These terms are often used interchangeably, but what is the difference between a business plan, a strategic plan and an Information Memorandum? Each of these documents can be very useful to business owners, depending on the objective they wish to achieve.
A business plan (BP) is the blue-print of your business. It is used to help you run your business, map out your business goals and how you intend to achieve them. A well thought-out BP is particularly important when you embark on a new venture, but its purpose does not end there. You can and should revise your BP as your business grows and matures, to reflect its changing needs.
A strategic plan (SP) is a type of BP, but note several key distinctions. It is used to help you determine, implement and manage the strategic direction of an existing business. It prioritizes the resources your business will need to build and maintain a sustainable competitive advantage and is therefore more long-term in nature. In contrast, a BP is more tactical in nature, focusing on the viability of a business opportunity and is therefore more short-term in nature.
An Information Memorandum (IM) is a legal document that is provided to potential investors to market a business to prospective buyers. It must present a comprehensive, accurate, and appealing view of the business so the investor is well-informed of the benefits and the risks involved if they choose to invest.
By Choong Ming Sien