Types of plan
There are many types of plan. They include:
- financial
- short term
- long term
- strategic
- business.
Financial plans
Financial plans are usually called budgets. Budgets include:
Cash budgets. These plan the flow of money (cash) into and out of an organisation. Cash flow is particularly important for small businesses that can’t afford overdraft fees or to go into debt.
Capital budgets. These plan the purchase or sale of assets, such as cars, equipment and buildings.
Income or revenue budgets. These plan how much money will be coming into the organisation.
Expenditure budgets. These plan how much the business can spend each year, month, or even each week
Short- and long-term plans
Plans can be short or long term. Short-term plans are usually annual or shorter, while long-term plans are usually for between 3 and 10 years, depending on the organisation or industry. Usually a long-term plan is created first and then converted into one or more short-term ones.
example
One example of a short-term plan is the performance agreement between a manager and each staff member. This sets out individual goals for the coming year.
Strategic plans
Strategic plans give the long-term picture and try to translate the vision into goals. These usually try to explain how long-term goals are going to be achieved.
What should be in a strategic plan?
Strategic plans should include the vision, strategy, goals and objectives, and information about the resources and organisation needed to achieve them. This makes them practical and helps the development of practical business plans.
example
The strategic plan for a corner dairy might start with its mission (‘supply groceries to local residents’) and vision (‘to be the best in town’) then the strategy (‘to supply all items by joining a cooperative buying system’), and current goals and objectives (‘always have the goods or products customers ask for’). Finally, the plan should identify how the goals might be achieved, for example, by telling suppliers what customers want and ensuring these products are supplied.
Are strategic plans just for managers?
No! For staff, strategic plans are helpful because they show where the organisation as a whole wants to go and how it plans to get there.
Business plans
Business plans are usually annual or short term. While a strategic plan mentions tasks, a business plan goes into far more detail about these tasks and targets, including when things would be done, by whom and with what resources.
Sometimes business plans are split into tactical and operational plans.
Operational plans are detailed plans about the day-to-day company functions.
Tactical plans are usually about the targets and objectives at level above the day-to-day running of the organisation.
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