The 5 Major Types of Business Plans: A Comprehensive Guide
Crafting a well-developed business plan is an essential step for any new startup or existing enterprise before launching operations or new initiatives. But not all business plans serve the same purposes. Depending on your specific goals and current stage of growth, several different types of business plans can be formulated. The five main formats include lean startup plans, operations plans, marketing plans, strategic plans, and feasibility studies/analysis.
Lean Startup Plans: Validating New Business Ideas
Lean startup plans take their name from the popular methodology for launching new ventures pioneered by entrepreneur Eric Ries. Lean startup approaches emphasize using limited resources to quickly test and iterate on business ideas or products through actual customer feedback and data.
Lean startup plans aim to validate whether a potential business concept or offering resonates with target users right from the beginning, rather than risking substantial capital upfront on an untested idea. These plans summarize the core customer problem being addressed, your proposed solution concept, key assumptions built into the model, and metrics for tracking traction. The focus is on creating rapid prototypes and minimum viable products to gather real market feedback from potential users, rather than perfecting a product in isolation.
Operations Plans: Managing Day-to-Day Tactics
If the lean startup plan validates the market potential for your proposed offering, the next priority is mapping out how day-to-day business operations and processes will actually function. Operations plans provide an in-depth blueprint for managing the required systems, workflows, staffing, equipment, and tactical details involved in physically producing and delivering your products or services.
Operations plans typically cover projected personnel and staffing needs, employee training procedures, equipment and tools required, facilities and infrastructure, inventory management systems, supply chain logistics, safety/security protocols, communication systems, key software platforms, and step-by-step procedures for your core production and service workflows. Having documented operations plans helps ensure real-world startup execution goes smoothly and efficiently across all the interconnected moving parts – giving guidance for hiring, resource allocation, process optimization, and productivity.
Marketing Plans: Expanding Customer Reach and Awareness
Once you have validated and built out your core product/service offering and business operations, the next priority is mapping out plans for reaching target customers and systematically growing sales. Marketing plans outline the specific strategies, programs, and tactical campaigns you will execute to increase market awareness and engagement among buyers.
Key sections in a marketing plan often include market research results, customer personas, brand positioning, pricing model, sales channels and distribution methods, lead generation funnels, sales promotion methods, content marketing approach, social media strategy, advertising and PR campaigns, partner programs, and budget allocations. Having a cohesive marketing plan defined keeps these customer acquisition initiatives focused and on track toward core business growth objectives.
Strategic Plans: Plotting Long-Term Goals and Objectives
While the previous plan types focus on launching and executing startup operations in the near-term, strategic plans take a higher-level view of long-term business goals, vision, and direction across a 3-5 year timeframe. Strategic plans define where you want the business to be in the future and how you will get there.
Typical sections in a strategic plan include the company mission statement, vision statement, target markets, core values, SWOT analysis, long-term goals, key performance indicators, strategic priorities and initiatives, execution roadmap, contingency planning, and financial projections. Completing this strategic visioning process brings alignment across the leadership team while charting a course for sustaining growth, competitive edge, innovation, and social impact.
Feasibility Studies: Analyzing Viability and Risks
Before diving fully into startup execution, entrepreneurial ventures should also consider completing feasibility studies evaluating the practical viability, risks, and likelihood of success for the proposed business model or initiative. These studies take a comprehensive look at the target market, competitive landscape, industry data, legal/regulatory issues, operations model, resource requirements, SWOT analysis, and other make-or-break factors.
Feasibility studies help ascertain if, where, when, and how you should launch your startup or new initiative based on careful analysis rather than hopes and assumptions. They provide vital data to identify potential weaknesses and make informed go or no-go decisions, increasing the chances of success.
Choosing the Right Business Plan Combination
Most startups and companies utilize a combination of these five business plan types at various stages – validating ideas through lean plans, building capabilities with operations and marketing plans, plotting strategy, and evaluating risks and feasibility. Determine where you currently stand to pick the 1-2 plan formats that fit your immediate startup needs, while keeping the bigger picture in mind. With the right mix of planning, your ventures are positioned for sustainable success.
Strategic Planning Widely Adopted
Strategic planning remain a widely used approach globally, especially among larger companies. In a Economist Intelligence Unit survey of executives, 46% said their firms undertake strategic planning annually. Another 23% conduct strategic planning every two to three years. Strategic plans enable long-term thinking and goal-setting as competition and disruption accelerate.
Financial Planning Sees Increased Adoption
More companies worldwide are embracing financial planning and analysis (FP&A) according to research by PwC. Their study found 46% of businesses saw increased investment in FP&A in 2019. Real-time financial planning and forecasting provides greater visibility into performance as markets fluctuate. Cloud computing makes advanced FP&A more accessible.
Business Continuity Planning Crucial
Business continuity and disaster recovery planning saw dramatic rise during COVID-19 crisis. According to Statista, business continuity planning adoption grew from 23% of companies in 2018 to over 60% in 2021. Enabling operational resilience is now higher priority after supply chain, health, and technology disruptions globally.
References:
http://doa.louisiana.gov/opb/faf/OPFormatWord_FY01MWLayout.pdf
http://www.caycon.com/downloads/Ten-Big-Questions.pdf
https://eiuperspectives.economist.com/strategy-leadership/strategic-planning-2020-and-beyond
https://www.pwc.com/gx/en/finance-function/finance-trends/financial-planning-analysis.html
https://www.statista.com/statistics/1238041/share-of-companies-with-business-continuity-strategy-worldwide/
