Highlights is the monthly newsletter of the npEnterprise Forum. This edition presents selections from a recent thread on on the difference between strategic plans and business plans.

STRATEGIC PLANS vs BUSINESS PLANS

Here are highlights from a recent discussion contrasting strategic vs. business plans.

(1) From JoAnne O'Brien-Levin
Here's a web-based article that makes an interesting distinction. I hope it's helpful: http://www.planning.org/consultant/businessplan.html

(2) From Deborah Hostetter

The distinction made in the article JoAnne offered is quite valid. There is a very big difference between strategic plans and business plans, although many organizations create strategic plans/objectives then shove them in a drawer never to be seen again. Those businesses do not succeed as well as they could (or not at all). When the business plan is clearly tied to the strategic objectives, and measured, the organization has a good opportunity to prosper from start-up, or turn around if needed.

Our NFP just celebrated 50 years, and could have been a truly healthy organization had there been a strategic plan upon which to base the daily, tactical business decisions. We had neither until we created one four years ago when I joined the company, and measure ourselves against it while updating for new market conditions. We are about to redo the business plan for the coming fiscal year. When those who are managing the organization don't have a clear roadmap, the chances of winning in this economy are much slimmer.

JoAnne, thank you for finding this very succinct article and sharing with us.

(3) From Carter McNamara
The best distinction I ever encountered about the difference between a strategic plan and business plan came from one of the founders of this list, Andy Horsnell.

A business plan is similar to, or the same as, a strategic plan IF the business plan is focused on the entire organization.

However, business plans have great value when focused on EACH of the products/programs, too.

Thus, there could an overall strategic plan for the entire organization, but a business plan for each of its products/programs.

Each product/program could have very different collaborators, competitors, pricing, packging, etc.

Thus, having a business plan for each product/program is a very good idea, rather than lumping all products/programs into the same business plan.

(4) From Norris Krueger

Typically, a business plan is for a new business or division, while a strategic plan could include something new, but typically it's for longer-range planning for an existing entity. However, I've seen the terms used interchangeably.

Either way, though, remember that here "plan" is a verb.

What might be worth looking at is the notion of a feasibility study. Many organizations may be at a sufficiently early stage that what they *really* need to assess is whether (a) their basic idea/technology actually works ["proof of concept"], (b) is there actually a market/customer base, and perhaps (c) can those be turned into a viable enterprise?

Anyway, before you go to all the bother of a startup business plan, they need to do a fair bit of homework (e.g., an in-depth industry analysis so they fully understand the space they're entering). I'm shocked by how few even draft a preliminary logic model. But if they assess the various external environment and rigorously analyze the others in their space, they will have a pretty good idea of what it will take to deliver significant value cost-effectively. A good business plan is but an artifact of great business planning.

For a strategic plan, the same is true. However, you have some baselines to work from since you have existing operations. That's good in that you have probably more intel than you realize. That's bad in that you also have a whole bunch of strategic assumptions that need not be true (or at least are outdated).

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