How To

Business Plan 101: Operational Plan

The Operations Plan is the most critical component of the business plan. It is the company’s action plan for executing its vision of day to day operations.  It is how the company is going to convince it’s investors that they are a viable force. In the operating plan, business owners will explain the essential elements of the business such as production/manufacturing, inventory and distribution. Specifically, this is the section to explain how a product is going to be made, stored and shipped to customers. If it is a service, this section will depict how the service will be executed for clients and customers.

There are two main sections that an Operations Plan must entail: Everyday Processes and Business Milestones.

Everyday Processes are also referred to as Short-Term Processes. These are the short-term goals and actions of how the company is going to provide its customers with goods and services.  A great example of this is Wal-Mart.  They have an excellent process mapped out of how to move products from the warehouse to the store using a unique distribution strategy. These Short-Term Processes are what moves a business from a conceptual stage to reality. By detailing the key operational steps that the company is going to take, they are proving to their investors that they can do this better than anyone else in that field.

Business Milestones are also referred to as Long-Term Processes. This is the second very important piece to this puzzle. This details how the company is going to continue to execute the vision of the company long-term.  This process is best mapped out using a table that shows the key milestones that the company wants to meet versus the target date that they have set for reaching them. Some of the milestones that should be tracked include when are new products/services going to enter the market, when will the company reach certain milestones for revenue, key partnerships, customer contracts, and when will certain employees be hired.

This post was contributed to Teach a CEO.


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