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What is the difference between a strategic plan and an operational plan.
A strategic plan outlines the long-term vision, mission, and goals of an organization, focusing on growth and direction over several years.
In contrast, an operational plan details the short-term tasks, processes, and resource allocation needed to achieve those strategic goals, emphasizing day-to-day efficiency and productivity.
The operations plan defines the clear goals of your business and what actions will be taken daily to reach them. So, investors need to know where your business stands and it will prove the viability of the goals helping you in getting funded.
Some of the factors that affect the operations plan are:
Yes, both a startup and a small business need an operations plan to get a better idea of the roadmap they want for their business.
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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.
Production process section, the bottom line, frequently asked questions (faqs).
The operations plan is the section of your business plan that gives an overview of your workflow, supply chains, and similar aspects of your business. Any key details of how your business physically produces goods or services will be included in this section.
You need an operations plan to help others understand how you'll deliver on your promise to turn a profit. Keep reading to learn what to include in your operations plan.
In your business plan , the operations plan section describes the physical necessities of your business's operation, such as your physical location, facilities, and equipment. Depending on what kind of business you'll be operating, it may also include information about inventory requirements, suppliers, and a description of the manufacturing process.
Keeping focused on the bottom line will help you organize this part of the business plan.
Think of the operating plan as an outline of the capital and expense requirements your business will need to operate from day to day.
You need to do two things for the reader of your business plan in the operations section: show what you've done so far to get your business off the ground and demonstrate that you understand the manufacturing or delivery process of producing your product or service.
When you're writing this section of the operations plan, start by explaining what you've done to date to get the business operational, then follow up with an explanation of what still needs to be done. The following should be included:
A high-level, step-by-step description of how your product or service will be made, identifying the problems that may occur in the production process. Follow this with a subsection titled "Risks," which outlines the potential problems that may interfere with the production process and what you're going to do to negate these risks. If any part of the production process can expose employees to hazards, describe how employees will be trained in dealing with safety issues. If hazardous materials will be used, describe how these will be safely stored, handled, and disposed.
Show your awareness of your industry's local, regional, or national standards and regulations by telling which industry organizations you are already a member of and which ones you plan to join. This is also an opportunity to outline what steps you've taken to comply with the laws and regulations that apply to your industry.
An explanation of who your suppliers are and their prices, terms, and conditions. Describe what alternative arrangements you have made or will make if these suppliers let you down.
An explanation of the quality control measures that you've set up or are going to establish. For example, if you intend to pursue some form of quality control certification such as ISO 9000, describe how you will accomplish this.
While you can think of the stage of the development part of the operations plan as an overview, the production process section lays out the details of your business's day-to-day operations. Remember, your goal for writing this business plan section is to demonstrate your understanding of your product or service's manufacturing or delivery process.
When writing this section, you can use the headings below as subheadings and then provide the details in paragraph format. Leave out any topic that does not apply to your particular business.
Do an outline of your business's day-to-day operations, including your hours of operation and the days the business will be open. If the business is seasonal, be sure to say so.
Describe the type, site, and location of premises for your business. If applicable, include drawings of the building, copies of lease agreements, and recent real estate appraisals. You need to show how much the land or buildings required for your business operations are worth and tell why they're important to your proposed business.
The same goes for equipment. Besides describing the equipment necessary and how much of it you need, you also need to include its worth and cost and explain any financing arrangements.
Make a list of your assets , such as land, buildings, inventory, furniture, equipment, and vehicles. Include legal descriptions and the worth of each asset.
If your business has any special requirements, such as water or power needs, ventilation, drainage, etc., provide the details in your operating plan, as well as what you've done to secure the necessary permissions.
State where you're going to get the materials you need to produce your product or service and explain what terms you've negotiated with suppliers.
Explain how long it takes to produce a unit and when you'll be able to start producing your product or service. Include factors that may affect the time frame of production and describe how you'll deal with potential challenges such as rush orders.
Explain how you'll keep track of inventory .
Describe any product testing, price testing, or prototype testing that you've done on your product or service.
Give details of product cost estimates.
Once you've worked through this business plan section, you'll not only have a detailed operations plan to show your readers, but you'll also have a convenient list of what needs to be done next to make your business a reality. Writing this document gives you a chance to crystalize your business ideas into a clear checklist that you can reference. As you check items off the list, use it to explain your vision to investors, partners, and others within your organization.
An operations plan is one section of a company's business plan. This section conveys the physical requirements for your business's operations, including supply chains, workflow , and quality control processes.
The operations plan and financial plan tackle similar issues, in that they seek to explain how the business will turn a profit. The operations plan approaches this issue from a physical perspective, such as property, routes, and locations. The financial plan explains how revenue and expenses will ultimately lead to the business's success.
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Updated January 3, 2024
The operations plan covers what makes your business run. It explains the day-to-day workflows for your business and how you will deliver the product or service that you offer. As part of your plan, it’s your chance to describe what you’ve set up so far and that you understand what is still left to make your business fully operational.
Like some of the other sections in your plan, the information you include fully depends on your type of business. If you run a subscription box service you’ll need to cover how you source and fulfill each order. If it’s a service-oriented business (like a mechanic or coffee shop) you’ll need to go into more detail about your location as well as the tools and technology you use.
The important thing is that the information here fully addresses how your business runs.
The components of your operations plan fully depend on what’s necessary to produce your product or service. For most, you’ll be adding details about your location and facilities, the technology being used, and any equipment or tools.
The information you include about your business location fully depends on the state, city, and neighborhood you’ve chosen. This will determine the specific taxes, registration, licenses, permits, zoning laws, and other regulations you’ll be subjected to.
Once you’ve legally established your business be sure to reference the relevant paperwork and legal documentation in this section. You may also want to point to mockups of the building, copies of legal agreements, and any other supporting documentation for how valuable the property is and how it helps your business function.
How will you create your product/service and what will it cost? You’ll include detailed breakdowns in your financial plan, but here you’ll talk about what it will take, who you will work with, and any alternatives.
Is your product or service driven by a specific technology or process? Let investors, banks, or other necessary parties know why it’s a valuable part of your business.
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Understanding your business operations makes your processes real. It ensures that you have organized steps in place to produce a product or service.
For investors, this helps prove that you know what you’re doing and can back up the rest of your plan with actual work that makes it happen. For you as a business owner, it’s a starting point for optimization. You have a blueprint for how things work. And as you run your business, can begin to identify opportunities for improvement.
If you don’t cover operations as part of your business plan, then you’re flying blindly. There’s no documented process for how things should work and no connection to the other strategic elements of your business.
Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.
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Some of this planning will be developed yearly—things like your yearly objectives and key results, for example, will naturally grow as time goes on. But to make sure you’re staying on track and executing against your long-term goals, you need an operational plan.
Operational planning is the process of turning your strategic plan into a detailed map that outlines exactly what action your team will take on a weekly, or sometimes even daily, basis. An operational plan will include action items and milestones that each team or department needs to complete in order to execute your strategic plan.
During the operational planning process, outline each team or person’s responsibilities for the next quarter, six months, or fiscal year. The level of detail and timeline you select for your operational plan should depend on how quickly your organization typically moves—if you’re a fast-paced team with an accelerated roadmap, consider creating an operational plan for the next quarter or half year. But if your organization tends to think more long-term, create an operational plan for the entire fiscal year.
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A strategic plan is a business-level plan of your long-term strategy for the next three to five years. An operational plan is smaller in both scope and timeline. The goal of operational planning is to outline the daily actions you need to take to hit your strategic goals.
Unlike a strategic plan, an operational plan should also focus on implementation . What daily and weekly actions does your team need to take in order to accomplish your longer-term strategic plan? What specific Key Performance Indicators (KPIs) do you need to track on a regular basis in order to ensure that your team is progressing towards your objectives? These details should be captured in your operational plan.
To capture exactly who is doing what by when, an operational plan needs to be very detailed. For this reason, create an operational plan at a smaller scale than your strategic plan—both in terms of timeline and scope. Instead of trying to create an operational plan for your entire company, create one at the department or team level. At a larger company, you could even create an operational plan for a specific initiative—similar to a detailed work plan .
For example, create an operational plan to explain the daily tasks your IT department needs to do in order to support the company. Your IT department’s operational plan might include how frequently IT team members will check the IT requests project inbox , budgeting details for the program, how the IT team will onboard and equip new employees, and how frequently the team will meet.
There are three levels to who should create an operational plan:
Scope: Your operational plan will capture the who, what, and when of each activity. It should be laser-focused on a team or initiative.
Timeline: Depending on how fast your organization moves, your operational plan should span a quarter, six months, or a fiscal year.
Stakeholders: Make sure the people involved in operational planning are close to the work, so they can accurately project and predict what work should be included in the plan.
A strategic plan is a great way to proactively align your team around a shared purpose. By defining long-term goals, you can outline exactly where you want to go.
An operational plan helps you hit your strategic goals. According to our research, only 26% of knowledge workers have a very clear understanding of how their individual work relates to company goals. By creating a detail-oriented operational plan, you can define exactly what short-term goals you need to achieve in order to be on track towards your long-term objectives. It can help you think through the actions you’re currently taking or need to take in order to execute against your goals.
In particular, an operational plan:
Clarifies exactly what your team will be doing on a weekly and daily basis.
Provides a comprehensive guide of the day-to-day operations your team members need to take in order to accomplish your long-term goals.
Sets a benchmark for daily expectations, so you can avoid getting off track.
During the operational planning process, you're not creating new plans or developing new goals. Rather, to create an operational plan, assess everything your team is currently working on and everything you need to do on a daily or weekly basis to hit your strategic goals. Here’s how:
If you haven’t already, create a strategic plan first. You need a long-term vision and goals before you can break down the day-to-day details. There are four steps to creating a strategic plan:
Determine your position
Develop your strategy
Build your strategic plan
Share, monitor, and manage your strategic plan
To learn more, read our article on strategic planning .
In order to create a detail-oriented operational plan, you need to narrow the scope to a team, department, or focus area. The scope of your operational plan will depend on the size of your company.
For example, imagine you’re breaking down your strategic plan into action plans for various company departments. Your marketing team spans multiple functions—for example, design , product marketing, social media, content creation, and web promotion. To capture specific, daily functions within each team, you should create an operational action plan for each smaller team.
Before creating an operational plan, decide who will be involved in the operational planning process. The team members creating the operational plan should be relatively close to the actions the plan describes.
To continue our example, the design team’s operational plan should be created by the head of the design team and the team leads (depending on the size of the team). Once they’ve created their operational plan, the team should share the plan with the head of marketing for final approval.
Your operational plan explains the actions your team will take to achieve your goals within a set time frame. To create an operational plan, outline:
Your team’s objectives
The deliverables that will be achieved by the operational plan
Any desired outcomes or quality standards
Staffing and resource requirements , including your operating budget
How you will monitor and report on progress
If you’re struggling to figure out all the details that should be included in your operational plan, ask yourself the following questions:
What do we need to accomplish? This information should come from your strategic plan or yearly goals.
What daily tasks do we need to complete in order to hit our goals? These can be daily tasks you’re currently doing or new work that needs to be kicked off.
Who are the people responsible for those tasks? Make sure each task has one owner so there’s no confusion about who to go to for questions or updates.
What are our metrics for success? If you haven’t already, make sure your goals follow the SMART framework .
To continue our example, here’s the framework the design team might use to create their operational plan:
Part of the strategic plan for the marketing team is to increase share of voice in the market—which means more eyes on marketing materials and increased engagement with potential customers. To support these goals, the design team will:
Create additional promotional materials for the social team
Revamp the website home page to attract more potential customers
To accomplish these two goals in the next year, the design team will:
Hire two new team members to focus on social media engagement
Partner with the web development team within the marketing department to create an interactive home page
To track and report on their progress, the design team will use Asana as their central source of truth for key performance metrics, including:
What designs they are creating
The level of engagement they’re getting on social media
The progress of the website update
This is just the framework the design team would use to create their operational plan. Bring this plan to life within a work management tool like Asana to share clarity on all of the work the team needs to do to hit their goals. With work management, every task can be tracked in real-time from inception to completion.
Once you’ve created the plan, share it with key stakeholders so they understand your team’s most important goals and the daily tasks it will take to get there. Manage your plan and updates in a shared tool that captures real-time progress, like Asana .
Like any element of project planning, things will inevitably change. Actively monitor your operational plan and report on progress so key stakeholders and team members can stay updated on how you’re tracking against your goals. Report on progress monthly through written status updates .
An operational plan can help you ensure you’re making progress on long-term goals. But in order for this plan to be effective, make sure you’re tracking your work in a centrally-accessible tool. Siloed information and goals don’t help anyone—instead, track your action items and goals in a work management tool.
Companies often confuse strategic, tactical, and operational planning. Strategic planning sets your organization’s long-term vision and goals. Tactical planning is the process of figuring out how to achieve your strategic plan. And operational planning links the two, outlining the procedural steps you’ll take to meet your goals. A sound operational plan is critical for achieving success in your organization.
Operational planning is the process of creating actionable steps that your team can take to meet the goals in your strategic plan. An operational plan outlines daily, weekly, and monthly tasks for each department or employee. During operational planning, you’ll also create milestones that help you achieve your strategic plan. For example, if your strategic plan aims to grow your customer base by 20%, your operational plan will include incremental steps to gain new leads and customers.
A well-constructed operational plan makes everyone’s jobs easier. The benefits include:
Operational plans help you hit strategic goals, so start by reviewing your strategic plan. Your operational plan should be specific to a department or team, so your organization will likely have more than one operational plan. Identify the key stakeholders for a particular team: they’ll be best suited to develop the plan, which should include:
Once the plan is complete, you can replicate this process for each department. Plans should be shared department-wide for feedback and questions.
Also referred to as departmental goals or objectives, operational goals are the short-term targets that your organization wants to hit. An operational plan includes operational goals and the steps to achieve them. Typically, organizational goals are:
All operational goals should be measurable and actionable. Actionable means your team can achieve them – so the goal cannot be dependent on an outside factor. For example, your IT team may be tasked with training 10 new employees on security best practices each quarter. But if 10 employees aren’t hired in a particular quarter, that operational goal is not actionable.
To be measurable, there must be a clear way to tell if you met your operational goal or not. For example, one operational goal for an accounting team might be to process invoices more quickly. Their accounting software should be able to collect data on how quickly invoices are processed and paid, so the team can measure their performance over time and see if they are working more efficiently.
An operational plan shouldn’t be static – it’s a living document. As time goes on, you may need to adjust your operational goals. That isn’t a sign of failure – it means you’re doing a better job of understanding how each team functions and setting your targets accordingly. You should keep your plan up to date and revisit it regularly, whether once a year or at the end of each fiscal quarter. Include key stakeholders in this process so that the plan works for everyone.
Creating an operational plan might seem challenging at first – but once you get started, it can help all your teams run more smoothly. See how Spider Impact helps you define, measure, manage and report on your operational goals. Click for a free test drive or demo .
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Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.
Investopedia / Ryan Oakley
Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.
Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.
A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.
There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.
While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.
A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.
While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.
Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.
The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.
Common elements in many business plans include:
Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.
Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.
A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.
How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.
The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.
A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.
As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.
University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.
Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."
Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."
Harvard Business Review. " How to Write a Winning Business Plan ."
U.S. Small Business Administration. " Write Your Business Plan ."
SCORE. " When and Why Should You Review Your Business Plan? "
Definition of operations strategy.
An operations strategy is a comprehensive plan that outlines the actions and decisions needed to manage and optimize the production and delivery of goods and services. It’s a roadmap designed to align day-to-day operations with long-term business goals, ensuring all activities contribute to overall organizational success. This type of strategy is crucial for establishing the methods and frameworks through which an organization achieves its objectives efficiently.
The significance of effective operations strategy cannot be overstated. By aligning operations strategy with broader business aims, companies can enhance their competitive positioning, realize cost efficiencies, and ensure smoother execution of business activities. Without a well-defined operations strategy, it becomes challenging to scale operations, enhance customer satisfaction, or achieve long-term sustainability. Explore business diagrams for strategic planning .
Aligning Operations Strategy with Business Goals: Ensures coherence and unified direction across all departments.
Enhancing Competitive Advantage: Through optimized processes and resource allocation, companies can outperform competitors.
Operational Efficiency: Streamlines processes to reduce waste and manage costs effectively.
For those interested in operational action planning, Learn more about Operational Planning .
An operations strategy is a long-term plan that outlines how an organization will utilize its resources to support business objectives, deliver value to customers, and gain a competitive edge. Here are some examples of operations strategies across different industries:
1. Cost Leadership Strategy
Example: A manufacturing company might focus on reducing production costs through economies of scale, lean manufacturing techniques, and efficient supply chain management. Companies like Walmart and IKEA leverage cost leadership by focusing on high efficiency, large-scale production, and cost-saving measures to offer low prices to consumers.
2. Quality Improvement Strategy
Example: A luxury car manufacturer, such as BMW or Mercedes-Benz, might focus on superior quality as a core element of its operations strategy. This can involve implementing rigorous quality control processes, investing in advanced manufacturing technologies, and sourcing high-quality materials to maintain a premium brand image.
3. Customer Service Strategy
Example: A company like Ritz-Carlton focuses on delivering exceptional customer service as part of its operations strategy. By empowering employees to provide personalized service and resolving issues on the spot, the company creates a loyal customer base and enhances its brand reputation.
4. Sustainability Strategy
Example: A company like Patagonia emphasizes sustainability in its operations strategy. This might include using environmentally friendly materials, reducing waste in manufacturing processes, and encouraging recycling among customers to align with its brand values and attract environmentally conscious consumers.
5. Technology Integration Strategy
Example: A company like Tesla incorporates advanced technology into its operations strategy by investing in automation, AI, and robotics to streamline production processes, enhance product quality, and improve efficiency in its Gigafactories.
These strategies are often tailored to fit the specific goals and challenges of the organization and are designed to align with the overall business strategy.
A successful operations strategy is comprised of several key components:
Resources: Including human, mechanical, and locational. It’s vital to assess both current capabilities and potential acquisitions.
Technology: Encompassing advanced tools beyond basic software, such as production automation and machine learning.
Products/Services: Analyzing the lifecycle of your offerings and adapting to market trends will optimize efficiency.
Facilities: Ensuring production facilities and inventory management systems meet operational goals and safety standards.
Production System: Essential for effective resource planning and quality control, influencing long-term operational efficiency.
Aligning with business goals.
An effective operational strategy is pivotal in ensuring that an organization’s daily activities are aligned with its overarching business goals. By synchronizing operational plans with strategic objectives, companies can streamline their processes and improve overall efficiency. This alignment helps in setting clear priorities and ensures that all departments work towards common targets, ultimately leading to cohesive and coordinated business efforts.
A well-crafted operational strategy enhances a company’s competitive advantage by optimizing resource utilization and improving customer satisfaction. For instance, tailoring production processes to meet unique customer needs not only boosts brand loyalty but also positions the business favorably in the market. Competitive priorities such as speed, quality, and flexibility become achievable, thus providing a significant edge over competitors. Read more on a winning customer experience strategy.
An operational strategy is crucial for enhancing operational efficiency. It allows businesses to identify and eliminate bottlenecks, optimize workflows, and reduce operational costs. Utilizing tools like action plans can further clarify roles and responsibilities, making the execution of operational tasks more structured and effective.
Companies leveraging platforms like Creately, can achieve greater transparency and collaboration, resulting in improved productivity and streamlined operations.
No matter which type of initiative you choose to prioritize in your company, you’ll need to consider several key components for an effective operations strategy:
Accurately assessing your current resources and anticipating future needs is crucial for long-term success. A thorough understanding of your business’s capabilities helps identify what is necessary to sustain or expand operations.
Effective HR planning covers everything from attracting new talent to retaining existing employees. Prioritizing your workforce can reduce turnover, stabilize operations, and preserve valuable institutional knowledge.
Implementing quality management practices ensures that product development meets desired standards. In a professional service firm, this might involve focusing on client feedback to enhance collaboration and outcomes.
In manufacturing, supply chain management is vital. Streamlining the flow of goods from suppliers helps reduce costs, support growth, and ensure high levels of customer service.
Embracing digital transformation and cutting-edge technologies is essential for boosting business efficiency. Regardless of the industry, tools like AI, automation, and cloud computing can greatly enhance operational capabilities and inform better decision-making.
Understanding the different types of operational strategies is crucial for optimizing your business operations. Here, we explore the various approaches and provide operational strategy examples to illustrate their application.
A cost-based strategy focuses primarily on minimizing expenses to deliver competitive pricing. It involves optimizing the supply chain, automating workflows, and carefully managing resources to maintain low costs without compromising quality. This strategy is particularly beneficial for businesses competing on price.
Focus: Minimizing costs to offer competitive pricing.
Approach: This strategy emphasizes cost efficiency through optimized supply chains, bulk purchasing, automation, and lean production techniques. Companies aim to reduce operational expenses without compromising product quality.
Example: Walmart is known for its cost-based strategy, using its scale and efficient logistics to offer low prices.
Quality-based strategies prioritize delivering high-quality products or services. This approach aims to enhance customer satisfaction, boost brand reputation, and reduce return rates. Companies implementing this strategy often invest in rigorous quality control processes and continuous improvement initiatives.
Focus: Delivering superior quality products or services.
Approach: Companies that adopt a quality-based strategy prioritize high standards in production and service delivery. They invest in quality control measures, continuous improvement processes, and premium materials to enhance customer satisfaction and brand reputation.
Example: Mercedes-Benz focuses on quality-based strategies by producing high-end vehicles with precision engineering and premium materials.
Flexibility strategies are designed to allow businesses to adapt quickly to market changes and customer demands. This strategy involves developing flexible systems and processes that can accommodate varying production volumes or personalized customer requests. Flexibility also fosters innovation and rapid product development.
Focus: Adapting quickly to market changes and customer demands.
Approach: Flexibility strategies involve developing adaptable systems that can respond to varying production volumes, customized orders, or changing market conditions. This strategy often includes diversification, flexible manufacturing systems, and scalable operations.
Example: Amazon’s ability to scale operations during peak times like holidays reflects its flexibility strategy, ensuring timely deliveries and meeting fluctuating demand.
In today’s fast-paced business environment, speed is often a critical factor in gaining a competitive edge. A speed-based strategy focuses on minimizing the time required to produce and deliver products or services to customers. By implementing techniques such as just-in-time (JIT) manufacturing, lean operations, and process streamlining, companies can significantly reduce lead times and enhance their ability to meet customer expectations swiftly. This strategy is particularly vital in industries where timely delivery is crucial, such as logistics and e-commerce.
Focus: Reducing lead times and accelerating delivery.
Approach: Speed-based strategies focus on reducing the time it takes to produce and deliver products or services. Techniques like just-in-time (JIT) manufacturing, lean operations, and streamlined processes are used to increase efficiency and meet customer expectations for quick service.
Example: Companies like FedEx and UPS utilize speed-based strategies to ensure fast and reliable delivery services.
Reliability is the foundation of trust between a company and its customers. A dependability strategy is centered on ensuring that products and services are consistently delivered as promised, maintaining high levels of operational reliability. By focusing on robust supply chain management, consistent production processes, and unwavering service quality, companies can build strong customer loyalty and a solid reputation for dependability. This strategy is essential for businesses where consistency and reliability are key to customer satisfaction and long-term success.
Focus: Ensuring consistent and reliable operations.
Approach: A dependability strategy centers on maintaining high levels of reliability in delivering products or services. This involves robust supply chain management, consistent production processes, and reliable service delivery, which build customer trust and loyalty.
Example: Toyota is known for its dependability strategy, focusing on consistent quality and reliable production processes through its well-established Toyota Production System (TPS).
In a rapidly evolving market, innovation is the engine that drives growth and differentiation. An innovation strategy emphasizes the continuous development of new products, services, and business processes to stay ahead of the competition. By investing in research and development (R&D), fostering a culture of creativity, and embracing new technologies, companies can introduce groundbreaking offerings that capture market share and set industry trends. This strategy is crucial for businesses aiming to lead in dynamic sectors where staying innovative is the key to sustained success.
Focus: Driving growth through innovation in products, services, or processes.
Approach: Innovation strategies prioritize the development of new products, services, or ways of doing business. Companies invest in research and development (R&D), encourage creativity, and seek out new technologies to stay ahead of competitors.
Example: Apple’s focus on innovation in product design and technology has kept it at the forefront of the tech industry.
Exceptional customer service can be a powerful differentiator in a competitive market. A service-based strategy focuses on delivering outstanding customer experiences as a core component of the business’s value proposition. Companies adopting this approach invest in comprehensive training, advanced customer relationship management (CRM) systems, and continuous service innovation to exceed customer expectations. This strategy is vital for businesses looking to build strong, lasting relationships with their customers, where service excellence is the hallmark of their brand.
Focus: Providing exceptional customer service to differentiate from competitors.
Approach: Companies adopting a service-based strategy emphasize customer service excellence as a key differentiator. They invest in training, customer relationship management (CRM) systems, and service innovation to create a superior customer experience.
Example: Companies like Ritz-Carlton and Zappos are renowned for their exceptional customer service, which is a core part of their operational strategy.
Adopting the right operational strategy can significantly impact your business’s efficiency and competitive stance in the market. By understanding and implementing a suitable strategy, you can better manage costs, maintain high-quality standards, and swiftly adapt to changes, thereby positioning your business for success.
Setting goals and objectives.
Creating a robust operational plan starts with clearly defining your goals and objectives. Understanding what you aim to achieve helps structure your approach and ensures alignment with overarching business strategies. Begin by analyzing your company’s market position, current operational capabilities, and the competitive landscape. Utilizing tools like a SWOT analysis generator aids in pinpointing strengths, weaknesses, opportunities, and threats, helping to set realistic and impactful goals.
Once goals are established, the next step is to allocate a corresponding budget. An effective operational plan must include financial planning to fund different activities, whether for marketing, production, or human resources. Incorporating leading indicators is equally crucial, as they provide early signals for potential issues and help in proactively managing operations. Indicators like sales growth, customer satisfaction scores, and production efficiency metrics offer actionable insights for monitoring and adjusting strategies.
A successful operational plan hinges on efficient communication and thorough documentation. It’s essential to communicate the plan’s objectives, strategies, and key performance metrics to team members and stakeholders to ensure everyone is on the same page. Keeping detailed documentation of processes, decisions, and progress aids in maintaining transparency and accountability.
Leveraging technology not only enhances the operations planning process but also streamlines execution. Integrated visual collaboration tools like Creately provide an interactive platform that enables users to visualize and manage operational plans effectively. Advanced tools such as Market Research, Competitive Analysis, and cascading OKR Structures can be used to help align day-to-day operations with long-term business goals. These tools facilitate data-driven decision-making, thereby improving overall operational effectiveness.
An operational plan serves as a roadmap to achieving business objectives, ensuring every team member understands their role and how their efforts contribute to the larger mission. By setting clear goals, managing budgets, maintaining open communication, and utilizing the right tools, businesses can vastly improve their operational efficiency and strategic alignment.
Cost savings and optimization.
A well-defined operations strategy helps businesses manage and optimize costs effectively. By streamlining processes and removing inefficiencies, companies can minimize waste and reduce expenses. This strategic approach enables organizations to allocate resources more judiciously, leading to better financial health and a stronger bottom line.
One of the significant advantages of a robust operations strategy is the ability to deliver high-quality products and services consistently. This reliability boosts customer satisfaction and loyalty. Enhancing customer experience is imperative for long-term success, as satisfied customers are more likely to become repeat buyers and brand advocates.
A meticulously crafted operations strategy ensures that all business activities are optimized for maximum efficiency. By simplifying workflows and leveraging technology, companies can enhance productivity and reduce the time and resources needed to achieve operational objectives.
Companies with strong operations strategies are better positioned to compete in their respective markets. By aligning operational activities with strategic goals, businesses can respond swiftly to market demands, leverage opportunities, and mitigate risks. This proactive approach offers a unique competitive edge, making it easier to thrive in a dynamic market environment.
In today’s fast-paced business environment, leveraging technology is critical to maintaining an effective operations strategy. Technology doesn’t just support operational processes; it transforms them. From automating routine tasks to providing real-time data insights, technology enables organizations to streamline their operations, reduce costs, and improve productivity and efficiency.
Several types of technology can significantly impact your operations strategy:
Production Line Automation: Automation tools can optimize workflows, reduce errors, and increase consistency in production processes.
Machine Learning: Leveraging machine learning algorithms can predict maintenance needs, analyze production data, and improve decision-making processes.
Business Process Automation (BPA) Software: Platforms like Creately’s visual workspace can automate repetitive tasks, ensuring that resources are used efficiently.
Real-Time Data Integration: Tools that provide real-time updates on various KPIs empower businesses to make data-driven decisions quickly and effectively.
Tools like Creately facilitate the creation and execution of an operations strategy with features like Strategy Mapping Software and Real-time Data Integration , making it easier to visualize and align strategic goals effectively within your organization.
Utilizing comprehensive tools like Creately facilitate thorough planning, seamless execution, and continuous improvement, ensuring your operations strategy is always aligned with your overarching business goals.
Integrating technology into your operations strategy offers numerous benefits:
Enhanced Efficiency: Automating routine processes frees up valuable time for employees to focus on more strategic tasks.
Improved Decision-Making: Real-time data integration and analysis tools, such as those offered by Creately, provide the insights needed for informed decision-making.
Increased Collaboration: Collaborative tools allow teams to work together seamlessly, regardless of their physical locations.
Reduced Costs: By optimizing processes and reducing manual errors, technology helps to cut down on operational costs, thereby increasing profitability.
Implementing an operations strategy requires more than just a solid plan. It involves leveraging the right tools, adhering to proven best practices, and constantly measuring and adapting the strategy to suit evolving business needs. Here are some of the key practices, tools, and frameworks that can facilitate the implementation of your operations strategy.
Embedding these key practices into your strategy implementation can ensure better outcomes:
Define Clear Objectives: Establish specific, measurable, achievable, relevant, and time-bound SMART goals that align with your overarching business strategy.
Engage Stakeholders: Actively involve stakeholders at all levels to foster buy-in and ensure everyone is on the same page.
Document Everything: Maintain comprehensive documentation of all strategic decisions and changes to ensure clarity and accountability.
Communicate Effectively: Foster open communication channels within the organization to ensure smooth execution and alignment with business goals.
Monitor Performance: Use key performance indicators (KPIs) and other metrics to regularly track progress and make necessary adjustments.
Several tools and frameworks can assist in the successful implementation of your operations strategy:
Visual Strategy Mapping: Utilize visual tools like Creately’s Visual Strategy Mapping Software to create a clear and communicative visual representation of your strategy.
Market Analysis and Competitive Strategy: Regularly conduct market analysis and competitive benchmarking to stay ahead of industry trends and adjust your strategy accordingly.
Real-time Data Integration: Leverage real-time data integration to ensure that all stakeholders have access to the most current information, facilitating informed decision-making.
Analysis Frameworks: Employ various analysis frameworks like SWOT analysis, PESTLE analysis, and Porter’s Five Forces to thoroughly analyze internal and external factors impacting your operations strategy.
Project Management Software: Utilize tools like Creately to manage project timelines, resources, and ongoing tasks efficiently, ensuring a streamlined implementation process.
Continuous assessment and adaptation are crucial for the long-term success of an operations strategy. Follow these steps for effective measurement and adaptation:
Set Benchmarks: Establish initial benchmarks for various KPIs to gauge the performance against strategic objectives.
Regular Reviews: Conduct regular performance reviews to identify gaps and areas of improvement.
Incorporate Feedback: Actively seek feedback from various stakeholders and incorporate it into your strategic refinements.
Adapt to Changes: Stay agile and be prepared to adjust your strategy based on new data, market trends, and internal performance metrics.
Scale Up Successes: Identify successful elements of your strategy and scale them up across different departments and operations.
By incorporating these best practices, tools, and frameworks into your operations strategy implementation, you can ensure a more effective and dynamic approach to achieving your organizational goals.
In conclusion, an operations strategy is a vital framework that guides the efficient production and delivery of goods and services within an organization. It aligns daily operational activities with long-term business objectives, ensuring that every action contributes to overall success. The importance of a well-defined operations strategy lies in its ability to enhance competitive advantage, operational efficiency, and customer satisfaction.
Key components of an operations strategy include resources, technology, products/services, facilities, and production systems, all of which must be carefully managed and optimized. Different types of operational strategies, such as cost-based, quality-based, and flexibility strategies, can be employed depending on the business’s goals and market conditions.
Effective implementation of an operations strategy involves setting clear objectives, engaging stakeholders, leveraging technology, and continuously measuring and adapting the strategy to meet evolving needs. By following best practices and utilizing tools like visual strategy mapping and real-time data integration, businesses can streamline processes, reduce costs, and improve overall performance, positioning themselves for long-term success in a competitive market.
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Heroshe is a content specialist and a writer at Creately, online diagramming and collaboration tool. He is responsible for creating engaging, informative, and high-quality content that helps users understand and utilize the platform's features effectively. He mainly focuses on making complex concepts easy to grasp, and is passionate about art & music.
An operational plan outlines the tasks each employee will need to carry out to accomplish the goals laid out in the strategic plan. 3 min read updated on September 19, 2022
Steps in how to do an operational plan should incorporate the following as you outline your strategy:
An operational plan outlines the tasks each employee will need to carry out to accomplish the goals laid out in the strategic plan. The operations section of a business plan expands on the company:
In other words, your operational plan should, clearly and in detail, elaborate on the physical, financial, and human resources you will allocate on a day-to-day basis in support of your company's broader strategic objectives.
The best operational plans have a clearly articulated objective that everyone in your company is focused on achieving. Your operational plan will, therefore, be a useful document for your investors. However, it can also help you and your employees by encouraging you to think carefully about deadlines and tactics.
The operations plan should provide answers to the following questions:
An operational plan must have clearly articulated goals. This section should state in clear terms what the company's operational objectives are. Operational objectives should be thought of as your plan to achieve your company's strategic objective. A good operational objective should be:
While each department should have a different operational objective, these should assist in achieving the company's overall objective.
Once you have generated objectives, you must create a strategic plan to meet them. Each department or team must be appropriately resourced. You should think about the following resources:
In addition to describing the production process, you should describe the operating process in detail. Questions you should answer include:
If you need help with how to do an operational plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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What is a business plan.
Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details.
While some owners may be tempted to jump directly into startup mode, writing a business plan is a crucial first step for budding entrepreneurs to check the viability of a business before investing too much time or money. The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.
In fact, businesses that plan grow 30% faster than those that don’t. 1
For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets.
Studies show that nearly 71% of the fastest-growing businesses have business plans, indicating that even existing businesses can benefit from updating their plans. 2
Your plan should include explicit objectives for hiring new employees , market analysis, financial projections, and potential investors. The objectives should indicate how they’ll help your business prosper and grow.
Committing resources to capital improvements and new assets such as computers, software or cars/trucks is never an easy decision for budget-conscious small business owners. But a business plan can bring clarity to the process of whether to buy or lease and help determine the optimal amount allocated to those assets. A good business plan can also help you decide if it’s feasible to take on additional office, retail or work space.
Marketing and market potential are important aspects of a plan for aspiring small businesses.
Getting your business in front of customers on a consistent basis is one of the keys to ensuring your business not only stays afloat but also thrives.
Marketing strategies can be simple, but before you decide on how you will get the word out, getting clear on your target audience and why your business solves their problem can make sticking to your marketing plan easier.
Knowing your unique market positioning can help you determine your messaging. Your marketing strategy should include who your target audience is, the platforms or methods you will connect with them on, and a measurement framework to determine if your efforts are working.
Take entrepreneur Scott Sultzer, who opened Sandwich Joint restaurant in downtown Los Angeles in 2009. “I included the potential marketing demographic of all those who lived in a certain area of the city,” he said of his marketing strategy. “My goal was to capture a certain percentage of all those people who lived and worked nearby.” 4
Created primarily as a marketing tool, Sulzer’s 10-page plan included such topics as target market breakdown, marketing strategy and market penetration. “My business plan was mostly about market projections,” he said. “How are we going to get those people that lead to an increase in our daily sales? And how are we going to reach them to let them know we’re here?” 4
Depending on your business, it’s important to have both brick-and-mortar marketing strategies as well as a plan for marketing your business online .
In addition to providing a roadmap for progress and a marketing plan , your business plan could also be important in securing funding .
Whether you’re seeking a credit line from a bank or an influx of capital from investors, a business plan that answers questions about profitability and revenue generation can make the difference between whether someone decides to invest – or how much they might choose to invest.
In fact, a study showed that businesses with a plan were more likely to receive formal financial support, such as funding, than businesses without one. 3
A business plan may also be needed to retain other professional services as well, such as attorneys, landlords, consultants or accountants. Sulzer used his business plan to secure a lease.
“I had to have a viable document that they could trust,” said Sulzer, who leased from one of the largest landowners in downtown Los Angeles. 4
“With a corporate landlord, they wouldn’t deal with me unless I had a business plan. I had to submit all my information and a plan that presented what I wanted to do, with financial breakdowns and percentages, demographics, and how I was going to get customers.” 4
For a small business to succeed, attracting talented workers and partners is of vital importance. A part of a business plan for hiring employees is to help bring in the right talent, from the executive level to skilled staff, by showing them the direction and growth potential of the business. It can also help secure vendor accounts, especially with exclusive suppliers.
Finally, a business plan can be important in providing structure and management objectives to a small business. It can become a reference tool to keep management on track with sales targets and operational milestones. When used properly and consulted regularly, it can help you measure and manage what you’re working so hard to create.
Ready to take the next step? Learn how to write a business plan .
Don’t forget to consider insurance coverage in your business plan. When the unexpected happens, you want to make sure your small business is covered. Customized insurance solutions are crucial to protecting and keeping your operation going.
Find out how small business insurance from Nationwide can help you build and protect your business whether you are just starting up or already established.
1 https://www.effectuation.org/wp-content/uploads/2017/06/The-Multiple-Effects-of-Business-Planning-onNew-Venture-Performance-1.pdf , Accessed October 2021. 2 https://onlinelibrary.wiley.com/doi/abs/10.1111/0447-2778.00006 , Accessed October 2021. 3 https://www.tandfonline.com/doi/abs/10.1080/13504851.2014.967377 , Accessed October 2021. 4 Nationwide Interview with Scott Sultzer, 2016.
Disclaimer: The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. Nationwide, Nationwide is on your side, and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2021 Nationwide.
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Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.
Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.
A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.
Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success.
A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.
Business plans typically include detailed information that can help improve your business’s chances of success, like:
A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.
I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.
The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.
The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.
Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.
Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.
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Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.
Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.
According to data from CB Insights , some of the most common reasons businesses fail include:
The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!
Get a jumpstart on your business plan by creating your own cash flow projection .
Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.
Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.
A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.
Want to prove there’s a market gap? Here’s how you can get started with market research.
Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.
Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.
Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.
Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.
Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.
Learn what you need to get a small business loan.
No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.
Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.
How does having a business plan help small business owners make better decisions.
Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.
Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.
In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.
Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.
Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.
Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.
Posted: Mon 12th Aug 2024
The purpose of a business plan is to explain what you want to achieve and how you're going to make it happen.
This guide will walk you through how to create your own business plan and includes a detailed business plan outline for you to follow, which you can find at the link below.
Download your free business plan template
In the following webinar, marketer Sophie Eglin explains which key elements you should include in your business plan, and shares practical tips for developing a plan that works for your unique business needs.
A business plan provides a roadmap for the work you need to do, and gives you a chance to flesh out key areas before you start building your new business.
It also helps test your idea and gives you a clearer understanding of what needs to happen to make it a reality.
Completing the different sections of a business plan makes sure you've thought about all the different aspects of running a business.
It's a great motivational tool, too. When you've written down the steps you need to take, you know how to start moving forward and therefore hold yourself accountable.
Keep in mind that most finance lenders will want to see a business plan before they give you money. If you're writing a business plan for a particular organisation, make sure you've checked what they want you to include.
VIDEO: Perfecting your business plan In this webinar, HSBC's Carrie Taylor-Mell and Stefan Johnson explore what makes a good business plan, what to include and avoid when you’re writing one, and what banks look for when assessing a business plan.
Business plans also provide accountability. They allow you to sense-check what you're doing and why. And they provide an opportunity to get ideas out of your head and start working on them.
Jonathan Bareham , co-founder of accountancy firm Raeden, says:
"Not having to report to anyone is attractive when you start up. As you grow, it can be tricky not to have a sounding board. A business plan can be useful for that."
He highlights the role of goal-setting in the planning process . Why are you starting a business?
Is it because you want a good work-life balance ?
Do you want to make an environmental impact?
It's likely a combination of factors. Writing down your motivation provides a reference for big decisions and makes sure you don't lose focus.
Business plans help explain what you're doing to other people. The process of writing everything down makes sure you can answer key questions about what you're doing.
Hiring people , opening premises or buying equipment requires significant investment. Planning and justifying what you're going to spend is important. Sharing them externally helps reassure partners, whether you're looking to borrow money or win over a mentor.
The main type of business plan is a written document, which is what we cover in this guide. You can use a template or follow a business plan outline to know what to include (more on that in a moment).
Download Enterprise Nation's free business plan template
It's important to pick the format that's right for you, so consider what you know so far and how you're going to use the plan.
If the plan is for your own benefit, you need to think about how much you can know at this point. There are lots of assumptions around sales and costs that you won't know until they're tested. This will limit the level of detail you can include.
The audience is important too. You could write a five-page summary if the business plan is just for you. If it's for raising investment or applying for a loan, it's going to require more detail and might be 15 to 20 pages long.
Organisations like the Prince's Trust and Start Up Loans , which offer start-up funding, have templates that they prefer or require applicants to fill out.
David Abrahamovitch, founder and CEO of London café-bar and restaurant company GRIND, says his founding team didn't create a business plan until they needed to borrow money. He believes a formal business plan doesn't provide much value at the concept stage.
"Business plans absolutely have their place but I see people who are spending months writing one. They're worried about who's going to copy their idea about trademarks. "All of these things are important, but at the moment you don't have a business. You don't have a brand to protect. You're worried about the wrong things. "You have to get to the minimum viable form of that business as quickly as possible and just test it."
In the video below, David talks more about his company's business planning process:
The length of traditional business plans can be intimidating. You may also lack the information to put one together if you haven't started trading yet.
The Lean Canvas model allows you to create a business plan on a single page (usually A3 size). Each section covers a topic that's important to building a business.
The structure examines whether a business idea is viable . The nine boxes capture some key assumptions, covering topics like the following:
Problem: What customer challenge does your product solve?
Solution: What does your business do?
Key metrics: How will you measure success?
Unique value proposition: What makes your business stand out ?
Unfair advantage: What do you have that your competitors don't?
Channels: How will you market your product?
Customer segments: Who are you selling to?
Cost structure: What expenses will you have?
Revenue streams: How will you generate sales?
The Lean Canvas is designed to provide a snapshot of your idea and challenge the assumptions you've made. It's not meant to be perfect, and takes about 30 minutes to complete.
It's a great way to quickly test a business idea or potential new product. Do a Google Images search for 'Lean Canvas' to find examples.
Launching and growing a small business is really exciting because you don't know what's going to happen. However, writing a business plan can be daunting as there are so many things you don't know yet.
Make phone calls and search the internet to strengthen your assumptions. It's possible to find information on standard services like accountants, renting desks or buying raw materials.
There are other aspects that are more difficult to predict. Projecting sales, for example, is one of the trickiest parts of forecasting. You love your product but will customers flock to the business?
One opportunity to solve this problem is to do a small amount of test trading. Paying for a market stall may cost you a thousand pounds after you pay for the stock and a location.
But the investment may pay dividends if it gives you a reality check on what customers are willing to pay and how popular your offering is. What's the least you can spend to learn the most?
Research what competitors are offering too. What are people paying for related products?
If you're a service-based business, you might be able to trial your offering part-time. Perhaps you can take on a client while still working your day job.
Make sure you justify any forecasts in your business plan and provide a logical explanation of how you came to your conclusions.
The aim of a business plan is to understand how you'll implement an idea. That means it's important to cover the different elements involved in starting and running a business.
The following sections explain what to include in each part of your business plan.
What's your business idea ? It's important to be able to explain your business in a succinct way. The executive summary should do exactly that.
Start with a summary of your business and the product or service it's going to sell.
Include short summaries of the other sections of your business plan – particularly how you're going to generate income and make a profit.
Identify the key people involved, emphasising their strengths (this can include advisers and partners).
Highlights from your progress and upcoming milestones.
A page or two should be enough to convey all the information that's needed.
If you struggle to explain your business to people you meet, or to write it down in an executive summary, invest more time in trying to break down the concept. Having a solid 'elevator pitch' helps with sales and marketing.
Why are you starting a business and what do you want to achieve? You're likely to have a mix of financial and non-financial goals – for example:
acquiring five clients in your first six months of trading
generating enough profit to go full-time on the business in year two
growing traffic on your e-commerce site to 5,000 monthly users
It can be helpful to split these into short (12 months), medium (one to two years) and long-term goals (three years and longer).
Make sure goals are S-M-A-R-T: Specific, measurable, achievable, realistic and timely.
Example of a business vision and objectives: A small tech business might have a vision to revolutionise the way people communicate by creating innovative and user-friendly communication tools. Its objectives could include: developing a messaging app that allows seamless integration across different devices and has very strong privacy and security features continuously improving user experience through regular updates and customer feedback The company's vision and objectives are in line with its core values of always being innovative, satisfying the customer, and taking advantage of advances in technology. It aims to become a market leader in the communication industry and provide solutions that simplify the way people connect with each other.
Your executive summary, vision and objectives have helped set the scene. But what kind of opportunity is there? This section includes your target customers and your competition .
Start by describing the types of people you'll be selling to. Useful information includes age, gender, income and location.
Try to be specific. Saying you'll target "other business owners", for example, doesn't help you understand how to market to them or how much they're likely to spend.
Instead, go into detail about the sector and size of businesses, the challenges they face and how you're going to help them.
Example: A social media agency might start this section by saying:
"We will primarily help restaurants in Manchester and the surrounding area with their social media marketing. The owners are responsible for marketing and use social media, but are time-poor and aren't getting enough value from these marketing channels."
Think about buying triggers, too. A café might target commuters walking to a local office complex first thing in the morning and be pushchair-friendly for new parents arriving mid-morning.
Creating customer personas is a useful way to better understand your target market if you're struggling with this section.
Understanding the potential of the business is important for financial planning and goal-setting – and getting motivated!
Once you know your target market, you can start to think about the size of the opportunity.
Estimating the size of the market and how much you can capture is difficult. Start by looking for statistics that relate to your target customers, such as the number of independent restaurants in Manchester, and any information on how much small restaurants spend on marketing.
Doing original market research is really useful. Draw up a questionnaire and start talking to potential customers. Most people want to help, particularly if you start by talking about the challenge you're solving.
The opportunity analysis section should answer these questions:
What evidence do you have that customers will buy from you?
Who are your competitors?
Do you know enough about the opportunity to build a marketing plan ?
What changing economic or market factors will affect your business?
Now you've thought about who within your market you're competing with, you need to evaluate them. Don't fall into the trap of thinking you don't have any competition!
Try to find three or four businesses offering similar services and write a short section detailing:
the company
its unique selling point and differentiation
its strengths and weaknesses
If you're offering something completely new, there's likely a reason it doesn't exist already, so understanding your customers' challenges is doubly important. And, you're still competing for your target audience's time and money.
Throughout this process, you should be thinking about this from your customers' point of view – why will they choose you over your competitors?
To drill down deeper into who exactly your business is targeting, divide your audience into segments. You should base these segments on certain criteria, such as:
level of education
This is crucial, if, for example, your product or service is for a specific age group or people living in a particular location.
It's important to understand what suppliers and partners you need to make your business a success. Your business plan should include details of what type of partners you need and any current relationships.
Include any equipment, the workspace you need and the costs involved, too. That will help you understand the costs to get up and running.
This operations section of your business plan should ideally provide details on the following (some may not apply to your type of business!):
The product or service you offer
Your production process or delivery process
Any tools, plant, machinery or equipment you use
Any technology (computers, software, devices and so on) you use
Your suppliers and main materials
Any relevant licences you hold, regulations you must comply with etc.
Your plans and pledges to reduce your environmental and carbon footprint
Anyone reading your business plan will want to know who the main players are within your business and who you have working for you. Write it all down in this section, and include the following:
Who manages the business, and their level of experience
Who makes up your team (if you're a solopreneur, give details of anyone to whom you outsource work)
Anyone else you seek outside help from (technical, professional, financial, legal and so on)
Who's responsible for selling your product or service, and their qualities and experience
How you network, both face-to-face and on social media
Your processes for onboarding staff and looking after their wellbeing
How your business serves the local community and wider society
Your pledges for transparency and good governance
When you understand the opportunity, you can start thinking about how to sell your products.
You can't take an "if you build it, they will come" approach to starting a business. You need to clearly define how you're going to reach potential customers. That includes the time and money that you need to invest into different marketing channels.
Write down your key marketing channels and how you plan to use them. This should be heavily influenced by conversations with potential customers – where do they find information about products? – and will evolve over time.
Potential sales and marketing channels include:
social media
email marketing
partnerships
cold-calling
It's helpful to go into detail about two to five key marketing campaigns. Include the cost, timing and what you hope to achieve.
For example, you might have a launch event at a newly opened shop or promote a partnership with a related product.
The final section covers finance . Your vision, customers, the opportunity and your route to market all influence costs and income, so it makes sense to do this last.
That said, it may lead you to revise other areas of your plan – treat writing a business plan as a learning process.
You need to understand your costs to start up and trade. Every business is different, but key areas to consider are:
stock or raw materials
Thinking about fixed and variable costs helps make sure you've identified everything. Fixed costs have to be paid no matter how many sales you make (for example, rent, wages or an accountant ). Variable costs depend on the volume of sales you make (for example, stock and shipping).
Look for opportunities to beg, barter and borrow! Partners may be able to help get you access to workspaces or other support.
You can present costs as a simple list that shows how much you'll need to get started or you can create cash-flow forecasts and profit and loss reports that go into much more detail.
Cash-flow forecast : Shows the money going in and out of the business every month, with costs assigned to different expense types such as 'advertising' and 'rent'
Profit and loss forecast : Shows how much money the business makes each month
If you need funding to get started, include details in this section. You should also look to incorporate the following:
A detailed breakdown of your business finances
Your pricing against the costs of the product or service
How you deal with your debtors and creditors
Your business's legal structure (for example, do you operate as a limited company or a sole trader ?)
Where you're trading from (i.e. is it a physical location or online only)?
As business owner, your personal financial statement or survival budget, if your business is a start-up or at an earlier stage of development
Granulate your plan into actionable and bitesize goals. And remember: make them SMART! (That's specific, measurable, achievable, realistic and timely.)
Be clear and use plain English. It's essential to avoid jargon, and explain any technical terms clearly. We all use acronyms at work, but don't overdo them. If you do use them, write what they stand for in brackets.
First impressions count! Don't forget to make your business plan look professional. When you build your plan, include a contents page, headers and section numbering. Put a cover on it if you'll be distributing hard copies.
Provide supporting documents. Include an appendix with products/services, expanded financial information and any literature on the business. You can also include bios for key personnel, such as the business owner and directors.
Include as much detail as you can but be succinct. Some people are visual readers. Use visuals such as infographics to illustrate key data and essential points. This is your opportunity to tell the story of your business , so use images and text to get your points across and connect with your target audience.
Show that you care about your business. That way others reading your business plan will care too!
A business plan template provides structure when you're putting all this information together.
Enterprise Nation has created a start-up business plan template you can use, which includes a series of questions to ask yourself about starting a business.
Download Enterprise Nation's business plan template
It's unlikely you'll have a complete understanding of the opportunity when you sit down to write your business plan, so go out and do research when it's needed.
This means speaking to customers, analysing competitors (try their products!) and speaking to suppliers.
Once you have a draft, show it to people in your network or other business owners who can provide feedback.
If you'd prefer to speak to a business expert, here are some advisers on Enterprise Nation who will help you write a business plan .
No. But it'll help crystallise your goals and test your assumptions. The framework is really useful to develop ideas, particularly if they've been rattling around in your head for some time.
Make sure you return to your business plan regularly. Reinforcing your original goals will help keep you on track. Forecasting is a skill. Check your projections against performance and try to figure out what assumptions were correct and where there were issues.
The way you use business plans will evolve over time. Filling in a Lean Canvas might work if you have an idea and haven't started working on it yet. Eventually, you might need to create a business plan to land investment or it can provide an opportunity to reassess what you do.
Lunch and Learn: Create a business plan
How to write the operational section of your business plan
How to set effective goals for your small business
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In a corporate environment an operational plan is a necessary tool to facilitate a long term strategic plan as well as develop an operational budget for the implementation of the strategic plan. A strategic plan is a long term plan for the company that generally encompasses three to five years of goals. The operational plan is a short term tactic that details how to implement the strategic plan including justification for the annual budget. The operational plan breaks up the larger strategic plan into workable short term goals and processes to achieve the long term objective.
When creating an operational plan, the goals and objectives of the corporation should be considered. You should have a clear understanding of where you are as a company, where you wish to go, ideas on how to get there and ways to quantify progress. Creating the operational plan is generally completed by the individuals who will be directly involved in its implementation and usually requires cooperation between multiple departments.
An operational plan will consist of several different parts and the completed product will be used to plan and justify the budget. The first part should include the objectives for the plan; clearly outlining what it is that should be accomplished over the course of the plan. It should also include detailed activities that will be necessary in order to accomplish the objectives. There should also be standards set as to the quality of the work and an outline of the outcome that is desired. In a broad sense the plan includes:
In addition, there also necessary components that will include benchmark timetables in order to measure success, a means of measuring the productivity of the plan and a listing of the resources needed to bring the plan to fruition. This would include any additional staff or consultants, any equipment, software, hardware or any professional fees necessary.
An operational plan is working document that should be used and revised as needed during the fiscal year. In order to create the plan, the staff should have an intimate knowledge of the inner workings of the department, the overall company goals, how the department will help facilitate those goals and what it will take to accomplish the goals. Once the plan is complete it is necessary to use the modes of measurement to track the success of the plan and to ensure the benchmarks are met. Reporting procedures should be put in place to regularly assess the plan.
Staff needs to have the skills and knowledge necessary to implement the plan, assess needed resources and acquire them as necessary. For example, if it is necessary to acquire additional staff to facilitate the plan, either staff needs to have the ability to go through the recruiting and hiring process or the capacity to work with the appropriate department, such as human resources, to accomplish that goal. It is necessary to have organizational skills as well as the drive to stay focused. Often it is helpful to put the most immediate short term goals along with the time lines in view of the department in order to keep the staff motivated and on task.
An operational plan may need to be revised according to practicalities in implementing the plan. If, for example, a desired goal changes, the operational plan will need to change to reflect this. Or, if the implementation of the plan does not go as intended, in order to accomplish it, there may need to be revisions in resources or an adjustment in the timeline. The operational plan should be stringent enough to set realistic goals and keep the department on track but fluid enough to accommodate the realities of daily operations.
An operational plan is an important document that will help a company accomplish its long term goals. It does this by breaking up the long term strategic plan into short term, more easily manageable goals. The organizational processes help ensure that each goal is able to be accomplished with efficiency. The short term goals will affect the outcome of the long term goals of the company and will keep the department on budget and focused. A properly designed operational plan will help the company grow and meet its overall objectives.
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Think of your business as a ship. You need to make sure everything is running correctly to ensure you stay afloat – however, there’s no use sailing if you have no clear idea of where you’re headed, or how you’re getting there. Your operational plan will be the lighthouse that reminds you which way to go, and highlights any potential dangers that could arise in the near future.
An operational plan details the actions your different teams or departments must carry out to achieve short-term targets and objectives of the company, and is essential in effective workforce management . This plan is updated depending on your needs.
This should comprehensively cover:
Operational plans tend to be updated fairly frequently, while strategic plans remain largely unchanged.
An operational plan ensures that a benchmark is in place for the meeting of these short-term objectives, and that you can refer to it in case of risks or to confirm that the day-to-day output of the company is on track with your targets. Depending on the size of a contact centre, sometimes multiple plans are executed for different departments to ensure everyone is on the same page.
What are the differences between strategic and operational plans?
While an operational plan focuses on short-term goals, a strategic plan embodies a long-term outlook for your contact centre, projecting from 12 months to around five years ahead. As a general blanket overview for your entire company, a strategic plan considers what projects or opportunities you’ll need to take on to meet your long-term goal, and what changes need to be implemented throughout to support this. Operational plans tend to be updated fairly frequently, while strategic plans remain largely unchanged unless there’s a major review.
Having an operational plan is crucial. It’s an all-star playbook for your business – reviewing the performance of key staff members through quality management , and recognising how the overall team can work together to meet targets. Without an operational plan, you’re out of the league.
Being able to update and refer to a plan enables comprehensive understanding of goals.
An operational plan ensures you can identify areas that aren’t generating as much revenue as they should, or are causing losses, and can help you establish what needs to change. Being able to continually update and refer to a short-term plan enables a comprehensive understanding of what the goals are and provides a guide for every step of the process. As a result, your agents should be well aware of what’s expected of them and with the right tools self-manage meeting these targets.
Operational plans bring accountability into daily tasks. By having a comprehensive plan of expectations for the performance of your business, if discrepancies occur, you should be able to analyse your plan and identify where these have taken place and how they can be resolved. These plans are a great way of managing other performance indicators too: shrinkage, the number of calls or average handling time, or which of your employees are achieving higher than their targets.
The planning process is dynamic – you need to be able to adapt your plan to a range of changes, which can be a daunting task. If you’re new to operational planning, it’s best to seek professional consultation or learning tools to help you step into the critical thinking role of an operational planner. There are many resources and guides from which you can draw your operational plan. Attending a workforce management course can open new doors for your management techniques, allow you to explore new avenues for staff optimisation and can help you derive the right targets to implement into your planning.
Call Design’s Workforce Management Essentials course is designed to educate workforce management admins and analysts with some of the best industry knowledge and practices. This course breaks down essential workforce management operations to ensure all facets of your business are running as they should be. Examining team efficiency, staff placements and forecasting in the short- and long-term are all theories explored in the course. This way, workforce planners can optimise their staff arrangements to prevent mistakes and make sure they are meeting business requirements.
Call Design has been delivering tailored workforce optimisation solutions to contact centres for almost 20 years, and pride ourselves on our service and industry expertise. To find out how our training courses can help you implement effective operational planning into your organisation, get in touch with our team .
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Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .
Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.
No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.
Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.
It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.
Here are nine reasons your company needs a business plan.
Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.
This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.
A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.
As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals.
Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.
The most common reasons businesses fail include:
Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.
Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.
While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.
You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.
A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.
In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .
From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.
Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction.
This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.
When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company. Consider employee and stakeholder ownership as a compelling and motivating force.
A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.
Important questions to consider as you build your marketing strategy include:
With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.
Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.
As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.
As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.
For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.
JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender, ©2023 JPMorgan Chase & Co
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The operations part of the plan will include manufacturing, financial, and logistic strategies to achieve a boost in production. Bottom Line. An operational plan is the key element of every goal-oriented organization. Contact The Alternative Board today to schedule a meeting with our team of business advisory services specialists. We will help ...
The operations section of your business plan is where you outline the priorities, goals, processes, and timetable for your organisation. An operations plan is beneficial to have not only to investors, but also to you and your staff because it allows you to consider strategies and deadlines. It can also provide information about inventory ...
An operational plan is action and detail-oriented; it needs to focus on short-term strategy execution and outline an organization's day-to-day operations. If your operations strategy is a promise, your operational plan is the action plan for how you will deliver on it every day, week, and month. Put simply, an operational plan helps you bridge ...
Operational planning is a process that involves creating a detailed roadmap to align with a strategic plan. The operational plan itself is a document that outlines timelines, action items, and critical milestones for executing the strategic plan. This document defines the organization's objectives and goals and clarifies how to achieve them.
Without a plan, your business operations are as good as a children's playground—everyone's doing their own thing with no care in the world.. An operational plan brings order to your organization. It defines the functional aspects of your long-term strategy, like goals, milestones, responsibilities and timelines, to build collaboration and make real progress toward your vision.
Operational plans map the daily, weekly or monthly business operations that'll be executed by the department to complete the goals you've previously defined in your strategic plan. Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work. Operational ...
Create a goal that everyone is motivated to complete with the resources available. Timely - Provide a deadline so everyone has a date they are working towards. Different departments will have different operational objectives. However, each department objective should help the company reach the main objective.
Writing an operations plan within a business plan involves summarizing the day-to-day tasks necessary to run the business efficiently and meet its goals in both the development and manufacturing phases of the business. Here's a step-by-step guide: 1. Development phase. In this stage, you mention what you've done to get your business ...
The operations plan section should include general operational details that help investors understand the physical details of your vision. Details in the operations plan include information about any physical plants, equipment, assets, and more.
The important thing is that the information here fully addresses how your business runs. What to include in your operations plan. The components of your operations plan fully depend on what's necessary to produce your product or service. For most, you'll be adding details about your location and facilities, the technology being used, and ...
5. Share and update your operational plan. Once you've created the plan, share it with key stakeholders so they understand your team's most important goals and the daily tasks it will take to get there. Manage your plan and updates in a shared tool that captures real-time progress, like Asana.
Operational Goals. Also referred to as departmental goals or objectives, operational goals are the short-term targets that your organization wants to hit. An operational plan includes operational goals and the steps to achieve them. Typically, organizational goals are: Tied to a specific department or team. Tied to a budget line or item.
Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
An operations strategy is a comprehensive plan that outlines the actions and decisions needed to manage and optimize the production and delivery of goods and services. It's a roadmap designed to align day-to-day operations with long-term business goals, ensuring all activities contribute to overall organizational success.
An operational plan outlines the tasks each employee will need to carry out to accomplish the goals laid out in the strategic plan. The operations section of a business plan expands on the company: Objectives. Timeline. Procedures. In other words, your operational plan should, clearly and in detail, elaborate on the physical, financial, and ...
The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results. In fact, businesses that plan grow 30% faster than those that don't. 1. For existing small businesses, a business ...
Here are 5 reasons why you need a business plan: 1. It will help you steer your business as you start and grow. Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You'll use your business plan like a GPS for how to structure, run, and grow ...
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business. 1. To help you with critical decisions. The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and ...
Describe your operations. It's important to understand what suppliers and partners you need to make your business a success. Your business plan should include details of what type of partners you need and any current relationships. Include any equipment, the workspace you need and the costs involved, too.
The operations plans are a detailed document that clearly outlines the projects and activities of a company to ensure that it achieves its set goals and objectives. This plan considers the overall goals and objectives of the company, but it usually focuses on a particular department or team. An operational plan describes the priority of the ...
The operational plan should be stringent enough to set realistic goals and keep the department on track but fluid enough to accommodate the realities of daily operations. An operational plan is an important document that will help a company accomplish its long term goals. It does this by breaking up the long term strategic plan into short term ...
Operational plans bring accountability into daily tasks. By having a comprehensive plan of expectations for the performance of your business, if discrepancies occur, you should be able to analyse your plan and identify where these have taken place and how they can be resolved. These plans are a great way of managing other performance indicators ...
Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals. 3. Reduce potential risks. Prevent your business from falling victim to unexpected dangers by researching before you break ground.