Page 161 - Finance for Non-Financial Managers

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Finance for Non-Financial Managers
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Business plan The generic name for a plan written for a
business. It will generally include a statement of the overall
objective of the plan, the period it covers, and the goals to be
achieved. How those ideas are expressed depends on the type of plan.
Strategic plan A type of business plan designed to define the overall
vision and mission of a business, its strategy and long-term objectives, and
some of the key details that might be important to the strategic reader. It
will typically be intended to drive the company’s strategy for several
years and will serve as the basis for the company’s operating plan.
Operating plan A detailed description of what the company will do
to pursue the objectives of its strategic plan for the next operating
period, usually one year. It will contain enough detail that the operating
managers of the company can use it to guide their daily and monthly
activities.
Financing plan A special version of a strategic plan written for the
express purpose of attracting outside financial resources to the com-
pany, usually intended for equity investors, but sometimes written for
lenders as well.This version will emphasize the amount of money
needed, how it will be used, and how the investors will receive a
return on their money.

port, and a call to action. In other words, its purpose usually
includes an emotional appeal of some kind. Therefore, the form
as well as the content should be aimed at capturing that support.
The purpose of a strategic plan is to guide the overall direc-
tion of an organization, to define its grand purpose, what it ulti-
mately wants to achieve, and the general strategies it will use to
get there. This might include the definition of its market and its
product categories and the ways in which it will change the lives
of the buyers in its intended market. It will also define the long-
range goals of the organization and provide a segue to the
shorter-term and more detailed activities that will be laid out in
the operational plans.
The strategic plan typically doesn’t contain a lot of details
about implementation. Rather, it talks in global terms about the
strategies the company will pursue, the benefits that will be
achieved when the implementation has been completed, and