How to Develop an Operational Plan for Your Business Plan

Crafting an Effective Operational Plan for Your Business Plan

Learn how to develop a comprehensive operational plan for your business plan. Discover key strategies, templates, and examples to streamline your operations and ensure business success.

As outlined in The Balance article titled "How To Craft the Operations Plan Section in Your Business Plan," the operations plan segment within your business blueprint elucidates the tangible requirements essential for the functioning of your enterprise. This encompasses details about your physical establishment, facilities, and equipment. Depending on the nature of your business, this section may additionally encompass specifics regarding inventory needs, suppliers, and a comprehensive portrayal of the manufacturing process.


Crafting Your Business's Operational Plan

Understanding how to develop an operational plan is paramount for business prosperity. This comprehensive guide delves into the significance of operational planning, elucidating its pivotal role in streamlining processes, enhancing efficiency, and achieving strategic objectives. By mastering operational planning, businesses can optimize resource allocation, mitigate risks, and adapt swiftly to market dynamics. Gain insights into crafting a robust operational plan that aligns with your organization's goals and fosters sustainable growth. Equip yourself with the essential skills to navigate complexities, drive performance, and stay ahead in today's competitive landscape. Elevate your business's potential and maximize success through effective operational planning strategies.



How to develop an operational plan

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Written by: Malose Makgeta

MBA with 20+ years experience in SME development and funding. LinkedIn Profile


Operational Planning Made Easy: Lessons from McDonald's, War Dogs and Moneyball


CONTEXT

Business plan development is the process of creating a business strategy and plan to help a business implement its vision and achieve its goals over time. The primary goal of business plan development is to create a strategy for moving a business from its current state to its desired state through a series of business actions. The skills programme provides entrepreneurs and business managers with a platform and tools for business strategic planning.


Description

An operational plan outlines an organisations key objectives and goals, as well as how to achieve them. It is a well-written document that ensures team members understand their responsibilities and what needs to be done. It serves as the foundation for an organisations day-to-day operations. An operational plan is typically for one year.

Purpose

The purpose of the module is to assist participants to be able to develop an operational plan that outlines the activities and goals that the organisation will pursue in order to achieve the strategic plans goals and objectives. Be able to create and implement operational plans, identify operational resources, and ensure project or business operational compliance. Upon successfully completing the module,  delegates should be able to integrate the module when creating a business plan.

Rational

After completing this section of your business plan, you will not only have a detailed operations plan to show your readers, but you will also have a handy list of what needs to be done next to make your business a reality. Writing this document allows you to turn your business ideas into a clear checklist that you can refer to. Use the list as you cross items off to explain your vision to investors, partners, and others within your organisation.

Key Lessons



Develop an Operational Plan for Your Business Plan

Business Plan Essentials: Operational Goals and Strategie from McDonald's, War Dogs and Moneyball

Ray Kroc: The Visionary Orchestrator

Ray Kroc, the visionary behind McDonald's, demonstrated a meticulous approach to operational planning. His keen understanding of the franchise model allowed for standardised processes, ensuring consistency across all McDonald's outlets. Ray's focus on operational efficiency was not just about immediate gains but laid the foundation for the global success of the brand. His ability to scale the business through careful planning and strategic partnerships set a benchmark for future entrepreneurs.

Ephraim Diveroli: The Risk-Taking Opportunist

Ephraim Diveroli, portrayed in War Dogs, approached operational planning with a risk-taking mindset. As an arms dealer, Ephraim's planning often involved navigating legal and ethical gray areas. His ability to exploit loopholes and seize opportunities, while financially lucrative in the short term, ultimately led to operational challenges. Ephraim's entrepreneurial spirit was marked by agility, but his lack of adherence to ethical standards impacted the sustainability of his ventures.

Billy Beane: The Data-Driven Game-Changer

In Moneyball, Billy Beane showcased an innovative approach to operational planning in the realm of baseball. His reliance on data and analytics revolutionised team management. Billy's emphasis on statistical analysis enabled him to make informed decisions about player recruitment, challenging conventional norms. His operational planning was marked by a commitment to efficiency and a willingness to challenge traditional practices in the pursuit of strategic advantage.

What is an Operational Plan

An operational plan is a detailed document that outlines how an organisation or business will achieve its strategic objectives and goals on a day-to-day basis. It provides a roadmap for implementing the strategies and tactics necessary to fulfill the organisation's mission and deliver its products or services.

The operational plan:

Operational planning is the process of mapping out strategic goals and objectives to technical goals and objectives[clarification needed]. It explains how, or what portion of, a strategic plan will be implemented during a given operational period, in the case of commercial application, a fiscal year or another given budgetary term. It also outlines milestones and conditions for success. An operational plan serves as the foundation and justification for an annual operating budget request. As a result, a five-year strategic plan would typically need five operational plans supported by five operating budgets.

The most important reason operational plans are critical to business success is that they assist employees in understanding the business's goals. It also works to achieve them by taking the necessary and actionable steps to assist the business's success. When well-structured and detailed, an operational plan can help to ensure that a business stays on track, whether for a single project or for a set period of time.

The operational plan typically includes information on various aspects of the organisation's operations, such as:

An effective operational plan provides a roadmap for the organisation, aligns the efforts of different teams or departments, and ensures that everyone is working towards the same objectives. It helps in coordinating activities, optimising resource allocation, and managing risks and challenges that may arise during the implementation process.

By following the operational plan, organisations can enhance their efficiency, productivity, and overall performance, leading to the successful achievement of their strategic goals.

Difference between a Business Plan and Operational Plan

While both a business plan and an operational plan are important documents for a business, they serve different purposes and focus on different aspects. Here are the key differences between a business plan and an operational plan:

Business Plan - A business plan is a strategic document that outlines the overall goals, objectives, and strategies of a business. It provides a comprehensive overview of the business, its target market, products or services, marketing and sales strategies, financial projections, and funding requirements. The primary purpose of a business plan is to guide the business's long-term vision, attract investors or lenders, and outline the path to achieve success. It typically covers a period of several years and helps establish the overall direction and viability of the business.

Operational Plan - An operational plan, on the other hand, focuses on the day-to-day operations of a business. It outlines the specific actions, processes, and resources required to implement the strategies and objectives defined in the business plan. An operational plan includes details about the organisational structure, responsibilities of key personnel, production or service delivery processes, inventory management, marketing campaigns, customer service procedures, and other operational aspects. The primary purpose of an operational plan is to ensure the efficient and effective execution of the business's activities to achieve its short-term goals. It is typically more detailed and provides specific instructions and guidelines for the operational teams within the business.

Main Differences

In summary, a business plan sets the strategic direction and long-term vision of a business, while an operational plan details the specific actions and processes needed for day-to-day operations and achieving short-term goals. Both plans are essential for a business's success, addressing different aspects of its operations and providing guidance at different levels of the organisation.

It is also crucial to distinguish between an "operational plan" and a "strategic plan." The strategic plan focuses on establishing the organisation's direction, formulating goals and objectives, and outlining a variety of strategies to pursue in order to achieve those goals. Serving as a broad framework, the strategic plan provides general guidance for managing the organisation based on the priorities and goals identified by stakeholders.

Crafting an Operational Plan: Lessons from McDonald's Journey

Picture this: a world where fast food reigns supreme, but it all began with a humble burger stand. Ray Kroc, a milkshake machine salesman, stumbled upon the McDonald brothers and their innovative Speedee Service System. Intrigued, he saw potential beyond the ordinary. Now, let's spice up our lesson on developing an operational plan by unraveling the quirks and challenges of this iconic trio.

Imagine the early days of McDonald's, where the visionary Ray Kroc and the innovative McDonald brothers embarked on a journey that would redefine fast-food forever. This story isn't just about burgers and fries; it's a narrative of operational excellence and overcoming challenges. Let's delve into the lessons we can extract from their experiences as we explore the art of developing a robust operational plan.

In the world of fast food, even the mighty have vulnerabilities. Picture Ray Kroc's relentless pursuit mixed with the McDonald brothers' meticulousness – vulnerabilities that, in hindsight, became their strengths. Let's have a lighthearted moment and acknowledge that even the most successful ventures have their quirks.

Ever wonder what challenges the McDonald brothers and Ray Kroc faced in shaping their empire? Picture this: a fledgling business in the era of drive-ins and sit-down diners. They grappled with the structure of their enterprise, constantly questioning the financial projections. Now, let's sauté these challenges and serve them as lessons for our entrepreneurial feast.

Now, envision the early days of McDonald's – a stage where business structure and financial projections were pivotal. The challenges of establishing a franchise model and setting realistic goals were as real then as they are today. We're about to unfold the pages of their story and draw parallels to entrepreneurship in the modern era.

Entrepreneurs, much like our McDonald's trio, face unexpected hurdles. The importance of preparing for unforeseen circumstances cannot be overstated. As we delve into their story, let's connect it to our readers' thoughts and experiences. Acknowledge the challenges they may be facing, assure them they're not alone, and sprinkle in relatable anecdotes of common struggles in entrepreneurship.

Entrepreneurs, like Ray, the McDonald brothers, and perhaps you, face unforeseen circumstances. It's essential to connect the story to your own experiences, asking yourself how you'd tackle such situations. We all share common struggles in entrepreneurship, and it's comforting to know that even the most iconic figures faced challenges akin to our own.

Now, let's extract practical tips from the McDonald's saga to develop a robust operational plan. Explore options for restructuring business, understand the nuances of different business structures, and set realistic financial goals. As we munch on these nuggets of wisdom, remember to recap key takeaways, encourage with an optimistic tone, and highlight the progress made by those who faced financial distress and emerged stronger. It's time to end our lesson with a side of encouragement and a sprinkle of reflection. Bon appétit, budding entrepreneurs!

Drawing from the McDonald's narrative, consider restructuring your business strategies as they once did with business. Learn from their journey and explore options for achieving operational excellence. Recap key points, maintain an optimistic tone, and encourage reflection on your personal goals. Remember, progress is born from challenges, and with the right operational plan, you too can emerge stronger.

Business Plan Development: Mastering the Operational Plan

An operational plan is vital for the success and growth of a business. It provides a clear and structured framework for effectively managing day-to-day operations and achieving strategic objectives. Here are some reasons why an operational plan is important for a business:

  1. Goal Alignment: An operational plan helps align the activities and efforts of different departments and teams with the overall strategic goals of the business. It ensures that everyone is working towards a common objective, enhancing coordination and collaboration within the organisation.
  2. Resource Optimisation: By detailing the resources required for each activity, an operational plan helps in optimising the allocation of resources, including personnel, finances, and equipment. It enables businesses to allocate resources efficiently, minimising waste and maximising productivity.
  3. Risk Management: An operational plan identifies potential risks and challenges that may arise during the implementation of activities. By proactively assessing risks and developing mitigation strategies, businesses can minimise the impact of disruptions and uncertainties, ensuring continuity and resilience.
  4. Performance Monitoring: The operational plan includes key performance indicators (KPIs) that enable businesses to track their progress and measure performance. Regular monitoring allows businesses to identify areas of improvement, make informed decisions, and take corrective actions when necessary.
  5. Adaptability: Business environments are dynamic, and market conditions can change rapidly. An operational plan provides a framework that allows businesses to adapt and respond to changing circumstances. It enables them to adjust strategies, reallocate resources, and seize new opportunities, ensuring agility and competitiveness.
  6. Communication and Accountability: An operational plan serves as a communication tool within the organisation, clearly defining roles, responsibilities, and expectations for employees. It promotes accountability and clarity, reducing confusion and enhancing productivity.
  7. Growth and Expansion: An operational plan supports business growth and expansion by providing a roadmap for scaling operations. It helps businesses identify areas where additional resources or adjustments are needed, enabling them to expand their reach and capture new markets effectively.

Overall, an operational plan provides businesses with a strategic framework for effective management, optimisation of resources, risk mitigation, performance monitoring, adaptability, and growth. It enables businesses to navigate challenges, seize opportunities, and achieve long-term success.

Developing an Operational Plan: A Moneyball Lesson on Partnership

In the fast-paced world of entrepreneurship, let's dive into the Moneyball story—a tale not just about baseball but about the formidable partnership of Billy Beane and Peter Brand. Picture this: two underdogs challenging the norm in a traditional industry. Now, let's have a little fun and poke some good-natured humor at their characters—Billy, the skeptical veteran, and Peter, the quiet analytics genius. Despite their differences, these characters share a vulnerability that resonates with every entrepreneur's journey.

Now, let's shift our focus to the challenges these entrepreneurs face, drawing parallels to your own business context. Whether you're establishing your business structure or fine-tuning financial projections, we've all been there. Billy and Peter, in the nascent stages of transforming the Oakland Athletics, navigated through uncertainties similar to those faced by budding entrepreneurs. Reflect on your stage of business—where do you stand in terms of structure, and how realistic are your financial goals?

In the entrepreneurial journey, unexpected challenges are the norm. Acknowledge these challenges and understand that you're not alone. Just like Billy and Peter faced unforeseen circumstances in the baseball world, you, too, might encounter unexpected hurdles. Relate their story to your experiences, ponder the questions it raises, and recognise the shared struggles of entrepreneurship. Let's laugh at the irony of life's curveballs and face them head-on.

Now, let's glean insights from the Moneyball story to develop an operational plan. Explore options for restructuring business, just as Billy and Peter restructured the conventional approach to baseball. Summarize key points, emphasising the importance of realistic goals. End on an encouraging note, motivating professionals to take the leap. Maintain an optimistic tone, showcasing the progress made by those who faced financial distress, emerging stronger than ever. Lastly, encourage reflection—what are your personal goals and aspirations in this entrepreneurial journey?

Step-by-Step Guide to Writing Your Business's Operational Plan

The operations plan is both the first and last step in preparing a request for an operating budget. The operations plan (OP) provides a plan for resource allocation as the first step; as the final step, the OP may be modified to reflect policy decisions or financial changes made during the budget development process. The people who will be involved in implementation should create operational plans. Significant cross-departmental dialogue is frequently required because plans developed by one part of the organisation inevitably have implications for other parts.

When writing this section of the operations plan, begin by explaining what you've done so far to get the business operational, then move on to what still needs to be done. The following elements should be included:

Developing a robust operational plan is crucial for the success of a business. It requires careful analysis, strategic thinking, and effective execution. Here are the steps to develop an operational plan:

  1. Define Goals and Objectives: Clearly identify the specific goals and objectives that your business aims to achieve. These goals should align with your overall business strategy and vision.
  2. Conduct a SWOT Analysis: Perform a thorough analysis of your business's strengths, weaknesses, opportunities, and threats (SWOT). This assessment will help you understand your internal capabilities and external factors that may impact your operations.
  3. Identify Key Activities: Determine the key activities or tasks that are essential for achieving your business goals. Break down these activities into smaller, manageable tasks.
  4. Assign Responsibilities: Clearly define roles and responsibilities for each activity. Assign responsibilities to individuals or teams within your organisation. This ensures accountability and clarity in execution.
  5. Allocate Resources: Assess the resources required to execute each activity effectively. This includes human resources, finances, equipment, and any other necessary resources. Allocate resources appropriately to ensure smooth operations.
  6. Establish a Timeline: Create a timeline or schedule for each activity, setting realistic deadlines and milestones. Consider dependencies between activities and allocate sufficient time for each task.
  7. Monitor and Measure Performance: Develop key performance indicators (KPIs) to measure the progress and success of your operational plan. Regularly monitor performance against these indicators to identify areas for improvement.
  8. Address Risks and Contingencies: Identify potential risks and develop contingency plans to mitigate them. This includes anticipating challenges, disruptions, and uncertainties that may impact your operations and developing strategies to overcome them.
  9. Communicate and Engage: Clearly communicate the operational plan to your employees, ensuring they understand their roles and responsibilities. Encourage open communication and foster collaboration to drive alignment and engagement.
  10. Review and Update: Regularly review your operational plan to assess its effectiveness and make necessary adjustments

The success of an operational plan is often determined by how realistic the expectations are. Without attainable goals, a business may never be able to achieve its long-term objectives. If you're thinking about developing an operational plan, here are some key principles to keep in mind

Operational plans should contain:

Goals and Objectives

The key to an operations plan is to have a clear objective and goal that everyone is working toward. In this section of your plan, you will clearly state your business's operational goal. Your operational goal is distinct from your business's overall goal. Your operational objective describes how you intend to achieve your strategic goal.

Consider SMART goals when developing an operational objective:

Production Process

After you've established your goals, you must plan how you'll achieve them. To do so, each department (or team) must have all the resources required for the production process.

Production Process is the transformation of raw materials or parts into finished goods using tools, human labor, machinery, and chemical processing.

The production process section of the operations plan lays out the specifics of your business's daily operations, whereas the stage of development section can be thought of as an overview. Keep in mind that the purpose of this business plan section is to show that you have a thorough understanding of the production and delivery of your product or service.

The following are some resources to consider:

Timelines

Creating a timeline with milestones is critical for your new business. It keeps everyone focused and serves as a good method for tracking efficiency.

Set timelines, and those can include the following:

Operational Planning:: Ephraim and David's Entrepreneurial Journey

In the unpredictable world of entrepreneurship, where every move can be a gamble, let's delve into the gripping saga of Ephraim Diveroli and David Packouz, the dynamic duo behind the War Dogs enterprise. Picture this: two unlikely entrepreneurs diving headfirst into the arms trade. Intrigued? Let's uncover the vulnerabilities, challenges, and, yes, even the humor in their journey.

Embarking on their entrepreneurial escapade, Ephraim and David faced a rollercoaster of challenges. Imagine juggling the complexities of different business structures while navigating the murky waters of financial projections. From the infancy of their business to the complexities of government contracting, the duo encountered hurdles that tested not only their business acumen but also their resilience.

In the vibrant world of entrepreneurship, let's delve into the intriguing journey of Ephraim Diveroli and David Packouz, the masterminds behind War Dogs. Picture this: a rollercoaster ride filled with unexpected twists, audacious decisions, and a touch of humor that only entrepreneurs like Ephraim and David could inject into their tale.

Entrepreneurship is a battlefield, and Ephraim and David's journey mirrors the struggles many budding business owners face. They exemplify the importance of preparing for unforeseen circumstances, resonating with the experiences and thoughts of entrepreneurs everywhere. As we unravel their story, consider your own challenges, acknowledge shared struggles, and realize that you're not alone in this entrepreneurial adventure.

Embarking on their business venture, Ephraim and David faced challenges that resonate with many entrepreneurs. Picture a scene where business structures loom overhead, financial projections create a maze, and the stage of their business feels like a tightrope walk without a safety net.

Now, let's extract practical tips from Ephraim and David's odyssey to tackle operational challenges. Explore options for restructuring your business, aligning it with your goals. Dive into the importance of creating realistic financial projections and adapting your business structure accordingly. As we navigate through their journey, remember to embrace change, summarize key takeaways, and conclude with an encouraging note. Stay positive, reflect on your aspirations, and envision the progress you can make.

But fear not, dear reader! Ephraim and David's journey mirrors the common struggles in entrepreneurship. Facing unforeseen circumstances, they encourage us to reflect on our own experiences and ponder how we'd tackle the challenges that come our way. Acknowledge the hurdles, for in shared challenges lies shared strength.

Now, let's draw inspiration from Ephraim and David's playbook. Explore options for restructuring your business like a strategic mastermind. Dive into the world of operational planning armed with realistic financial goals. Recap the key takeaways and end with an encouraging note, motivating you to take the leap into the entrepreneurial battlefield.

In the spirit of Ephraim and David's entrepreneurial resilience, remember that every challenge is an opportunity for growth. So, fellow entrepreneurs, laugh in the face of adversity, adapt, and conquer. Your journey may not involve arms deals, but the lessons from War Dogs are universally applicable. Take the leap, stay optimistic, and watch your entrepreneurial spirit soar!

Remember, every entrepreneur faces their share of financial distress, but it's the journey that transforms challenges into stepping stones. Maintain an optimistic tone, showcasing the progress made by those who faced adversity and emerged stronger, much like our entrepreneurial heroes, Ephraim and David.

As we wrap up our journey with Ephraim and David, ask yourself: How will you approach your own entrepreneurial odyssey? Pose questions that encourage introspection, for in the realm of business, every challenge is an opportunity waiting to be seised.

Business Plan Development: Creating a Strategic Operational Roadmap

Indeed highlights key operational plan takeaways as follows:


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