Strategic business planning is absolutely necessary to setting up business in the UK. At the same time, there are very important differences between a company’s business plan and its strategic plan. Not understanding these differences often leads to combining them into a single plan incapable of yielding optimal results. The obvious solution is to draw a distinction between the two plans so that both can be implemented properly.
Before discussing the key differences, it is important to note that businesses should avoid the ‘strategic plan vs business plan’ trap of focusing too heavily on one at the expense of the other. Both types of planning are vital to company success.
To help you better understand the concept, I have listed three key differences between strategic and business plans below. Should you have any questions, do not hesitate to contact me. As an expert in strategic business planning, I can help your company make the most of both kinds of planning.
1. Plan Appropriateness
The first key difference is appropriateness. Although a strategic plan is a form of business planning, a strategic plan would be inappropriate to a start-up. Strategic plans are for existing companies looking to improve their performance. Start-ups should focus primarily on their business plans in the early stages.
When start-ups try to combine strategic and business planning into a single entity, they get ahead of themselves. This is not good in that it makes achieving the start-up’s goals more difficult. It is far better to focus on a solid business plan, implement it, and then think about strategic planning later on.
2. Plan Time Frame
The second key difference is the time frame for both kinds of plans. A typical business plan provides vision for about one year. Businesses can stretch that out to 18 or 24 months, but doing so is not wise given the continuing evolution of business. One-year business plans are best.
A strategic plan is distinctly different in that it tends to be a 3-5-year plan on average. Some strategic plans exceed five years if they are comprehensive enough. As such, strategic business planning is a more long-range form of planning compared to the much shorter business plan.
3. Scale of the Plan
The third and final key difference is the scale of the plan in question. The purpose of a business plan is to establish a general purpose for a start-up alongside a framework for reaching first-stage goals. As such, it is very limited in both scale and scope. Strategic planning is just the opposite.
A strategic plan is a comprehensive tool for allocating resources, building competitive advantage, utilising staff, communicating with stakeholders, accessing funding, and so on. It should be clear that the scale and scope of strategic planning is much larger.
When it comes to the strategic plan vs the business plan, the two are distinctly different. Companies that know and understand these differences are better equipped for both forms of planning.
By Peter Smith.
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