company and ensure that it is regularly updated and reviewed. By doing so, you will be able to steer your company towards success and stay ahead of the competition.

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

In the world of business, planning is essential. It provides a roadmap for achieving goals, navigating challenges, and ensuring long-term success. Two key types of plans that businesses commonly use are the Business Plan and the Strategic Plan. While these terms are often used interchangeably, they serve distinct purposes and focus on different aspects of an organization's operations. In this article, we will explore the differences between a Business Plan and a Strategic Plan.

Business Plan: A Blueprint for Operations

A Business Plan is a comprehensive document that outlines the specific details of how a business will operate. It is typically created when starting a new venture or when seeking funding from investors or lenders. Here are some key characteristics and components of a Business Plan:

1. Business Overview:

• Provides an introduction to the business, its mission, and its objectives.
• Describes the type of business, its legal structure, and its ownership.

2. Market Analysis:

• Analyzes the target market, including customer demographics, needs, and trends.
• Evaluates the competitive landscape and identifies potential competitors.

3. Products or Services:

• Details the products or services the business offers, including features, pricing, and benefits.
• Discusses the development, production, or sourcing of these offerings.

4. Sales and Marketing Strategy:

• Outlines the strategies for promoting and selling products or services.
• Includes a marketing plan that covers advertising, branding, and customer acquisition.

5. Management and Team:

• Profiles the management team, their qualifications, and roles within the organization.
• May include information on key personnel and their responsibilities.

6. Financial Projections:

• Presents financial forecasts, including income statements, balance sheets, and cash flow statements.
• Often includes details on startup costs, funding requirements, and revenue projections.

7. Funding Request (if applicable):

• States the amount of funding needed and how it will be used.
• May include details on the terms of investment or loans sought.

8. Appendices:

• May include supplementary documents, such as resumes, market research data, or legal agreements.

In summary, a Business Plan is a detailed document that focuses on the operational aspects of a business. It provides a roadmap for how the business will be structured, how it will operate, and how it plans to achieve its financial goals.

Strategic Plan: A Blueprint for Long-Term Success

A Strategic Plan, on the other hand, is a forward-looking document that outlines an organization's long-term goals and the strategies required to achieve them. It is not limited to startups but is equally important for established businesses seeking growth and sustainability. Here are key characteristics and components of a Strategic Plan:

1. Vision and Mission:

• Defines the organization's overarching purpose (mission) and its aspirational future state (vision).

2. Goals and Objectives:

• Sets specific, measurable, and time-bound goals that align with the organization's mission and vision.
• Often includes both short-term and long-term objectives.

3. Environmental Analysis:

• Assesses the external factors affecting the organization, including market trends, competition, and regulatory changes.
• Considers internal factors, such as strengths and weaknesses.

4. Strategic Initiatives:

• Identifies the major strategies and initiatives necessary to achieve the defined goals.
• Specifies the action plans, timelines, and responsible parties for each initiative.

5. Resource Allocation:

• Determines the allocation of resources, including budgets, personnel, and technology, to support the strategic initiatives.

6. Monitoring and Measurement:

• Defines key performance indicators (KPIs) and metrics to track progress toward strategic goals.
• Establishes a process for regular review and adjustment of the plan.

7. Implementation and Execution:

• Outlines the steps and responsibilities for executing the strategic initiatives.
• May involve changes in organizational structure, processes, or systems.

8. Communication:

• Communicates the strategic plan to all stakeholders, including employees, investors, and partners.
• Ensures alignment and buy-in throughout the organization.

In essence, a Strategic Plan is a high-level document that focuses on the big picture. It sets the course for the organization's future, guiding decision-making and resource allocation to achieve long-term success.

Key Differences:

• Scope: A Business Plan primarily addresses the day-to-day operations and financial aspects of a business, while a Strategic Plan focuses on long-term goals and strategies for growth and sustainability.
• Audience: Business Plans are often created for external stakeholders, such as investors and lenders, while Strategic Plans are designed to guide internal decision-making and align the organization.
• Time Horizon: Business Plans typically cover a shorter time frame (e.g., one to three years), whereas Strategic Plans have a longer-term perspective (e.g., three to five years or more).
• Content: Business Plans include detailed financial projections and operational specifics, whereas Strategic Plans emphasize vision, goals, and strategies.

In conclusion, both Business Plans and Strategic Plans are essential tools in the business world, serving distinct but complementary purposes. A Business Plan provides a detailed roadmap for immediate operations, while a Strategic Plan charts the course for long-term success and

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Understanding The Distinction Between a Business Plan & Business Planning

In the dynamic world of entrepreneurship, our choice of words matters. Our vocabulary can often become a veritable alphabet soup of jargon, acronyms, and those buzzwords (I'm looking at you, "disrupt").

And let's not get started on business cliches – "circle back," "synergy," “deep-dive,” etc.

Yet sometimes, it's worth pausing to consider the words we casually sprinkle around in our business conversations. In a previous article, we explored the differences between strategic and tactical business planning , two related but distinct approaches to guiding a business. Now, we're going to delve into another pair of terms that often get used interchangeably but have unique implications: "business plan" (the noun) and "business planning" (the verb).

The business plan, a noun, is a tactical document. It's typically created for a specific purpose, such as securing a Small Business Administration (SBA) loan . Think of it as a road map – it outlines the route and the destination (in this case, the coveted bank loan). But once you've reached your tactical goal (in this case, getting the loan), it often gets shoved in the glove compartment, forgotten as part of the organization's action plan until the next road trip (i.e., additional funding ).

Business planning is not a static concept, but rather a dynamic verb. It's an ongoing process that necessitates continual adjustments. It's about creating a holistic, interconnected value-creating strategic plan that benefits all stakeholders. This includes attracting top-tier employees, ensuring a return on lending or investment, and making a positive impact on the community, whether online or in real life.

That being said, the customer remains at the heart of this process. Without customers, there are no sales, no revenue, and no value. Everything else is contingent on this key element.

If we were to compare the business plan to a map, then business planning would be the journey. It's a continuous process of making strategic decisions, adapting to new paths, and steering the business towards its goals. Sometimes, it even involves redefining objectives midway.

So, let's do a "deep-dive" (I couldn't resist) into these two terms, examining their application in the real world. Along the way, we'll uncover some tools that can aid us in the ever-evolving process of strategic business planning and the more finite task of crafting a winning business plan.

The Business Plan is a Document

Alright, let's take a closer look at a phrase we've all tossed around: the business plan. Imagine it as the detailed blueprint of your organization's goals, strategies, and tactics. It's like the North Star for your entrepreneurial ship, shedding light on the key questions: what, why, how, and when (speaking of questions, here are some FAQs about the business plan ).

Writing a solid business plan isn't easy , especially if you're just dipping your toes into the world of business planning. But don’t worry; we'll get to that (eventually).

So, let's break it down. What does a business plan document consist of, exactly?

• Executive Summary: Just as it sounds, this is a quick overview of the nitty-gritty that's in the rest of your business plan. It's the introduction to your organization, highlighting your mission statement and serving up the essential details like ownership, location, and structure.
• Company Overview: This is where you will detail your products and/or services, their pricing, and the operational plan. If you're opening a restaurant, this section is where you present your menu, and it's also where you talk about your ingredient sourcing, the type of service you'll provide, and the ambiance you're aiming for. 
• Market Analysis Summary: This section demands a comprehensive analysis of your industry, target market, competitors, and your unique selling proposition. Without access to top-notch (and often not free) research tools, it can be challenging to find current industry data. Check out our  guide on the best market research tools to get started.
• Strategy and Implementation Summary: Here, you'll lay out your short-term and long-term objectives along with the strategies you'll implement to attract and retain customers. This is where you’ll talk about all the different marketing and sales strategies you'll use to charm your future customers.
• Management Summary: This is your chance to spotlight your company's key personnel. Detail the profiles of your key leaders, their roles, and why they're perfect for it. Don't shy away from acknowledging talent gaps that need to be filled, and do share how you plan to fill them!
• Pro Forma Financials: This is where you get down to the dollars and cents with a detailed five-year revenue forecast along with crucial financial statements like the balance sheet and the profit & loss statement.

A business plan is an essential instrument, not just for securing funding, but also for communicating long-term goals and objectives to key stakeholders. But, while a business plan is essential for many circumstances, it's important to understand its scope and limitations. It's a tactical tool, an important one, but it's not the be-all and end-all of business strategy. Which brings us to our next point of discussion: business planning.

Business Planning is a Process

If we view the business plan as a blueprint, then business planning is the architect. But let's be clear: we're not building just any old house here. We're building the  Winchester Mystery House of business. Just as the infamous Winchester House was  constantly under construction , with new rooms being added and old ones revamped, so too is your business in a state of perpetual evolution. It's a dynamic, ongoing process, not a one-and-done event.

In the realm of business planning, we're always adding 'rooms' and 'corridors' – new products, services, and market strategies – to our 'house'. And just as  Sarah Winchester reputedly consulted spirits in her Séance Room to guide her construction decisions, we consult our customers, market data, and strategic insights to guide our strategy. We're in a constant state of assessing, evolving, executing, and improving.

Business planning touches all corners of your venture. It includes areas such as product development, market research, and strategic management. It's not about predicting the future with absolute certainty – we’re planners, not fortune tellers. It's about setting a course and making calculated decisions, preparing to pivot when circumstances demand it (think global pandemics).

Business planning is not a 'set it and forget it' endeavor. It's akin to being your company's personal fitness coach, nudging it to continually strive for better. Much like physical fitness, if you stop the maintenance, you risk losing your hard-earned progress.

Business Planning Case Study: Solo Stove

Now that summer is here, my Solo Stove stands as a tangible testament to effective business planning.

For those unfamiliar, Solo Stove started with a simple yet innovative product – a smoke-limiting outdoor fire pit that garnered over $1.1 million on Kickstarter in 2016, far exceeding its original objective. Since then, it has expanded its portfolio with products tailored to outdoor enthusiasts. From flame screens and fire tools to color-changing flame additives, each product is designed to fit seamlessly into modern outdoor spaces, exuding a rugged elegance that resonates with their target audience.

This strategic product development, a cornerstone of business planning, has allowed Solo Stove to evolve from a product to a lifestyle brand. By continually listening to their customers, probing their desires and needs, and innovating to meet those needs, they've built a brand that extends beyond the products they sell.

Their strategy also includes a primary "Direct To Consumer" (DTC) revenue model, executed via their e-commerce website. This model, while challenging due to increased customer acquisition costs, offers significant benefits, including higher margins since revenue isn’t split with a retailer or distributor, and direct interaction with the customer.

Through its primary business model,  Solo Stove has amassed an email database of over 3.4 million customers . This competitive advantage allows for ongoing evaluation of customer needs, driving product innovation and improvement, and enabling effective marketing that strengthens their mission. The success of this approach is evident in the company's growth: from 2018 to 2020,  Solo Stove’s revenue grew from $16 million to $130 million , a 185% CAGR.

While  85% of their revenue comes from online DTC channels, Solo Stove has also enhanced their strategic objectives by partnering with select retailers that align with their reputation, demographic, and commitment to showcasing Solo Brands’ product portfolio and providing superior customer service.

Solo Stove's success underscores how comprehensive business planning fosters regular assessment, constant evolution, and continual improvement. It's more than setting goals – it's about ceaselessly uncovering ways to deliver value to your customers and grow your business.

However, even successful businesses like Solo Stove can explore additional strategic initiatives for growth and diversification, aligning with their strategic direction and operational planning. For instance, a subscription model could provide regular deliveries of products or a service warranty, creating a consistent revenue stream and increasing customer loyalty. Alternatively, a B2B model could involve partnerships with adventure tourism operators, who could purchase Solo Stove products in bulk.

These complementary business models, when integrated into the operational plan, could support the primary DTC model by driving customer acquisition, providing ongoing revenue streams and expanding the customer base. This strategic direction ensures that Solo Stove continues to thrive in a competitive market.

The Interplay between the Business Plan (Noun) and Business Planning (Verb)

In the realm of business strategy, there's an intriguing chicken-and-egg conundrum: which comes first, the business plan or business planning? The answer is both straightforward and complex: they're two sides of the same coin, each indispensable in its own right and yet inextricably linked.

The process of business planning informs and modifies the business plan, just as the business plan provides a strategic foundation for the planning process. This interplay embodies the concept of Model-Based Planning™, where the business model serves as a guide, yet remains flexible to the insights and adaptations borne out of proactive business planning.

Let's revisit the Solo Stove story to elucidate this concept. Their business model, primarily direct-to-consumer, laid the groundwork for their strategy. Yet, it was through continuous business planning  –  the assessment of customer feedback, market trends, and sales performance –  that they were able to refine their model, expand their product portfolio, and enhance their growth objectives. Their business plan wasn't a static document but a living entity, evolving through the insights gleaned from ongoing business planning.

So, how can you harness the power of both the tactical business plan and strategic business planning in your organization? Here are a few guiding principles:

• Embrace Model-Based Planning™: Start with a robust business model that outlines your strategic plan. But remember, this isn't set in stone—it's a guiding framework that will evolve over time as you gain insights from your strategic planning process.
• Make business planning a routine: Regularly review and update your business plan based on your findings from market research, customer feedback, and internal assessments. Use it as a living document that grows and adapts with your business.
• Foster open communication: Keep all stakeholders informed about updates to your business plan and the insights that informed these changes. This promotes alignment and ensures everyone is working towards the same goals.
• Be agile and adaptable: A key part of business planning is being ready to pivot when necessary . Whether it's a global pandemic or a shift in consumer preferences, your ability to respond swiftly and strategically to changing circumstances is crucial for long-term success.

Fanning the Flames: From Planning to Plan

The sparks truly ignite when you understand the symbiotic relationship between tactical business plans, strategic business planning, and the achievement of strategic goals. Crafting a tactical business plan (the noun) requires initial planning (the verb), but then you need to embark on continuous strategic planning (the verb) to review, refine, and realign your strategic business plan (the noun). It's a rhythm of planning, execution, review, and adjustment, all guided by key performance indicators.

Business planning, therefore, isn't a one-off event, but rather an active, ongoing process. A business plan needs constant nurturing and adjustment to stay relevant and guide your organization's path to success. This understanding frames your business plan not as a static document, but as a living, breathing entity, evolving with each step your business takes and each shift in the business landscape. It's a strategic roadmap, continually updated to reflect your organization's objectives and the ever-changing business environment.

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• Effective Strategic Plans and Business Plans: Understanding the Difference Between

by Waymaker | Jul 25, 2023

Defining Strategic Plans and Business Plans

What is a strategic plan, what is a business plan, key components of strategic plans and business plans, elements of a strategic plan, elements of a business plan, the purpose and goals of the strategic plan and the business plan, the purpose of a strategic plan, the purpose of a business plan, the planning process: strategic plans vs. business plans, developing a strategic plan, developing a business plan, the role of stakeholders in each plan, stakeholder involvement in strategic plans, stakeholder involvement in business plans.

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In the world of business, the terms strategic plans and business plans are often used interchangeably. However, there are significant differences between these two types of plans that are important for entrepreneurs and business leaders to understand.

Before delving into the differences between strategic plans and business plans, it’s important to define each term.

A strategic plan is a long-term plan that outlines an organization’s goals and objectives and the actions needed to achieve them. It typically covers a three to five-year time period and focuses on broad, high-level initiatives that will position the organization for success in the future.

Strategic planning is a crucial process for any organization that wants to succeed in today’s competitive business environment. It allows organizations to identify their strengths, weaknesses, opportunities, and threats, and to develop a plan of action that will help them achieve their long-term goals.

During the strategic planning process, organizations typically conduct a thorough analysis of their internal and external environments. This includes an assessment of their current strengths and weaknesses, as well as an analysis of the market, competition, and other external factors that could impact their success.

Based on this analysis, organizations develop a set of strategic objectives and initiatives that will help them achieve their long-term goals. These initiatives may include expanding into new markets, developing new products or services, or investing in new technologies.

A business plan , on the other hand, is a detailed plan that outlines the steps a company will take to achieve its short-term goals and to operate on a daily basis. It typically covers a one to three-year time period and includes detailed financial projections, marketing plans, and operational strategies.

A business plan is a critical tool for any entrepreneur or small business owner who wants to succeed. It allows them to identify their target market, develop a marketing strategy, and create a roadmap for achieving their financial goals.

When developing a business plan, entrepreneurs typically begin by conducting market research to identify their target market and assess the competition. They then develop a marketing strategy that will help them reach their target market and differentiate themselves from the competition.

In addition to marketing, a business plan also includes detailed financial projections that outline the company’s revenue and expenses over the next one to three years. This allows entrepreneurs to identify potential financial challenges and develop strategies to overcome them.

Finally, a business plan includes operational strategies that outline how the company will operate on a day-to-day basis. This includes everything from hiring and training employees to managing inventory and fulfilling orders.

In conclusion, while both strategic plans and business plans are important tools for organizations and entrepreneurs, they serve different purposes. Strategic plans focus on long-term goals and broad initiatives, while business plans focus on short-term goals and daily operations.

Strategic plans and business plans are essential tools for any organization looking to achieve long-term success. While both plans share some common elements, they differ in their focus and level of detail.

A strategic plan is a comprehensive document that outlines an organization’s long-term goals and objectives. Key components of a strategic plan include:

• Mission Statement:  This statement defines the organization’s purpose and values, and provides a framework for decision-making.
• Vision Statement:  This statement describes the organization’s long-term aspirations and what it hopes to achieve in the future.
• Objectives:  These are specific, measurable goals that the organization aims to achieve within a set timeframe.
• Strategies:  These are the broad approaches that the organization will take to achieve its objectives.
• Tactics:  These are the specific actions that the organization will take to implement its strategies.

By outlining these key components, a strategic plan provides a roadmap for the organization to follow as it works towards its long-term goals.

A business plan is a detailed document that outlines how a company will achieve its short-term and long-term goals. While it shares some elements with a strategic plan, a business plan is more focused on the day-to-day operations of the business. Key components of a business plan include:

• Executive Summary:  This is a brief overview of the entire business plan, highlighting the key points and goals.
• Market Analysis:  This section provides an in-depth look at the industry and market in which the company operates.
• Marketing and Sales Strategies:  These are the specific tactics that the company will use to promote and sell its products or services.
• Operational Plans:  This section outlines the day-to-day operations of the business, including staffing, production, and logistics.
• Financial Projections:  This section provides detailed financial projections, including revenue, expenses, and profit margins.
• Funding Requirements:  This section outlines the company’s funding needs and how it plans to secure financing.

By including these key components, a business plan provides a detailed roadmap for the company to follow as it seeks to achieve its goals and grow its operations.

Overall, both strategic plans and business plans are essential tools for any organization looking to achieve long-term success. By outlining clear goals and strategies, these plans provide a framework for decision-making and help ensure that the organization stays focused on its long-term objectives.

Strategic plans and business plans are both essential tools for any organization. They provide a clear roadmap for achieving goals and ensuring long-term success. While the two plans are similar in some ways, they serve different purposes and have different goals.

A strategic plan is a high-level document that outlines an organization’s long-term goals and objectives. It provides a roadmap for achieving those goals and helps to align the entire organization around a shared vision. The purpose of a strategic plan is to provide a framework for making strategic decisions that will move the organization closer to its desired future state.

Developing a strategic plan requires careful consideration of an organization’s strengths, weaknesses, opportunities, and threats. It involves analyzing market trends, assessing the competition, and identifying potential risks and challenges. The end result is a comprehensive plan that outlines the steps necessary to achieve the organization’s long-term goals.

One of the key benefits of a strategic plan is that it helps to ensure that everyone in the organization is working towards the same goals. By creating a shared vision and providing a clear roadmap for achieving it, a strategic plan can help to align the efforts of all employees, departments, and stakeholders.

A business plan is a detailed document that outlines an organization’s short-term goals and objectives. It provides a roadmap for achieving those goals and helps to define the company’s market niche, outline its marketing and sales strategies, and determine the funding needed to cover startup costs and ongoing expenses.

The purpose of a business plan is to provide a clear and comprehensive plan for achieving the organization’s short-term goals. This includes identifying potential customers, outlining marketing and sales strategies, and determining the resources needed to launch and maintain the business.

Developing a business plan requires careful research and analysis. This includes assessing the market demand for the product or service, analyzing the competition, and identifying potential risks and challenges. The end result is a detailed plan that outlines the steps necessary to launch and grow the business.

One of the key benefits of a business plan is that it helps to ensure that the organization is well-prepared for the challenges of starting and growing a business. By providing a clear roadmap for achieving short-term goals, a business plan can help to minimize risks and increase the chances of success.

Strategic plans and business plans are both essential tools for any organization. While they serve different purposes and have different goals, they both provide a clear roadmap for achieving success. By developing a comprehensive strategic plan and a detailed business plan, organizations can ensure that they are well-prepared for both short-term and long-term success.

Planning is an essential part of any successful business, but the planning process can differ significantly depending on the type of plan being developed. Strategic plans and business plans have different goals, and therefore require different approaches to planning.

Use Waymaker Academy to learn how to build your business plan.

A strategic plan is a long-term plan that outlines an organization’s goals and objectives, and the strategies it will use to achieve them. Developing a strategic plan typically involves a lengthy planning process that includes input from a wide range of stakeholders, such as executives, employees, customers, and shareholders. The planning process may involve conducting research and analysis to identify opportunities and threats in the market, as well as the organization’s strengths and weaknesses.

The strategic plan should be reviewed and updated annually to ensure it remains relevant and aligned with the organization’s goals. This process may involve revisiting the organization’s mission and vision statements, as well as assessing the progress made towards achieving the goals outlined in the plan. 

One of the key benefits of a strategic plan is that it provides a clear direction for the organization, helping to align everyone around a common set of goals and objectives. It also helps to ensure that resources are being allocated in the most effective way possible, and that the organization is able to adapt to changes in the market.

A business plan, on the other hand, is a shorter-term plan that outlines the company’s goals and objectives for the next one to three years. The process of developing a business plan typically involves a smaller team of stakeholders focused on executing the company’s short-term goals.

The business plan may also include input from investors, lenders, and other external stakeholders who have a vested interest in the company’s success. This may involve presenting financial projections, market analysis, and other data to demonstrate the viability of the business.

One of the key benefits of a business plan is that it provides a roadmap for the company’s short-term goals, helping to ensure that everyone is working towards the same objectives. It also helps to identify potential risks and challenges, and provides a framework for measuring progress and making adjustments as needed.

Overall, both strategic plans and business plans are important tools for any organization. By taking the time to develop a clear plan, companies can ensure that they are working towards their goals in the most effective way possible.

Stakeholder involvement plays a key role in both strategic plans and business plans, although the level and type of involvement can vary depending on the plan.

Stakeholder involvement is critical in the development of a strategic plan, as it ensures that all parties have a voice in shaping the organization’s future. This involvement also helps to build consensus around the organization’s goals and the strategies needed to achieve them.

Stakeholder involvement in a business plan may be more limited, as the focus is on executing short-term goals rather than shaping the organization’s long-term future. However, investors and lenders may play a significant role in the development of a business plan, as they provide funding and have a vested interest in the success of the company.

While strategic plans and business plans share some common elements, they serve very different purposes and are designed to achieve different goals. By understanding the differences between these two plans, entrepreneurs and business leaders can better plan for the future, execute their short-term goals, and position their organizations for long-term success.

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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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Strategic Plans vs. Business Plans: What's the Difference?

"The journey of a thousand miles begins with a single step." Lao Tzu

Not only is this an inspirational quote, it encapsulates the difference between strategic plans and business plans.

The strategic plan offers a high-level look at what the organization wants to accomplish - or where, at the end of the thousand mile journey , it wants to be. The business plan details the steps required to ensure the destination is reached. The difference between a strategic and business plan, boiled down to the basics: it's where a business wants to end vs. what actions it needs to take to get there.

Plotting the Journey

A strategic plan does more than satisfy requirements from lenders or potential investors; it provides an organization with the opportunity to clearly describe their business and articulate its mission and goals, i.e to define the strategic direction of the firm. The time frame is typically three to five years, if not longer.

The business plan outlines the steps necessary to ensure that the business reaches its desired outcomes in the short run, i.e. 1 year. Strategic plans are often compared to roadmaps; if so, the business plan is the turn-by-turn directions that Google Maps provides to help you navigate to your destination.

For an example, imagine someone who wants to give up the cold and snow and move to a warmer climate. That's the ultimate destination; the vision is lounging in the sun or maybe hitting the golf course for a round every morning. This individual doesn't know where he'll live or what each day will look like, but he has the end goal in mind.

Moving Ahead

Now he has to begin this journey with a single step. Part of that is committing to the move and then asking, "What do I need to do now?" Maybe career options are different there, and he needs to bolster his education, or gain more work experience in a specific area. Maybe he's close to retiring and has to iron out financial details. Maybe he has children and needs to research the best schools for them.

The "business" plan incorporates all of these facets and the ultimate end result many years from now; what he can control is what he does today, this week, and this month. Each of those steps brings him closer to warmer weather.

Replace "warmer weather" with becoming the market leader in a given space and growing revenue by X%, and you understand how strategic and business plans work. The strategic plan, to put it simply, is your "what and where." The business plan is the "how."

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How do business plans differ from strategic plans?

Like individuals, businesses also require an action plan. Drafting one helps both internal and external stakeholders understand what the business’s main activities are, how it aims to function and what its key goals are for the future, amongst other things.

Plans, however, vary with purpose. Some are designed to help reach daily targets whilst others are meant to guide long(er)-term growth strategies.

There are two main types of medium term plans - business plans and strategic plans, and it’s important to understand what makes each one unique. Luckily for you, this guide will do just that by defining both, explaining the similarities and differences as well as sharing some useful tools that can help make the writing process easier and faster.

Ready? Let’s get started!

In this guide:

What is a business plan?

• What is a business proposal?
• Business plan vs. business proposal: what do they have in common?
• Business plan vs. business proposal: what are the differences?

What tools can you use to write a business plan?

• What tools can you use to write a business proposal?

A business plan is a document providing detailed information about your business and its objectives for the years to come (usually 3-5 years).

To keep it short and simple, a business plan consists of two parts: 

• A financial forecast which provides information about the expected growth and profitability of your business, your potential funding requirements, and cash flow projections.
• A written part which provides the context and details needed to assess the relevance of the forecast: company overview, description of products and services, market analysis, strategy, operations, etc.

Formal business plans are usually written: to secure financing, to get buy-in from stakeholders (board members, investors, business partners) on the plan of action for the coming years, to convince suppliers to do business with the company, or to communicate the company's vision to staff members.

Financial savvy businesses regularly track their actual financial performance against the forecast included in their business plan and re-assess their progress against what was planned, and update their plans as needed.

Need a convincing business plan?

The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

What is a strategic plan?

Strategic planning refers to the methodology used by businesses to develop plans to achieve long-term goals. Note that these goals are usually broad but actionable within a given timeframe.

The importance of this type of planning cannot be understated - it’s estimated that 95% of typical workforces don’t understand their organization's strategy, according to OnStrategy.

Strategic planning helps guide employees within an organization by telling them what they are working towards and how they might get there.

Strategies should not be mistaken, however, with tactics, which are specific steps taken to achieve the goal outlined. These are often short-term and easily defined.

For example, if a business wanted to increase its brand awareness, the main strategy might be to engage in more promotional content. Specific tactics, on the other hand, could include the use of social media, influencers, and product placement to increase brand exposure.

Business planning vs. strategic planning: what do they have in common?

Before we dive into how the two differ, let’s first understand the similarities between a business plan and a strategic plan.

To begin with, both are forward-looking, help map goals and explain how the business will attempt to achieve them. 

In essence, they are both an insight into what the business “plans” to look like in the future.

Whilst both business plans and strategic plans are medium-term, they only cover between 3 and 5 years. The reason for this is quite simple: it is difficult to predict anything with certainty beyond this point.

Whilst both are a plan of action, they each tackle different aspects of the business. Now let’s see how a business plan may differ from a strategic plan.

Business planning vs. strategic planning: what are the key differences?

The main differences between the two types of plans can be explained using the following points:

Precision vs. abstract

Business plans are quite specific: they include a precise financial forecast where every aspect of the business as been budgeted. And they often deal with the finer details, external sources of financing as well as projected market share based on specified goals. 

A strategic plan, on the other hand, is more abstract and higher level. It uses broader language and, unlike a business plan, does not include a precise timing and associated cash flows with each initiative. 

Regular vs. infrequent updates

Business plans are regularly revisited, the forecasted financial performance is compared against the actual performance of the business in order to track whether the business is on the right path to achieving its goals or if they need to be realigned. Additionally, many external or even internal factors may require these goals or tactics to be changed.

A strategic plan, on the other hand, is more long-term. The advancement might be tracked quarterly but the plan itself is reviewed every couple of years or so. The aim is the same - to ensure the business is on track. However, as it is a more abstract plan, it does not have to be frequently updated to match business performance.

Small vs. large businesses

Business plans are essential for all business types, regardless of their structure. For example, sole traders, partnerships and limited companies, all utilise business plans to drive the business and help obtain funding.

Strategic plans are, however, mostly implemented by large(r) businesses, because startups and small businesses lack resources or sometimes even the necessity for strategic plans.  

External vs. internal

The intended audiences for both a business plan and a strategic plan also differ. Business plans are meant for both internal (business owner, shareholders, and management team) and external (lenders, investors or suppliers) audiences.

On the other hand, strategic plans are usually meant for internal audiences only, such as the organisation’s employees. It helps guide teams and departments in terms of what they should be working towards helping the business achieve its goals.

In this section, we will review three solutions for writing a professional business plan:

• Using Word and Excel
• Hiring a consultant to write your business plan 
• Utilizing an online business plan software

Create your business plan using Word or Excel

Writing a business plan using Word or Excel has both pros and cons. On the one hand, using either of these two programs is cheap and easy to learn. 

However, using Word means starting from scratch and formatting the document yourself once written - a process that can be quite tedious. There are also no templates or examples to guide you through each section.

Creating an accurate financial forecast with Excel is also impossible for a business owner without expertise in accounting and financial modeling. And, investors and lenders are unlikely to trust the accuracy of such forecast.

Ultimately, it's up to you to decide which program is right for you and whether you have the expertise or resources needed to make Excel work. 

Hire a consultant to write your business plan

Outsourcing a business plan to a consultant or accountant is another potential solution.

Consultants are used to writing business plans, and accountants are good at creating financial forecasts without errors.

This means that they will be able to create an effective business plan with accurate financial estimates without much effort.

However, accountants often lack the industry expertise to accurately forecast sales and hiring consultants or accountants is expensive. Budget at least £1.5k ($2.0k) for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).

For these reasons, outsourcing your business plan to a consultant or accountant should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.

Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their own business plan using an online software.

Use an online business plan software for your business plan

Another alternative is to use online business plan software . There are several advantages to using specialized software:

• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can be inspired by already written business plan templates
• You can easily make your financial forecast by letting the software take care of the financial calculations for you without errors
• You get a professional document, formatted and ready to be sent to your bank
• The software will enable you to easily track your actual financial performance against your forecast and update your forecast as time goes by

If you're interested in using this type of solution, you can try our software for free by signing up here .

What tools can you use to write a strategic plan?

In terms of appropriate software, strategic plans are often written using Microsoft Word, PowerPoint, or similar tools. As they do not need to be particularly specific or include financial forecasts, they do not require such software the way business plans do.

Other tools used in the development of strategic plans include:

• PESTEL: A PESTEL analysis helps identify external factors that may impact a business’s performance or operations which the business needs to include in its planning. It refers to P olitical, E conomical, S ocial, T echnological, E nvironmental, and L egal factors. This type of analysis is often used when planning international expansion.
• SWOT: A SWOT analysis refers to internal and external factors that can impact the business. It analyzes the internal S trengths and W eaknesses of the business and the external O pportunities and T hreats affecting the business. This type of analysis is useful when planning the evolution of the companies product portfolio or activites. 
• BCG matrix: The BCG matrix is a product portfolio matrix that helps a business consider which products in its portfolio should be developed further. It compares the relative market share of a product with its market growth rate. 
• McKinsey matrix: The McKinsey matrix is also designed to help determine how to allocate resources to various products in a company’s portfolio. It compares business strengths against industry attractiveness.   

Need inspiration for your business plan?

The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.

While both business plans and strategic plans set out some kind of goals for the business, they differ in their applications. Business plans are meant to develop concrete goals for the growth of a business whilst strategic plans are helpful for internal use to guide teams and departments.

Creating a business plan can seem daunting- unless you have our online business plan software on hand. This nifty tool has all your plan designing needs covered and ready to go!

Also on The Business Plan Shop

• 7 tips for writing an effective business plan
• Business Model vs. Business Plan

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Business plan, strategic plan, operational plan: why all 3 are important

By Andrea Nazarian

When you’re in the early stages of running your business, it’s easy to get lost when thinking about all the things you need to organize in order to grow. This is where making a business plan, strategic plan and operational plan comes into play. 

A business plan outlines the “what” and “how” of your business, while a strategic plan sets the long-term vision. Operational plans dive into day-to-day tasks. We’ll explain their roles, differences, and how they work together. 

In this post, we’ll break down these concepts, explain the difference between them and why all three are important.  By understanding these plans, you’ll gain the tools to steer your ship, set big goals, and navigate the everyday waters with confidence and success.

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What is a Business Plan?

A business plan, just like a blueprint for building a house, shows the general path for your business to follow. Besides the essential facts, it’s the tool that conveys your vision to potential investors, partners, and your own team.

A business plan is your business’s roadmap to success. It’s a detailed guide that helps you understand where your business is headed and how to get there. In this plan, you outline your business goals, what products or services you offer, who your customers are, and how you’ll reach them. 

Writing a business plan is one of many tips for starting a business you can tap into to get off the ground. 

Your business plan includes financials 

Your business plan also includes financial details, like how much money you’ll need and how you’ll make money. It’s important to outline everything because it helps you make smarter decisions, attract investors or loans, and stay on track as you grow. 

Think of your business plan as a game plan that keeps you focused and prepared for whatever comes your way.

What is a Strategic Plan?

A strategic plan is a detailed plan that lays out where you want your business to be in the future and how you’ll get there. In this plan, you outline your long-term goals, the actions you’ll take to move towards those goals, and the major steps to reach those goals.

A strategic plan helps you make smart choices about things like which products to focus on, how to stand out from competitors, and where to expand. It’s like your compass for making decisions that match your vision. 

Goal setting in your strategic plan 

Setting SMART goals (Specific, Measurable, Achievable, Relevant, Time bound) is a clear way to put your strategic plan into actionable tasks. 

This plan also keeps you flexible – you can adjust it as your business grows and the market changes. By having a solid strategic plan, you’re setting yourself up for success, making sure all your actions lead to reaching those big dreams you have for your business.

What is an Operational Plan?

An operational plan is where the nitty-gritty of running your business happens. An operational plan is like your playbook for your day-to-day tasks . 

It spells out exactly how you’ll execute your strategies outlined in your strategic plan and reach your goals outlined in your business plan.

In your operational plan, you break things down: who’s doing what, when and how. It’s like giving clear instructions to your team on tasks, deadlines, and responsibilities.

From managing the kitchen in a restaurant to handling customer orders in a salon, it’s all in the operational plan.

It also covers how you’ll maintain quality, manage resources, and handle any bumps along the way. Think of it as your action plan – turning your grand ideas into reality, step by step. 

What’s the Difference Between a Business Plank, Strategic Plan and Operational Plan?

Business plan.

• Focus: This is the big blueprint for your entire business. It explains what your business does, who your customers are, how you’ll make money, and your long-term goals.
• Timeframe: Usually covers a few years and includes financial projections.
• Use: It’s your pitch to investors and guides your business decisions.

Strategic plan:

• Focus: This is the long-term vision. It’s about where you want your business to go and the major steps to get there.
• Timeframe: Often covers 3-5 years.
• Use: It guides big choices like expanding, new products, and setting direction.

Operational plan:

• Focus: This is the detailed game plan for your day-to-day business operations. It’s about how you’ll execute your strategies.
• Timeframe: Covers the short term, usually a year or less.
• Use: It’s the instructions for your team on tasks, deadlines, and responsibilities.

In short, a business plan is your overall roadmap, a strategic plan sets the direction for growth, and an operational plan makes sure everything runs smoothly day by day. They work together to keep your business on track and thriving.

Why is Having a Business Plan, Strategic Plan and Operational Plan Important?

Having a business plan, a strategic plan, and an operational plan is like having a superhero trio for your business. Here’s why they’re so important:

Business Plan:

• Clarity: It gives you a clear path for your business journey. You know what you’re doing, who your customers are, and how to make money.
• Guidance: It helps you make smart choices and stay on track to reach your goals.
• Attractiveness: Investors and lenders like to see a solid plan before supporting your business.

Strategic Plan:

• Direction: It’s like a compass for your long-term vision. It tells you where your business is headed and how to get there.
• Big Goals: It sets ambitious goals like growing big, launching new things, and standing out from the crowd.
• Adaptation: It helps you adjust when things change, keeping your business aligned with your dreams.

Operational Plan:

• Smooth Sailing: It’s your step-by-step guide for daily tasks. You know who does what and when.
• Efficiency: It makes things run smoothly and helps you manage resources well.
• Quality Control: It ensures your products or services are top-notch and consistent.

Together, these plans are like your business’s superpowers. They make sure your business is not just surviving, but thriving..

Strategic Plan Example

Let’s say your restaurant, Brenda’s Bistro, wants to become the ultimate dining spot in your community, celebrated for your fantastic dishes and top-notch hospitality.

Brenda’s Bistro’s mission is to create unforgettable dining experiences by offering a diverse menu crafted from locally sourced ingredients, while delivering outstanding customer service.

• Achieve a 20% increase in revenue within the next two years.
• Expand the customer base by targeting families and young professionals through special promotions.
• Introduce a new themed menu every season to keep customers excited and engaged.

Strategies and Initiatives:

• Strengthen Brenda’s Bistro online presence by sharing engaging content on your website and social media accounts regularly.
• Partner with local farmers to ensure your ingredients are fresh, sustainable, and support the community.
• Launch loyalty programs and offer discounts to encourage repeat visits.

Key Performance Indicators (KPIs):

• Monitor revenue growth every quarter to track progress toward your goal.
• Collect customer feedback through surveys and online reviews to measure satisfaction.
• Evaluate the success of your seasonal menus based on the number of orders and positive feedback.

How to Make a Strategic Plan

Crafting a strategic plan isn’t a one-size-fits-all deal; each company’s unique goals require a tailored approach. 

Let’s break down the essential steps to shape that core plan.

1. Gather the key people

Start by bringing together the important voices. This usually includes your executive board, managers, and sometimes outside investors. 

Their insights and suggestions are like puzzle pieces that fit into a successful strategic plan.

2: Find your business’ strengths and weaknesses 

Your strategy needs to know where your company stands both inside and out. Begin with a SWOT analysis, checking your internal strengths and weaknesses, plus external opportunities and threats. 

Gather insights from gap analysis, looking at competitors, and listening to customer and employee feedback give you the bigger picture.

3. Set Goals

Now, create goals from all that info. Match these goals with your mission, vision, and values. 

Pick the ones that make a big impact, make sense for the long haul, and line up with your values. Examples can be reaching certain sales targets, or a certain number of followers on your business’ social media. 

4.Make a game plan 

Time for an action plan. Break down each goal into strategies, initiatives, and tactics. Depending on your goals, these could be marketing plans , tech upgrades, or smart partnerships. 

You don’t need tons of details here; that’s what the operational plan covers. Also, set up key performance metrics to measure your progress.

5. Review and and tweak

Schedule regular check-ins to review your plan. This is where you reflect and adjust if needed. Good financial info comes in handy here. 

How often you do this depends on your business’s rhythm – maybe monthly for new businesses or yearly for more established ones.

Remember, your strategic plan is your map to success. Tailor it, review it, and let it guide you toward your goals.

Now that your strategic plan is sorted, let’s dive into the power of operational planning to make those goals a reality.

How to Make an Operational Plan

It’s time to take that big-picture strategic plan and break it into doable steps. First, check out the long-term goals. 

Figure out which departments need to team up to reach which goal. Ask questions like: What kind of resources does the business already have access to? 

What’s missing? Any money financial risks coming up? This helps you see which parts of your business need a boost to hit those goals.

1. Nail down your budget

Make a budget based on what each department in your business needs to reach the big goals. What does your kitchen staff need? How about front-of-house staff?

With your match-up between goals and areas, spread your budget where it’ll give the best bang for your buck. 

Remember to keep some cash aside for surprises and changes. A solid budget is like a shield against unexpected stuff.

2. Set targets

Each goal you’re chasing needs a target. Think carefully here – not too wild that your team loses heart, but not too tiny that the big plan stays out of reach. 

Realistic targets are your secret weapon. An example target could be selling 100 orders’ worth of a certain dish by the end of the month.

3. Check in with your team regularly 

Don’t just set and forget. Schedule regular check-ins with your staff to see how things are going. 

Are you hitting those targets? Are things humming along? 

These feedback sessions with your employees are like checkups for your plan. If things are off, you can tweak the plan to get back on track.

Homebase’s free mobile app has a built-in messenger tool to make it easy to stay connected. Send messages to individuals, groups, or your entire team.

3. Stay open and data-driven

Keep communication flowing during reviews. And don’t forget the data – it’s your treasure map. 

Numbers show where you’re doing well and where there’s room to improve. Use your POS software or an employee management tool like Homebase to help you make data-informed decisions on how to improve your business operations. 

With Homebase’s workforce forecasting and smart scheduling tools, you can save on labor costs for your business. 

With all this, your operational plan becomes a real powerhouse, making sure your business charges ahead toward those big dreams.

Make Your Business Plan, Strategic Plan and Operational Plan Work for You

In the bustling world of business, having a roadmap is essential for success. The triumphant trio of a business plan, strategic plan, and operational plan work together to steer your ship towards greatness. 

These plans aren’t just fancy paperwork – they’re important tools that guide your every move. 

By understanding each plan’s role and significance, you’re armed with the superpowers needed to navigate the complex business waters. 

A business plan provides clarity, a strategic plan offers direction, and an operational plan ensures smooth sailing. Together, they fuel your business’s journey from survival to thriving, making sure you’re not just a player in the game, but a true champion.

Here are 10 small business tools you can use to put these three plans into action.

FAQs About Business Plan, Strategic Plan and Operational Plan

Why do i need a business plan.

A business plan acts as a roadmap for your business journey. It outlines your goals, customers, and how you’ll make money. It’s crucial for attracting investors and making smart decisions. 

What’s the purpose of a strategic plan?

A strategic plan sets your long-term vision and goals. It guides big choices like expanding and standing out. It’s like a compass, helping you stay on course towards success.

What’s the difference between a strategic plan and an operational plan?

While a strategic plan sets long-term goals, an operational plan focuses on day-to-day tasks. It’s like a playbook that tells your team exactly what to do to reach those goals.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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

• November 19, 2021
• By James Gussie

Business plans lay out a company’s long-term strategy, while strategic plans outline how the business will reach its short- and medium-term goals. The difference between these two planning types is important to know for any entrepreneur or executive looking to set realistic expectations in today’s competitive marketplace.

Many company owners are aware of the need of a business strategy. The business plan is an important part of the loan application process since it acts as the basis for your company. It does, however, only give half of the tale. A strategic plan is also required to obtain the whole picture and to have a foundation on which to develop your company.

Let’s start with the distinction between a business and a strategic strategy. In the most basic terms:

A business strategy outlines the company’s “who” and “what.” The strategic strategy lays out the “how” and “when” for us.

In a wider sense, the business strategy informs us who we are by demonstrating:

• Who is in charge of the company? What qualifies them for this position? What does it take for them to contribute value to the table?
• Who are your rivals? What do they have to offer, and how do you differ from them?
• Who is your target market? What is the size of the market? What happened to them? What exactly do they want, and how are you going to provide it to them? Also, how will you reach out to your target market?

The business plan responds to the “what” question by detailing precisely what the company offers and how it does so. The product, services, and operations are all described in detail so that we can see how the promises are being fulfilled and if the company is running well.

On the other side, the strategic strategy lays forth the following:

• What criteria will you use to determine success? What metrics are important, and how will you keep track of them?
• What has to happen in order for you to accomplish your objectives? What are the resources you’ll need to get there?
• When? When will each action take place, who will do it, and when must certain milestones be met?

In the end, your business’s strategic strategy is an action plan. It’s the mission, goals, and actions that will propel your company ahead. A strategic plan is often laid out over a three- to five-year period, with particular stages carried out periodically. Benchmarks are often established in six-month and annual intervals to allow for planning, execution, and traction between milestones.

You’ll need a team of people to assist you plan, develop, and execute both the business and strategic strategies in both instances. Remember that your company need both a solid foundation and a sense of direction, as well as assistance in locating and acquiring important people and resources. You’re essentially driving with the brakes on if you don’t have them.

The “ strategic plan vs business plan vs operational plan ” is a question that has been asked for years. The difference between the three plans is what they are meant to be used for.

Table of Contents

Frequently Asked Questions

What is difference between a strategy and a plan.

A: A plan is a set of instructions for achieving or accomplishing something, while strategy refers to the art and practice of creating plans.

What are the 4 types of business plans?

A: A business plan is a written document outlining the goals, plans and methods of a new small or start-up company. There are four types of business plans: a) Business Plan Proposal b) Small Scale Business c) Entrepreneurial d) Start-Up

What are the 3 types of business plans?

A: A business plan is a document that details the goals, policies and procedures of an organization. Depending on its focus, it can be used to help understand the market or generate ideas for further development. There are three types of plans typically found in organizations: strategic planning, operational planning and marketing/sales/administrative

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• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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Capitalize on present opportunities and prepare for the future with strategic planning.

Whether you’re starting a new business or looking to revamp your company’s existing structures, a strategic plan is crucial for success. It complements existing documents, such as mission statements and individualized project plans, and considers future opportunities and potential setbacks.

With a strategic plan suited to your specific goals, you can chart a realistic, sustainable road map that acknowledges your current organizational challenges while unlocking future possibilities. Learn how strategic planning can benefit your organization and set you up for long-term success.

What is strategic planning?

Strategic planning is a continuous, systematic process for organizations to define their short- and long-term direction. It involves comprehensively assessing internal aspects, like employee development, budgets, and timelines, and external elements, such as market trends and competitors, to enable effective resource allocation so your organization can achieve business goals and scale effectively.

The strategic planning process is dynamic and requires adaptability to changing circumstances to establish a structured approach to decision-making and maintain team agility. At its core, strategic planning serves as a road map that steers an organization from its present state toward a well-defined future, ensuring sustainable growth.

The benefits of strategic planning

As a holistic road map, a strategic plan well suited to your organization can propel your productivity. Here are a few benefits that strategic planning brings:

• Creating a shared purpose. Strategic planning involves team members in setting the organization’s mission, vision, and values. This collaborative process ensures that every team member understands and connects with these fundamental principles — fostering a sense of shared purpose and direction.
• Proactive planning. The strategic planning process translates abstract ideas into actionable objectives. Setting specific, attainable goals and mapping out strategies to achieve them provides a clear blueprint for the future that’s guided by informed decision-making and deliberate goal-setting.
• Effective resource allocation. Strategic planning allocates resources such as finances, personnel, and technology based on their potential impact on business goals. This process assesses the resources required to achieve each objective and distributes them to maximize efficiency and effectiveness.
• Defining long-term and short-term goals. Strategic plans break down long-term, overarching goals into smaller, short-term objectives to create a step-by-step pathway to achieve the larger vision. This makes goals more manageable and actionable and enables regular monitoring and adjustment of these goals.
• SWOT analysis. Strategic planning provides a clear understanding of your organization’s current status, position in the market, and well-being through a SWOT (strengths, weaknesses, opportunities, threats) analysis. By evaluating both internal and external factors, this process helps identify areas where your organization excels, where it can improve, and external factors that could impact its success, ultimately helping you strategize for future growth and stability.
• Anticipating market trends. Strategic planning enables organizations to foresee and prepare for future changes by analyzing market data and trends. This proactive approach involves evaluating emerging trends, consumer behavior, and technological advancements to adapt strategies accordingly, ensuring you stay ahead of the curve.

How does a strategic plan differ from other project management and business tools?

When creating a long-term vision, a strategic plan becomes pivotal in steering your organization toward success. However, there are other project management tools and workflows with similar goals. Here’s how strategic plans differ from those processes.

Strategic plans vs. business plans

While a strategic plan outlines the organization’s long-term direction and actions to achieve overarching goals, a business plan focuses more on starting new ventures or restructuring existing ones. The strategic plan is broader in scope and encompasses long-term visions like market expansion, while the business plan might detail the steps to attract new customers and establish brand identity .

For example, a new brick-and-mortar sports apparel store might have a business plan for attracting new customers and establishing a brand identity, with a strategic plan that focuses on expanding into online sales to capture a broader audience over a three-year period.

Strategic plans vs. mission statements

A strategic plan outlines a comprehensive set of strategies to achieve organizational goals, while a mission or vision statement concisely communicates the organization’s core purpose. The mission statement sets the tone and direction, and the strategic plan lays out the specific initiatives, such as research and development investments and partnerships, to realize that vision.

Consider a mission statement for a security camera company — to create seamlessly integrated security systems that protect homes. Meanwhile, their strategic plan details initiatives such as product development, resource allocation, and personnel plans to achieve that mission statement.

Strategic plans vs. company objectives

Company objectives are specific, feasible, and measurable targets. In contrast, a strategic plan provides a broader blueprint for aligning resources and realizing those objectives. The strategic plan incorporates and supports various company objectives through detailed action plans and resource allocation.

For instance, an ecommerce platform aims to increase online sales by 15% in the first quarter. To achieve this, their marketing team creates a strategic plan prioritizing a digital marketing revamp, including optimizing the company website, driving organic traffic, and boosting search engine optimization (SEO).

Strategic plans vs. business cases

Unlike strategic plans, which broadly set the direction for multiple projects and initiatives aligned with a company’s long-term goals, business cases justify individual projects and focus on a specific initiative’s viability and benefits.

For example, a business case might focus on the financial feasibility and expected outcomes of introducing a new analytics feature in a software product. In contrast, the strategic plan of this software company might include goals such as becoming a leader in data-driven solutions, where the analytics function features prominently.

Strategic plans vs. project plans

Project plans are detailed documents that outline specific timelines, tasks, and budgets to complete a project. In contrast, strategic plans incorporate multiple project plans, ensuring they align with the broader goals and vision of the organization, and provide the context and framework for developing and implementing individual project plans.

For a web development team, a project plan could detail the steps for redesigning a client’s website, including milestones, resources, and deadlines. However, the strategic plan for this web development company might aim to become the go-to agency for innovative web solutions. Their strategic plan guides not just this single project but others in terms of technology adoption, client engagement strategies, and market positioning.

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The 5 essential steps to strategic planning

Now that you’re familiar with strategic plans’ benefits and use cases, here are five best practices to create one tailored for your organization.

1. Understand your position

Before drafting the actual plan, it’s essential to understand your position in the market. Conduct a SWOT analysis of your industry that focuses on current market trends, client needs, and the competitive landscape. This comprehensive understanding helps you grasp where your organization stands and what unique opportunities or challenges you might face so you can establish a solid foundation for future strategies.

2. Set clear goals and objectives

After understanding your market position, establish specific, attainable, and measurable objectives that align with your business’s mission and broader goals. Ensure these goals are relevant, time-bound, and fit within your organization’s resources and budget. Doing so effectively guides your efforts and provides a framework for measuring progress.

3. Define the organization-wide plan

After brainstorming broad long- and short-term goals, convert them into a cohesive strategy encompassing all departments. For example, if launching a new website design is your goal, involve developers, designers, and marketers in your planning process. Assess and use each team member’s strengths and encourage cross-departmental collaboration. This step ensures that your strategy is holistic and aligns every department toward common objectives.

4. Establish and meet KPIs

Implement key performance indicators (KPIs) relevant to your project. For a web development agency, these could include metrics such as website loading speed, user engagement rates, or client acquisition. You can also use data visualization tools , like Google Analytics, to gather insights and track objectives and key results.

This phase is where you translate strategy into action by allocating resources according to your pre-established goals and measure the progress against these KPIs.

5. Review and update

Strategic plans in business are flexible. As markets and consumer demands evolve, so must your approach. Regularly review your KPIs, collect customer feedback, study market trends and industry changes, and motivate your team to be flexible when necessary.

A continuous, iterative process ensures your organization remains responsive and aware of ever-changing conditions, allowing you to effectively anticipate new hurdles, improve existing frameworks, and leverage opportunities.

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Difference Between Business Plans and Strategic Plans?

By Rolfe Larson , Senior Consultant for Strategic and Business Planning , Joining Vision and Action .

We often get this question: Do we need a strategic plan or a business plan?

Frankly, they are similar in many ways, and since each plan has to be tailored to the organization it is prepared for, one can easily blur into the other. Both types of plans typically include a vision for the future, research into trends and opportunities, and, of course, clear goals and strategies to achieve that vision. Both create road maps for the future.

JVA’s  Earned Income for Nonprofit s  workshop on February 23-24 is specifically designed for nonprofits that are exploring or expanding their social enterprise efforts to increase impact and financial sustainability, a critical component of many business and strategic plans. Find out more  here .

Strategic Plans

What sets a strategic plan apart is its focus on the organization and its impact . What changes would we like to see in the world, and what should our role be in accomplishing those changes? Strategic plans are visionary documents, although they also need to be practical. Such as: what strategies do we need to pursue to find the funding we need to achieve that impact?

Strategic plans typically involve the board of directors, who contribute their knowledge about the community and the needs the organization could address. They clarify the long-term direction for the organization, often looking out five or more years.

While some strategic planning is done internally, typically, nonprofits work with a skilled consultant to facilitate the process, who brings in an outside perspective and provides best-practice techniques for strategic planning.

Business Pla ns

In contrast, the emphasis of a business plan is on the enterprise (the nonprofit or a program of that organization), and what revenues and financial condition is both desirable and achievable. It often looks at a shorter period of time, typically two to three years. It does that by carefully analyzing its likely customers, the market where it will operate, likely competitors and how feasible its goals are. It includes information on what kinds of marketing strategies will be required to attract those customers.

A business plan is very much a business-oriented document, typically less visionary compared to a strategic plan. It usually contains detailed market analysis and comprehensive financial projections. It may also include social goals (such as for a social enterprise); but ultimately, the business plan needs to demonstrate if and how the business will succeed financially. Often business plans are preceded by feasibility studies, to assess whether the proposed venture is viable or how it needs to change to become viable.

Business plans are implementation plans, and they are typically prepared by a consultant with expertise in business planning, in partnership with staff with subject-area knowledge.

The Bottom Line

Whether you are looking to create a strategic plan or a business plan, or a hybrid of the two, the bottom line is to create something that’s clear about where you are today (assessment), where you want to be at some point in the future (vision with goals), and, finally, how you plan to get there (strategies). Be sure to create the road map that works best for your organization and then follow it!

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8 Business Plan Templates You Can Get for Free

8 min. read

Updated April 10, 2024

A business plan template can be an excellent tool to simplify the creation of your business plan. 

The pre-set structure helps you organize ideas, covers all critical business information, and saves you time and effort on formatting.

The only issue? There are SO many free business plan templates out there. 

So, which ones are actually worth using? 

To help remove the guesswork, I’ve rounded up some of the best business plan templates you can access right now. 

These are listed in no particular order, and each has its benefits and drawbacks.

What to look for in a business plan template

Not all business plan templates are created equal. As you weigh your options and decide which template(s) you’ll use, be sure to review them with the following criteria in mind:

• Easy to edit: A template should save you time. That won’t be the case if you have to fuss around figuring out how to edit the document, or even worse, it doesn’t allow you to edit at all.
• Contains the right sections: A good template should cover all essential sections of a business plan , including the executive summary, product/service description, market/competitive analysis, marketing and sales plan, operations, milestones, and financial projections. 
• Provides guidance: You should be able to trust that the information in a template is accurate. That means the organization or person who created the template is highly credible, known for producing useful resources, and ideally has some entrepreneurial experience.
• Software compatibility: Lastly, you want any template to be compatible with the software platforms you use. More than likely, this means it’s available in Microsoft Word, Google Docs, or PDF format at a minimum. 

1. Bplans — A plan with expert guidance

Since you’re already on Bplans, I have to first mention the templates that we have available. 

Our traditional and one-page templates were created by entrepreneurs and business owners with over 80 years of collective planning experience. We revisit and update them annually to ensure they are approachable, thorough, and aligned with our team’s evolving best practices.  

The templates, available in Word, PDF, or Google Doc formats, include in-depth guidance on what to include in each section, expert tips, and links to additional resources. 

Plus, we have over 550 real-world sample business plans you can use for guidance when filling out your template.

Download: Traditional lender-ready business plan template or a simple one-page plan template .

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2. SBA — Introduction to business plans

The U.S. Small Business Administration (SBA) offers two different business plan templates along with a short planning guide. 

While not incredibly in-depth, it’s enough to help you understand how traditional and lean plans are structured and what information needs to be covered. The templates themselves are more like examples, providing you with a finished product to reference as you write your plan.

The key benefit of using these templates is that they were created by the SBA. While they may provide less guidance, you can be assured that the information and structure meet their expectations.

Explore: The SBA’s planning guide and free templates

3. SCORE — Planning workbook

SCORE’s template is more like a workbook. It includes exercises after each section to help you get your ideas down and turn them into a structured plan.

The market research worksheets are especially useful. They provide a clear framework for identifying your target market and analyzing competitors from multiple angles. Plus, they give you an easy way to document all the information you’re collecting.

You will likely have to remove the exercises in this template to make it investor-ready. But it can be worth it if you’re struggling to get past a blank page and want a more interactive planning method.

Download: SCORE’s business plan template

4. PandaDoc — A template with fillable forms

PandaDoc’s library offers a variety of industry-specific business plan templates that feature a modern design flair and concise instructions. 

These templates are designed for sharing. They include fillable fields and sections for non-disclosure agreements, which may be necessary when sending a plan to investors.  

But the real benefit is their compatibility with PandaDoc’s platform. Yes, they are free, but if you’re a PandaDoc subscriber, you’ll have far more customization options. 

Out of all their templates, the standard business plan template is the most in-depth. The rest, while still useful, go a bit lighter on guidance in favor of tailoring the plan to a specific industry.

Explore: PandaDoc’s business plan template library  

5. Canva — Pitch with your plan

Canva is a great option for building a visually stunning business plan that can be used as a pitch tool. It offers a diverse array of templates built by their in-house team and the larger creative community, meaning the number of options constantly grows.

You will need to verify that the information in the template you choose matches the standard structure of a traditional business plan. 

You should do this with any template, but it’s especially important with any tool that accepts community submissions. While they are likely reviewed and approved, there may still be errors.

Remember, you can only edit these templates within Canva. Luckily, you only need a free subscription, and you may just miss out on some of the visual assets being used. 

To get the most value, it may be best to create a more traditional planning document and transfer that information into Canva. 

Explore: Canva’s business plan gallery

6. ClickUp — The collaborative template

Out of all the project management tools that offer free business plan templates, ClickUp’s is the most approachable.

Rather than throwing you into all the features and expecting you to figure it out—ClickUp provides a thorough startup guide with resource links, images, and videos explaining how to write a plan using the tool. 

There’s also a completed sample plan (structured like an expanded one-page plan) for you to reference and see how the more traditional document can connect to the product management features. You can set goals, target dates, leave comments, and even assign tasks to someone else on your team. 

These features are limited to the ClickUp platform and will not be useful for everyone. They will likely get in the way of writing a plan you can easily share with lenders or investors. 

But this is a great option if you’re looking for a template that makes internal collaboration more fluid and keeps all your information in one place.

Sign Up: Get a free trial of ClickUp and explore their template library

7. Smartsheet — A wide variety of templates

I’m including Smartsheet’s library of templates on this list because of the sheer number of options they provide. 

They have a simple business plan template, a one-page plan, a fill-in-the-blank template, a plan outline, a plan grading rubric, and even an Excel-built project plan. All are perfectly usable and vary in visual style, depth of instructions, and the available format.

Honestly, the only drawback (which is also the core benefit) is that the amount of templates can be overwhelming. If you’re already uncertain which plan option is right for you, the lengthy list they provide may not provide much clarity.

At the same time, it can be a great resource if you want a one-stop shop to view multiple plan types.

Explore: Smartsheet’s business plan template library  

8. ReferralRock affiliate marketing business plan

I’m adding ReferralRock’s template to this list due to its specificity. 

It’s not your standard business plan template. The plan is tailored with specific sections and guidance around launching an affiliate marketing business. 

Most of the template is dedicated to defining how to choose affiliates, set commissions, create legal agreements, and track performance.

So, if you plan on starting an affiliate marketing business or program, this template will provide more specific guidance. Just know that you will likely need to reference additional resources when writing the non-industry sections of your plan.

Download: ReferralRock affiliate marketing business plan template

Does it matter what business plan template you use?

The short answer is no. As long as the structure is correct, it saves you time, and it helps you write your business plan , then any template will work. 

What it ultimately comes down to, is what sort of value you hope to get from the template. 

• Do you need more guidance? 
• A simple way to structure your plan? 
• An option that works with a specific tool?
• A way to make your plan more visually interesting?

Hopefully, this list has helped you hone in on an option that meets one (or several) of these needs. Still, it may be worth downloading a few of these templates to determine the right fit. 

And really, what matters most is that you spend time writing a business plan . It will help you avoid early mistakes, determine if you have a viable business, and fully consider what it will take to get up and running. 

If you need additional guidance, check out our library of planning resources . We cover everything from plan formats , to how to write a business plan, and even how to use it as a management tool . 

If you don’t want to waste time researching other templates, you can download our one-page or traditional business plan template and jump right into the planning process.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

Table of Contents

• Qualities of a good template
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• Does the template matter?

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What is an action plan and how to create one + an example.

An action plan is an organized list of steps that you can take to reach a desired goal. Creating an action plan requires carefully considering resources, goals, and available time. With a well-structured action plan, you can reach your goals in the most efficient way possible. Here’s how to create an action plan – plus some helpful examples and time-saving tips to guide you during your strategic planning process.

Table of Contents

What is an Action Plan?

At one point or another, you may have a task that seems larger than life. But an action plan helps.

In essence, an action plan is a systematic, detailed blueprint, or a comprehensive document, that lays out the strategy to achieve a certain goal or set of goals. It’s similar to a roadmap, providing clear directions on how you can move from your current status to your desired state.

The concept of an action plan is not limited to any specific domain, making it a versatile tool. It can be applied in various fields such as business, education, project management, personal growth, healthcare, and so forth.

A well-crafted action plan typically encompasses several elements:

• Objective: The objective is the ultimate goal that you aim to achieve. It needs to be clear and precise. This is the “destination” you’re striving to reach, so it’s vital to define it in a way that leaves no room for ambiguity. Often, the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound) is used to frame these objectives.

• Steps or Tasks: Once the goal is set, the next stage is to break it down into smaller, manageable steps or tasks. Each task should be straightforward, feasible, and should contribute directly to the attainment of the ultimate goal. For example, when you break down a large project into smaller, manageable tasks, it keeps you on track to success, and makes staying motivated in business easier during tough projects.

• Resources: For each task, you should also identify the necessary resources. These can be physical resources, such as equipment or materials, or human resources, like specific skills or personnel. By identifying these upfront, you can better plan and mitigate potential bottlenecks.

• Timeline: It’s also crucial to set a timeline for each task, which includes a start and an end date. This not only instills a sense of urgency but also helps to track progress over time. A well-planned schedule can also prevent tasks from overlapping or clashing.

• Responsibility Assignment: Each task needs a responsible person or team who will see it through to completion. Defining this ensures accountability and prevents tasks from being overlooked.

• Contingency Plan: Despite the best of planning, unforeseen circumstances may arise. Having a contingency plan prepares you for such scenarios, ensuring that your plan remains robust and flexible.

• Tracking and Evaluation: An important aspect of an action plan is tracking progress and evaluating outcomes. This step is essential as it allows you to adjust your plan as needed, based on the performance of each task or changing circumstances.

Creating an Effective Action Plan

Creating an effective action plan is an integral part of achieving any goal. In the following video, Brian Tracy, a well-known speaker and author in the field of self-development, outlines his method for formulating such a plan. Tracy’s process, built from years of experience, provides clear and practical steps that can be applied to any project or objective.

How to Write an Action Plan

An effective action plan operates as a guiding light, leading the way towards achieving specific objectives, milestones, and goals. For any project or substantial task, it can be the pivotal element that swings the balance between success and failure.

To make the process of creating an action plan easier, we’ve provided a summary table below. This table functions like a checklist, outlining clear steps and eliminating any confusion about what needs to be done next.

Having this overview can be a great starting point, but a deeper understanding of each step will further assist you in crafting a robust action plan. So let’s get started and explore each of these steps in more detail.

Step 1: Define the goal

Defining project goals is a critical first step in the action-planning process. It involves establishing a clear and concise objective that guides the rest of the plan. A well-defined goal serves as a roadmap for the team, providing direction and focus for their efforts. It also helps to keep everyone aligned and on track, ensuring that the plan is executed effectively.

To define a goal effectively, it is important to consider several key factors. First, the goal should be specific, meaning that it should clearly state what is to be achieved. Second, it should be measurable, allowing for progress to be tracked and evaluated.

Third, it should be attainable, meaning that it should be realistic and achievable given the available resources and constraints. Fourth, the goal should be relevant and aligned with the organization’s overall strategy and goals. Finally, it should have a specific timeline, with deadlines established to ensure that the goal is achieved within a reasonable period of time.

Step 2: Project management – Identify the necessary actions

This step outlines the specific tasks and activities that need to be performed in order to achieve the defined goal. It involves breaking down the goal into smaller, manageable steps and determining what needs to be done to accomplish each step. The actions should be specific, measurable, and have clear deliverables.

Project management plays a vital role in this step, as it helps to ensure that the necessary actions are planned and executed effectively. Project managers use a variety of tools and techniques to identify the necessary actions, such as creating a work breakdown structure, creating a project schedule, and identifying project dependencies.

They also work closely with the team to ensure that the necessary resources are available, that risks are identified and managed, and that progress is tracked and reported. Using project management best practices, the team can ensure that the necessary actions are performed efficiently and effectively and that the project remains on track and on schedule.

Step 3: Assign tasks and responsibilities to project managers and any person responsible

Assigning tasks and responsibilities is a key step in the action planning process, as it ensures that all the tasks have a designated person responsible for their completion. This step involves identifying who will be responsible for each of the necessary actions identified in the previous step and assigning ownership for the delivery of each task. It is important to ensure that responsibilities are clearly defined and that each person understands their role and what is expected of them.

Project managers play a central role in assigning responsibilities, as they are responsible for ensuring that the right person is assigned to each task. They work closely with team members to understand their strengths, skills, and availability, and make assignments based on this information.

They may also assign backup resources to ensure the team can complete tasks even if the primary person responsible is unavailable. It is important to remember that assigning responsibilities is a collaborative process, and that team members should have the opportunity to provide input and feedback. Employ team building exercises to promote teamwork, and provide streamlined methods for employees to communicate with managers and decision makers.

Step 4: Determine the timeline and deadlines

This step involves creating a timeline that outlines when each task should start and finish, and when milestones should be reached. The timeline should be based on the scope of the project, the availability of resources, and any other constraints. Use a calendar or gannt chart to outline the exact schedule for each step.

Having a clear timeline and deadlines helps to keep the project on track and ensures that tasks are completed in a timely manner. It also provides a clear visual representation of the project’s progress and helps to identify any potential issues or delays.

Deadlines also help to keep team members accountable and focused, as they know when they need to have their tasks completed. Deadlines also help to prioritize tasks and ensure that the most important work is completed first.

Step 5: Establish a system for monitoring progress

Establishing a system for monitoring progress provides a way to track the project’s progress and identify any issues or challenges that may arise. This step involves implementing tools, processes, and metrics that can be used to measure the project’s progress against the timeline and goals. The system for monitoring progress should be simple, efficient, and easy to use.

Having a system for monitoring progress is important for several reasons. First, it provides real-time visibility into the project’s progress, allowing the project manager and team to quickly identify any issues or challenges that may arise.

Second, it helps to keep everyone accountable and focused, as team members know that their work will be monitored and evaluated. Third, it allows for continuous improvement, as the project manager can use the data and metrics collected to identify areas for improvement and make adjustments as needed.

Step 6: Track progress, evaluate, and adjust as necessary

Evaluating and adjusting as necessary is a critical step in the action planning process, as it provides a way to ensure that the project remains on track and is executed effectively.

This step involves regularly reviewing the actual progress of the project and making any necessary adjustments to the plan, timeline, and actions. The evaluation should be based on the system for monitoring progress that was established in a previous step.

Tracking progress is an important part of this step, as it provides the data and metrics needed to evaluate the project’s progress and identify any areas for improvement. The project manager should use the system for monitoring progress to track key metrics, such as task completion rates, timeline progress, and resource utilization. This information can then be used to assess the project’s progress against the goals and timeline and to identify any areas for improvement.

By evaluating and adjusting as necessary, the project manager can ensure that the project remains on track and is executed effectively. This helps to minimize disruptions and delays and ensures that the project stays aligned with the goals and objectives.

The process of evaluating and adjusting should be continuous, with regular evaluations and progress reviews. This allows the project manager to respond quickly to any changes or challenges that may arise, and to make any necessary adjustments to keep the project moving forward. For example, you may need to employ some time saving tips or delegate to get back on schedule. Alternatively, you may need to try some new call to action examples to more effectively impact customer behavior to meet your goals.

Do I Need an Action Plan?

Everyone who has set business goals should strive for effective business planning . Without an action plan, it’s very easy to become overwhelmed by significant goals or lose sight of what perspectives should guide the decision-making process. Having an organized, realistic plan is how to stay motivated and stay focused on reaching success.

This is especially true for larger companies that are trying to navigate complex projects or launch multiple initiatives at the same time. An action plan can help them stay organized, track project progress, anticipate potential challenges, and simplify hiring .

Smaller businesses can also benefit from having an action plan, as it will provide a road map for scaling up operations in the future. An effective action plan should include strategies, resources, timelines, revenue targets , and measures of success. The business budget and cash flow should always be taken into account when creating an action plan.

Why Your Business Should Have an Action Plan

Every business should have an action plan as it’s essential to success and keeping your company on track. Here are five reasons your business needs one:

• Clarity of Purpose: An action plan lets everyone in your company know exactly what they need to accomplish, so they can stay focused and productive. Set call-to-action examples and performance expectations so everyone knows what to strive for.
• Measurable Results: Having specific goals and a timeline helps you keep track of your progress, see what’s working, and adjust plans when needed.
• Achievable Goals: Action plans make sure that you don’t set yourself up for failure by setting unrealistic objectives. Outline steps for success in manageable pieces.
• Effective Use of Resources : An action plan helps you prioritize tasks and resources, so you can get the best return on investment (ROI). Public relations strategies and campaigns are two common examples.
• Increased Accountability: By clearly defining roles, responsibilities, deadlines, and expectations, everyone involved is more accountable for their tasks and the success of the project overall.

Plan of Action Example (Template)

A well-structured action plan helps to keep the project on track and on schedule providing a clear path to success. Here’s an action plan template example you can use to inspire you for your own projects:

I. Define the goal:

A. Objective: Launch a new product line

B. SMART Goal: To launch a new product line in 6 months, generating $500,000 in revenue within the first year.

II. Identify necessary actions:

A. Conduct market research to determine the target audience and demand

B. Develop product prototypes and conduct testing

C. Create marketing materials and promotional campaigns

D. Set up the supply chain and logistics

E. Launch product through digital and physical channels

III. Assign responsibilities:

A. Market research: Marketing team

B. Product development: R&D team

C. Marketing plan , materials, and campaigns: Marketing team

D. Supply chain and logistics: Operations team

E. Product launch: Marketing and Operations teams

IV. Determine timeline and deadlines:

A. Market research: Month 1-2

B. Product development: Month 2-4

C. Marketing materials and campaigns: Month 4-5

D. Supply chain and logistics: Month 5-6

E. Product launch: Month 6

V. Establish a system for monitoring progress:

A. Key metrics: Revenue, market share, customer satisfaction

B. Tools: Project management software, weekly progress meetings

C. Progress review meetings: Every 2 weeks

VI. Evaluate and adjust as necessary:

A. Regularly review revenue and customer satisfaction data

B. Adjust marketing strategy and promotions as necessary

C. Monitor supply chain and logistics, and make adjustments as needed

D. Evaluate timeline and deadlines, and adjust as necessary to ensure a timely product launch.

Tips for Building a Fantastic Action Plan

Building an action plan is the first step to reaching your business goals. Here are five tips for creating a fantastic action plan:

• Be Clear & Specific: Make sure that everyone involved in the project understands what needs to be done and when it needs to be completed. Set measurable and achievable targets, with specific timelines and deadlines.
• Prioritize Tasks: Identify which tasks should take priority so you can focus on what’s important right now, while still having a plan for the future.
• Start Small: Break large projects down into smaller components that you can do in stages, rather than trying to accomplish everything at once. Team-building exercises are a great way to keep energy and motivation high.
• Outline Resources Needed: Research ahead of time what resources will be needed for each task and make sure you have everything in place beforehand.
• Include Room for Change: The reality is that things don’t always go as planned so be prepared to adjust timelines or objectives as needed along the way.

Action Plan Vs To-Do List

Action plans and to-do lists may seem similar at first glance, but they are two different tools that serve specific purposes. An action plan is an organized approach to achieving a goal. It helps you break down larger tasks into smaller, manageable pieces and outlines the steps you need to take in order to reach your objectives.

A to-do list is a tool used to keep track of day-to-day tasks or items that need attention. It’s typically used as a checklist for getting things done in a certain timeframe. While both can be helpful when it comes to staying organized and productive, action plans offer a more comprehensive approach to reaching longer-term goals.

Action Plan Vs Strategic Plan

An action plan and a strategic plan are two distinct frameworks used in planning and executing goals, each serving its unique function. An action plan is a detailed outline of the specific, immediate steps required to achieve a short-term objective. It focuses on the ‘how’ aspect, breaking down larger tasks into smaller, actionable items, typically with a shorter time horizon.

On the other hand, a strategic plan is a comprehensive roadmap designed for long-term goals. It involves a broader perspective, focusing on the ‘why’ behind the goals. This plan outlines the organization’s vision, mission, and core objectives over a more extended period, often including market analysis, competitive positioning, and long-term resource allocation. While action plans are more about tactical execution, strategic plans provide the overarching direction and purpose that guide these actions.

Both plans are crucial: the strategic plan sets the course, and the action plan drives the day-to-day activities needed to steer the ship towards the destination outlined in the strategic plan.

Action Plan Vs Project Plan

An action plan and a project plan are both tools used to help maintain organization and productivity when working toward a specific goal. Action plans focus on smaller tasks that need to be completed and prioritize them in an organized list.

Project plans are more comprehensive, providing an overview of all the steps required for completing a particular project. They usually include timelines, deadlines, resources needed, and other specifics. While action plans can help define the daily tasks necessary for completing a project, they should ultimately be formulated as part of the larger project plan.

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