Intro
Almost every business entrepreneur knows and understands the importance of a business plan. As a key component of the start-up and fundraising process, the business plan acts as the foundation for your organisation. Still, it only tells part of the story. In order to get the big picture and have a structure on which to build your business, you also need a strategic plan and an operational plan.
So what is a business plan?
In its simplest form, a business plan defines ” the who” and “the what” of your business. It outlines by whom the business will be run and what it will do. It describes the products and services your business will sell and who your customers will be.
A strategic plan – what is it?
A strategic plan extends beyond the basics of a business plan to explain the ‘how’. This explains the long-term objectives that the business has and how it aims to realise these long-term objectives. A strategic plan identifies the future products and services your business might provide and the potential target markets you might expand into. This type of plan explains, in fact, the long-term strategy for both growth and expansion of your business.
An operational plan – how to define it?
To explain how you will achieve your short-term objectives, an operational plan goes deep into the details of your business. This represents the ‘when’ and ‘where’ of the overall planning process. An Operational Plan covers the specifics of marketing campaigns, short-term product development, and more immediate targets and projects that will happen during the next year.
Strategic vs Business plan: is there a difference between them?
To begin with, let’s consider the difference between a business plan and a strategic plan. To recall:
A business plan introduces the ” who” and the ” what” of the business. A strategic plan gives us long-term objectives and explains ” how” business will get there. This type of plan also provides a long-term view.
Viewed more generally, the business plan answers the question “who?”. In the same context, it shows us:
- Who conducts the business? What makes them qualified? How did they contribute and add value?
- Who are the competitors? What do they provide and what distinguishes you?
- Who is your consumer? Where are they located? What do they want and how will you provide it? What is the size of the market? Likewise, how will you link with your market?
Well, a business plan responds to the “what” question by letting us know:
- What the business offers and how it is delivered.
- The product, the services and the operations are all explained so that readers can understand how the needs of customers are met.
On the other hand, a strategic plan highlights the long-term objectives and the ‘how’, with a focus on the elements below:
- Where will the business be in 3, 5 or even 10 years?
- How will you expand to provide various products and services over time?
- How will your market and industry evolve over time and how will your business adapt to these changes?
- How will you develop your market and get new consumers?
- In order to achieve your goals, what is required? What assets do you need to achieve it?
- How will you manage success? What metrics are important and how will you monitor them?
Therefore, a business plan describes what you are doing at the present time. On the other hand, a strategic plan explains your long-term expectations and how you plan to move your business from where it is today to where it will be in the years ahead. A strategic plan gives you a deeper look into the future and outlines the key steps you need to take to realize your goals.
Strategic vs operational plan: what is the difference?
Whereas strategic planning focuses on the long term and details general development strategies, an operational plan looks at the short term. It explains in detail what your business plans to do and when it will do it over the next year or so. An operational plan typically covers such details as:
- Which activities need to occur to reach your business goals?
- About when each activity should take place, who will be in charge of it and when do you need to reach certain key steps?
- How will your business operate? Which providers will you collaborate with? When do you need to have them available?
- Which marketing campaigns will you implement and what costs will they incur?
- What are the investments you will make in your products and services this year?
In short, an operational plan is the short-term action plan for your business. It is the tasks, milestones, and steps needed to take your business forward. Typically, an operational plan provides details for a 1-year time frame, whereas a strategic plan considers a 3-5 year timeframe, in some cases even longer. The operational plan is basically the roadmap showing how you will execute your strategic plan.
Tips on how to use your business plan as a tool for strategic and operational growth
One brilliant business plan may include both the basic business plans, the long-term strategic plan and as well as the short-term operational plan. By using a step-by-step planning approach, you can handle all three stages of planning and ensure that the process is made easy to be evaluated and revised as your business grows, modifies and adapts.
Get started with a basic plan
The Lean Planning Methodology starts in a simple way: a 30-minute business plan that sets out the basics of your business: who you are, what you do and who your consumers are. It’s a perfect way to provide a brief general overview of your business.
Develop your plan
This is where you can expand your business plan to fit your long-term strategy. By adding more detail to the plan elements you explain your long-term goals and the next small steps to be done. In addition, this allows you to better understand your products and services that will change and expand over time to meet changing market conditions.
Ultimately, there will be financial predictions in your flexible plan that include monthly details of short-term revenues and expenses, as well as longer-term annual overviews of your financial aims, including profitability and potential future borrowing and investment.
Be sure to use your business plan to manage your business
Regardless of the plan you are working on, you need a dedicated team of team players to help you plan, develop and implement both your operational and strategic plans. Keep in mind, your business requires both to ensure a clear grounding and focus. As well as helping you to identify the more in-depth work that needs to happen in order to help achieve your long-term objectives. All this, will help you to turn your business plan into a continuous growth tool.
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