Confused by Differences between Strategic Plan, Business Plan and Forecast
Lately I came across a few passionate entrepreneurs, bright business ideas, marvelous concept and do-able business model, but short of some funding to get started. I also came across 2 business owners, already in business, very good potential to grow, but lack funding too. After talking to them, I discovered they lack the tool to communicate their plans to potential investors, we call “Business Plan”.
Strategic Plan, Budget, Balanced Score Cards, and Forecasts, Do this —
Step 1 ) do a longer term 3-5 year Strategic Roadmap ( at most 2-slide ppt will do ), first, then
Step 2) do the 1st year Budget to quantify the strategic roadmap actions in year 1,
Step 3) then cascade the Budget downward to your Keymen via Balanced Score Cards to be properly explained to and signed off by them, together with financial incentives as carrots
Step 4) do Rolling Forecasts monthly thereafter to understand status achieved and actions to go in year 1.
Business Plan ( 5-year Strategic Plan + 1-year Budget ) is like the Flight Path to a Pilot, guiding him on direction, height and speed to take. Rolling Forecast is to enable the Pilot to re-adjust his direction, height and speed to either catch up or slow down to be on original Flight Path. Balanced Score Card is like mini milestones and actions of each team mate to follow in order for whole team to be on Path to target. Hope this little tip / sharing helps. However, it takes a bit of an art rather than science to do this with just the right impact. Overdose will kill creativity, too little will lose its meaningful. Key is Communication, and Constant Communication with your team.
The above tool kit is not difficult to master, but can bring you and your business to where you want.
Good Luck !
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