A Business Plan Won’t Help You Reach Your Goals
I talk a lot about creating strategic plans, and very little about writing business plans (though I help business owners with both.)
There’s a reason for that. While they may seem similar, they’re completely different documents with different purposes.
A business plan is like a blueprint drawing. It’s a detailed image of what you’ll get if everything goes perfectly. Think of an architectural plan; you can “see” the building, but there’s no information about where the materials will come from, how long each step will take, or who will do what on the construction site.
It’s not action-oriented; it’s just a beautiful picture of what could exist.
A strategic plan is like GPS directions. It names the exact destination (your goals), then provides steps for how to get there. You follow the route, taking each step incrementally and checking to see what the next few steps are. If an obstacle appears, you change your route.
It’s tactical, dynamic, and 100% focused on getting you to where you want to go.
Let’s dig in a bit on the differences between these two types of plans, so you can decide which one you need for your business (maybe both, maybe not!)
Business plans vs. strategic plans—a 3 point comparison:
Who is each type of plan for?
A business plan is for you AND potential partners who may invest in your business:
Making a business plan helps you define what your business is for and how it will work. It forces you to be thoughtful about everything from your finances to your customer experience. If you don’t need to show your plan to anyone else, you may do all this work in your head without writing it down.
But potential partners, like lenders or landlords, will want proof you understand how your business will function, especially the financial details. This is why you need a written business plan to apply for a loan. No one wants to take a risk on a half-baked idea.
A strategic plan is just for you:
Making a strategic plan helps you define & organize your goals and create a step-by-step path towards them. It forces you to be thoughtful about what’s important to you, what you truly want or need to achieve, and exactly how to achieve those goals.
How do you use each type of plan?
A business plan is a static, theoretical document:
The usefulness of a business plan is mostly in the process of creating it and the thought that goes into it; it’s a worthwhile exercise. But once you’ve finished writing it, you may not look at it again. If the reality of running your business is very different from your original plan (isn’t it always?), the plan quickly becomes obsolete.
A strategic plan is a dynamic, living document that you look at every day.
A strategic plan is an action plan. It has specific tasks and deadlines that connect directly to your business goals. You need to make a updated one every 6 months or so, to stay current with what’s happening in your business and incorporate your new ideas. A great strategic plan is structured, but responsive to changes in your priorities.
What is in each type of plan?
A business plan contains a lot of speculative analysis and general information.
Market research, competitive analyses, 5-year financial projections, staffing plans; you can base them all on what’s true today, but things always change and your projections may not hold up. In my opinion, it’s better to create these as you need them, so they’ll actually be useful.
A business plan also has a lot of basic information about who’s involved in your business and how it works. Your business structure, product/service info, management team, industry overview; again, all great things to think carefully about, but not very action-oriented.
A strategic plan is all about what you want to achieve and how you’ll get there.
Your strategic plan is a direct statement of your priorities. It’s what you’re doing every day to become successful (whatever that means to you.) Whether you’re focused on community engagement, profitability, growth, or something else, a strategic plan lays out the exact steps to achieve your goals.
To wrap this all up: a business plan is important, especially if you need to think through your business idea before launching it or you need to convince someone else that you know what you’re doing. But it won’t propel you toward success. A strategic plan, carefully crafted and often updated, is what will help you define, map out, and reach your goals.
Cover image from Unsplash.
