If you’re running a business, it’s crucial to clearly define your business activities and responsibilities if you want to achieve your business goals. Having a strategic plan in place will not only motivate your team members to work towards your goals, but it will also improve your chances of financial success.
An operational plan is like a roadmap that can help navigate your business towards specific goals while also overcoming obstacles that may appear along the way.
In this article, we’ll explain what an operational plan is and how to create an effective operational plan for your business.
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What is an Operational Plan?
An operational plan is a document that sets out the tasks that a business needs to perform in order to reach specific milestones. Your operational plan will outline your business’s current performance while implementing the management strategies your business needs to succeed.
In contrast to a business plan, an operational plan will outline your business’s daily operations and weekly tasks.
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Operational Plans: 6 Key Elements to include
A great operational will include the following six elements:
- Strategies
- Timelines
- Budgets
- Responsibilities
- Key Performance Indicators(KPIs)
- A Back-Up Plan
1. Strategies
Your operational plan should outline key tasks that need to be performed for you to reach your company’s goals. It’s important to also outline the specific daily activities your business needs to carry out in order to reach your strategic goals.
Additionally, it’s essential for your plan to outline strategic goals for all the different departments of your business. For example, you may want your business’ marketing team to execute marketing strategies that focus on product, pricing and market position.
2. Timelines
You should set a reasonable ‘due date’ for each goal your business wants to achieve. These can be long-term goals or short-term goals. For example, a long-term goal for your business could be that you wish to triple the yearly revenue your business is currently making in five years time.
A short-term goal, on the other hand, could be that your business aims to hire 20 new employees by next year.
Timelines also will also help your employees stay motivated and ensure that they’re completing tasks in a reasonable time frame. Furthermore, they will help your business avoid unnecessary and substantial delays.
3. Budget
You should create a business budget and outline what financial and material resources are required to complete each goal. A clear and comprehensive budget is a useful way of preventing your business from wasting money and resources.
4. Responsibility
You should outline who’s responsible for managing or undertaking each action. We recommend that you appoint a project manager for your business to ensure that all tasks are achieved in a timely manner and within budget.
5. Key performance indicators(KPIs)
Indicators show progress by identifying what a successful action looks like. A performance indicator should be specific and measurable. For example, an increase in website subscribers by five percent or an increase in social media engagement by 10 percent.
Your business can use either lagging or leading indicators to measure its performance. Lagging indicators can be used to measure the current or past performance of your business goals. This will allow you to see how your business is tracking in regards to achieving its goals.
Contrastingly, using leading indicators will provide predictive measures that will allow your business to avoid making potential errors and to identify alternative ways to reach key goals.
6. A backup plan
You should have a back-up plan for your business in case circumstances change. When you’re creating your back-up plan you should consider the likelihood of your primary operational plan failing and how you will manage it.
Why do you need an Operational Plan?
Without a map, or a clear and common direction, your business’s path to success will be more complex and challenging. Therefore, a great operational plan will provide your business with the many benefits including the following:
- Promotion of business efficiency and team focus
- Business growth through sensible planning and the management of resources
- Clear picture on how to reach business objectives
- It will provide a clear allocation of each member’s tasks and responsibilities
- It will outline how the budget will run
- It will outline how the business’ progress will be reviewed and measured
Conclusion
An operational plan is crucial for your business to identify what it needs to improve and succeed. An effective operational plan will ensure that your business stays on track towards the goals you have established. In contrast, an ineffective operational will plan can result in your business failing to achieve its goals.
If you’re feeling unsure of the operational plan you’re currently using for your business, you should start a legal health check to identify areas of your operational plan that could be improved.
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