Business Planning & Strategy Framework: The Differences
Business plan and strategic plan are seen as synonyms of each other by many, but that’s not the actual truth. Although, there does exist a bit of overlap between the meanings of the two terms, but there is a significant differentiation that exists among the two. In this article, we will be shedding a light on the same.
A ‘business plan’ explains about “what a business intends to do”, while a strategic plan answers the question — “how would a business execute the business plan”. That’s the primary difference in the simplest of words possible. While a business plan entails a firm’s financial projections, marketing plan, and organizational structure, on the other hand, a strategic framework comprises an elaborative action plan for the near future that can help the business reach its intended goals.
However, both of them must consider SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, and both kind of plans need to be reviewed from time to time in order to tweak them as per the constantly changing market conditions.
A business plan is all about setting the course…
A business plan would typically include answers to the most vital questions a bank, investor, or a potential partner would ask before investing into an organization. It will offer clear and concise understanding of the business goals, its intentions, expansion plans, and the viability. It can be seen as a blueprint to the effective functioning of your business in the first place. A business plan entails the guidelines that are needed to be followed in order to set the business for prospective growth.
What Does a Business Plan Constitutes?
An effective business plan constitutes three major segments:
· A marketing plan
· An operational plan
· Financial planning
👉Marketing Plan
It comprises a detailed explanation of the goods and services you have decided to offer to your potential customers, your target consumer segment, and the USP (Unique Selling Proposition). The other factors that are taken into consideration while devising a marketing plan would include product or service differentiation, deciding your competitive strategy, and drafting a marketing blueprint.
👉Operational Planning
To materialize your vision, you need the necessary elements to make it functional. The operational planning would constitute determining the business structure, staffing, leasing space for the workforce to operate from, sourcing essential equipment, and managing anything and everything that may be needed for seamless running of business operations. 🔗A smart business strategist would include a detailed ‘operations plan’ in his overall ‘business plan’.
👉Financial Planning
Financial planning in a business leader’s 🔗strategy framework consists of outlining the detailed financial expenses to be incurred into the operations. In this phase of business planning, a business strategist explains to the investors and lenders about how are they going to get back the returns on their monetary investments into the concerned business. The emphasis is made on keeping the business profitable over a long course of time.
How Does Strategic Planning Differs from Business Planning?
The strategic part of a business plan does overlap with the planning part, but is different in a way that it’s more into executing and there is minimal planning involved here. After the planning part is done, only comes the execution plan or the ‘strategic plan’. A strategic framework comprises a comprehensively drafted roadmap that you will be following in the next few years to grow your business, and achieve the organizational goals.
It’s basically an action plan that denotes the due dates, and specific tasks that are needed to be completed in accordance with the pre-set timelines. A strategic plan ensures that the growth initiatives are well coordinated, and are optimally-structured. With a perfect strategic plan in place, a strategist can increase his chances of succeeding by manifolds.
