Strategy and planning are crucial for small businesses looking to grow and scale. Even though they’re similar, they serve different purposes and require different approaches. Let me break down the top 5 differences between strategy and planning.

Purpose and Focus

• Strategy: Strategy is the high-level approach and direction that guides a business towards its long-term goals. It focuses on defining growth’s “what” and “why”, such as market positioning, competitive advantage, and overall business objectives.

• Planning: Planning is about the “how” and “when.” It involves the detailed steps and actions required to implement the strategy. Planning is more concerned with the day-to-day and short-term aspects of business operations.

Timeframes

• Strategy: Typically, a strategic plan covers a longer timeframe, often 2+ years or more. It sets the overall vision and direction for the business in the foreseeable future.

• Planning: Planning usually covers a shorter time frame, such as the next year or quarter. It breaks down the strategic goals into specific, actionable steps for the immediate future.

Flexibility vs. Rigidity

• Strategy: Strategy allows for adaptability and flexibility. It acknowledges that circumstances can change, and the business needs to adjust its course to remain relevant and competitive.

• Planning: Planning tends to be more rigid and structured, as it outlines specific actions and timelines. Changes to the plan might be necessary but should be made cautiously to avoid disruptions.

Scope

• Strategy: Strategy encompasses a broader scope, considering factors like market analysis, competitive positioning, product development, and long-term financial goals, along with the current economic climate.

• Planning: Planning is narrower in scope and focuses on operational details, such as budgeting, resource allocation, marketing campaigns, and project management.

Decision-Making Level

• Strategy: Developing and deciding on the strategic direction of the business is typically the responsibility of senior management or the business owner. It involves high-level decision-making.

• Planning: Planning involves various levels of the organisation, including middle management and frontline staff. It deals with the tactical and operational aspects of the business.

Strategy and planning go hand in hand for small businesses trying to grow, but they have different purposes, timelines, scopes, and flexibility. A small business needs a strategy that guides its planning and helps it reach its growth goals.

If a small business wants to scale up, they must use strategy and planning. They go together and are essential for growth and success. Let me show you an example of why both strategy and planning are necessary.

Example – Product Diversification Strategy & Plan

Strategy: Consider a small manufacturing business that wants to scale by diversifying its product offerings. The strategic decision is to enter a new product line that fits the current core capabilities and market demand. The strategy might involve creating a niche product within the same industry to make use of existing distribution channels and customer relationships.

Planning: Following the strategic decision to diversify, they need planning to bring the new product to the market. This includes product design and development, manufacturing processes, quality control, supply chain management, and marketing strategies. A solid planning phase means the new product will fit the strategy and meet quality and cost standards.

Remember: Strategy sets the direction and provides the overarching framework for decision-making. It’s answering the “what” and the “why”. Whereas planning fills in all the details, such as roadmaps, timelines, and action steps required to execute the strategy effectively. It answers the “how” and “when”.

Without a clear strategy, a business may lack direction and purpose; without planning, it risks failing to execute the strategy effectively.

Feeling ready to kick some goals in 2024? Looking for a hand with your strategy or planning to make your business vision a reality? Then, head to the website and book a complimentary chat, where we’ll get to know you and your business.

We’ll discuss your goals, challenges, and aspirations. It’s your chance to learn how we work and see if our expertise aligns with your needs.

After our initial chat, you might like to consider a 1-hour paid strategy call. In this intensive session, we’ll collaborate with you to create a tailored 2024 strategy in the areas of your choice.