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However, a business plan is used to present the entrepreneur’s ideas to a bank.Another way to grasp the difference is by understanding the difference in ‘scale’ between a strategic plan and a business plan.
If you were to sit down with a potential partner, investor or banker, this document contains the answers to the key questions they are bound to ask.
It not only accurately summarizes what your business is all about, but why it’s a viable proposition.
What’s compelling and different about what you’re offering compared to the competition? Here’s where you outline your detailed financial projections, including growth expectations over the next couple of years.
Lenders and investors want to know they’re going to get paid back or make a return.
A business plan is used to initially start a business, obtain funding, or direct operations. A strategic plan generally covers a period of 3 to 5 years, whereas a business plan is normally no more than one year.
A strategic plan is for established businesses, organizations and business owners that are serious about growing their organization.If much of what we just covered sounds like it belongs in a strategic plan as well, you’re right.However, a strategic plan is different in that it sets out the detailed roadmap you will follow in the next few years to achieve your objectives.Whereas a business plan could be for new businesses and entrepreneurs who are startups.A strategic plan is used to provide focus, direction and action in order to move the organization from where they are now to where they want to go.Whereas a business plan is used to assess the viability of a business opportunity, and is more tactical in nature.A strategic plan is used to communicate the direction of the organization to the staff and stakeholders.The business plan and the strategic plan are both essential planning tools for your business.Where one may provide more value than the other depends on your stage of growth and what you’re trying to achieve.A complete business plan typically includes three key parts.This includes a specific description of the goods or services you propose to offer, your target market and your unique selling proposition to customers. This is your organizational structure, HR requirements to staff your team and your needs in terms of space, equipment and distribution.