The successful growth of a company depends on its business plans. These plans provide a guide to the company’s owners, managers and employees. The guidance helps determine how best to plan the growth of the business. Everyone is prepared for unforeseen changes in the industry and market. It is important to understand that there is a difference between business planning and strategic business planning.
A simple business plan outlines how the business will be established and developed. It determines who will be taking operational decisions and what type of value those individuals will bring to the table. The plan determines the competition. It takes into account the market research that shows weaknesses and strong points of competing businesses. The customer is defined in clear terms. The planner decides what type of customers should be targeted. The business plan outlines the type, size, location and scope of the market. Overall, a business plan defines the business, customer and market. Basic aspects of all these subjects are discussed in the plan clearly. The team members know their role in the organization and what they are required to do.
A strategic business planning limits itself to the action plans. It is used to devise strategies for achieving particular goals of the business. It clearly outlines how the success will be measured, what type of metrics will be used to measure the success, and what type of resources is needed to achieve those goals. There is clear direction with fixed timetable and schedules for each activity and goal. Each action is planned in advance.
A business plan is useful when establishing a business. It helps obtain funding from investors and lenders. They can study the business plan to understand how the entrepreneur plans to develop the business and take it forward. The strategic planning for the business, on the other hand, is devised once the business has been established and it is on track to achieve its initial goals. A strategic planning is done for next 3-5 years. It is divided into various phases. The benchmark dates are set so the team members try to achieve their goals within the defined time limit. The plan may be evaluated yearly or half-yearly.
Every evaluation report reveals if there has been slackness on the part of a team in achieving their targets. The data shows why and how the team failed to achieve its targets. The conclusion may require tweaking the next stage of the strategic plan. A simple business plan is the foundation on which the business is established. A strategic business plan gives direction to the team about how to achieve specific targets. It sets the strategic direction of the company. Unlike the initial business plan that is made available to external stakeholders, a strategic plan is limited to internal team members. It works as a guide to inspire, motivate and lead employees in achieving the set business goals.