What is an Operational Business Plan?
An operational business plan is explaining how you will achieve your business goals. An operational plan discusses everything from management, employees, products or services, project management, and supply chain to HR.
The details of an operational plan business plan will be different for every business, depending on its type, size, and product.
A business operational plan should also show that you understand the manufacturing or sourcing of the product you are going to sell and you have already progressed in your business.
What Goes Into Operational Plan In Business Plan
An operational business plan is needed for the business as a whole and for each department separately too. For a small business, these three criteria can help develop an operational plan.
Set Goals and Build Operational Plan Around Goals
You have already set goals for your business; it is time to set goals for different departments or divisions.
The department goals will align with business goals and help the company achieve them.
After setting goals in an operational plan in business plan, you will break down the process of achieving them into small, measurable, tasks. You have heard about SMART goals; the SMART goals principle is applicable everywhere in the operations plan business plan.
The small and measurable tasks we mentioned before are also called key performance indicators (KPIs). A KPI shows a measurable value contributed towards achieving business goals.
Assign Responsibilities and Tasks
So far in your operational plan in a business plan, you have set your business goals and department goals. You have broken it down into SMART tasks and KPIs. It is time to assign these tasks and responsibilities to the right people.
A goal without a deadline is just a dream; set a timeline for each goal. Also, explain to your team if this is an ongoing or a single-use plan.
You can understand single-use plans in terms of a project and an ongoing project in terms of the tasks you do when you don’t have a project.
Define the resources you need for each goal. These resources may include spending on software, tools & equipment required to work, training, etc.
Determining resources requirement when writing an operational plan in business plan helps you plan well and increase the efficiency of the team.
How Do You Write Operational Plan For Business Plan?
You will have a top-notch operation plan in business plan when you write about these aspects.
- Prioritize Goals: Focus on important goals only. It will be hard to decide but you should direct your time and efforts to achieve the goals with the most impact.
- Set KPIs: KPIs are the small tasks that contribute toward achieving goals. KPIs measure the growth of your business.
- Discuss Manufacturing Process: If you are manufacturing your products, outline the manufacturing process. Discuss manufacturing facility, manufacturing capacity, material sourcing, factory to warehouse logistics, and warehouse to sale points logistics.
- Include Costs and Expenses: What are the expenses you will need to make to achieve these goals? Give a detailed breakdown of the costs and expenses required for each goal.
- Set Budgets: Set budgets for each goal. Fixing a budget will help you get creative within the resources and not overspend.
- Build a Hiring Plan: You will need to hire people regularly. Develop a hiring plan and define who you want to hire, what will be the hiring process, will be the salaries and benefits for the employee.
- Set Work Hours: Determine what will be your working hours. Will you go for the typical 9-5 or you will need employees in off hours for completing projects
- Determine Employee Location Requirements: Decide if you need an employee in the office or on the site. See if you can allow employees to work from home if the need arises.
Risk Management: In the operational plan in a business plan, Identify the risks you are facing and prepare a contingency plan when needed.
Set Quality Control Processes: Quality control is used to maintain and improve product quality. Assign quality control systems building and management to an employee or create a department for better management.
Develop Management Plans: Management plans are an overreaching framework for the company management, department management, project management, etc. See how many management plans you need to make for your business.
Set Timelines and Milestones: Milestones are the big achievements. Setting milestones and timelines will help your team understand what they need to achieve and how much time they can take for it.
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Operational Plan For Businesses With A Physical Product
When you are going to sell a physical product like shoes, clothing, tool, etc, you will need to plan the manufacturing or sourcing process.
Many businesses opt for manufacturing at their facilities while others may prefer OEM manufacturing. In both cases, you need to outline the process and establish policies.
Here are the parts of an operational plan in business plan for a business selling physical products.
Discuss how you will manufacture products for your business. If you have a manufacturing facility, explain the manufacturing capacity of your business.
If you are sourcing your product from a manufacturer, discusses who is the manufacturer or how you will select a manufacturer.
Industry Association Membership
Approach industry associations like chambers of commerce or organizations of the manufacturers for the same/similar products as you.
Getting into industry association memberships help you with networking, exploring new opportunities, understanding the market better, and preparing you for the long term.
A supply chain is important for every business selling a product.
A supply chain is a network between a manufacturer and a seller. It includes manufacturer, wholesaler, distributor, shipping, and fulfillment to the seller location.
Even when you are manufacturing products for your business, you will need to establish a different supply chain. You will need to build materials sourcing supply chain. You will also need to plan how the products will be shipped to the retail locations from your warehouse.
Explain your quality control process in detail when writing an operational plan in business plan.
A quality control process is aimed at maintaining or improving product quality. Quality control is set up with safety measures to make sure faulty products don’t end up with the customers.
Quality control processes are different for every business and largely depend on the product type.
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An operational plan outlines the day-to-day activities and processes required to run your business. It covers areas such as production, logistics, inventory management, facilities, staffing, and other operational aspects.
An operational plan should include details about your business’s physical location, equipment and technology, production processes, supply chain management, staffing requirements, and key operational milestones or targets.
Define the production or service delivery process in the operational plan by outlining the steps involved, the resources required, and the timelines for each stage. Include details about quality control measures and any necessary regulatory compliance.
Address potential operational challenges or risks in the plan by identifying them and providing strategies or contingency plans to mitigate them. This could include backup suppliers, emergency response protocols, or alternative production methods.
The operational plan demonstrates how your business will execute its strategies and deliver its products or services. It helps stakeholders understand the practical aspects of your business, ensuring that resources are allocated effectively and operations run smoothly.