Entrepreneurship

Strategy vs. Business models vs. Business plans

Now that we know about strategies (how we’re going to compete externally) and business models (the internal logic of a business), we now need to know about business plans.  What are they? How are they different? Why do you need one?

A business plan is the operational details of the business for a specific time period. Typically strategies and models are longer term, while a business plan is shorter term. A business plan consists of the specific actions and activities that will be undertaken to achieve financial and strategic objectives. It is usually bound by timelines and by financial targets. It is used to measure progress.  A business plan is concrete.

A business plan covers both internal and external elements of the business.  The business plan is the nitty-gritty stuff that outlines how you are going to implement your strategies and business model. Essentially, the business plan ties together your strategic choices and the operational/economic logic of your business.

Business plans are important because they create an executional path.  They specify the details of how you plan to achieve your goals and strategies. They create accountability and allow you to measure your progress. They ensure that key projects don’t “slip”. They are an important management tool for a business.  The also put your plans on paper , which can help you identify any mistaken logic or operational issues with your proposed plan.  Business plans also help communicate the tasks that must be accomplished to staff, and sets priorities for them.

You can’t keep your business plan in your head. It’s important to more than your banker.

Advertisements

2 replies »

  1. Reblogged this on olleh4u and commented:
    While strategy and business model is for longer term, business plan is for shorter term. Business plan is to specify the details of how you plan to achieve your goals and strategies. If you change your business model, you will also change your business plan. Even though you’re not required to change all of the plan.

    For more information about the differences between business model and business plan, you can visit this website http://smallbusiness.chron.com/differences-between-business-plan-business-model-4744.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s