- Business Strategy
- Why is a Strategic Plan Important?
By Erica Olsen
Simply put, a strategic plan is the formalized road map that describes how your company executes the chosen strategy. A plan spells out where an organization is going over the next year or more and how it’s going to get there. Typically, the plan is organization-wide or focused on a major function, such as a division or a department.
A strategic plan is a management tool that serves the purpose of helping an organization do a better job, because a plan focuses the energy, resources, and time of everyone in the organization in the same direction.
If you’re thinking, “Hey, I’ve got this great book on business plans, so I’ll just use that to form my strategic plan,” be aware that strategic plans and business plans aren’t the same concepts.
A strategic plan is a management tool that C-level managers need to master and is for established businesses and business owners who are serious about growth. It also does the following:
Helps build your competitive advantage
Communicates your strategy to staff
Prioritizes your financial needs
Provides focus and direction to move from plan to action
A business plan, on the other hand, is a planning tool for new businesses, projects, or entrepreneurs who are serious about starting a business. A business plan
Helps define the purpose of your business
Helps plan human resources and operational needs
Is critical if you’re seeking funding
Assesses business opportunities
Provides structure to ideas