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What is the difference between a business plan and a strategic plan.

It is not uncommon that the terms ‘strategic plan’ and ‘business plan’ get confused in the business world. While a strategic plan is a type of business plan, there are several important distinctions between the two types that are worth noting. Before beginning your strategic planning process or strategy implementation, look at the article below to learn the key difference between a business vs strategic plan and how each are important to your organization.

Definition of a business plan vs. a strategic plan

A strategic plan is essential for already established organizations looking for a way to manage and implement their strategic direction and future growth. Strategic planning is future-focused and serves as a roadmap to outline where the organization is going over the next 3-5 years (or more) and the steps it will take to get there.

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A strategic plan serves 6 functions for an organization that is striving to reach the next level of their growth:.

• Defines the purpose of the organization.
• Builds on an organization’s competitive advantages.
• Communicates the strategy to the staff.
• Prioritizes the financial needs of the organization.
• Directs the team to move from plan to action.
• Creates long-term sustainability and growth impact

Alternatively, a business plan is used by new businesses or organizations trying to get off the ground. The fundamentals of a business plan focus on setting the foundation for the business or organization. While it looks towards the future, the focus is set more on the immediate future (>1 year). Some of the functions of a business plan may overlap with a strategic plan. However, the focus and intentions diverge in a few key areas.

A business plan for new businesses, projects, or organizations serves these 5 functions:

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

In other words, a strategic plan is utilized to direct the momentum and growth of an established company or organization. In contrast, a business plan is meant to set the foundation of a newly (or not quite) developed company by setting up its operational teams, strategizing ways to enter a new market, and obtaining funding.

A strategic plan focuses on long-term growth and the organization’s impact on the market and its customers. Meanwhile, a business plan must focus more on the short-term, day-to-day operational functions. Often, new businesses don’t have the capacity or resources to create a strategic plan, though developing a business plan with strategy elements is never a bad idea.

Business and strategic plans ultimately differ in several key areas–timeframe, target audience, focus, resource allocation, nature, and scalability.

While both a strategic and business plan is forward-facing and focused on future success, a business plan is focused on the more immediate future. A business plan normally looks ahead no further than one year. A business plan is set up to measure success within a 3- to 12-month timeframe and determines what steps a business owner needs to take now to succeed.

A strategic plan generally covers the organizational plan over 3 to 5+ years. It is set with future expansion and development in mind and sets up roadmaps for how the organization will reach its desired future state.

Pro Tip: While a vision statement could benefit a business plan, it is essential to a strategic plan.

Target Audience

A strategic plan is for established companies, businesses, organizations, and owners serious about growing their organizations. A strategic plan communicates the organization’s direction to the staff and stakeholders. The strategic plan is communicated to the essential change makers in the organization who will have a hand in making the progress happen.

A business plan could be for new businesses and entrepreneurs who are start-ups. The target audience for the business plan could also be stakeholders, partners, or investors. However, a business plan generally presents the entrepreneur’s ideas to a bank. It is meant to get the necessary people onboard to obtain the funding needed for the project.

A strategic plan provides focus, direction, and action to move the organization from where they are now to where they want to go. A strategic plan may consist of several months of studies, analyses, and other processes to gauge an organization’s current state. The strategy officers may conduct an internal and external analysis, determine competitive advantages, and create a strategy roadmap. They may take the time to redefine their mission, vision, and values statements.

Alternatively, a business plan provides a structure for ideas to define the business initially. It maps out the more tactical beginning stages of the plan.

Pro Tip: A mission statement is useful for business and strategic plans as it helps further define the enterprise’s value and purpose. If an organization never set its mission statement at the beginning stages of its business plan, it can create one for its strategic plan.

A strategic plan is critical to prioritizing resources (time, money, and people) to grow the revenue and increase the return on investment. The strategic plan may start with reallocating current financial resources already being utilized more strategically.

A business plan will focus on the resources the business still needs to obtain, such as vendors, investors, staff, and funding. A business plan is critical if new companies seek funding from banks or investors. It will add accountability and transparency for the organization and tell the funding channels how they plan to grow their business operations and ROI in the first year of the business.

The scalability of a business plan vs. strategic plan

Another way to grasp the difference is by understanding the difference in ‘scale’ between strategic and business plans. Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan. It is often followed by departmental and marketing plans that work from the Strategic Plan.

Smaller and start-up companies typically use only a business plan to develop all aspects of operations of the business on paper, obtain funding and then start the business.

Why understanding the differences between a business plan vs a strategic plan matters

It is important to know the key differences between the two terms, despite often being used interchangeably. But here’s a simple final explanation:

A business plan explains how a new business will get off the ground. A strategic plan answers where an established organization is going in the future and how they intend to reach that future state.

A strategic plan also focuses on building a sustainable competitive advantage and is futuristic. A business plan is used to assess the viability of a business opportunity and is more tactical.

10 Comments

I agree with your analysis about small companies, but they should do a strategic plan. Just check out how many of the INC 500 companies have an active strategic planning process and they started small. Its about 78%,

Strategic management is a key role of any organization even if belong to small business. it help in growth and also to steam line your values. im agree with kristin.

I agree with what you said, without strategic planning no organization can survive whether it is big or small. Without a clear strategic plan, it is like walking in the darkness.. Best Regards..

Vision, Mission in Business Plan VS Strategic Plan ?

you made a good analysis on strategic plan and Business plan the difference is quite clear now. But on the other hand, it seems that strategic plan and strategic management are similar which I think not correct. Please can you tell us the difference between these two?. Thanks

Thank you. I get points to work on it

super answer Thanking you

Hi. I went through all the discussions, comments and replies. Thanks! I got a very preliminary idea about functions and necessity of Strategic Planning in Business. But currently I am looking for a brief nice, flowery, juicy definition of “Business Strategic Planning” as a whole, which will give anyone a fun and interesting way to understand. Can anyone help me out please? Awaiting replies…… 🙂

that was easy to understand,

Developing a strategic plan either big or small company or organization mostly can’t achieve its goal. A strategic plan or formulation is the first stage of the strategic management plan, therefore, we should be encouraged to develop a strategic management plan. We can develop the best strategic plan but without a clear plan of implementation and evaluation, it will be difficult to achieve goals.

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Business plan vs Strategic Plan - What You Must Know

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

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

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

Introducing The Business Plan

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

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

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

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

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

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

The Actionables- A Strategic Plan

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

Why A Strategic Plan is Crucial to The Organization

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

Elements to Consider in a Strategic Plan

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

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

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

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

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

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

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

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

Learning All About Strategic Planning

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

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

• May 6, 2024

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

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

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

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

What is a Business Plan?

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

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

Okay! And what about the strategic plan?

What is a Strategic Plan?

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

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

Key Difference Between a Business Plan and Strategic Plan

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

Level of detail

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

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

Time horizon

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

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

Audience and use

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

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

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

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

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

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

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

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

Common Pitfalls in Execution

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

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

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

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

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

The Bottom Line

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

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

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

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Frequently Asked Questions

Which comes first, strategy or business plan.

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

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

Can a business plan be used for a strategic plan?

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

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

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

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

Do I need both a business and strategic plan?

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

About the Author

Upmetrics Team

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

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The Difference Between a Plan and a Strategy

Setting strategy should push your organization outside its comfort zone.

• Apple Podcasts

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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Business Plan Vs Strategic Plan Vs Operational Plan—Differences Explained

Noah Parsons

5 min. read

Updated October 27, 2023

Many business owners know and understand the value of a business plan.  The business plan is a key component  of the startup and fundraising process and serves as a foundation for your organization. However, it only tells part of the story. To get the whole picture and have a framework on which to build your business you also need a strategic plan and an operational plan.

• What is a business plan?

In its simplest format, a  business plan  describes the “who” and the “what” of your business. It lays out who is running the business and what the business does. It describes the products and services that your business sells and who the customers are. 

• What is a strategic plan?

A  strategic plan  looks beyond the basics of a business plan to explain the “how”. It explains the long-term goals of the business and how it expects to achieve those goals over the long term. A strategic plan explores future products and services that your business might offer and target markets that you might expand into. The plan explains your strategy for long-term growth and expansion.

• What is an operational plan?

An operation plan zooms into the details of your business to explain how you are going to  achieve your short-term goals . It is the “when” and “where” of your planning process. The operational plan covers the details of marketing campaigns, short-term product development, and more immediate goals and projects that will happen within the next year.

• What is the difference between a strategic plan and a business plan?

First, let’s look at the difference between a business and a strategic plan. For review:

A  business plan  covers the “who” and “what” of the business. The  strategic plan  gives us long-term goals and explains “how” the business will get there, providing a long-term view.

In broader terms, the business plan tells us who by showing us:

• Who is running the business? What makes them qualified? What do they bring to the table that adds value?
• Who is the competition? What do they offer and what makes you different?
• Who is your customer? How big is the market? Where are they? What do they want and how will you give it to them? Also, how will you connect with your market?

The business plan answers the “what” by telling us:

• What the business provides and how it’s provided. 
• Product, services, and operations are all explained so that readers understand how customer needs are met.

The strategic plan, on the other hand, outlines long term goals and the “how”, focusing on the following:

• Where will the business be in 3, 5, or even 10 years?
• How will you expand to offer different products and services over time?
• Will your market and industry change over time and how will your business react to those changes?
• How will you grow your market and reach new customers?
• What needs to happen so you can achieve your goals? What resources do you need to get there?
• How will you measure success? What metrics matter and how will you track them?

So, your business plan explains what you are doing right now. Your strategic plan explains long-term aspirations and how you plan to transition your business from where it is today to where you want it to be in the future. The strategic plan helps you look more deeply into the future and explains the key moves you have to make to achieve your vision.

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• What is the difference between strategic planning and operational planning?

While strategic planning looks at the long term and explains your broad strategies for growth, an operational plan looks at the short term. It explains the details of  what your business is going to do  and when it’s going to do it over the next twelve months or so. An operational plan covers details like:

• What activities need to happen to achieve your business goals?
• When will each activity take place, who will do it, and when do you need to reach specific milestones?
• How will your business operate? What suppliers will you work with? When do you need to have them in place?
• What marketing campaigns will you run and what will they cost?
• What investments will you make in your products and services this year?

The bottom line, your operational plan is the short-term action plan for your business. It’s the tasks, milestones, and steps needed to drive your business forward. Typically an operational plan provides details for a 1-year period, while a strategic plan looks at a  3-5 year timeline , and sometimes even longer. The operational plan is essentially the roadmap for how you will execute your strategic plan.

• How to use your business plan for strategic development and operations

A great business plan can encompass both the basic plans for the business, the long-term strategic plan, and the near-term operational plan. Using a lean planning method, you can tackle all three phases of planning and make the process easy to review and revise as your business grows, changes, and adapts.

Start with a simple plan

The lean planning methodology starts with a simple,  30-minute business plan  that outlines the fundamentals of your business: who you are, what you are doing, and who your customers are. It’s a great way to provide a brief overview of your business.

Expand your plan

From there, you can expand your plan to include your longer-term strategy. Adding greater detail to elements of the plan to explain long-term goals, milestones, and how your products and services will change and expand over time to meet changing market conditions.

Finally, your lean plan will cover  financial forecasts  that include monthly details about the short-term revenue and expenses, as well as longer-term annual summaries of your financial goals, including profitability and potential future loans and investments.

• Use your business plan to manage your business

Regardless of the type of plan, you are working on, you need a team of players on hand to help you plan, develop, and execute both the operational and strategic plans. Remember, your business needs both to give it a clear foundation and a sense of direction. As well as to assist you with identifying the detailed work that has to happen to help you reach your long-term goals. 

Learn how  LivePlan  can help you develop a business plan that defines your business, outlines strategic steps, and tracks ongoing operations. You can easily share it with your team and all of the right stakeholders, explore scenarios and update your plan based on real-world results. Everything you need to turn your business plan into a tool for growth.

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

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• 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’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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Strategic Plan vs Business Plan - Which Matters More for Leaders?

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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Strategy vs. Plan: Key Differences and Applications

Strategy and planning are two important management disciplines that help companies achieve their goals. A strategy is a long-term approach or overarching plan that guides an organization or individual towards achieving a specific goal or objective. Strategy comes first, then a plan .

A plan is a detailed outline of the specific actions, routine procedures, timelines, and resources required to execute a strategy or achieve a specific objective. You can use different tactics for better plan fulfillment. Tactics are different from strategies in that they provide methods to accomplish the plan effectively.

A clear strategy helps ensure that the company's goals are met in an efficient manner. There are key differences between strategy and plan that must be understood.

These include the scope of each, the timeline involved, and the resources assigned. In this blog post, we will explore these differences and discuss how they can be applied in business settings.

What is a Strategy?

Strategy is what you see in the big picture and is the foundation for all decision-making processes. It's about understanding where your business is today, deciding where you want it to be tomorrow, and figuring out how best to get there.

This involves making tough choices about what direction to take, what resources you will need, and how to use them effectively.

No matter how small or large the task, strategy is always key. It's about understanding the market , your customers, and competitors and developing it to maximize opportunities while minimizing risks.

A successful strategy should have a clear purpose and direction for an organization, as well as define how resources should be used the most effectively.

Here are some key elements of a successful strategy:

• Vision: A clear understanding of what you want to accomplish in the future.
• Objectives: Specific goals that need to be achieved in order to reach your vision.
• Budget: A realistic assessment of available resources and how they should be allocated.
• Team Dynamics: An understanding of how different roles interact with each other and contribute towards achieving success.
• Processes: Established procedures for carrying out tasks efficiently and effectively.

Having an effective strategy in place can help organizations reach their desired outcomes more efficiently and effectively by providing direction and focus for all involved parties.

It also helps ensure that everyone is working towards the same goal with clear expectations of what needs to be done in order to achieve success.

What is a Plan?

Remember those times when you had a goal? Whether it was to achieve financial freedom , lose weight, or advance your career — you probably needed a plan in order to achieve it.

A plan is a set of actions that are designed to achieve a specific goal. It is an integrated set of strategies and activities that are used to reach a desired outcome.

Plans can be created for any type of project, from business strategy to project management. When creating a plan, it is important to consider the difference between strategic plans and project plans.

A strategic plan is a long-term approach that outlines the overall mission and goals of an organization or individual. It typically includes objectives, strategies, tactics, and timelines for achieving those objectives.

On the other hand, a project plan focuses on the specific tasks and activities needed to complete a particular project within a certain timeframe.

Here are some key elements of planning:

• Identifying objectives: What do you want to achieve?
• Defining resources: What resources do you need?
• Establishing timelines: When will each task be completed?
• Developing strategies: How will you reach your objectives?
• Assigning responsibilities: Who will be responsible for each task?
• Monitoring progress: Are tasks being completed on schedule?

By following these steps, you can create an effective plan that will help you reach your goals in an organized and efficient manner.

Planning is essential for success in any endeavor, whether it's personal or professional. With careful planning and execution, you can make sure that your projects run smoothly and achieve their intended results.

Key Differences Between Strategies and Plans

While strategy and plan are two terms often used as synonyms, they have distinct differences in terms of scope, focus, and application. Let’s understand some of these differences.

Strategies are broad and long-term, while plans are more specific and short-term. If you plan on scaling up your business, you need a strategy. If you want to hire additional staff to help with your workload, you need a plan.

Notice how the scopes in both situations are vastly different from each other?

This is because strategies are aimed at high-level areas, as they involve making decisions about investments, resources, and development directions. All of them contribute to the bigger picture of what the business should look like in the future.

Whereas, plans involve more concrete actions like assigning tasks and project scheduling .

Building a strategy is a process. You can think of it as a blueprint for achieving your goals. Plans are also processes but focus on the implementation side of things and deal with more specific details. Remember that strategies are created while plans are executed. A strategy guides decision-making, while a plan describes the steps needed to achieve specific goals.

To create a strategy, you will need to define ideas, allocate budgets and resources, and set goals. Executing a plan requires managing progress, tracking results, and adjusting actions as needed.

3. Flexibility

Strategies are flexible, while plans are rigid. Strategies are more flexible than plans since they can easily be changed depending on changing conditions or circumstances.

On the other hand, once a plan has been created, it is difficult to make changes without disrupting its implementation process.

A strategy is designed to help a business gain a competitive advantage in its market, while a plan is designed to help practically implement the strategy.

By definition, strategies should focus on idea generation, research, experimentation, and trial and error. Plans should take into account specific objectives and aim to achieve a certain goal within the given timeframe.

5. Importance

There's no doubt that in order for a business to be successful, it is extremely important to have both strategies and plans.

However, no business can work without a strategy, as it is the foundation on which every business is built. A strategy helps a business to identify where it wants to go, while a plan describes how it will get there.

6. Application

Strategies are used to guide decision-making, while plans are used to execute decisions. A strategy provides guidance and direction for all aspects of a business, while a plan provides specific steps for implementing a decision.

Strategies lead to initiatives, while plans lead to actions. For example, a company might have an overarching strategy to become a leader in new technologies and innovative thinking.

This could lead to initiatives such as research, development teams, or corporate partnerships with entrepreneurs and startups. From there, specific plans can be developed to execute these initiatives.

7. Timeframe

Strategies are long-term, while plans are short-term. A strategy is designed to guide a business for several years, while a plan is typically focused on achieving specific goals within a few months or a year.

Strategies should be prepared for the long term, while plans should act on short-term tasks to achieve them.

Example of Strategy and Planning

To further illustrate the differences between strategy and planning, let's take the example of a company that wants to expand its business into new international markets:

• Strategy: To launch a successful international expansion, the first step is to gain a thorough understanding of your industry and competition. This must include researching potential markets, becoming aware of local laws and regulations, as well as gauging what resources are necessary for entry. With this knowledge in hand, the company can form an overarching business-level strategy that outlines goals, objectives, and how best to conquer those global territories.
• Planning: Once the strategy has been developed, the company would need to create a plan to execute the strategy effectively. This plan would provide instructions on how to enter each new market, such as acquiring funding, hiring local staff, and establishing supply chains. The plan would also allocate resources and budget to each step of the process.
• Leadership: Next, the company would need to develop a leadership development strategy to ensure that its employees are prepared to execute the international expansion plan effectively. This strategy would involve figuring out the leadership skills required to manage an international team and assessing the current leadership skills within the organization. The company can also design programs to help people develop those skills.
• Investment: International expansion would require a significant investment of resources, including funding, staff, and time. The company would need to allocate resources effectively, balancing the need to invest in new markets with the need to maintain existing operations. The investment strategy must be carefully designed to ensure that the company invests in the right areas and achieves a positive return on investment .
• Outreach Initiative: International expansion is a critical endeavor for the company, requiring unified resources and stakeholders. To maximize success in new markets, it's important to build relationships with local partners, government representatives, and other key members of each community. This initiative means finding things that people need and making programs to help them. This will create partnerships between the people involved that last a long time.

Overall, this example illustrates how strategy and planning are distinct but interconnected processes that are essential to achieving business goals.

Developing a successful international expansion strategy requires a high-level plan that outlines the overall approach, while the project management plan outlines the specific steps required to be executed in every area.

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Anastasia belyh.

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.

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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.

How to build an organizational strategy

Get our free ebook and learn how to bridge the gap between mission, strategic goals, and work at your organization.

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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• 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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Strategy vs. Plan: Understanding the Key Differences

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

Strategy vs Plan: Definitions

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

What is a Strategy

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

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

Key characteristics of a strategy

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

Examples of strategy

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

What is a Plan

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

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

Key characteristics of a plan

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

Examples of plans

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

Key Differences Between a Strategy and Plan

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

How to Choose Between a Strategy and Plan

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

Determine your time frame and scope

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

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

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

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

Identify your focus and purpose

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

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

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

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

Assess the level of detail needed

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

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

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

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

Consider flexibility and adaptability

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

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

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

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

Evaluate measurement and evaluation needs

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

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

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

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

Practical Steps to Decide

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

How Do Strategy & Planning Relate to One Another?

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

Strategy sets the direction

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

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

Planning details the path

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

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

Strategy informs planning

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

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

Planning implements strategy

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

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

Feedback loop and adaptation

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

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

Monitoring and evaluation

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

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

How to Streamline Planning and Strategizing with Creately

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

Extensive template library

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

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

Collaborative workspace

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

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

Drag-and-drop interface

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

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

Built-in visual collaboration tools

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

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

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

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

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

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Plan vs Strategy: Is There a Difference?

Often times, the words “plan” and “strategy” are often used interchangeably. The meanings of the words are quite similar: a method for achieving an end.

Here’s the truth:

There are strong differences between these words.

A plan is an organized scheme created with a clear objective in mind. Conversely, a strategy functions as a flexible blueprint employed to achieve a particular goal, with the capacity for adaptation and change as needed.

It’s important for a company to understand the difference between having a plan and having a strategy. This is because although they each have strengths and purposes, they aren’t necessarily interchangeable. The differences in types of industry, clients, and projects call for one method or another.

What Is a Plan?

A plan is an arrangement, a pattern, a program, or a scheme for a definite purpose. A plan is very concrete in nature and doesn’t allow for deviation. If “Plan A” doesn’t work, you don’t alter “Plan A” and try again. Rather, you move to “Plan B;” something totally different.

A plan is most useful when staying well organized and on-track is the highest priority. A plan provides a coherent framework from which to build and a sure direction to follow, with intermittent milestones to pass in order to reach an end goal. It eliminates false confidence and increases stability. A plan increases the transparency of your work, leaves no room for assumptions, and can prove that you’ve put in a lot of thought and effort.

Types of plans include:

• Financial: Must be rooted in reality and universally accepted
• Tactical: Concerns the responsibility and functionality of lower-level departments
• Operational: Focused on specific, routine procedures and processes
• Succession: Don’t skip a beat should a major player suddenly depart
• Contingency: Be proactive in vetting a researched and realistic backup

What Is a Strategy?

A strategy is a blueprint, layout, design, or idea used to accomplish a specific goal. A strategy is very flexible and open to adaptation and change when needed.

A strategy is most useful when creativity, collaboration, and innovation are of the utmost importance. It encourages openness and debate from every side of the equation. A strategy embraces questions and out-of-the-box, effective answers while allowing for a natural flow of thought and continual momentum that builds until success is reached and expectations are blown out of the water. A strategy can surprise, impress, and put you on track to becoming a competitive powerhouse.

The building blocks of building a good strategy include the following actions:

• Framing the right questions
• Learning from the past
• Diagnosing the whys
• Forecasting the future
• Searching potential pathways
• Choosing how to integrate
• Committing to changes
• Evolving when it’s necessary

Example of Strategy and Planning

Business strategy vs plan:.

A business team may have a plan to roll out a new product. Research, design, manufacturing, product placement, and marketing will all take place within their designated time frames and on budget. New products will continue to go through the same process until the customers decide on a winning product.

In contrast, a business team with a strategy will take the lessons learned from the past to determine what can be done differently, earlier in the process of product development. Innovation will be applied throughout the design and manufacturing processes. The team will use foresight to determine what customers will want (even though the customers themselves might not know it yet) and creative marketing techniques to ensure a winning product.

Sports Strategy vs Plan:

Another great example of the difference between a strategy vs a plan can be seen in sports. This example serves to illustrate the difference between a soccer team’s plan or strategy to score a goal.

A soccer team with a plan to score a goal might begin with a throw-in to another specific player. The ball would then be passed to a designated offensive player who would then be responsible for shooting the ball into the goal. The succession of moves would be deliberate and would not be adjusted when risks or obstacles to the plan were presented.

A soccer team with a strategy to score a goal might also begin a play with a throw-in one of a few different teammates. The main idea would then be to move the ball forward and pass to open offensive players who would then shoot the ball at the goal. The succession of moves would be open to adaptation and change if the ball were intercepted or if other players were open for receiving the ball.

When planning for the future, which is undeniably unknown, it helps to strategize and consider the various scenarios you might be faced with and be prepared to modify your strategy so you can keep moving forward rather than starting over at the beginning.

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What Is Business Strategy & Why Is It Important?

• 20 Oct 2022

Every business leader wants their organization to succeed. Turning a profit and satisfying stakeholders are worthy objectives but aren’t feasible without an effective business strategy.

To attain success, leaders must hone their skills and set clear business goals by crafting a strategy that creates value for the firm, customers, suppliers, and employees. Here's an overview of business strategy and why it's essential to your company’s success.

Access your free e-book today.

What’s a Business Strategy?

Business strategy is the strategic initiatives a company pursues to create value for the organization and its stakeholders and gain a competitive advantage in the market. This strategy is crucial to a company's success and is needed before any goods or services are produced or delivered.

According to Harvard Business School Online's Business Strategy course, an effective strategy is built around three key questions:

• How can my business create value for customers?
• How can my business create value for employees?
• How can my business create value by collaborating with suppliers?

Many promising business initiatives don’t come to fruition because the company failed to build its strategy around value creation. Creativity is important in business , but a company won't last without prioritizing value.

The Importance of Business Strategy

A business strategy is foundational to a company's success. It helps leaders set organizational goals and gives companies a competitive edge. It determines various business factors, including:

• Price: How to price goods and services based on customer satisfaction and cost of raw materials
• Suppliers: Whether to source materials sustainably and from which suppliers
• Employee recruitment: How to attract and maintain talent
• Resource allocation: How to allocate resources effectively

Without a clear business strategy, a company can't create value and is unlikely to succeed.

Creating Value

To craft a successful business strategy, it's necessary to obtain a thorough understanding of value creation. In the online course Business Strategy , Harvard Business School Professor Felix Oberholzer-Gee explains that, at its core, value represents a difference. For example, the difference between a customer's willingness to pay for a good or service and its price represents the value the business has created for the customer. This difference can be visualized with a tool known as the value stick.

The value stick has four components, representing the value a strategy can bring different stakeholders.

• Willingness to pay (WTP) : The maximum amount a customer is willing to pay for a company's goods or services
• Price : The actual price of the goods or services
• Cost : The cost of the raw materials required to produce the goods or services
• Willingness to sell (WTS) : The lowest amount suppliers are willing to receive for raw materials, or the minimum employees are willing to earn for their work

The difference between each component represents the value created for each stakeholder. A business strategy seeks to widen these gaps, increasing the value created by the firm’s endeavors.

Increasing Customer Delight

The difference between a customer's WTP and the price is known as customer delight . An effective business strategy creates value for customers by raising their WTP or decreasing the price of the company’s goods or services. The larger the difference between the two, the more value is created for customers.

A company might focus on increasing WTP with its marketing strategy. Effective market research can help a company set its pricing strategy by determining target customers' WTP and finding ways to increase it. For example, a business might differentiate itself and increase customer loyalty by incorporating sustainability into its business strategy. By aligning its values with its target audiences', an organization can effectively raise consumers' WTP.

Increasing Firm Margin

The value created for the firm is the difference between the price of an item and its cost to produce. This difference is known as the firm’s margin and represents the strategy's financial success. One metric used to quantify this margin is return on invested capital (ROIC) . This metric compares a business's operating income with the capital necessary to generate it. The formula for ROIC is:

Return on Invested Capital = Net Operating Cost After Tax (NOCAT) / Invested Capital (IC)

ROIC tells investors how successful a company is at turning its investments into profit. By raising WTP, a company can risk increasing prices, thereby increasing firm margin. Business leaders can also increase this metric by decreasing their costs. For example, sustainability initiatives—in addition to raising WTP—can lower production costs by using fewer or more sustainable resources. By focusing on the triple bottom line , a firm can simultaneously increase customer delight and margin.

Increasing Supplier Surplus & Employee Satisfaction

By decreasing suppliers' WTS, or increasing costs, a company can create value for suppliers—or supplier surplus . Since increasing costs isn't sustainable, an effective business strategy seeks to create value for suppliers by decreasing WTS. How a company accomplishes this varies. For example, a brick-and-mortar company might partner with vendors to showcase its products in exchange for a discount. Suppliers may also be willing to offer a discount in exchange for a long-term contract.

In addition to supplier WTS, companies are also responsible for creating value for another key stakeholder: its employees. The difference between employee compensation and the minimum they're willing to receive is employee satisfaction . There are several ways companies can increase this difference, including:

• Increasing compensation: While most companies hesitate to raise salaries, some have found success in doing so. For example, Dan Price, CEO of Gravity Payments, increased his company's minimum wage to $80,000 per year and enjoyed substantial growth and publicity as a result.
• Increasing benefits: Companies can also decrease WTS by making working conditions more desirable to prospective employees. Some offer remote or hybrid working opportunities to give employees more flexibility. Several have also started offering four-day work weeks , often experiencing increased productivity as a result.

There are several ways to increase supplier surplus and employee satisfaction without hurting the company's bottom line. Unfortunately, most managers only devote seven percent of their time to developing employees and engaging stakeholders. Yet, a successful strategy creates value for every stakeholder—both internal and external.

Strategy Implementation

Crafting a business strategy is just the first step in the process. Implementation takes a strategy from formulation to execution . Successful implementation includes the following steps :

• Establish clear goals and key performance indicators (KPIs)
• Set expectations and ensure employees are aware of their roles and responsibilities
• Delegate work and allocate resources effectively
• Put the plan into action and continuously monitor its progress
• Adjust your plan as necessary
• Ensure your team has what they need to succeed and agrees on the desired outcome
• Evaluate the results of the plan

Throughout the process, it's important to remember to adjust your plan throughout its execution but to avoid second-guessing your decisions. Striking this balance is challenging, but crucial to a business strategy's success.

Learn More About Creating a Successful Business Strategy

Business strategy constantly evolves with changing consumer expectations and market conditions. For this reason, business leaders should continuously educate themselves on creating and executing an effective strategy.

One of the best ways to stay up-to-date on best practices is to take an online course, such as HBS Online's Business Strategy program. The course will provide guidance on creating a value-driven strategy for your business.

Do you want to learn how to craft an effective business strategy and create value for your company's stakeholders? Explore our online course Business Strategy , or other strategy courses , to develop your strategic planning skills. To determine which strategy course is right for you, download our free flowchart .

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The difference between a strategic plan and a business plan.

Every business needs a strategic plan. Every business needs a business plan. It’s knowing precisely what each plan entails and when that plan can be of most use that makes the difference between these two essential documents.

Let’s start by defining the purpose behind each type of plan. This can help both budding entrepreneurs and veteran CEOs avoid the mistake of pursuing the wrong kind of plan at the wrong time in the growth cycle of their companies.

The Strategic Plan

As we have noted before, a strategic plan “is a written document that points the way forward for your business.” The focus of a strategic plan can include (but isn’t limited to):

• Expanding business operations
• Reaching into new market segments
• Solving organizational problems
• Potential restructuring a business

By staying focused on your original purpose, goals, and objectives, strategic planning reintroduces you to “the big picture.” It’s the basis for business owners to achieve their vision, which they communicate to stakeholders in a strategic business plan and program.

A strategic plan serves as a roadmap for determining what will likely lie ahead for your business in the next 3-5 years, while also including a series of actions or activities that can turn strategy into operational reality.

Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more

The Business Plan

Generally speaking, a business plan is needed when a company is in its earliest phase of growth. This plan offers a description of how your business will operate, its objectives for growth and financial success, and how it aims to get there. Essentially, it articulates the  why  behind a business. Key elements include:

• Executive summary and mission statement
• Projected staffing and equipment needs
• Short- and long-term marketing strategy
• Financial statement, including anticipated startup expenses and capitalization
• Outline of management structure and operational processes

A business plan “is a broader, more preliminary document that sets your course when your company may still be nothing more than a twinkle in your eye,” notes BDC of Canada. This plan “not only accurately summarizes what your business is all about, but why it’s a viable proposition.”

Strategic Business Planning

Strategic planning is the systematic process for developing an organization’s direction. This includes pinpointing objectives and actions required to achieve that future vision, and metrics to measure success.

A business plan, as described by the Center for Simplified Strategic Planning, Inc., aims to define “the initial goals and objectives of the company, its structure and processes, products and services, financial resources [and] all of the basics that go into forming a company ” and getting it up and running.

TAB offers its members a different kind of approach— strategic business planning . It’s the basis for business owners to achieve their vision, which they will then communicate to stakeholders in a strategic business plan and program.

Action steps embodied in a strategic business plan include:

• Understanding your business. Assess where your business is today. Review core business information and revisit your vision, mission statement, and core values.
• Analyzing your strengths, weaknesses, and threats. Conduct a SWOT analysis to evaluate where your business is operating at peak efficiency and where organizational weaknesses (and threats from competitors) might stunt future growth.
• Defining objectives and set goals. Drill down into specific objectives that will help you achieve your vision—everything from developing new marketing strategies and launching a new product to re-allocating key financial resources.
• Putting the plan in action . Take action steps to translate the plan from paper to reality. Break tasks down into small steps, assign a responsible party to be accountable for each task, and establish a schedule for reviewing your overall plan on a regular basis.

As we enter into a new year, strategic business planning is more urgently needed than ever before. Want to learn more? Register for our free TAB white paper, “4 Step Guide to Strategic Planning.”

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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

By Homebase Team

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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529 vs brokerage account: which is better for college savings?

By Brian Keaney

June 24, 2024

Two popular college savings options are 529 plans and brokerage accounts. A brokerage account is an investment account offered by a financial institution. It allows you to buy, sell, and hold various investment assets, such as stocks, bonds, mutual funds, and other securities.

When considering investing in these, it’s crucial to understand their pros and cons. We’ll cover tax efficiency, financial aid impact, costs, investment strategies, contribution limits, withdrawal rules, state-specific considerations, and more. This will help you choose the best option for saving for college.

Tax Efficiency and Growth

Tax benefits of 529 plans.

One of the most compelling benefits of 529 plans is their significant tax advantages. Contributions to a 529 college savings plan grow tax-deferred, and withdrawals for qualified educational expenses are always tax-free at the federal level. In most states, they are often tax-free as well. Some states also offer tax deductions or credits for contributions to their 529 plans.

Beyond these tax benefits, 529 plans also offer flexibility in using the funds. They are primarily intended for higher education expenses.

However, recent changes in federal law have expanded the use of 529 plans to include K-12 tuition, apprenticeship programs, and student loan repayment. 529 tax advantages and recent versatility make them a great option for families to start saving for college education expenses, even if you are unsure what path your child will take.

Taxation of Gains in Brokerage Accounts

On the other hand, brokerage accounts do not offer tax benefits, unlike Roth IRAs or 529 plans. When the assets in your investment account are sold, the IRS taxes the profits made as short or long-term capital gains.

Short-term capital gains are from assets sold within a year of purchase and are taxed at ordinary income tax rates. Long-term capital gains from assets held for longer than a year are taxed at the reduced rate of 15% for most individuals.

Financial Aid Implications

Impact of 529 plans on financial aid.

If a parent owns a 529 plan, those assets are considered parental assets, and federal financial aid calculations assess them at a maximum rate of 5.64%. When filling out a FAFSA form, 529s have a lower impact on the amount of financial aid awarded than other types of assets.

Impact of Brokerage Accounts on Financial Aid

In comparison, financial aid calculations assess assets held in the student’s name at a much higher rate of 20%. This higher assessment can reduce the financial aid a student receives.

By keeping college savings in a 529 parent-owned plan, families can minimize the impact on their Student Aid Index (SAI) . A better SAI score may qualify the student for more need-based financial aid. 

Comparing Costs and Fees

Management fees in 529 plans.

529 plans typically have management fees as low as 0.10% to 0.70% and are often lower than those of actively managed funds in brokerage accounts. It is important to look at the fee structure when choosing a plan and investment options, as they vary.

Brokerage Account Fees and Commissions

Brokerage accounts can have several types of fees, including trading commissions, management fees for mutual funds, and account maintenance fees. These fees can vary greatly. Management fees can start at 1-2% for a full-service brokerage.

While some discount brokers offer commission-free trades, actively managed funds can incur significant costs.

Risk and Investment Strategies

Common 529 plan investment options.

529 plans generally offer a range of investment options . Most plans offer age-based portfolios that automatically adjust. As the child gets closer to college, the investments become less risky.  This can simplify investment management for account holders. When the child is younger, the investment allocation is more aggressive. The investments automatically become less risky as the child approaches their high school graduation.

However, 529 plan investments are generally limited to a predefined selection of investment options, and not all types of investments, such as individual stocks, bonds, and certain mutual funds, are available.

Brokerage Account Investment Options

Brokerage accounts offer a wide range investment options, such as:

• Mutual funds
• and more 

Some also offer non-traditional investments. While this flexibility allows you to personalize your investment approach, it also requires hands-on management and a deep understanding of the market and investment strategies to take advantage of the diverse and complex investment options.

Contribution Limits

Contribution limits for 529 plans.

State 529 plans have high contribution limits , with New York and California each having cumulative limits of over $500,000 per beneficiary.  These high limits make 529 plans suitable for families looking to save large amounts for education.

However, if the saved money is used for non-educational expenses, the IRS imposes tax penalties when the money is withdrawn. This tax and penalty will likely cancel out any tax-free growth that occurred.

Contribution Limits for Brokerage Accounts

Brokerage accounts don’t have contribution limits. However, making contributions without the tax benefits of a 529 plan means you will owe taxes on any gains in the account. Trade commissions and capital gains taxes must be accounted for when withdrawing funds for education (or any other reason). Therefore, the actual amount available in your account may be less than your balance indicates when it’s time to pay tuition.

Withdrawal Rules and Penalties

Withdrawals from 529 plans.

Withdrawals from 529 plans are tax-free if used for qualified educational expenses . You can use those funds for tuition, fees, books, room and board, and certain other expenses. They can even be used to pay off student loans . On the other hand, income tax and a 10% penalty on the earnings apply to non-qualified distributions . 

Withdrawals from Brokerage Accounts

Withdrawals from brokerage accounts are not restricted, providing more flexibility. You can cay for tuition, spring break, or any other need.

State-Specific Considerations

State tax deductions and credits for 529 plans.

Over 30 states offer tax deductions or credits for contributions to their 529 plans, enhancing the tax benefits. It’s important to check your state’s specific rules to maximize these benefits. Know, however, that you are not limited to just the state in which you live. You can open a 529 plan in any state that offers one . However, most states require you to use the in-state 529 plan to be eligible for a tax credit.

Uniform Laws and Regulations for Brokerage Accounts

While there are federal regulations for brokerage accounts, there are no state tax benefits for education savings.

Evaluating the Upsides and Downsides

Advantages of 529 plans.

• Tax-free growth and withdrawals for qualified educational expenses
• Potential state tax deductions or credits
• Low impact on financial aid eligibility
• High contribution limits

Disadvantages of 529 College Savings Plans

• Funds must be used for qualified educational expenses to avoid penalties
• Limited investment options compared to brokerage accounts

Advantages of Brokerage Accounts

• No restrictions on withdrawals
• Broad range of investment options
• No specific contribution limits

Disadvantages of Brokerage Accounts

• Investment gains are subject to capital gains taxes
• Higher impact on financial aid eligibility

Making the Right Choice for Your Child’s Education

When deciding between a 529 college savings plan and a brokerage account, consider your financial situation, goals, and risk tolerance. If tax advantages and minimizing financial aid impact are important to you, a 529 plan is the better choice.

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Biden is offering some migrants a pathway to citizenship. Here’s how the plan will work

President Joe Biden is taking an expansive election year step to offer relief to potentially hundreds of thousands of immigrants without legal status in the U.S.

President Joe Biden has ordered an expansive election-year step to offer relief to potentially hundreds of thousands of immigrants who don’t have legal status in the U.S. but are married to American citizens.

President Joe Biden speaks during an event marking the 12th anniversary of the Deferred Action of Childhood Arrivals program, in the East Room of the White House, Tuesday, June 18, 2024, in Washington. (AP Photo/Evan Vucci)

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Javier Quiroz Castro gives a hug to President Joe Biden at an event marking the 12th anniversary of the Deferred Action of Childhood Arrivals program, in the East Room of the White House, Tuesday, June 18, 2024, in Washington. (AP Photo/Evan Vucci)

WASHINGTON (AP) — A new Biden administration policy announced Tuesday will give roughly half a million immigrants who are married to American citizens but lack legal status in the United States a pathway to citizenship for them and their children.

It is one of President Joe Biden’s most sweeping immigration policies and one that migrant advocates had been heavily lobbying the administration to undertake.

A look at the new policy, who might benefit and how:

How did things work before?

Under U.S. immigration law, if an American marries someone who is not a citizen but is living in the United States, it can be a straightforward process for the spouse to apply for long-term permanent residence — called a green card.

But if the spouse has been living in the United States illegally for a long time, that process gets much more complicated.

They often have to leave and apply from their home country. Depending on how long the person has lived in the U.S. without authorization, they could have to stay abroad for three to 10 years before applying to come back. They can seek a waiver to avoid waiting that long abroad, but getting a waiver also is averaging about three and a half years.

They have to go abroad, apply at a consulate — where waits can be extensive — and be permitted back into the U.S.

“There is the risk of prolonged separation especially if things go wrong,” said Elizabeth Taufa, policy attorney and strategist for the Immigrant Legal Resource Center.

Facing the prospect of leaving their families in America for a lengthy process that might not work, many decide to stay and live in the shadows.

How is Biden changing immigration policy?

Under the new policy, many spouses without legal status can now apply for lawful permanent residence without leaving the U.S. and eventually get a path to citizenship. But it’s not a blanket approval.

To be eligible, people have to have lived in the U.S. for at least 10 years, not pose a security threat and have been married by June 17, 2024. They would have to apply to the Department of Homeland Security, which considers the applications on a case-by-case basis, the department wrote in a fact sheet describing the new policy. Immigrant spouses cannot have already been admitted or paroled into the country previously.

Applicants will be vetted for previous immigration history, criminal history and more, including potential fraud, Biden’s announcement said.

Once Homeland Security approves an application, the White House said, the person would then have three years to apply for permanent residency and could get work authorization for up to three years.

About 1.1 million immigrants without legal status are married to American citizens in the United States, according to immigration advocacy organization FWD.us. The administration thinks that ultimately about half that number — about 500,000 — could be eligible for this program, plus about 50,000 of their children.

On average, the spouses have lived in the United States for a little over two decades, the White House said. A senior administration official said during a call to brief reporters that they expect the majority of people benefitting from the program will be from Mexico.

How does this fit in with Biden’s other immigration policies?

The Biden administration has pursued a two-pronged strategy on immigration and border security over the past year and a half.

On one hand, Biden has made it much more difficult to qualify for asylum at the southern border and intensified removals of those who don’t qualify to stay. Immigration advocates vilified Biden’s decision this month to cut off asylum processing after arrivals on the southern border hit a certain number per day.

On the other hand, the administration has taken a number of steps to admit people into the country.

In the biggest example, the administration created a program last year allowing people from Cuba, Haiti, Nicaragua and Venezuela to come to the U.S. if they have a financial sponsor, pass a background check and fly into a U.S. airport. As of the end of April, 434,800 people have arrived through that program from those four countries.

Many advocates have pushed the administration to do more for immigrants who have lived in the U.S. illegally for decades.

What’s changing in the program for ‘Dreamers’?

Separate from the policy for migrant spouses, the administration also announced changes designed to help those in the Deferred Action for Childhood Arrivals program qualify more easily for long-established work visas.

The Obama administration in 2012 offered people who were brought illegally to the U.S. by their parents as children deportation protections and temporary work permits. Many of them, often known as “Dreamers,” are now parents themselves.

Many companies who employ DACA recipients can apply for them to get a work visa, which is more stable and provides a pathway to permanent residence, said Dan Berger, an immigration fellow at Cornell Law School who co-founded Path2Papers , an organization that helps dreamers pursue work visas and other ways to get legal permanent residency.

But to get the work visa, the DACA recipient must travel abroad, apply and get a waiver to reenter the U.S. Berger said that waiver process is very slow and offers little guidance, so employers and DACA recipients aren’t eager to try it.

“Having clear guidance and clear expectation is really helpful,” he said.

What’s next?

The Department of Homeland Security has to produce guidance on how the spousal program will work. The program will go into effect by the end of summer, President Joe Biden said during a ceremony Tuesday.

It will fall to the U.S. Citizenship and Immigration Services, an agency within the Department of Homeland Security, to process all the applications. That agency has historically struggled with funding as it works to reduce backlogs and wait times .

Republicans and immigration opponents have intensely criticized the proposal, and opponents are almost certain to sue in an attempt to stop it.

More From Forbes

Building a lasting legacy: 8 strategies for coaches and trainers.

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Doaa Darwish , CEO at TRAINER'S BOX.

In the ever-evolving world of professional coaching and training, building a business that outlasts one's lifetime requires foresight, strategic planning and an unwavering commitment to excellence. Coaches and trainers have the unique opportunity to impact lives profoundly, and establishing a legacy can help ensure that this influence continues well into the future. Here are eight key strategies to help achieve this enduring success.

1. Develop A Clear Vision And Mission

The foundation of any lasting business is a clear vision and mission. Your vision should encapsulate your long-term goals and the broader impact you want to have in the world. The mission should define your business's core purpose and the services you provide to achieve this vision.

A well-articulated vision and mission serve as guiding stars, helping you make strategic decisions that align with your long-term objectives and resonate with your audience. Communicate these elements consistently across all platforms to build a strong, unified brand identity.

2. Invest In Continuous Learning And Innovation

The coaching and training industry is dynamic, with new methodologies, technologies and insights emerging regularly. To remain relevant and effective, continuous learning is paramount. Attend workshops, obtain advanced certifications and stay updated on industry trends.

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Innovation should also be a cornerstone of your practice. Embrace new technologies, such as virtual reality for immersive training or AI-driven analytics for personalized coaching plans. This commitment to growth and innovation is imperative in enhancing your skills and demonstrating your dedication to providing the best possible service to your clients.

3. Build A Strong Personal Brand

Your personal brand is the perception others have of you and your business. It encompasses your reputation, the quality of your services and your core values. You can leverage social media channels like LinkedIn, Instagram, Twitter and YouTube to share your knowledge, insights and success stories.

Regularly posting content such as tips, client testimonials and thought leadership articles helps you stay top-of-mind and positions you as a thought leader in your field. Actively engage with your audience and run live Q&A sessions, webinars and interactive posts to build a loyal following.

4. Use A Learning Management System (LMS)

A learning management system (LMS) can be a game changer for coaches and trainers looking to scale their business and ensure a lasting impact. An LMS allows you to create, manage and deliver online courses efficiently. With an LMS, you can offer structured learning paths, track client progress and provide resources that can be accessed anytime, anywhere.

Your LMS not only makes your coaching more accessible but also ensures consistent delivery of your methodologies and principles. Moreover, an LMS can be a repository of your knowledge and training materials, preserving your legacy for future generations.

5. Create Scalable Programs And Products

To ensure your business outlasts your active involvement, focus on creating scalable programs and products. Online courses, e-books, membership sites and mobile apps are powerful ways to reach a large crowd without the constraints of one-on-one coaching.

These scalable solutions can allow you to disseminate your knowledge and methodologies to a larger group of people, extending your influence and impact. Additionally, they provide a passive income stream, contributing to your business's financial stability and longevity.

6. Foster A Community And Network

Building a hemogenous network around your brand fosters loyalty and engagement. Create platforms where your clients and followers can interact, share experiences and support each other. Examples of building effective communities are social media groups, forums or live events.

A strong community can enhance the client experience and ensure your influence extends beyond individual coaching sessions. Networking with other professionals in your field can also open doors to collaborations, referrals and new opportunities, further solidifying your legacy.

7. Partner With A Professional Team

Collaborating with a professional team can significantly amplify your impact and ensure the longevity of your business. This team might include other coaches, marketing experts, business consultants and administrative support. By bringing together diverse expertise, you can delegate tasks outside your core competencies, allowing you to focus on what you do best.

A professional team can also bring fresh perspectives and innovative ideas, helping you stay competitive and relevant in the industry. Moreover, a well-structured team can carry on your vision and mission, maintaining continuity even if you step back from active involvement.

8. Plan For Succession And Legacy

Succession planning is critical to building a business that outlasts your lifetime. Identify potential successors within your organization or from your network who share your vision and values. Providing them with the training and resources they need to lead your business effectively is essential.

Additionally, consider creating a legacy plan that outlines your business's future direction, fundamental principles and strategies for growth. This plan should be a living document, updated regularly to reflect new goals and changing circumstances. Legal measures, such as trusts or foundations, can also be established to ensure your legacy is protected and your business continues to operate according to your wishes.

Final Thoughts

We conduct one-on-one meetings to help trainers and coaches with their business vision strategy. When it comes to delivering your self-paced programs, I always advise using software awarded as the learner's best choice, where the user experience (UX) and user interface (UI) exceed expectations.

Your learning management system must also be entertaining and efficient for the instructors and administrators at the back end to leave a 360-lasting experience for everybody who engages with your programs and help it stand for a long time. Your legacy is not just about the business you build, but the lives you touch and the impact you make along the way.

Forbes Coaches Council is an invitation-only community for leading business and career coaches. Do I qualify?

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Business Continuity Planning: Ensuring Resilience In Data Center Operations

• June 24, 2024
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Modern data centers are expected to guarantee at least 99.999% uptime. Some data centers guarantee 100% uptime. To make these guarantees confidently, data centers have to implement high standards of resilience. This means they need effective business continuity planning. Here is a quick guide to what you need to know.

Business continuity vs disaster recovery

Business continuity refers to the comprehensive process that ensures critical business functions can continue in the face of disruptions. It involves identifying potential risks, developing strategies to mitigate these risks, and creating plans to maintain essential operations.

Disaster recovery (DR) is a subset of business continuity that specifically deals with the restoration of IT infrastructure and operations after a disaster has occurred. It involves a set of policies and procedures designed to recover and protect business IT systems and data.

The importance of business continuity planning

Business continuity planning often serves multiple purposes. Here are five of the main ones.

Minimizes downtime : By implementing strategies such as redundant systems, failover mechanisms, and backup solutions, businesses can reduce the amount of downtime experienced during unexpected events.

Protects data integrity : Regular data backups and offsite storage ensure that, in the event of a data loss incident, critical information can be quickly restored.

Ensures regulatory compliance : Many industries have stringent regulatory requirements regarding data protection and operational continuity. A well-developed business continuity plan helps businesses comply with these regulations.

Enhances customer trust : By having measures in place to maintain operations, businesses can uphold their commitments to customers and hence maintain customer satisfaction.

Improves risk management : By identifying and evaluating risks, businesses can implement targeted strategies to mitigate them. This reduces the likelihood of significant disruptions and enhances overall organizational resilience.

The role of data centers in business continuity

Data centers are pivotal in ensuring business continuity as they house critical IT infrastructure. This generally includes servers, storage systems, and network equipment that support essential business applications and data. They also provide secure and reliable environments for storing vast amounts of business-critical data.

This is precisely why modern data centers are designed with resilience in mind. In particular, they implement high levels of redundancy with multiple power supplies, cooling systems, and network connections. This redundancy ensures that if one component fails, others can take over, maintaining continuous operations without interruption.

Key strategies for ensuring business continuity

Here are five key strategies for ensuring robust business continuity.

Risk assessment

This involves evaluating both natural and human-made risks, such as earthquakes, floods, cyber-attacks, and power outages. Technical measures include mapping out critical infrastructure, performing vulnerability scans, and simulating disaster scenarios.

By understanding these risks, businesses can develop mitigation strategies, such as geographic diversification of data centers and implementing robust cybersecurity defenses, to reduce the impact of identified threats.

Redundant systems and infrastructure

This involves duplicating critical components and functions, such as power supplies, network connections, and server clusters. Technical implementations include deploying Uninterruptible Power Supplies (UPS), backup generators, and failover mechanisms for network connectivity.

Virtualization and cloud computing can further enhance redundancy by allowing workloads to be quickly transferred to alternate servers or data centers in the event of a failure. Regular maintenance and testing of redundant systems are necessary to verify their readiness.

Data backup and recovery

Implementing a comprehensive data backup strategy involves using both on-site and off-site storage solutions, such as cloud-based services. Key technical aspects include automating backup processes, ensuring backups are encrypted, and maintaining an up-to-date inventory of backup data.

Recovery procedures should be clearly defined, with Recovery Time Objectives (RTOs) and Recovery Point Objectives (RPOs) established to minimize data loss and downtime. Regular testing of backup and recovery processes is essential to ensure data can be restored quickly and accurately in the event of a disaster.

Disaster recovery planning

A detailed disaster recovery (DR) plan outlines the steps to restore IT infrastructure and services after a disruption. This plan should include a comprehensive inventory of all IT assets, prioritized based on their criticality to business operations.

Technical elements of a DR plan involve setting up disaster recovery sites, whether physical or cloud-based, that can take over operations seamlessly. Disaster recovery plans should also account for the human element of disaster recovery. For example, they should ensure that there is ample documentation to assist the team implementing the recovery plan.

Regular testing and updates

Continuously testing and updating business continuity plans is vital to ensure their effectiveness. Technical testing methods include simulation exercises, failover tests, and penetration testing to evaluate the robustness of security measures. These tests help identify weaknesses and areas for improvement.

Updates to the continuity plan should reflect changes in business processes, technology advancements, and emerging threats. For example, businesses can now use automated tools to assist in monitoring systems and alerting administrators to potential issues, facilitating proactive updates.

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