To start a business, it’s important to first have a business plan. This is a formal written document that has details about the vision, direction and overall goals of the business. But simply having a business plan will not guarantee growth. The organization also needs an operational plan that translates the business plan into the everyday workflow of the business.
An operational plan is a specific outline for how your business will accomplish a key goal.
It describes the workflow from early input to end results including:
- Resources required
- Deadlines for each step of the process
- Implementation milestones
- Who will be responsible for accomplishing each step
Such a plan helps a company meet its long-term goals by mapping out the steps it will take to get there. An operational plan template is an easy way to start.
Related: Do Small Businesses Need Strategic Planning? <https://in.godaddy.com/blog/do-small-businesses-need-strategic-planning>
5 sections to include in your operational plan
An operational plan is the perfect tool for expanding your business. Here is what to include in your plan.
- Financial resources.
- Human resources.
- A risk assessment.
- Key performance indicators (KPIs).
- Operational timelines.
Now let’s examine each component of an operational plan in detail.
1. Financial resources
Financial factors must be considered while creating an operational plan. Whatever your business goals are, most of the operating stages require funds.
For instance, funds are needed to:
- Start a project
- Pay salaries
- Purchase equipment
- Take care of promotional and administration costs
The first step in creating an operational plan is to make sure you calculate all possible costs involved in completing the project.
2. Human resources
The functioning of any business will be carried out by the people working in it. Hence, it’s important to hire the right people, especially for management and executive levels. They are the ones who will set up guidelines, checkpoints, activities and timelines for the staff who will actually do the work.
As such, your operational plan must include the total human resource costs involved in accomplishing the goal. This should include any skilled workers you expect to hire, along with training costs to bring them on board.
3. A risk assessment
Assessing future risks and listing ways to address unexpected obstacles also need to be considered.
Anticipating risks is often overlooked but should be included in any operational plan.
It’s vital to understand and be ready to tackle obstacles that might arise. Analyse the potential risks and rank them according to the likelihood of their occurrence. List ways to handle each one, including costs. Make the assessment of these risks thorough and easy to act on.
4. Key performance indicators (KPIs)
Key Performance Indicators (KPIs) will play an important role in the success of the operational plan. These are specific milestones that help individuals and teams measure their progress toward achieving a given goal.
For example, a KPI for a holiday rental agency might be tied to how many bookings it receives per month.
KPIs can also be set for sales teams who have been given a goal to reach a certain sales threshold by the end of the year.
In this case, weekly sales meetings or calls might be a strong indicator of how well sales teams are progressing toward their goals. The company could simply use their call history to calculate how many calls/meetings it takes to complete a sale. This is a good way to set monthly new call/meeting KPIs that will lead to goal satisfaction at the end of the year.
Note that the most effective KPIs show an organization what to expect in the future, enabling it to adjust its strategy for better results.
5. Operational timelines
The success of any plan depends on deadlines. These are set time periods during which the work should be completed to meet business goals. Often a goal has multiple stages, each requiring its own deadline.
The purpose of setting a timeline for each step in the operational plan is to give deadline to the tasks. This helps the people working in the organization stay focused and avoid disruption of dependent business operations.
For instance, in a publications business, each writer has a story deadline. If he/she misses that deadline, the steps that follow such as editing and publishing get derailed and ultimately the publication date is delayed. The same holds true in many businesses, where one department cannot begin work until another has finished theirs.
Not just for big businesses
An operational plan is helpful for all kinds of business, as it helps even very small shops accomplish their business goals. By listing the right steps required, even a simple operational plan can help a small business stay focused and grow little by little.
Here’s to growth!
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