I love cooking shows! People can be so imaginative with food recipes. While many of us are content with the traditional combination of peanut butter and chocolate, chefs and food enthusiasts are combining seemingly unrelated ingredients to yield culinary genius. Take the recent trend of cronuts, a croissant-donut hybrid, or bacon cinnamon rolls. It reminds me of one of my favorite quips: “It’s not an either/or world; it’s a both/and world.” I recently got asked the difference between a business plan and a strategic plan. The truth is that strategic plans and business plans are more alike than different and can be combined together to create social sector genius.
As we have discussed in past blogs, business planning and pitches are more popular in the social sector than ever before, but this does not mean that strategic plans are not equally needed. In fact, a strategic business plan is a nice hybrid between the two. As the graphic below suggests, they have very similar recipes.
The foundation of a strategic plan is vision, mission and values of an organization – all of which can be directly connected to an organization’s market, customer and fit (which are the fundamentals of any feasibility assessment). Both of these foundations serve as the “true north” for the organization, but they can and should be modified as the environment shifts.
The process between creating a strategic plan and a business plan are also remarkably similar. You start with an internal and external scan, or research, to gather insights on the best direction for the organization. Those insights become the basis for an organization’s strategy, which is value creation for a business and impact for a social sector organization. In both cases, value and impact must be coupled with sustainability through a strong business model or fundraising plan. Then, strategy is followed by execution, which can be set via goals, KPIs (key performance indicators) and an action plan, which are often tracked in a dashboard. A business plan takes execution to the next level of detail and dictates the resources needed to be successful, e.g., personnel, operations. Plans can take many forms, ranging from a shorter business model canvas or prospectus to a full-length business plan.
However, the outcome associated with each planning process is different. A strategic plan charts the long-term direction of an organization, while a business plan tests the feasibility of a business or organization and builds a roadmap for implementation.
Taken together, a business plan and strategic plan communicate the same thing – confidence in the future direction. So, the hybrid strategic business plan communicates not only your vision for the future, but also how you plan to get there. It combines hopes and dreams with reality. Isn’t that a recipe for the sector that we all want?
To make the process even easier, check out the latest version of our business planning template. We’d love to get your recipe for strategic plans and/or business plans and your opinion about their usefulness within the social sector.