How To Write the Operations Plan Section of Your Business Plan + Example

Operational plans are important for any effective business plan. They provide a roadmap for how your company will operate on a day-to-day basis, and specifically detail the specific strategies and actions you will take to accomplish your company’s goals.

What is the Operations Plan in the Business Plan?

The Operations Plan is one of the critical business plan components to include in your plan as it presents your company’s action plan for executing its long-term vision. Your business operations plan must detail:

1. The processes that are performed to serve customers every day (short-term processes) and
2. The overall business milestones that the company must attain to be successful (long-term processes).

Why Your Operations Plan is Important

Anyone can have lofty goals (e.g., we will reach $X million in revenue in year X). The Operations Plan proves to the reader that you have thought through and devised a plan to achieve your goals.

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What to Include in Your Operations Plan

The operations section of your business plan has two sub-sections: Key Operational Processes and Business Milestones.

Key Operational Processes (Short-Term Processes)

Every company has processes to provide its customers with products and services. For instance, Wal-Mart has a unique distribution system to effectively move products from its warehouses to its stores, and finally to its customers’ homes. Technology product manufacturers have processes to convert raw materials into finished products. And service-oriented businesses have processes to serve clients, to identify prospective new clients, to continually update service features, etc.

Below are key operational functions that your organization may need to fulfill. In your plan, identify each of these areas that are relevant to your company and what the role of that function is. For example, our customer service team will ensure our customers are satisfied. We will provide 24/7 customer service and post product updates on social media each week.

• Product Development
• Sales
• Marketing
• Finance
• Customer Service
• Manufacturing
• Administration
• Accounting/Payroll
• Human Resources
• Legal
• Purchasing

The processes that a company uses to serve its customers are what transform a business plan from concept to reality. Anyone can have a concept. Importantly, investors do not invest in concepts; rather, they invest in reality. Reality is proving that your management team can execute the concept better than anyone else, and the Operations Plan is where the plan proves this by detailing key operational processes.

Business Milestones (Long-Term Processes)

The second part of your Operations Plan is showing your team’s expected timeline to achieving key milestones. This is best presented in a chart. On the left side, there should be a list of the key milestones the company must reach, and on the right, the target date for achieving them. Sample operational milestones include expected dates when:

• New products and services will be introduced
• New stores will open
• Revenue milestones will be achieved (date when sales exceed $X, when sales exceed $Y, etc.)
• Key partnerships will be executed
• Key customer contracts will be secured
• Key financial events (future funding rounds, IPO, etc.) will occur
• Key employee hires will happen

Additional text should be used, where necessary, to support the projections laid out in the chart.

The milestone projections presented in the Operations Plan must be consistent with the projections in your Financial Plan. In both sections, it is important to be aggressive but credible. Presenting a plan in which the company grows too quickly will show the naivete of the management team while presenting too conservative a growth plan will often fail to excite the potential investor or lender.

By including your Operation Strategy in your business plan you a) show investors/lenders you have a real plan for executing your vision upon funding and b) have a roadmap to follow to ensure your long-term success.

Operations Plan in Business Plan Example

The following operational plan example outlines a hypothetical plan for a small consulting firm, XYZ Company. The plan details the resources required, key operational processes, performance indicators, and milestones to guide the company’s growth and success. This example can be adapted to fit the specific needs and goals of various businesses.

Tracking Key Performance Indicators with Operational Planning

As a business owner, it’s important to track your progress against your company goals. This is where KPIs come in. KPIs, or key performance indicators, are an important part of your company’s strategic plan, and help you track progress and identify areas of improvement. You should document your KPIs in the operations plan of your business plan.

Here are a few things to keep in mind when choosing KPIs for your business:

• Make sure that the KPIs you choose are relevant to your company’s goals.
• Choose KPIs that can be easily measured.
• Avoid choosing too many KPIs, as this can be overwhelming. Stick to a few key ones that will give you the most insights into your business’s progress.
• Set realistic targets for each KPI. This will help you track your progress and identify areas of improvement.
• Review your KPIs regularly to ensure that they are still relevant and accurate, while also being in line with strategic plans.

Examples of KPIs that You Could Track with an Operational Plan

Some examples of KPIs that you could track are:

• Sales growth
• Delivery times
• Customer satisfaction ratings
• Product quality
• Production processes
• Employee retention
• Operational costs

Creating an operational plan with KPIs will help you track your progress, identify areas of improvement, improve strategic planning, and make necessary changes to reach your company’s strategic objectives.

Key Takeaways

A few key things to remember when writing your operations plan:

• Describe the resources that will be required to run your business
• Detail the processes and procedures that will be used to get work done
• Identify the people who will be responsible for carrying out various tasks

Following these tips will help you create a comprehensive and effective operations plan for your business.