What is the Difference Between a Business Plan, a Strategic Plan and an Operating Plan?

Planning is an important and necessary function in businesses and organizations. The ability to implement- execute- track- adjust and execute again on a well-developed plan distinguishes those that are successful. Tracking and adjusting to changing business conditions is often what leads to achieving plan goals.


Some business people use the terms strategic plans and business plans interchangeably and while there are common elements in both there are also distinct differences. For the sake of clarity, we make the distinction between the types of “plans” an organization can have.

Business Plan

Start-ups and existing organizations seeking capital or partners need a Business plan. Its function is to describe their purpose, viability and profitability in a way that will attract the support it is looking for. A business plan is produced only once or on an as-needed basis. Unlike strategic and operating plans, a business plan is for limited public consumption and is essentially a marketing piece written to attract the attention of specific audiences. The success criteria for a Business Plan is getting the required financial and/or human capital you seek.

Strategic Plan

A strategic plan is, in most cases, a senior management or board driven initiative that provides focus, direction and actions to move an organization from a current state to a future state. Strategic plans are future oriented with outlooks of 3 to 5 years. It is a big picture view of what the organization will be in the future.  It is built on internal and external data that helps to objectively identify and define the organizations’ strengths, weaknesses opportunities and threats – a SWOT Analysis.


A strategic plan provides a road map for an organization to maintain and increase its strengths, minimize its weaknesses so that it can take advantage of opportunities and avoid threats. Carefully selected key performance indicators (KPIs) are necessary to ensure progress toward the organization’s desired future state. A strategic plan serves as a benchmark that the organization can use to build on and adopt for subsequent planning purposes. 

Operating Plan

An operating plan outlines specific tactics an organization will focus on for the upcoming year. It provides the focus, direction and tactics to move the organization to achieve daily, weekly and monthly goals that support and execute the strategic plan. Like a strategic plan, an operating plan is primarily for internal use only not to be shared with the public.


Middle management and staff are responsible for implementing the Operations plan. Managers and supervisors are responsible for allocating the duties and functions needed to carry out day to day operations.


Operating plans are short term, usually for one year. Operating plans help in running the day-to-day activities as efficiently as possible. It ensures that you do what needs to be done to achieve the tactical objectives of the business. The annual operating plan must support, execute and deliver on the goals and objectives detailed in the strategic plan.


Strategic and operating plans are designed to run a business, while a business plan is designed to describe and promote a business.

A Plan’s Value

Strategic and operating plans are not written in stone. Things will happen that require course corrections. New opportunities come up, expected results are not met. However, this does not mean that these carefully built plans should be shelved whenever the unexpected occurs. In fact, this is when a plan’s value becomes evident as a tool to evaluate new opportunities. A plan represents a set of choices an organization has made. It is as much about what an organization will not do as about what it will do. So, when a new choice comes up, the organization can use the plan as a filter for comparing new opportunities with planned opportunities.


Best practice strategic and operating plans have a laser focus on delivering the result measured by key performance indicators. Companies and organizations that find it difficult to determine if they are getting an appropriate return on their planned investments (ROI) should establish KPI’s if they don’t have them or reassess their KPI’s if they do. The effectiveness of your planning will be severely compromised if you neglect to monitor and adjusting tactics during the plan period.

Illustrate the differences between plans

What are your thoughts on business plans, strategic plans and operating plans? What other kinds of information should these plans include, how can they be improved? We look forward to reading your feedback and perspectives, via comments below, or let’s connect on LinkedIn for further discussion.