Creating An Operational Plan For Business

Creating An Operational Plan For Business – An Important Part of Your Business Plan:
The operational plan describes how your business will function, in as much detail as necessary, noting what steps already are complete and which must be accomplished. The operational plan should define the business owner’s understanding of the entire business process.

Planning and executing the operational plan depends on information from financial requirements and sales and marketing strategies and should include organizational resources such as people, processes, inventory, , and forecasting. The operational plan focuses on the physical necessities of the business such as buildings, storage, supplies, and materials and employees or suppliers who help manufacture your product or people who provide your service. Typically the operational or operations plan as it is sometimes called, comes before the financial plan and precedes the management plan.
The operational plan should explain how the product will be made or how customers will be served, detailed in a step-by-step process. If there are regulations governing your business or industry, they should be referenced here. A plan for maintaining current governance should be in place and listed in the operational plan. If there are safety organizations that oversee your business, will you become certified to avoid penalties or shut down? Here is where a plan should be outlined.
If your business plans on using suppliers or vendors, they should be named here, as well as the process for receiving their services or materials, and their terms. The cost and time frames and substitute suppliers also should be identified in the operational plan. Inventory needs also are described in the operational plan.
The first step in writing the operational plan is to use the information gathered above to outline the entire business process. Name what has already been done, what still needs to be accomplished, and which are ongoing processes. An actual outline might be beneficial, listing main tasks and sub-tasks.
Sections that should be included in your operational plan are:

  • General information, which contains hours of operation and any seasonal or holiday closures; buildings, including layouts, schematics and drawings, leases or ownership papers and land or building value; plans to expand or move; equipment, including what is already on hand, what is owned and its value, what equipment is leased or financed, and what needs to be obtained; materials required and the source; inventory structure; special requirements such as parking for employees or customers; zoning and other applicable laws such as those for environmental protection or safety. Include what is owned outright and how everything is insured. Include total number of employees according to category (hourly, salaried, union). If extensive information is available, you may wish to sub-categorize the general topics.
  • Special requirements such as drainage, water, ventilation, wheelchair ramps, special stations such as eye rinse, and what public utilities are utilized should be mentioned.
  • The next section covers the process, step by step, for all products. Mention how soon production will begin, and on what schedule(s). Time requirements and production processes should be listed in this section. Include how unforeseen issues will be dealt with. Include any potential issues but also opportunities (taken from the strengths, weaknesses, opportunities and threats review for the main business plan). Detail daily processes. As a guide, use key staff job descriptions. Interview some employees to get information that is unknown. Day to day activities typically create unpredictable or unforeseen scenarios that staff can experience.
  • Now discuss any required product testing or mockups that will be created for certain products and any industry compliance standards that make these tests necessary.
  • The next section should include any organizational memberships, in particular, if in , safety and environmental organizations or certifications (such as 9000; OSHA). Demonstrate knowledge of your industry regulations and standards and quality assurance planning to maintain compliance.
  • Outline the suppliers in the next section, along with details about their costs and time frames.
  • List products and their costs.
  • The last section should reiterate what accomplishments the business has made to date, and goals for the future, with time frames and methods of evaluating the progress. Include threats here (taken from the strengths, weaknesses, opportunities and threats review). How will these be resolved?

The result of your operational plan should be a workable report that serves as an internal reference, guide for procedures manuals, and as a tool for presentations to potential clients, governmental organizations, investors, or potential buyers in the future.