An operational plan is a crucial component of a business plan that outlines the steps a company will take to achieve its strategic objectives. It provides a detailed overview of the company’s workflow, supply chains, and other operational aspects. The operational plan is essential for investors, as it demonstrates how the business will execute its strategy, but it is also beneficial for the company itself, as it forces the business to think about tactics and deadlines.
Key Components of an Operational Plan
An operational plan should answer the following questions:
- Who: The personnel or departments responsible for completing specific tasks.
- What: A description of what each department is responsible for.
- Where: The location where daily operations will take place.
- When: The deadlines for completing tasks and achieving goals.
- How much: The cost associated with each department’s tasks.
Setting SMART Objectives
The operational plan should have clear, SMART (Specific, Measurable, Attainable, Realistic, and Timely) objectives that are focused on completing the business mission. These objectives should be different from the company’s overall strategic objectives and should be scheduled with the company’s long-term goals in mind.
Timeline and Milestones
Creating a timeline with milestones is important for tracking progress and efficiency. It helps identify if milestones are not being met, indicating a need to re-evaluate the production process or consider new hires.
Importance of an Operational Plan
An operational plan is an instruction manual for the workings of a business, offering insight into its operations. It helps investors assess a company’s credibility and understand the workings of the business. A well-defined operational plan is crucial for implementing a strategic plan effectively.
Traditional vs. Lean Startup Business Plan Formats
Business plans can follow either a traditional or lean startup format. Traditional plans are more detailed, take more time to write, and are comprehensive, while lean startup plans are high-level, fast to write, and contain key elements only. The choice of format depends on the business’s needs and the level of detail required.
