At the end of a year, or the beginning of the next, is typically when business owners take out their plans for review. Plans are one of the fundamental tools of business but knowing the difference between a strategic, business and operational plan can save you time in the planning process. While one will serve you in the long term, another will help you right now. Use our handy table to know which is which.
Look backwards to plan forwards
Planning should not just be about the future. It is also a time for reflection. It can be very easy to just focus on the difficult journey in front of us, and lose sight of the road we have already been on.
Don’t neglect the lessons of the past when making a plan for the future.
We can use the time to look back on our successes, and the achievements we will continue to build on. We can reflect on the errors or mishaps that we don’t want to repeat. And we can endeavour to capture the opportunities that may have got away, and the opportunities that we are determined to chase down this time around.
That’s not to say however that a plan guarantees success. The purpose of a plan is not to make sure we know everything, but to make sure we are going in the right direction. There will always be surprises along the way but a good plan can get you through the challenges without breaking your stride.
Making the right plans, at the right time
For most small businesses the Business Plan will be the most familiar. It is the document that many of us have sweated over when first putting our business ambitions on paper. Demanded by bank managers and investors, and critiqued on shows like the Dragon’s Den and The Apprentice, it is the one document that we have come to believe we must know inside out. But like all plans, the Business Plan fulfils a specific purpose and is actually just one of three ways we can set the groundwork for our businesses.
The Strategic Plan
In many ways the Business Plan and Strategic Plan overlap. They are both designed to set out the argument for why the business exists, and how it provides value. For that purpose they both contain key information about the business or organisation. For the smaller business the Strategic Plan and Business Plan might be one and the same, but for larger organisations the differences become more apparent.
An example; for a business that is looking to expand into new locations the Strategic Plan would highlight the expansion strategy and the territories it wants to move into. In this case a Business Plan might be developed for individual territories to capture the unique business requirements for each location.
The Operational Plan
The Operational Plan differs in that it is a short-term and specific plan to turn the Strategic and Business Plan into reality. For the smaller business it might be a project plan that details all the activities that need to happen to successfully delivery the project. For larger business there may be many Operational Plans covering different departments, or different deliverables.
Using the example above several Operational Plans might be required that could cover market research of a specific location, finding and refurbishing offices in a territory, designing and delivering new products or services for each new market.
At any one time you might have all three of these plans, or you might just have one or two. Use the table below to make sure you are working on the right plan.
The Differences between a Strategic, Business and Operational Plan
|Strategic Plan||Business Plan||Operational Plan|
|Goals||Broad and Long-Term||New business or product/service launch||Specific and Short-Term|
|Timelines||Covers 3-5 years and sometimes up to a decade||1-2 year period||1 year|
|Whole Reason for being||Defines strategies to achieve the business long-term goals and accomplish the organization’s mission. It sets out how opportunities can be exploited and market share grown||To start a business, attract investors, and/or funding from banks. Business plans can also be used to prepare for bringing a new product or service online within an established business||Aims to turn the vision into a reality. Details the specific activities and events that need to take place in order to achieve the broader, strategic goals and usually is set out as a series of projects|
|Owned by||The Stakeholders and Senior Management Team (or Business Owners if you are a small business)||The Senior Management Team, Business Owners or the new product/service owner||Middle and Lower management|
|Seen by||Internal document usually seen by the Senior Management Team and Stakeholders.
The headlines might be shared with the whole business.
|Internally shared with senior management team, stakeholders and department heads.
Externally shared with bank managers, investors, and partners
|Internal document that is seen by the whole delivery team and used to define projects, roles and tasks, and measure progress and performance.|
|Review Cycle||Annual (doesn’t usually change that much)
Can be reviewed after a major business or market event
|Planned intervals typically between 6 and 12 months. Review cycle might be dictated by funding rounds||Annual|