Between a business plan vs a marketing plan, which is more important to your small company? Here is a detail comparison and difference between a business plan and marketing plan.
The purpose of every business is to make profit, and for that profit to start rolling in early enough, certain plans and processes have to be put in place. No business succeeds without planning and research, and it is the act of carrying out that research that gave birth to business plans and marketing plans.
Entrepreneurs are advised to create detailed business and marketing plans when starting up a new business in order to help their businesses along the road to sustainability and profitability. Business plan and marketing plan are similar even as they are different, but to enable us explore the similarities and differences of them both, let us first see what they mean.
What is a Business Plan?
A business plan is a formal statement of business goals, reasons the goals are attainable, and plans for reaching the said goals. It summarizes the operational and financial objectives of a business, and it contains detailed plans and budgets showing how those objectives are to be realized.
A complete business plan is bound to have several other components like executive summary, company description, products/services, market analysis, strategy and implementation, organization and management team, financial plan and projections.
A business plan is mostly written when an entrepreneur is seeking financial assistance from lenders or investors, because it is the only document that provides lenders with necessary details to determine if the business is or would be viable, financially sound and able to repay the loan.
Not only does it help to develop competitive strategies, the business plan can determine if the business’ actual activity matches the forecasted plans. In fact, a business plan contains the big picture about your business and it cannot be done without.
What is Marketing Plan?
A marketing plan is a comprehensive document or blueprint that outlines a business’ advertising and marketing efforts. In layman’s lingo, a marketing plan is basically plans you have made on how to sell your product/service. It describes activities that accomplish specific marketing objectives within a set time frame.
According to studies, the typical marketing plan contains four factors which are:
These are known as 4Ps. The Ps help you to describe what your product is, how much would it would be sold, how to make your target customers aware of your product/service, make them like it enough to buy it, and where your product/service would be distributed.
It explains how the business generates customers through advertisements, trade show participation and new referrals. By explaining how a business will overcome competitive challenges from other companies, the marketing plan is regarded as a key section within the business plan and requires detailed industry research and consideration.
A complete marketing plan is a separate, comprehensive document that goes into more details about objectives, goals and tactics. This document guides a company’s marketing, sales and advertising departments on how to implement effective marketing efforts.
Business Plan vs Marketing Plan – What’s the Difference?
Though business plan and marketing plan have certain similarities, they are different in their own right based on the roles they play in the advancement of a business. Business plan and marketing plan differ from each other in the following ways;
1. A business plan is drawn up to enable a business identify its goals and missions, while the marketing plan explains how the business will achieve, if not exceed, those goals and missions.
2. The business plan provides a wide overview of the business which includes information on staff, operations, location, marketing and financial aspects, as well as clearly outlined missions and goals; while the marketing plan identifies the business’ price points, promotional strategies, target markets and competition as well as how to use this to achieve the company’s mission and goals.
3. Cash flow is vital for a business plan, but not usually included in a marketing plan. Marketing plan focuses on getting the cash while business plan focuses on how to utilize the cash to achieve business goals.
4. Business plan is basically written for key executives within the company and external members of the financial community.
It is mostly used to target potential investors, lenders, stockholders and accountants in order to generate the funds that would provide working capital for the business; while the contents of a marketing plan are aimed at consumers and clients and it is usually shared only with those responsible for marketing, sales and advertising efforts.
5. Marketing plan can be used to run a business effectively without a business plan. This is mostly noticed in small businesses that are able to provide their own startup capital. A lot of small businesses carry out marketing plans rather than business plans because their job or their attention or their focus is on getting paying customers, not on the whole business.
6. A business plan is written for an audience to get them to buy into a concept, while a marketing plan is written for the staff or team members in order to execute the day-to-day actions which must be met in order to achieve the larger business goals or corporate vision.
In conclusion, for every business that seeks to be successful, the business plan and marketing plan are both essential aspects. These plans not only help businesses organize their operations, but it also helps them benchmark their success or failure. Without proper marketing efforts, the business model will fail; conversely without a well-researched business plan, no amount of marketing will help the business.