What’s the difference between a business plan and a strategic plan?

Most people operating businesses know how important it is to have a business plan, particularly if they are looking to secure a loan or other form of financing.
However, a business plan is only half of what your business needs in order to become successful. You also need a strategic plan that will allow you to keep building on your success.

Most people operating businesses know how important it is to have a business plan, particularly if they are looking to secure a loan or other form of financing.However, a business plan is only half of what your business needs in order to become successful. You also need a strategic plan that will allow you to keep building on your success. But what’s the difference between the two?In simple terms, a business plan defines the products, services, structure, resources and day-to-day operations while a strategic plan is focused on improving performance, establishing long-term objectives and ensuring the company continues to grow.To get a better idea of the differences between the two, we can look at the components of each plan.A business plan is designed to define the products or services the company provides in addition to detailing and outlining what needs to be done to operate the company on a daily basis. In essence it is the framework that details how your business is put together.Perhaps the best way of describing a business plan is to look at a typical table of contents of what a plan should include.Your plan should always contain an executive summary. This provides an overview of the key components of your plan.Its importance can be defined by showing the reader or yourself for that matter that you have a clear understanding of your business. This, of course, in not written until you have completed the plan.As you move into the plan it should include a company profile of who you are and what you do. Next comes the need to develop an operational plan that shows how you are going to produce your products or services.Critical to every business plan is a marketing plan that will identify target markets, trends and establish how you will communicate what you have to offer.No business plan would be complete without a financial plan. In fact this is crucial if you are planning to seek investors or as mentioned before need a loan.And finally your plan should include background material such as research statistics and other information that are critical to how your business operates.The components of a strategic plan on the other hand are more focused on your company’s future. It is designed as a process that looks ahead three, five or more years in terms of where you see yourself going. A strategic plan sets out the vision and mission, establishes goals and objectives, details timelines and outlines what needs to happen in order for you to achieve success.One of the key elements of a strategic plan is that it provides you with tools on how you can measure your success. It will tell whether you are on target to achieving your goals and with review can highlight what areas you need to focus on or improve upon to achieve your key objectives.In a sense the strategic plan provides the overall direction for your business and establishes a set of guidelines that can be used as benchmarks to help keep you moving forward. A strategic plan can be summed up by asking a few key questions.Where am I now? Where am I going? Where do I want to be? How will I get there? And finally, am I on the right course?The one big difference between a business plan and a strategic plan is the size and scope of each document. A business plan will require pages and pages of detailed information while a strategic plan can be articulated in just a few pages.In either case, whether you are developing a business plan or a strategic plan it is important that you take the time to do them right. They are essential components of every business and should be developed so that they complement each other and are consistent with your overall objectives.Joe Smith is a communications consultant and an accomplished fine artist. He can be reached via email at joesmith@shaw.ca.

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