What does it mean to have a plan? It comprises three components – strategic plan (which sets your strategy), financial plan (which sets your financial goals and performance) and operating plan (that details how the company will align its efforts to achieve the financial plan and the overall objectives of the company.

“It is important that your plan includes element of your strategy.” 

The strategic plan is about setting a direction for the organization and identifying a range of strategies to pursue so that the organization might achieve its long term goals. The strategic plan is a general guide for the management of the organization but does not stipulate the day-to-day tasks and activities involved in running the organization.

Your financial plan shows how your business idea and strategy translates into a business that is financially viable. It takes into account your projected revenue, expenses, cash and other financial needs. The financial plan comes to life in three financial statements:

• Income Statement. statement of your revenue and expenses.
• Cash Flow Projection/Statement. projection of the cash inflows and outflows and resulting cash needs of the business
• Balance Sheet. presentation of the net worth of the business by measuring the businesses assets, liabilities and associated “equity” in the business

Your Operating Plan presents highly detailed information specifically to direct people to perform the day-to-day tasks required in the running the organization. The purpose of the Operating Plan is to provide personnel with a clear picture of their tasks and responsibilities in line with the goals and objectives contained within the Strategic Plan and the Financial Plan.

Having your strategic plan to set your strategy, your financial plan to see how that translates your strategy into your financial performance and needs and your operating plan to drive your daily activities toward your goals, sets your organization up with the “plan” to succeed.