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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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The operations of your business can be defined as the sum of all the daily activities that you and your team execute to create products or services and engage with your customers, among other critical business functions. While organizing these moving parts might sound difficult, it can be easily done by writing a business operational plan. But before we learn how to make one, let’s first understand what’s the relationship between strategic and operational planning.
Operational planning and strategic planning are complementary to each other. This is because strategic plans define the business strategy and the long-term goals for your organization, while operational plans define the steps required to achieve them.
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A strategic plan is a business document that describes the business goals of a company as well as the high-level actions that will be taken to achieve them over a time period of 1-3 years.
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 plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively. They work even better when there’s a platform like ProjectManager , which facilitates communication across departments to ensure that the machine is running smoothly as each team reaches its benchmark. Get started with ProjectManager for free today.
Operational planning is the process of turning strategic plans into action plans, which simply means breaking down high-level strategic goals and activities into smaller, actionable steps. The main goal of operational planning is to coordinate different departments and layers of management to ensure the whole organization works towards the same objective, which is achieving the goals set forth in the strategic plan .
There’s no single approach to follow when making an operation plan for your business. However, there’s one golden rule in operations management : your strategic and operational plans must be aligned. Based on that principle, here are seven steps to make an operational plan.
Leverage everything you’ve learned today with our template. This free operational plan template for Word will help you define your budget, timeline, KPIs and more. It’s the perfect first step in organizing and improving your operations. Download it today.
Your operational plan should describe your business operations as accurately as possible so that internal teams know how the company works and how they can help achieve the larger strategic objectives. Here’s a list of some of the key elements that you’ll need to consider when writing an operational plan.
An executive summary is a brief document that summarizes the content of larger documents like business plans, strategic plans or operation plans. Their main purpose is to provide a quick overview for busy stakeholders.
An operational budget is an estimation of the expected operating costs and revenues for a given time period. As with other types of budget, the operational budget defines the amount of money that’s available to acquire raw materials, equipment or anything else that’s needed for business operations.
It’s important to limit your spending to stay below your operational budget, otherwise, your company could run out of resources to execute its normal activities. You can use our free operating budget template for Excel to track your operating costs.
It’s essential to align your operational objectives with your strategic objectives. For example, if one of your strategic objectives is to increase sales by 25 percent over the next three years, one possible operational objective would be to hire new sales employees. You should always grab your strategic plan objectives and turn them into one or multiple action items .
Explain the various business processes, workflows and tasks that need to be executed to achieve your operational objectives. Make sure to explain what resources are needed, such as raw materials, equipment or human resources.
It’s important to establish a timeline for your operational plan. In most cases, your operational plan will have the same length as your strategic plan, but in some scenarios, you might create multiple operational plans for specific purposes. Not all operational plans are equal, so the length of your operational timeline will depend on the duration of your projects , workflows and processes.
Find any skills gap there might be in your team. You might need to hire a couple of individuals or even create new departments in order to execute your business processes .
Most companies implement quality assurance and control procedures for a variety of reasons such as customer safety and regulatory compliance. In addition, quality assurance issues can cost your business millions, so establishing quality management protocols is a key step in operational planning.
It’s important to establish key performance indicators (KPIs) to measure the productivity of your business operations. You can define as many KPIs as needed for all your business processes. For example, you can define KPIs for marketing, sales, product development and other key departments in your company. This can include product launch deadlines, number of manufactured goods, number of customer service cases closed, number of 5-star reviews received, number of customers acquired, revenue increased by a certain percentage and so on.
Note any potential risks, assumptions and time or resource constraints that might affect your business operations.
Every plan has a massive effect on all team members involved, and those can be to your company’s benefit or to their detriment. If it’s to their detriment, it’s best to find out as soon as possible so you can modify your operational plan and pivot with ease.
But that’s the whole point of operational planning: you get to see the effect of your operations on the business’s bottom line in real time, or at every benchmark, so you know exactly when to pivot. And with a plan that’s as custom to each department as an operational plan, you know exactly where things go wrong and why.
Creating and implementing a high-quality operational plan is the best way to ensure that your organization starts out a project on the right foot. ProjectManager has award-winning project management tools to help you craft and execute such a plan.
Gantt charts are essential to create and monitor operational plans effectively. ProjectManager helps you access your Gantt chart online so you can add benchmarks for operational performance reviews. You can also create tasks along with dependencies to make the operation a surefire success.
Whether you’re a team of IT system administrators, marketing experts, or engineers, ProjectManager includes robust planning and reporting tools. Plan in sprints, assign due dates, collaborate with team members and track everything with just the click of a button. Plus, we have numerous ready-made project reports that can be generated instantly, including status reports, variance reports, timesheet reports and more.
Operational planning isn’t done in a silo, and it doesn’t work without the full weight of the team backing it up. Ensure that your department is successful at each benchmark. ProjectManager is an award-winning pm software dedicated to helping businesses smooth out their operational plans for a better year ahead. Sign up for our free 30-day trial today.
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Noah Parsons
24 min. read
Updated May 7, 2024
Writing a business plan doesn’t have to be complicated.
In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.
If you’re reading this guide, then you already know why you need a business plan .
You understand that planning helps you:
As you start to write your plan, it’s useful to zoom out and remember what a business plan is .
At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow.
A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals.
After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business.
We’ll dive into how to use your plan later in this article.
There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create.
It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.
Dig deeper : How to write a one-page business plan
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The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.
Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan.
In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .
Your executive summary should include:
Dig Deeper: How to write an effective executive summary
This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service.
This is usually called a problem and solution statement .
To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.
This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.
Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business.
A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .
Try to be as specific as possible when you describe your market.
Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.”
Related: Target market examples
Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.
Next, provide any additional information you have about your market.
What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.
Dig Deeper: Learn how to write a market analysis
Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers.
Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service.
For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.
A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.
Dig Deeper: How to write a competitive analysis for your business plan
The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics.
The best place to start with a marketing plan is with a positioning statement .
This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning.
For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.
Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy .
This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services.
While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer.
If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process.
A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.
Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.
Dig deeper: What to include in your sales and marketing plan
The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like.
Depending on how your business is structured, your operations plan may include elements of the business like:
Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains.
These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.
If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.
For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.
Dig Deeper: Learn how to write the operations chapter of your plan
Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.
Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:
If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap.
Possible milestones might be:
You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:
It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.
Dig Deeper: How to use milestones in your business plan
Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.
Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality.
Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?
If you still need to hire key team members, that’s OK. Just note those gaps in this section.
Your company overview should also include a summary of your company’s current business structure . The most common business structures include:
Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided?
Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.
Dig Deeper: How to write about your company structure and team
Last, but certainly not least, is your financial plan chapter.
Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast.
A typical financial forecast in a business plan includes the following:
A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.
Dig Deeper: How to create financial forecasts and budgets
This is the place for additional data, charts, or other information that supports your plan.
Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.
Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.
Dig Deeper : What to include in your business plan appendix
Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.
Your cover page should be simple and include:
Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.
Dig Deeper: How to create a business plan cover page
Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.
The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity.
AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers.
There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.
Learn more: 10 AI prompts you need to write a business plan
To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .
Knowing why you are writing a business plan will determine your approach to your planning project.
For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure.
If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.
Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.
Keep things concise
Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it.
So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.
Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.
Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.
If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.
Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template.
There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).
But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses.
Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples .
We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.
It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started.
Here are a few common mistakes and how to avoid them:
Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.
The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.
With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas.
A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.
Dig Deeper: Learn what key slides should be included in your pitch deck
One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.
And yet, nothing ever goes exactly as planned – it’s the nature of business.
That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.
Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:
Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets.
Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees.
Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.
A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.
Learn More: How to run a regular plan review
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How to write a business plan FAQ
What is a business plan?
A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
What are the benefits of a business plan?
A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.
Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.
What are the 7 steps of a business plan?
The seven steps to writing a business plan include:
What are the 5 most common business plan mistakes?
There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:
What questions should be answered in a business plan?
Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.
However, these are the key questions you should ask and answer with your business plan:
How long should a business plan be?
The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.
If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.
What are the different types of business plans?
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.
Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.
Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.
One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.
Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
What’s the difference between a business plan and a strategic plan?
A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.
However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.
Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.
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Table of Contents
Executive summary.
It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.
Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.
Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:
Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.
Market analysis.
The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.
Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.
Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.
Organization and management team.
Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.
This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.
Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.
Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.
We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.
This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.
Cash flow statement.
A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.
Section | Description | Example |
---|---|---|
Executive Summary | Brief overview of the business plan | Overview of EcoTech and its mission |
Overview & Objectives | Outline of company's goals and strategies | Market leadership in sustainable technology |
Company Description | Detailed explanation of the company and its unique selling proposition | EcoTech's history, mission, and vision |
Target Market | Description of ideal customers and their needs | Environmentally conscious consumers and businesses |
Market Analysis | Examination of industry trends, customer needs, and competitors | Trends in eco-friendly technology market |
SWOT Analysis | Evaluation of Strengths, Weaknesses, Opportunities, and Threats | Strengths and weaknesses of EcoTech |
Competitive Analysis | In-depth analysis of competitors and their strategies | Analysis of GreenTech and EarthSolutions |
Organization & Management | Overview of the company's structure and management team | Key roles and team members at EcoTech |
Products & Services | Description of offerings and their unique features | Energy-efficient lighting solutions, solar chargers |
Marketing & Sales | Outline of marketing channels and sales strategies | Digital advertising, content marketing, influencer partnerships |
Logistics & Operations | Details about daily operations, supply chain, inventory, and quality control | Partnerships with manufacturers, quality control |
Financial Projections | Forecast of revenue, expenses, and profit for the next 3-5 years | Projected growth in revenue and net profit |
Income Statement | Summary of company's revenues and expenses over a specified period | Revenue, Cost of Goods Sold, Gross Profit, Net Income |
Cash Flow Statement | Overview of cash inflows and outflows within the business | Net Cash from Operating Activities, Investing Activities, Financing Activities |
4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.
To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.
Why you should write a business plan.
Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:
Type of Business Plan | Purpose | Key Components | Target Audience |
---|---|---|---|
Startup Business Plan | Outlines the company's mission, objectives, target market, competition, marketing strategies, and financial projections. | Mission Statement, Company Description, Market Analysis, Competitive Analysis, Organizational Structure, Marketing and Sales Strategy, Financial Projections. | Entrepreneurs, Investors |
Internal Business Plan | Serves as a management tool for guiding the company's growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. | Strategies, Milestones, Deadlines, Resource Allocation. | Internal Team Members |
Strategic Business Plan | Outlines long-term goals and the steps to achieve them. | SWOT Analysis, Market Research, Competitive Analysis, Long-Term Goals. | Executives, Managers, Investors |
Feasibility Business Plan | Assesses the viability of a business idea. | Market Demand, Competition, Financial Projections, Potential Obstacles. | Entrepreneurs, Investors |
Growth Business Plan | Focuses on strategies for scaling up an existing business. | Market Analysis, New Product/Service Offerings, Financial Projections. | Business Owners, Investors |
Operational Business Plan | Outlines the company's day-to-day operations. | Processes, Procedures, Organizational Structure. | Managers, Employees |
Lean Business Plan | A simplified, agile version of a traditional plan, focusing on key elements. | Value Proposition, Customer Segments, Revenue Streams, Cost Structure. | Entrepreneurs, Startups |
One-Page Business Plan | A concise summary of your company's key objectives, strategies, and milestones. | Key Objectives, Strategies, Milestones. | Entrepreneurs, Investors, Partners |
Nonprofit Business Plan | Outlines the mission, goals, target audience, fundraising strategies, and budget allocation for nonprofit organizations. | Mission Statement, Goals, Target Audience, Fundraising Strategies, Budget. | Nonprofit Leaders, Board Members, Donors |
Franchise Business Plan | Focuses on the franchisor's requirements, as well as the franchisee's goals, strategies, and financial projections. | Franchise Agreement, Brand Standards, Marketing Efforts, Operational Procedures, Financial Projections. | Franchisors, Franchisees, Investors |
Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.
Software | Key Features | User Interface | Additional Features |
---|---|---|---|
LivePlan | Over 500 sample plans, financial forecasting tools, progress tracking against KPIs | User-friendly, visually appealing | Allows creation of professional-looking business plans |
Upmetrics | Customizable templates, financial forecasting tools, collaboration capabilities | Simple and intuitive | Provides a resource library for business planning |
Bizplan | Drag-and-drop builder, modular sections, financial forecasting tools, progress tracking | Simple, visually engaging | Designed to simplify the business planning process |
Enloop | Industry-specific templates, financial forecasting tools, automatic business plan generation, unique performance score | Robust, user-friendly | Offers a free version, making it accessible for businesses on a budget |
Tarkenton GoSmallBiz | Guided business plan builder, customizable templates, financial projection tools | User-friendly | Offers CRM tools, legal document templates, and additional resources for small businesses |
What is a good business plan.
A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.
Can i write a business plan by myself, is it possible to create a one-page business plan.
Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.
What is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.
A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?
How is business planning for a nonprofit different.
Learn how to create a business plan
A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing .
A business plan should follow a standard format and contain all the important business plan elements. Typically, it should present whatever information an investor or financial institution expects to see before providing financing to a business.
A business plan should be structured in a way that it contains all the important information that investors are looking for. Here are the main sections of a business plan:
The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo.
The executive summary is the most important section because it is the first section that investors and bankers see when they open the business plan. It provides a summary of the entire business plan. It should be written last to ensure that you don’t leave any details out. It must be short and to the point, and it should capture the reader’s attention. The executive summary should not exceed two pages.
The industry overview section provides information about the specific industry that the business operates in. Some of the information provided in this section includes major competitors, industry trends, and estimated revenues. It also shows the company’s position in the industry and how it will compete in the market against other major players.
The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model.
Market analysis includes information about the target market’s demographics , geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.
A business can choose to consolidate the market analysis and competition analysis into one section or present them as two separate sections.
The sales and marketing plan details how the company plans to sell its products to the target market. It attempts to present the business’s unique selling proposition and the channels it will use to sell its goods and services. It details the company’s advertising and promotion activities, pricing strategy, sales and distribution methods, and after-sales support.
The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.
Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.
The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory . For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.
The financial plan is an important section that will often determine whether the business will obtain required financing from financial institutions, investors, or venture capitalists. It should demonstrate that the proposed business is viable and will return enough revenues to be able to meet its financial obligations. Some of the information contained in the financial plan includes a projected income statement , balance sheet, and cash flow.
The appendices and exhibits part is the last section of a business plan. It includes any additional information that banks and investors may be interested in or that adds credibility to the business. Some of the information that may be included in the appendices section includes office/building plans, detailed market research , products/services offering information, marketing brochures, and credit histories of the promoters.
Here is a basic template that any business can use when developing its business plan:
Section 1: Executive Summary
Section 2: Industry Overview
Section 3: Market Analysis and Competition
Section 4: Sales and Marketing Plan
Section 5: Management Plan
Section 6: Operating Plan
Section 7: Financial Plan
Section 8: Appendices and Exhibits
Thank you for reading CFI’s guide to Business Plans. To keep learning and advancing your career, the following CFI resources will be helpful:
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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.
Watch a live demo and Q&A session to help you streamline goal-setting, accelerate annual planning, and automate how teams intake strategic work.
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.
The Operations Plan is a component of your business plan that is like the engine of your car. The operations plan holds the key parts of your business and it shows how those parts work together to keep the business running. If you are starting a business or your business is growing, the operations plan also shows that your business is more than just a good concept. It shows why the business is running smoothly and how key milestones ahead will be met as the business grows. The operations plan is the powerhouse engine in your business plan . Let’s start that engine together.
The key to putting your operations plan together is choosing which processes show how your business works and what the expected outcomes will be as a result. Include the processes that you believe are most important even if they are basic or simple. And, if you think your business is too new to create an operations plan, think again. Every business has processes, no matter how large or small they may be. Your operations plan may be considered by potential investors or lenders; make it the best it can be.
The best operations plan includes a list of key processes with short explanations that detail each process. Some explanations will also include a brief sentence explaining how the key process will help the business meet the expected key milestones. For example, “Our Marketing team will post on social media each time our product sales reach one of our sales goals. This will drive new customers to our product offering.”
Main components of an operations plan:
Describe how the product is being developed and if it is currently offered or is on target for launch. Include the production process for testing, improvements or revisions.
Key milestone : Note the forecast for new product development to expand the product line.
Describe the process of manufacturing, from the first step to the delivery of products. This may include several bullet points. Add facilities maintenance in this section. Also, include the management processes of the staff.
Key milestone : Include a brief forecast with plans to increase manufacturing capabilities.
Include a description of day-to-day activities that are overseen by staff members, including facilities management, safety, reports and compliance, hiring staff and training.
Key milestone : Add a sentence regarding staff training for leadership as the business grows.
List the process of purchasing parts, services, products, and raw materials. Include a sentence about financial oversight of expenditures to control costs.
Key milestone : Indicate how the staff is preparing for purchasing increases to meet higher manufacturing demands.
List the processes that comprise customer service, including any customer relationship management software (CRM) or other processes that interact with customers. Provide details on processes for customer retention.
Key milestone : Add a sentence describing staff training to build customer relationships.
Describe how your business conducts sales, whether through online channels, via wholesale or retail sales, or by other means. Explain why the process works for your business and how it is positioned to be successful because of the sales process.
Key milestone : Indicate how planned sales strategies will expand to meet key milestones.
Note the process of current marketing campaigns and the response of the target audience. Note how responses are scored on social media.
Key milestone : Include operational plans for building brand awareness, key selling points, and entry positions.
At this stage of business, the finance process should be clearly outlined, with current and any expected funding included. Also, include a sentence about how the business has structured a repayment plan for any loans and is making on-time payments.
Key milestone : Describe any anticipated funding options that have already been put into place.
Describe in a few sentences how timely accounting is completed on a regular basis. Add a sentence about the payroll system and the software that runs it.
Key milestone : Add a note about increasing software programs in accounting to increase performance during growth.
Include a sentence about the process of oversight for the business. Add the process of documentation, filings, and oversight of any copyrights, patents, or trademarks. Include any licensing payments that add revenue to the business.
Key milestone : Include a description of the legal process already in place to accommodate expansion and long-term growth.
Now that you’ve read about the main components in a business operations plan, it’s time to connect them in writing your own operations plan. To do this, you can follow the easy steps ahead as you construct each process.
Remember, you may not need all of the processes listed here. You will want to choose those that make sense for your business and, if needed, add some others. When completed, your operations plan will flow smoothly from start to finish.
Badger Drains & Plumbing, based in Milwaukee, WI, is dedicated to providing top-notch residential and commercial plumbing services. Our operations plan outlines the key processes that make our business run smoothly and how we plan to meet our key milestones as we grow.
Our services, instead of physical products, are continuously refined based on customer feedback and technological advancements in plumbing. This includes adopting newer, more efficient ways to conduct pipe repairs, installations, and maintenance services.
Key milestone : To introduce environmentally friendly and cost-effective plumbing solutions within the next year.
Our staff handle day-to-day operational tasks, prioritizing safety, efficiency, and regulatory compliance. This includes everything from scheduling service calls to conducting routine safety checks and equipment maintenance.
Key milestone : Implement a leadership development program for senior technicians to prepare them for managerial roles as the company expands.
We procure high-quality plumbing materials, tools, and technologies from reputable suppliers, ensuring we have the necessary inventory to meet customer demand without excessive expenditure.
Key milestone : Strengthen relationships with key suppliers to negotiate better prices and ensure priority fulfillment as service demand increases.
Customer service is a pillar of our operations, involving not just resolving issues but proactively enhancing customer satisfaction through follow-ups and feedback collection using CRM software.
Key milestone : Introduce a loyalty program by the end of the next quarter to increase customer retention rates.
Sales efforts are directed through personal client interactions and digital marketing to generate leads, with a strong focus on the benefits of choosing Badger Drains & Plumbing for reliability and professionalism.
Key milestone : Achieve a 20% increase in annual contracts by targeting commercial entities in the Milwaukee area.
Our marketing is focused on local SEO, targeted ads, and social media engagement to connect with the Milwaukee community, emphasizing our quick response times and quality service.
Key milestone : Launch a community-oriented campaign to increase brand visibility and customer engagement by participating in local events and sponsorships.
Our current financing includes business revenue and a small business loan, with a diligent approach to budgeting and a clear plan for loan repayment and future investments.
Key milestone : Secure a line of credit to fund an expansion of services within the next two years.
We use modern software solutions to ensure accurate and timely financial and payroll management, allowing us to focus more on serving our customers and less on back-office tasks.
Key milestone : Transition to a more comprehensive software suite that integrates CRM and finance for better overall management efficiency.
Our legal framework encompasses regular reviews of compliance, documentations, and the management of any intellectual property, ensuring all operations are above board.
Key milestone : Establish a retainer partnership with a legal firm specializing in small businesses to prepare for interstate licensing and expansion.
By following this operations plan, Badger Drains & Plumbing aims to enhance its service offerings, optimize operational efficiency, increase productivity, and achieve sustainable growth, maintaining its commitment to being Milwaukee’s trusted plumbing service provider.
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Operational planning definition.
What does operational planning mean? 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.
An operational planning process involves examining how a business operates and laying out who’s responsible for what and when.
Remember, every company approaches this differently, and annual operational plans are constantly updated or changed. The key to making it work? Clear and collaborative communication.
The timeframe to execute a plan typically depends on an organization’s velocity. For example, creating an annual operational plan is a fluid, changing process.
A well-conceived business operational plan keeps team members collaborating smoothly, ensures everyone knows what needs to be done and what their part is, and guides critical decisions about long-term strategy.
Clearly define the goal or vision for the operational plan.
Analyze and identify essential business stakeholders, team members, budgets, and resources.
1. Clearly define the goal or vision for the operational plan.
2. Analyze and identify essential business stakeholders, team members, budgets, and resources.
3. Accurately plan for risk.
4. Consistently track performance.
5. Communicate to team members and stakeholders about progress.
6. Adapt the operational plan to broader company goals as needed.
Operational planning faqs.
What is operational planning for the business? Operational planning in business entails a team or department working to carry out a strategic plan. It’s a forward-looking process that outlines departmental goals, resources, and budget to ensure team-based activities align with the strategic plan.
Effective operational business plans rely on the commitment of the entire team or department. This buy-in ensures issues are promptly reported, goals are identified, timelines are adhered to, and business collaboration is optimized.
When there’s transparent communication between the finance department and the rest of the business, operational plans become even more efficient in driving the organization toward its objectives.
Examples of operational planning:
Just as a roadmap helps you navigate a physical journey, an operational plan guides your organization on its path to success.
Everyone on the team can refer to a single source of truth to understand the organization’s direction and how their roles contribute to achieving the overall goals. An operational plan is a living document that should be reviewed and updated regularly. It should be adaptable to changing circumstances and also provide stability and direction for your organization.
As we said, think of operational planning as the roadmap that keeps your business on the right track, regardless of size.
One of the most significant advantages of operational planning is getting everyone on the same page, working together like a well-oiled machine to reach your strategic company goals.
Operational planning helps leadership define responsibilities, daily tasks, and activities in detail. It also shows how team members support overall department and organizational goals and describes outcomes to measure against daily tasks.
It also boosts team productivity. Operational planning enhances efficiency, productivity, and profits by ensuring employees in each department and across the company know their daily responsibilities and objectives.
Here are some of the benefits of having a robust operational plan:
Remember, operational plans are built by humans and are susceptible to human error. But when you weigh the pros against the cons, it’s clear that all organizations benefit from an operational plan in place to support growth.
Typically, an operational plan lives in the realm of middle management — in contrast to the C-suite’s strategic plan.
Operational plans have a narrower scope and focus on routine tasks that continuously evolve. Changes to the strategic plan are typically less frequent compared to operational plans.
There are several factors to consider when determining who creates operational plans: <H3>
Strategic, tactical, and operational planning are distinct yet interconnected processes organizations use to achieve their goals. Each level of planning has a specific focus and timeframe.
Let’s look at each type of plan in detail.
A strategic plan describes an organization’s high-level goals, long-term vision, and mission, usually over the next three to five years.
This type of plan also details any significant projects or initiatives that must happen to meet this vision and how the organization will broadly measure the goals.
A strategic plan provides a big-picture view of the organization’s direction and broad objectives. In other words, it’s a visionary plan that doesn’t address the steps needed to achieve them.
An operational plan (also known as an operation plan, work plan, or operations plan) is a detailed outline of what a team or department will focus on in the immediate future, typically within the upcoming year.
The operational plan answers questions about weekly goals, tasks, and responsibilities, ensuring alignment with the organization’s strategic goals and mission.
A tactical plan maps out the steps an organization or team must take after creating their strategic and operational plans.
It involves breaking down strategic and operational plans into smaller, more manageable goals and objectives.
Tactical plans define the steps and actions needed to achieve the desired outcomes.
Remember, strategic, tactical, and operational planning work together to ensure organizations have a clear and actionable roadmap for achieving their goals.
Strategic planning is essential for setting the long-term direction, while operational planning is crucial for executing day-to-day activities. Tactical planning can break down goals into smaller, achievable steps.
Remember these best practices and operational planning techniques when building an operational planning cycle.
The goal of an operational plan is to address foundational questions.
Start by reviewing your strategic plan. Ask yourself, “How will our actions shape our organization?”
From there, consider the following factors:
1. Resources. What is your operating budget? How does it compare to previous years?
2. Staffing. Do you have enough talent to achieve your goals? How do you want to grow your workforce over one, two, and three years?
3. Tools. What operational planning methodology will you use to carry out your plan? What are the operational planning tools you will use?
4. Team alignment. Have you effectively communicated your organization’s vision for the future to your team members?
5. Performance benchmarks. How will you measure progress?
6. Prioritize feedback. Be willing to accept feedback and adjust the operational plan as necessary.
To bring your operational plan to life, you must clearly articulate it to your team.
Project management software can offer all stakeholders a high-level view of tasks and progress. Identify which operational business planning techniques and tools will best achieve the organization’s goals.
Operational planning software can be a valuable asset throughout the process.
In operational planning, budgeting involves assigning tasks and allocating resources to team members to achieve specific financial goals.
Each budget item should align with the strategic objectives outlined in the operational plan, with corresponding timelines and deliverables.
To ensure effective monitoring and progress reporting, establish a reporting system that aligns with the goals, targets, deliverables, resource allocation, and timetables outlined in the operational plan.
This reporting process allows stakeholders to provide regular feedback on the plan’s implementation and track advancements toward achieving the desired outcomes.
The most effective operational plans can identify areas for improvement. The team can then strategically adjust the plan, involve additional members, and proceed toward the next benchmark with a refined approach.
No two operational plans are alike. What is consistent across plans is that the primary goal is to create a functional operational plan that aligns with the organization’s mission and strategic plan.
A clearly defined operational plan ensures that every manager and employee understands their specific responsibilities and the methods and timing of their execution.
Operational planning aims to create a practical plan that supports existing strategic goals, not to generate new ones.
Like project planning, operational planning is never a one-and-done task but a continuous process.
Here are the steps you need to get started:
Before diving into operational details, establish the long-term vision and goals through a strategic plan.
The leadership team should create and monitor the strategic plan, making necessary adjustments.
Narrow down the operational plan’s scope to a specific department, team, or focus area.
Start big with the strategic plan, then narrow down to the operational plan. From there, focus on the tactical areas you need to see your plan through — in other words, a supporting action plan.
Before executing the operational plan, it’s crucial to recognize the key stakeholders involved in the operational planning process.
These team members play a vital role in leading and informing others. Identifying these team members in advance ensures effective communication and successful execution of the operational plan.
Your operational plan outlines the timeframe for achieving specific goals and presents the team’s actions. It must include objectives, deliverables, quality standards (if any), desired outcomes, operating budget, staffing and resource requirements, and progress and monitoring information.
Share the operational plan with key stakeholders so they understand mission-critical goals and the daily tasks that support them.
Track progress in real-time for best results. This also allows you to update the operational plan and report on progress to team members and stakeholders as needed.
Absolutely! Planful’s Financial Performance Management platform seamlessly integrates the demand for structured planning in finance with the business’s need for dynamic planning.
With Planful, you can create collaborative financial plans that align resources with strategic goals. Planful also automates the data collection process for operational planning, saving you from a time-consuming, manual process.
The platform’s agility enables you to adapt and pivot quickly in response to changing business conditions. You can reliably model numerous scenarios and effortlessly convert annual plans into quarterly or monthly rolling forecasts, all tailored to the organization’s current requirements.
Learn more about Planful’s Operational Planning solution .
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.
Internal management team, external management resources, human resources, frequently asked questions (faqs).
When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.
This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.
The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.
The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.
It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.
Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.
If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.
While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.
An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.
When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.
Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.
Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .
The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:
After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.
When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?
Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.
Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.
The 'management section' describes your management team, staff, resources, and how your business ownership is structured.
A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:
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Businesses may utilize operational plans to lay out objectives, set reasonable timelines, and define expectations. They can increase productivity and efficiency at work by studying how to write compelling and thorough operational plans. An operations plan specifying goals and objectives may be made using various techniques.
What is an Operational Business Plan?
An operational business plan is a detailed document that gives a window into the company's mission, vision, goals, and operational techniques that will steer it in the right direction. It is a pathway, a helpful instrument for the organization that gives answers on, for example, resource allocation, the running of operations, and efficiency measurement.
An operational business plan is an indispensable tool for entrepreneurs to make the right decisions, create new opportunities, and ensure the business's sustainable long-term development goals. By establishing strategic directions, dealing with risks, procuring funding, and promoting accountability, businesses can overcome barriers and get the maximum benefit.
A proper business plan is a must for any business, regardless of its size and industry, as it is like a roadmap to help reach success. It is common as it gives a clear vision and a specific direction, defining tactics, strategies, and objectives to achieve them. Companies must prioritize their chores and delegate resources adequately with a clear plan.
Let’s look at the reasons why an operational plan is a significant part of your business strategy:
An operational business plan delivers strategic orientation and specialization by describing short-term and long-term goals. It lays out the boxes of reaching these objectives; this allows the companies to stay focused even when the market changes or the customers embrace different products.
Companies can identify business threats and problems using inclusive market studies and competitors' analysis. An operational business plan provides a way to preemptively manage such risks and change strategies to take advantage of opportunities in a changing business environment.
A properly drafted business plan is vital in getting investment funds from investors or lenders. You can use Google Workspace to draft a solid business plan streamlining operations. It shows you have researched the market, identified the business plan’s growth potential, and have a path to profit, thus inspiring confidence in stakeholders to provide you with the financial support needed for business initiatives.
An operational business plan is an important accountability tool, ensuring that the organization's goals and performance metrics are set. Teams can monitor growth, pinpoint mistakes, spot and reward accomplishments, build a culture of persistent improvement, and earn overall business influence. You must schedule appointments with your clients and discuss the minutes with the team to enhance the outcomes.
An operational business plan comprises several key components essential for guiding the organization toward its objectives:
The executive summary introduces the whole business plan and highlights its salient points, such as the company's mission, the aims, and the proposed strategies.
This business plan component is highly focused and provides details, such as type of venture, products and services, market segment, competitive environment, and unique selling points.
Market analysis is a comprehensive process involving the evaluation of industry trends, customer needs, competition, potential market openings, and information critical for making strategic decisions. Based on the market analysis, you need to create marketing strategies. There are various forms of marketing, including email marketing through email newsletters , social media marketing, and many other things.
Operational strategies essentially describe how the business plans to function effectively, utilizing methods such as production processes, supply chain management, quality control, and technology utilization.
The financial projections involve expected revenues, expenses, cash flow statements, and breakeven analysis to evaluate the business's financial viability and long-term sustainability.
The plan encompasses the project schedule, tasks, responsibilities, and milestones. It outlines the implementation of how the execution strategies were developed in the business plan and how the progress was effectively monitored.
Preparing for assessing possible risks and developing contingency plans to respond to them is what the business should do to protect itself against unpredictable obstacles or threats.
The setting of metrics and performance indicators facilitates performance monitoring and evaluation of the business progression towards its objectives in a continuous fashion, thus permitting the implementation of timely changes and upgrades when needed.
Crafting an operational business plan is critical to any business as this is the key to setting the business's targeted goals, strategies, and tactics. It defines the strategies and guidelines for success, thus ensuring productive use of available resources and effective decision-making.
Market research is the most important part of creating an operational business plan . It means getting data on your intended audience, competitors' market trends, and the industry. This will assist you in defining your target market, familiarizing yourself with their needs and preferences, and analyzing the competition. After conducting thorough market research, you can decide on pricing, positioning, and marketing strategies. This is the right way to create opportunities for success.
To ensure the success of any work plan, it is essential to set clear and achievable aims and objectives. To do this, you must have a sense of direction and purpose. Goals should be defined in a way that makes them specific, measurable, attainable, relevant, and time-bound. When defining goals and objectives for your company, it's important to consider its core strengths and weaknesses, trends in the market, and industry standards. Setting attainable goals and objectives can motivate your team, keep track of progress, and make any necessary changes.
After you have identified your target and objectives, the next thing to do is develop the strategies and tactics to help you achieve these goals. Strategies are the broad approaches that tell you how you will attain your goals, while tactics are the specific actions or initiatives you will take to support those strategies. In strategy and tactics of development, consider your market segment, competitive advantages and resources, and market trends. By doing so, you can produce a comprehensive and well-thought-out action plan.
The operational business plan requires a well-defined organizational structure, and roles and responsibilities must be clearly defined. As a result of such an approach, people from all company positions unanimously know their role. While developing an organizational structure, establish the optimal size of the company, the complexity of the production, and the skills and needs of your employees. Closely define the reporting lines, generate communication channels, and share the responsibility to roll out smooth operations and make the staff accountable.
Financial analysis and budgeting are the key features of an operational plan of action. They guide you in your business's profitability and break-even point determination, investment allocation, and monitoring performance. Perform a financial statement analysis by investigating your earning streams, expenses, break-even points, and cash flow. Bring this information to learn how to create a realistic budget that matches your priorities and objectives. Make it a point to periodically assess and revise your financial projections to ensure that, from a financial standpoint, your business remains stable and on track.
To make your operational business plan successful, you need full communication, execution well, and continuous control. Communicate the plan to your team so everyone understands their roles and contributions. Create a set of key performance indicators (KPIs) to help you track progress and monitor them regularly to ensure you hit your targets. Monitor market conditions, customer feedback, and performance metrics to identify problems and adjust appropriately. Consistently deliver information on the achieved milestones and result in positive outcomes.
An operational business plan is a dynamic document that requires constant updating and review. When your business is going through changes and markets are expanding and contracting, it is wise to audit and update your plan. Make sure to carve out time to review the main plan at least once yearly, if needed. Assess your strategies and tactics to see if they need adjustment, update the financial projections, and implement any further revisions. By constantly revising and monitoring your operational business plan, you can make it widely applicable and efficient in achieving your business success.
An operational business plan constitutes detailed work and an advanced strategic approach. Nevertheless, frequent mistakes often obstruct the implementation and may prevent the plan’s success.
Avoiding mistakes in operational business planning is worthwhile, as it can facilitate the development of more effective and sustainable strategies. Through creating specific goals, keeping risks low, designing realistic financial projections, planning the implementation, and monitoring progress, businesses can greatly increase their success potential and achieve their long-term objectives. Look for some key pitfalls to avoid when building a successful operational business plan.
If definite and attainable goals are specified, the organization will be in a state of haze and clarity. Establishing clear, specific, measurable, attainable, relevant, and time-bound (SMART) goals is vital to staying focused on achieving the overall objectives of the business plan.
Ignoring market research can lead to poor estimations about buyers’ expectations, market tendencies, and competitors’ strategies. Thorough market research is essential in an organization's branding since it gives the management the knowledge they need to make good decisions and develop good strategies.
Neglecting to recognize and address risks can leave the business vulnerable to unexpectedly challenging situations or disruptions. Integrating risk management strategies into the business plan mitigates risks and enhances resilience.
Financial mismanagement can occur from overly optimistic financial projections, damaging the business plan's credibility and implementation. Financial projections must rely on credible data, anticipated plausible outcomes, and lower probable estimations.
A zero focus on the implementation plan indicates that execution will likely fail. A practical implementation strategy, including timelines, tasks, assignments, and resources, is necessary for the plan to be successful.
Failure to monitor progress and manage changes that arise after implementing the business plan will likely result in missed opportunities or inefficient strategies. The major performance indicators (KPIs) should be routinely monitored and evaluated to adjust and refine them for continuous betterment.
To sum up, building a working operational business plan is an inseparable part of a successful business strategy. In doing so, you’ll have a detailed strategy that fits your expectations, explains your goals, and indicates direction for progress. It is essential to conduct thorough market research, have feasible goals, objectives, strategies, and tactics, build the organizational structure, analyze the financials, implement and control the plan, and constantly update and review it.
1. what is a business plan for the operations.
A business plan to implement operations includes the company's daily procedures and strategies to realize its strategic goals. It portrays how these operational areas, including production, marketing, finance, and human resource management, will support the business goals.
A complete business plan indicates who will do what and helps the company achieve its strategic goals. It strengthens efficiency, minimizes risks, and guides decision-making to ensure the strategy moves in the right direction.
The main components include mission, vision, operational strategies, organizational structure, resource allocation, performance metrics, risk management, and contingency alternatives.
The business creates operational planning by
The operational business plan should undergo a periodic review and revision, usually every quarter or annually, to keep it in line with the changes in market conditions, business priorities, and internal issues. Periodic reviews are imperative for keeping up-to-date with the dynamics and consistency in realizing business goals.
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Feb 1, 1997
Generally, there are seven major components that make up a business plan. They are:
1. Executive summary
2. Business description
3. Market strategies
4. Competitive analysis
5. Design and development plans
6. Operations and management plans
7. Financial factors
The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business. In fact, within the operations plan you'll develop the next set of financial tables that will supply the foundation for the "Financial Components" section. The financial tables that you'll develop within the operations plan include:
*The operating expense table
*The capital requirements table
*The cost of goods table
There are two areas that need to be accounted for when planning the operations of your company. The first area is the organizational structure of the company, and the second is the expense and capital requirements associated with its operation.
The organizational structure of the company is an essential element within a business plan because it provides a basis from which to project operating expenses. This is critical to the formation of financial statements, which are heavily scrutinized by investors; therefore, the organizational structure has to be well-defined and based within a realistic framework given the parameters of the business.
Although every company will differ in its organizational structure, most can be divided into several broad areas that include:
*Marketing and sales (includes customer relations and service)
*Production (including quality assurance)
*Research and development
*Administration
These are very broad classifications and it is important to keep in mind that not every business can be divided in this manner. In fact, every business is different, and each one must be structured according to its own requirements and goals.
Terence P. McGarty in his book, Business Plans That Win Venture Capital , lists four stages for organizing a business:
1. Establish a list of the tasks using the broadest of classifications possible.
2. Organize these tasks into departments that produce an efficient line of communications between staff and management.
3. Determine the type of personnel required to perform each task.
4. Establish the function of each task and how it will relate to the generation of revenue within the company.
Once you have structured your business, however, you need to consider your overall goals and the number of personnel required to reach those goals.
In order to determine the number of employees you'll need to meet the goals you've set for your business, you'll need to apply the following equation to each department listed in your organizational structure:
In this equation, C represents the total number of customers, S represents the total number of customers that can be served by each employee, and P represents the personnel requirements. For instance, if the number of customers for first year sales is projected at 10,110 and one marketing employee is required for every 200 customers, you would need 51 employees within the marketing department.
10,110 ÷ 200 = 51
Once you calculate the number of employees that you'll need for your organization, you'll need to determine the labor expense. The factors that need to be considered when calculating labor expense (LE) are the personnel requirements (P) for each department multiplied by the employee salary level (SL). Therefore, the equation would be:
P × SL = LE
Using the marketing example from above, the labor expense for that department would be:
51 × $40,000 = $2,040,000
Once the organization's operations have been planned, the expenses associated with the operation of the business can be developed. These are usually referred to as overhead expenses. Overhead expenses refer to all non-labor expenses required to operate the business. Expenses can be divided into fixed -- those that must be paid, usually at the same rate, regardless of the volume of business -- and variable (or semivariable) -- those which change according to the amount of business.
Overhead expenses usually include the following:
*Maintenance and repair
*Equipment leases
*Advertising & promotion
*Packaging & shipping
*Payroll taxes and benefits
*Uncollectible receivables
*Professional services
*Loan payments
*Depreciation
In order to develop the overhead expenses for the expense table used in this portion of the business plan, you need to multiply the number of employees by the expenses associated with each employee. Therefore, if NE represents the number of employees and EE is the expense per employee, the following equation can be used to calculate the sum of each overhead (OH) expense:
OH = NE × EE
In addition to the expense table, you'll also need to develop a capital requirements table that depicts the amount of money necessary to purchase equipment you will use to establish and continue operations. It also illustrates the amount of depreciation your company will incur based on all equipment elements purchased with a lifetime of more than one year.
In order to generate the capital requirements table, you first have to establish the various elements within the business that will require capital investment. For service businesses, capital is usually tied to the various pieces of equipment used to service customers.
Capital for manufacturing companies, on the other hand, is based on the equipment required in order to produce the product. Manufacturing equipment usually falls into three categories: testing equipment, assembly equipment, and packaging equipment.
With these capital elements in mind, you need to determine the number of units or customers, in terms of sales, that each equipment item can adequately handle. This is important because capital requirements are a product of income, which is produced through unit sales. In order to meet sales projections, a business usually has to invest money to increase production or supply better service. In the business plan, capital requirements are tied to projected sales as illustrated in the revenue model shown earlier in this chapter.
For instance, if the capital equipment required is capable of handling the needs of 10,000 customers at an average sale of $10 each, that would be $100,000 in sales, at which point additional capital will be required in order to purchase more equipment should the company grow beyond this point. This leads us to another factor within the capital requirements equation, and that is equipment cost. If you multiply the cost of equipment by the number of customers it can support in terms of sales, it would result in the capital requirements for that particular equipment element. Therefore, you can use an equation in which capital requirements (CR) equals sales (S) divided by number of customers (NC) supported by each equipment element, multiplied by the average sale (AS), which is then multiplied by the capital cost (CC) of the equipment element. Given these parameters, your equation would look like the following:
CR = [(S &3247; NC) × AS] × CC
The capital requirements table is formed by adding all your equipment elements to generate the total new capital for that year. During the first year, total new capital is also the total capital required. For each successive year thereafter, total capital (TC) required is the sum of total new capital (NC) plus total capital (PC) from the previous year, less depreciation (D), once again, from the previous year. Therefore, your equation to arrive at total capital for each year portrayed in the capital requirements model would be:
TC = NC + PC - D
Keep in mind that depreciation is an expense that shows the decrease in value of the equipment throughout its effective lifetime. For many businesses, depreciation is based upon schedules that are tied to the lifetime of the equipment. Be careful when choosing the schedule that best fits your business. Depreciation is also the basis for a tax deduction as well as the flow of money for new capital. You may need to seek consultation from an expert in this area.
The last table that needs to be generated in the operations and management section of your business plan is the cost of goods table. This table is used only for businesses where the product is placed into inventory. For a retail or wholesale business, cost of goods sold , or cost of sales , refers to the purchase of products for resale -- the inventory. The products that are sold are logged into cost of goods as an expense of the sale, while those that aren't sold remain in inventory.
For a manufacturing firm, cost of goods is the cost incurred by the company to manufacture its product. This usually consists of three elements:
1. Material
3. Overhead
As in retail, the merchandise that is sold is expensed as a cost of goods, while merchandise that isn't sold is placed in inventory. Cost of goods has to be accounted for in the operations of a business. It is an important yardstick for measuring the firm's profitability for the cash-flow statement and income statement.
In the income statement, the last stage of the manufacturing process is the item expensed as cost of goods, but it is important to document the inventory still in various stages of the manufacturing process because it represents assets to the company. This is important to determining cash flow and to generating the balance sheet.
That is what the cost of goods table does. It is one of the most complicated tables you'll have to develop for your business plan, but it is an integral part of portraying the flow of inventory through your operations, the placement of assets within the company, and the rate at which your inventory turns.
In order to generate the cost of goods table, you need a little more information in addition to what your labor and material cost is per unit. You also need to know the total number of units sold for the year, the percentage of units which will be fully assembled, the percentage which will be partially assembled, and the percentage which will be in unassembled inventory. Much of these figures will depend on the capacity of your equipment as well as on the inventory control system you develop. Along with these factors, you also need to know at what stage the majority of labor is performed.
Part six of seven. Tomorrow, we'll cover the financial factors that go into your plan. Tips are updated daily at 8:30am PST or 11:30 EDT.
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The old way of planning no longer works in complex and unpredictable business environments, and companies are struggling to find their feet on shaky ground. As we’ve seen with many of our customers and strategies in Cascade, organizations can no longer count on executing three or even five-year strategic plans.
The new reality forces companies and their operations teams to adapt their operational plans more frequently and within shorter time frames if they want to reap benefits faster than their competitors. Organizations need to work on their strategic instinct and fast adaptability to enhance their operational efficiency .
And that requires big changes—including building a flexible operational plan, supported by the right tools and systems that help you achieve real-time centralized observability and empower a strategic response to external disruptions.
Read this article to build a bulletproof operational plan that includes all the key elements necessary to overcome unpredictable business chaos. You’ll also get free templates that will help you rapidly adapt and align your teams.
✨Bonus: We’ve included pro tips from business leaders in our network to help you identify gaps in your strategy execution and build resilient business operations.
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 the gap between business strategy and on-the-ground execution and ensures that the organization is on track to achieve its long-term goals.
Operational planning deals with the day-to-day details and short-term goals, while strategic planning focuses on the big picture and long-term direction of an organization.
To put it in simpler terms, operational planning is about the "how" of daily tasks, while strategic planning defines the "what" and "why" for future success.
📚Recommended reading: Strategic vs. Operational Planning
The quality of your operational plan will depend on your input. A successful operational planning initiative will consider these aspects:
👉🏻 Once you’ve gathered this information, you can develop an operational plan to help you execute business strategies.
Enough chit-chat; it’s time to put your operational plan together. We've built this based on our proven and tested approach, used by over +45,000 Cascade users.
See how Cascade Strategy Execution Platform enhances operational efficiency by reducing duplication and aligning teams toward common goals. It effectively eliminates waste resulting from misalignment, fostering smoother operations and improved performance.
Here’s a recap of the five key elements your plan must consider:
Selecting your operational plan's key metrics isn't a mere exercise in tracking numbers; it's about laser-focused alignment with your business needs and objectives. These metrics are the tangible indicators of your organization's efficiency and performance. They serve as the compass, guiding your daily decisions and actions toward achieving concrete results.
By precisely aligning these metrics with your company's core objectives, you ensure that every initiative and action within your operational plan directly contributes to achieving tangible results.
An aligned operational plan makes it easier to:
Remember that the role of operations is to close the gap between your organization's strategic goals and what is being done on a daily basis to make them happen.
👉🏻 How Cascade can help:
With Cascade’s Metrics Library , you can bring your operating and financial business-level goals together with your strategy under one single roof. This makes reporting & governance easy, accurate, and less time-consuming by connecting your business data to your key business initiatives.
Through Cascade’s integrations , you can consolidate your metrics in one place, importing your data directly from business systems, data lakes, BI tools, or even spreadsheets.
The focus areas of your operational plan are the key areas of the business that the plan will address.
This will depend on your business plan. Think about how the business operates and how it succeeds. Do you need to pursue short-term cost reductions while simultaneously pursuing longer-term growth and transformation initiatives? Your operational plans must be built on these strategic priorities.
For example, you can prioritize your focus areas based on the most relevant business strategies or by specific departments. Some examples of focus areas could be:
💡Tips to help define the focus areas of your operational plan:
Strategic objectives are specific goals aligned with the operation’s strategy and focus areas. They represent what you want to achieve in each focus area and will serve as the building blocks of your plan, ensuring that it’s focused and actionable.
Some examples of strategic objectives:
💡Tips for defining strategic objectives include:
It’s time to identify and prioritize the projects that need to be executed. Remember, projects are action plans to help you achieve your strategic objectives.
Project planning should include thinking about time frames, task assignments, and deliverables (and prioritizing).
Here are some examples of project ideas:
💡Tips for defining and prioritizing projects:
Finally, you’ll need to know if your operational plan and day-to-day activities result in outcomes.
Set KPIs for key initiatives and strategic objectives to measure success, ensure alignment, and identify performance gaps in your operational plan.
Some examples of operations KPIs are:
💡Tips for defining and tracking KPIs:
👉🏻 How Cascade can help build your plan:
Cascade’s planner feature enables you to build your operational plan with structure and ease by breaking down the complexity from high-level initiatives to executable outcomes. Define your key elements (focus areas, objectives, projects, and KPIs), and share the plan with your teams. You’ll get full visibility of the plan’s progress in real-time, allowing you to identify gaps, quickly update the plan, and communicate the change with your team with a single click.
👉🏻 If you don’t want to start building the plan from scratch, use our free Operational Plan Template pre-filled with examples of focus areas, objectives, projects, and KPIs that you can customize to meet your organization’s needs.
Here are five operational plan examples to help you create plans for your teams. You can use one master operational plan or set up an operational plan for each department.
This Operational Plan Template will help you close the gap between business goals and day-to-day operations. You'll be able to set goals and KPIs for your top priorities and work with the operations team to deliver operational excellence and business results.
This HR Operational Plan Template can be used to meet staffing requirements, manage human capital and align human resources activities with your strategy. HR managers in any industry can create a clear operational plan that can be constantly monitored, adapted, and improved.
If you’re in the IT team, try out this IT Plan Template to get your IT operational planning up and running fast. It comes prefilled with focus areas and KPIs relevant to IT operations; you can easily customize workflows and deliverables to your needs.
This Marketing Plan Template can help you efficiently understand and plan your digital marketing operations using best practices. Use it to quickly set up priorities and get your social media and marketing teams moving on tasks that will make an impact.
This finance-focused template is ideal if you want to get on top of your finance operations plan. Use it to allocate and distribute financial resources across your organization and get real-time updates through your dashboard and reports—which are great tools to create a visually compelling financial summary that clearly shows your key metrics.
💡Pro Tip: To ensure successful execution, it's crucial to align not just your master operational plan with your overarching strategic plan, but also all the operational department plans.
With the Alignment Maps feature, you’ll be able to visualize how your top-level business strategy breaks down into functional and operational plans. This empowers COOs and CFOs to consolidate their operational plans in one place, creating tighter alignment between the finance and operations teams and improving cross-collaboration to build more resilient operations.
Want to dig deeper? Use the Relationships feature to see the relationships between connected objectives from your plans and understand how your different department goals contribute to the core business metrics and goals. This view will allow you to clearly map dependencies, blockers, and risks that may lie along your journey.
1. don’t underestimate the power of transparent communication.
Regularly communicate the operational plan and progress to all relevant stakeholders to build the necessary buy-in and support. Your employees must know your goals and the roadmap, and team members should understand their role in its execution. This business transparency will help everyone row in the same direction.
“Clarity regarding strategy is one of the key drivers of autonomous execution. If people understand what you’re working toward and have guardrails in place, they can be empowered to make their own decisions and don’t need everything to be ‘run up the chain’ to get approved. This allows you to move fast and at scale.” — Sam Sterling , Chief Strategy Officer, Akqa
Keep the momentum going and ensure that the plan is executed effectively. Regular monitoring and reviews can help identify and address any challenges or obstacles that may arise.
Schedule regular reviews and check-ins and provide the necessary support to ensure projects are on track and moving forward.
“I think adopting a growth mindset is super important. This means having the confidence to fail fast, try something new and empower people to do that.” — Ken Miller , General Manager, Azure Intelligent Cloud at Microsoft
With the Team Updates functionality, every team member can post updates on key measures, actions, and objectives. This will give you real-time visibility into performance and help you identify possible risks before it’s too late—without having to schedule extra meetings or nag your team members for updates.
Your operational plan should be flexible, adaptable, and open to adjustments. This means keeping an eye on progress, making corrections if needed, and being willing to adapt the plan to changing circumstances or new opportunities. As McKinsey suggests, you can consider creating a team that will be able to collect data, link analysis with action, and offer quick responses to rapid changes.
“Traditionally, companies would have taken that piece of paper and gone out and said: we're going to execute it, start to finish. Then get into the formulation of the strategy, what we need to hit, and what the end product result will be like. But what we do know is that’s never the case. Along the way, you're going to have bumps, and inevitably, you’ll need to change from that original picture.” — Annie Lucchitti , Marketing Manager, Unilever
Effective operational planning requires the engagement and empowerment of your team. Involve stakeholders in the planning process and provide them with the necessary resources. Give them context and an opportunity to set goals and prioritize initiatives. This will help you boost engagement and hold them accountable for progress.
“I think it just works at every single level. Are people allowed to be themselves at work? Personally, are they at peace? Are they happy? Productivity happens when people have the right skills, but also when they are engaged and happy. If one of those fails a bit, productivity will start decreasing.” — Joan Torrents , Global Sourcing Manager, TESCO.
Don’t underestimate the importance of tracking and measuring progress against the operational plan's goals and objectives. Set milestones, enforce KPIs, and stay on top of progress. Doing this will help you stay on course, empower you to act quickly, and provide valuable insights into what is going wrong.
“Data is a foundational element in the strategy definition phase as well as in the strategy execution phase as it helps create a baseline, identify key priorities, set goals, and measure progress.” — Erica Santoni , Principal, Diversity Equity & Inclusion, Intuit
Use Cascade’s Dashboards to monitor your day-to-day progress on key metrics and critical business and strategic information in real-time.
Compile the information in powerful reports and executive summaries in seconds with pre-built templates. Share them with your key stakeholders —internal and external— and invite them to collaborate on your strategy together.
What good is an operational plan if no one executes it? If your organization wants to operate at a higher level, static tools like Excel spreadsheets, PowerPoints, Google Docs, and/or project management tools aren’t the solution.
❌They aren’t designed for adaptive strategy and planning.
❌They often lead to siloing and hinder effective cross-collaboration.
❌They make it challenging to measure progress and slow down decision-making.
With Cascade as your central operating system, you can stop running business operations blindfolded and embrace rapid, coordinated, and data-driven decision-making.
Get your Operational Plan Template to get started with a dynamic plan that will lead to actual outcomes for your business and see faster results from your strategy.
Or take Cascade for a spin! Start today for free or book a 1:1 product tour with Cascade’s in-house strategy expert.
Your toolkit for strategy success.
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? "
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The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability. Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory... all the stuff involved in operating your business on a day-to-day basis.
Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will run their businesses.
Your goal is to answer the following key questions:
Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:
Location and Facility Management
In terms of location, describe:
Daily Operations
Personnel Requirements
Sound like a lot? It can be--but not all of the above needs to be in your business plan.
You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan
Working through each issue and developing concrete operations plans helps you in two major ways:
Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.
That way the operations section answers the "How?" question.
Next time we'll look at another major component in a business plan: who is (or will be) on your Management Team .
More in this series:
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How To Start A Business Plan: A Step-By-Step Guide
Creating a business plan is a critical first step for any entrepreneur. Knowing how to start a business plan will help you create a roadmap, guiding your business from startup to growth and beyond. Whether you're looking for investment, trying to set clear goals, or simply organizing your thoughts, a solid business plan can make all the difference.
1. executive summary.
What It Is: This section summarizes your business plan as a whole and outlines your company profile and goals.
What to Include:
Tip: Keep it concise. Although it's the first section, it's often best to write it last, after you’ve detailed everything else.
What It Is: This section provides detailed information about your company, including who you are, what you do, and what markets you serve.
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Tip: Use this section to highlight your company’s strengths and what makes you unique.
What It Is: Market research demonstrates your understanding of the industry and target market.
Tip: Include data and statistics to back up your findings and show that you’ve done your homework.
What It Is: This section outlines your business’s organizational structure and management team.
Tip: Highlight the skills and experiences of your team that will help the business succeed.
What It Is: Here, you detail the products or services you offer or plan to offer.
Tip: Focus on the benefits your products or services bring to your customers.
What It Is: This section explains how you will attract and retain customers.
Tip: Ensure your marketing and sales strategies are aligned with your market research findings.
What It Is: If you’re seeking funding , this section outlines your requirements.
Tip: Be specific and realistic about how much funding you need and how it will be used.
8. Financial Projections
What It Is: Financial projections provide a forecast of your business’s financial future.
Tip: Use realistic and conservative estimates. Consider hiring a financial professional to help with this section if needed.
What It Is: The appendix includes any additional information that supports your business plan.
Tip: Only include essential information that adds value to your business plan.
Creating a business plan requires clarity and precision. First and foremost, keep your business plan clear and concise. Avoid using jargon or complex language that could make the plan difficult to read or understand. Your aim should be to communicate your ideas effectively and efficiently.
Next, be realistic in your approach. Ensure that your goals and financial projections are attainable based on your research and understanding of the market. Overly ambitious projections can undermine your credibility and potentially lead to unrealistic expectations.
It's also essential to remember that a business plan is a dynamic document. As your business grows and market conditions change, you should revisit and revise your plan regularly. This helps you stay aligned with your goals and adapt to new challenges and opportunities.
Finally, seek feedback from experienced business professionals. Having someone with business experience review your plan can provide valuable insights and help identify any potential issues or areas for improvement. Their feedback can enhance the overall quality and effectiveness of your business plan.
By following these tips, you'll be better equipped to create a robust and effective business plan that can guide your business towards success.
The bottom line is that starting a business plan may seem challenging, but with careful planning and attention to detail, you can create a comprehensive guide to steer your business toward success. Use this step-by-step guide to ensure that all essential components are covered, giving your business the best possible start.
Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.
The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.
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“A goal without a plan is just a wish,” is a popular saying, and nowhere is this more evident than in the business landscape.
Picture a crew rowing a boat with intense effort. Despite their individual hard work, the boat spins in circles, making no progress towards the finish line.
Similarly, companies without effective operational planning fail because team members are not aligned on shared objectives. Instead, they work independently on tasks that do not contribute to the overarching goals, leading to inefficiencies and a lack of progress.
This is why implementing operational planning is imperative. It helps you break the company-wide plan into monthly, quarterly, half-yearly, or annual goals. This also optimizes processes, utilizes resources effectively, and fosters a culture of continuous improvement and innovation in the company.
Read this blog to delve into the nuances of operational planning and the essential steps to develop an effective one in the firm. But before that, let’s look at the definition of operational planning.
Operational planning is the process of defining the daily activities and processes required for an organization or department to achieve its broader strategic objectives. It involves creating a clear, actionable roadmap that aligns everyday operations with the organization’s long-term vision .
Now, let’s look at the various types –
A Single-use Plan: Also known as a specific plan, it is developed for non-recurring or single projects or events with a clear start and end dates. Once the project/event is over, the plan is discarded and not used again.
A Standing Plan: Also called a multiple-use plan, it can be used repeatedly whenever a similar situation arises. This plan comprises standards and procedures to ensure smooth workflow in daily operations and can undergo modification as per the business needs.
Now that we know the types, let’s move on to the benefits of having an operation plan.
Read More: 7 Steps to Build a Winning Operational Strategy for Your Business
The following points highlight the significant advantages that operational planning provides to businesses:
Operational planning breaks down long-term objectives into smaller, manageable tasks and milestones. This granular approach ensures daily operations align directly with the company’s strategic vision. Moreover, the detailed roadmap provides clarity and direction, helping employees understand how their individual efforts contribute to the company’s success.
Operational planning enables companies to identify inefficiencies, redundancies, and waste in their processes. This allows them to streamline workflows, optimize resource allocation, manage inventory, and reduce unnecessary expenses. Operational planning also helps in budgeting and forecasting, which can prevent overspending and improve financial management.
Operational planning helps allocate resources (human, financial, and material) to the right task at the right time. By clearly defining roles, setting achievable targets, and providing the necessary tools and training, employees can perform their tasks more efficiently, thereby improving productivity. Additionally, when employees understand how their work contributes to larger company goals, they tend to be more engaged and motivated.
Read More: 11 Effective Strategies to Enhance Employee Engagement
A robust operational plan incorporates effective risk management strategies within its framework. It enables organizations to outline potential operational risks and develop contingency plans to minimize the impact of these events on overall operations. For example, identifying common supply chain risks enables firms to create a list of alternative suppliers and leverage them whenever necessary to maintain operational stability and curb production delays.
Operational planning offers companies an organized framework within which decisions are to be made. It enables firms to assess current situations, collate real-time insights, weigh the pros and cons, and make data-driven decisions based on the evaluation. For example, a financial company can analyze current market trends and economic forecasts to adapt its investment strategies swiftly and maximize revenue.
Operational planning plays a critical role in streamlining the entire product/service delivery lifecycle. It allows organizations to automate processes, reduce waste and costs, and enhance resource usage. This results in faster turnaround times and high-quality outcomes. Therefore, it helps maximize return on investment (ROI) and improve customer satisfaction.
Read More: How to Enhance Customer Experience Using Resource Management Software?
Let’s now look at the steps for creating an efficient operations plan.
Developing an operational plan is not a one-and-done exercise. It’s a continuous process to ensure that day-to-day operations align with broader organizational objectives. As a result, operational plans need to evolve as and when strategic goals change.
Below mentioned are the key steps for creating an efficient one –
The first step in developing an operational plan is to understand and analyze the organization’s long-term, strategic goals. These high-level objectives can be broken down into smaller, achievable goals to allow firms to better visualize what they need to accomplish on a short-term or daily basis. This top-down approach helps businesses create realistic operational targets that align with broader organizational objectives.
The next step is to break down the operational goals into manageable daily tasks and activities. By narrowing down the scope of work, managers can clearly outline the resource requirements, including equipment, staff, time, and financials, needed for daily operations. It also helps organizations establish daily operational functions of every team and department.
Read More: Effective Ways to Create a Work Breakdown Structure
Establishing realistic timelines and creating a comprehensive budget is crucial for successful operational planning. Therefore, managers should set deadlines for each task or activity, ensuring they are achievable and allow room for potential setbacks. Concurrently, they need to develop a detailed operational budget that accounts for all the costs associated with running an efficient operation.
In the next step, managers should identify and deploy appropriate human resources to various operational tasks based on attributes such as skills, competencies, location, cost, capacity, and availability. Similarly, they should assess the requirements for non-human resources and allocate the assets accordingly. Proper resource allocation ensures tasks are completed on time, thereby enhancing overall productivity and efficiency.
As per PMI , “KPIs help build the value of/for an organization.”
Next, companies need to set up and regularly monitor benchmarks and KPIs to gauge the efficacy of the operational plan. The KPIs must be specific and measurable, while the benchmarks should be based on historical data or industry standards. Cumulatively, these metrics enable managers to identify discrepancies and make necessary adjustments to ensure operational continuity and maintain quality standards.
Read More: Top 15 Operational Metrics That a Business Should Monitor
Once the KPIs are set, managers must create a thorough communication plan for both internal and external stakeholders. This plan helps standardize communication procedures and specifies the appropriate usage of synchronous or asynchronous modes. Moreover, it keeps everyone in the loop and fosters effective collaboration between various participants.
Managers should set up periodic reviews to assess progress, address issues, and adjust the operational plan as needed. Regular evaluations help ensure that the plan aligns with the evolving business goals. Additionally, it helps identify emerging opportunities and threats, enabling organizations to stay agile and competitive in volatile market conditions.
Read More: How to Improve Operational Efficiency in Your Firm?
Operational planning enables businesses to achieve their long-term vision and goals efficiently. It helps cut down unnecessary costs, optimize internal processes, and boost employee productivity , resulting in better ROI and profitability.
By following the steps mentioned above, you can create a robust plan that addresses the existing bottlenecks and empowers you to achieve operational excellence.
Are you prepared to enhance your operational planning and reap its advantages?
Read More: Glossary of Resource Workforce Planning, Scheduling and Management
SAVIOM is undoubtedly the market leader in offering the most powerful and configurable Enterprise Resource Management Solution. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them to achieve their business goals. SAVIOM also has products for project portfolio management , professional service automation , and workforce planning software which can be easily customized per business requirements.
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As a business entity, you need to be able to manage the complexities of your processes, business management reports , corporate and professional relationships, operational systems, and other relevant activities that you and your stakeholders are involved in. The entire operations of your business is essential to be organized so you can give focus on the action plans that you need to prioritize as well as on the quality standards that you need to incorporate in all your procedures. Having an operations management plan can help you a lot with regards this matter or undertaking. It will be easier for you to develop your own operations management plan if you will use templates and other document guides and references.
We have listed several examples of operations management plan templates that you can use if you want to create the specified document for your organization. Ensure that you will check out and download the examples that we have provided you with so you can have a more efficient time when developing the operations management plan of your business.
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If you want your business to attain success, you have to ensure that you will develop carefully curated plans that can serve as the guide of your business operations. Even if not all businesses have an operations management plan of their own, it is still essential for you to consider the benefits that the specified document can provide you with. One of the initial things that you need to do if you want to immerse in the processes of organizing and directing your operations is to be knowledgeable of what an operations management plan is and how it can be helpful to the management of your business operations. An operations management plan can be defined as follows:
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Your business operations are not limited to the processes, activities, and programs that you implement for sales purposes. Aside from earning a profit, business operations also consider the presence of various procedures and efforts that gives your organization the ability to accomplish or achieve corporate goals and objectives. This is the main reason why you need to have a deep and full understanding of the key principles of an effective operations management plan as well as how they can work together for the maximum benefit of the business and its stakeholders. Listed below are some of the essential items that you should always consider when creating an operations management plan.
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In comparison to an incident action plan , an operations management plan must also be packed with well-thought call-to-actions, activities, and strategies. Your operations management plan can be used at its maximum level if you can create a comprehensive discussion of your desired results and the steps that are needed to be taken so that you can get to the level or stage that you aspire your business operations to be at. A few of the useful tips that can help you make an impressive operations management plan for your business include the following:
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If you have already decided to develop an operations management plan, we recommend you to use templates for formatting purposes. Some of the things that you can achieve if you will use templates in the processes of developing your own operations management plan include the following:
Just like when creating a monthly sales plan and other kinds of business documents, using references when making your operations management plan can benefit you a lot. Download the template examples in this post and begin the creation of your business’s operations management plan.
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Develop a project timeline for a middle school science fair.
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Sales and operational planning (S&OP) helps businesses to align their strategic goals with day-to-day operations. By integrating financial planning with operational and sales planning, S&OP ensures that all departments work cohesively towards common objectives. This process operates on strategic and tactical levels, providing insights that influence long-term decisions while guiding day-to-day actions. Understanding the dual focus of S&OP is essential for creating a robust plan that addresses immediate needs while positioning the company for future success.
S&OP serves as a bridge between the high-level strategic vision of a company and the detailed tactical plans needed to execute that vision. It requires a continuous, collaborative effort across all functional areas, including sales, marketing, finance, and your supply chain. The goal is to balance supply and demand to maximize efficiency, minimize costs, and meet customer expectations.
Misalignment between departments can lead to numerous issues such as poor demand forecasting, inefficient inventory management, and a lack of agility in responding to market or customer changes. These problems can result in stockouts, excess inventory, increased costs, and missed revenue opportunities.
For instance, a common problem is the "bullwhip effect" for companies who manage a supply chain. This happens when small fluctuations in demand at the customer level cause progressively larger fluctuations in demand for products and raw materials at the wholesale and manufacturing levels. This effect can lead to significant inefficiencies and increased costs throughout the supply chain. Sales and operations planning helps mitigate such issues by improving visibility and coordination across the supply chain .
Imagine a scenario where the sales team predicts a surge in demand for a particular new product, but this information isn't effectively communicated to the production team. As a result, the company underproduces, leading to stockouts and lost sales. Additionally, without proper alignment, marketing campaigns may be launched without ensuring product availability, further frustrating customers and damaging the brand's reputation. These disjointed efforts create operational inefficiencies and financial strain, making it challenging for companies to compete in a dynamic market.
Such misalignments can also lead to a negative impact on customer satisfaction. For example, a customer might place an order based on a marketing promotion, only to find out that the product is out of stock. This can erode trust and loyalty. The financial implications of these inefficiencies can be substantial, affecting the company's profitability and long-term sustainability.
Sales and operations planning provides a structured process that ensures continuous alignment between sales, operations, and financial plans. This alignment is achieved through strategic and tactical planning, encompassing long-term and short-term perspectives.
By integrating various functional plans into a cohesive strategy, sales and operations planning aims to ensure that the organization is working towards the same goals. This integration is facilitated by regular cross-functional meetings, where teams review performance, and discuss upcoming challenges. This collaborative approach helps break down silos and fosters a culture of transparency and accountability.
On the strategic level, sales and operations planning provides insights that influence long-term decisions.
Capacity planning involves determining whether to increase or decrease manufacturing capacity based on projected demand trends. This could include investing in new machinery, expanding facilities, or scaling down operations to avoid excess capacity. Effective capacity planning ensures the company can meet future demand without incurring unnecessary costs.
Workforce planning assesses the numbers, costs and output of employees in response to expected budget expectations. This assists the company in having the right number of skilled workers to meet production goals. A well-planned workforce strategy can improve productivity, ensure bonuses can be paid and enhance operational efficiency.
Long-term relationship building with suppliers is crucial for a steady supply of raw materials and components. This might include negotiating contracts, establishing contingency plans, and exploring alternative sources. Strong supplier relationships can lead to better pricing, improved quality, and greater flexibility in responding to changes in demand.
On the tactical level, the S&OP process focuses on creating detailed plans that guide the day-to-day operations planning process.
Production planning involves creating a production plan that specifies the products to be manufactured, in what quantities, and when. This plan is approved by executive management and serves as a foundation for the master schedule and material requirements planning (MRP). Effective production planning ensures that resources are used efficiently and that production schedules align with demand forecasts.
Inventory management determines optimal inventory levels to meet customer demand without overstocking. This involves setting safety stock levels, reorder points, and lead times. Proper inventory management helps balance the cost of holding inventory with the need to provide high service levels to customers.
Keeping sales and marketing activities in sync with production capabilities is critical for avoiding mismatches between supply and demand. This includes coordinating promotions, product launches, and sales campaigns. By aligning these activities, companies can maximize the impact of their marketing efforts while ensuring that they can fulfill customer orders in a timely manner.
Tactical planning also involves identifying opportunities to improve operational efficiency . This might include process improvements, technology upgrades, or lean manufacturing initiatives. By continuously seeking ways to streamline operations, companies can reduce costs, improve quality, and increase their overall competitiveness.
The S&OP process typically follows a monthly cycle, involving several key steps to ensure continuous alignment between different business functions. Here is an overview of the typical S&OP process:
The finance team creates the proposed plans and business partners provide feedback via the workflows in the platform, discussing potential risks, opportunities, and trade-offs. Once the plan is approved, it becomes the official S&OP plan for the upcoming quarter, guiding the company's operations. This step ensures that all levels of the organization are aligned and committed to the plan .
S&OP enhances demand forecasting accuracy by incorporating insights from various departments, leading to better alignment between supply and demand and reducing the risk of stockouts or excess inventory. Improved forecasting helps companies plan more effectively and respond more agilely to changes in market conditions.
By aligning production plans with sales forecasts, S&OP helps optimize inventory levels, ensuring the company maintains the right amount of inventory to meet customer demand without overstocking . This reduces carrying costs and minimizes waste, contributing to better financial performance.
S&OP fosters collaboration between different business functions, breaking down silos and promoting a unified approach to business planning. This leads to better communication, improved decision-making, and a more cohesive strategy. Enhanced collaboration can also lead to a more engaged and motivated workforce.
With a robust S&OP process, companies can respond more quickly to changes in demand, market conditions, and supply chain disruptions. This agility helps businesses stay competitive and adapt to evolving customer needs. Being able to pivot quickly can provide a significant competitive advantage.
By optimizing resources and aligning plans with financial goals, S&OP can drive increased profitability through reduced costs, improved efficiency, and maximized revenue opportunities. Effective S&OP can help companies achieve their financial objectives while maintaining high levels of customer satisfaction.
Implementing S&OP can be complex and may face resistance from employees who are accustomed to existing processes. Overcoming this resistance requires strong leadership and effective change management strategies. Companies must invest in training and communication to ensure a smooth transition.
Integrating data from various departments can be challenging, especially if the company relies on disparate systems and lacks robust data management practices. Overcoming data silos requires a concerted effort to standardize data and improve data sharing across the organization.
S&OP requires significant resources, including time, technology, and personnel, to implement and maintain effectively. Smaller companies may find it challenging to allocate the necessary resources. However, the investment can pay off in terms of improved efficiency and profitability.
The S&OP process requires ongoing monitoring and continuous improvement, which can be demanding for companies stretched thin with other operational priorities. Companies should regularly review and refine their S&OP processes to ensure continued effectiveness.
S&OP software can eliminate the reliance on spreadsheets, which are often prone to errors and version control issues, by providing a centralized and automated platform for data management.
This software integrates data from various departments into a unified system, enhancing data accuracy through real-time updates and advanced validation checks. As a result, companies can reduce manual data entry errors, ensure consistency across their plans, and make more informed decisions based on reliable and up-to-date information.
Solutions like Phocas BI and FP&A offer scalability and flexibility, allowing companies to access and share data in real-time, regardless of location. This enhances collaboration and ensures all stakeholders access the most up-to-date information.
Sales and operations planning is a critical process that helps businesses align their strategic goals with day-to-day operations. By integrating financial planning with operational and sales planning, S&OP ensures that all departments work together towards common objectives. The process operates on both strategic and tactical levels, providing insights that influence long-term decisions while guiding day-to-day actions.
By following best practices, such as ensuring data gathering accuracy, fostering a collaborative culture, aligning goals, investing in technology, and committing to continuous improvement, companies can successfully implement S&OP and drive better business performance. In a competitive and dynamic business environment, S&OP is not just a business planning tool but a strategic advantage that can help business processes thrive.
Dave Kenyon is a seasoned writer specializing in sales, marketing, FP&A, and BI technology. Dave enjoys making data and tech highly accessible and understandable in creative and innovative ways. With over 20 years of experience in tech sales, marketing, and communication, Dave has a rich background in both large multinationals and agile start-ups. His expertise spans software, technology, start-ups, and sales and marketing, making him a valuable resource for insights and strategies in these dynamic fields.
FP&A (Financial Planning & Analysis) software versus Excel
What tools are necessary to carry out financial planning and analysis (FP&A) in a mid-size business? The safe answer is Excel spreadsheets. Yet the real requirement for running a business with a $5 to $50 million turnover is a planning tool that allows team members to improve decision making rather than build cumbersome financial models.
How connected planning software helps your strategy succeed
How many strategy days have you been on? Leaders often go offsite so they can think laterally and not be disturbed. So much emphasis is placed on strategy that the implementation of strategic business planning gets overlooked. This is often the case if the strategy is not linked to the budget or resources are not distributed correctly. One of the key reasons strategies don’t work is because business leaders don’t review the implementation or business performance frequently enough. Where does your business sit with monitoring the success of your strategy?
#1 for predictive planning in budgeting and forecasting
Phocas ranked #1 in predictive planning in the “integrated products for planning and business intelligence and analytics category” in the recent BARC The Planning Survey 24. This is a big deal in the planning sector. This survey is the largest and most comprehensive in the world where more than 1000 professional users of budgeting and forecasting software share their real-world experience of these products. The results are analyzed and expertly interpreted to help other business people with their software decision-making.
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Strive management tells fox business increased demand for its services sparked plans to launch strive wealth management.
Strive Asset Management CEO Matt Cole argues that ESG has negatively impacted investors' bottom line, and discusses how the company is seeking to shake up the industry.
EXCLUSIVE: Strive Asset Management, an Ohio-based financial services company that specializes in non-woke, anti- environmental, social, and governance (ESG) investing, announced on Tuesday it had raised $30 million in Series B funding, as well as its plans to launch a new wealth management offering due to increased demand.
The Series B financing round was led by Cantor Fitzgerald, L.P., and also included Deason Capital Services and Narya Capital, a firm co-founded by Republican vice presidential nominee, Ohio Sen. JD Vance .
The new offering, Strive Wealth Management, comes as the company, which was co-founded by former Republican presidential candidate Vivek Ramaswamy in 2022, says it has seen significant demand for expanded financial services following the early success of its asset management platform across the country.
WHERE DOES KAMALA HARRIS STAND ON KEY ECONOMIC ISSUES?
Republican vice presidential nominee, Sen. J.D. Vance (R-OH), arrives for a campaign rally at Radford University on July 22, 2024 in Radford, Virginia. (Alex Wong/Getty Images / Getty Images)
"The success of Strive’s asset management business has been extraordinary, growing to over $1.6 billion in assets under management less than two years after the launch of our first ETF," Strive CEO Matt Cole told FOX Business.
"Off the back of this momentum, Strive will be launching a direct wealth management offering focused exclusively on maximizing value for our clients. Many Americans are hungry for an authentic and unapologetic embrace of capitalism, meritocracy, and innovation and that’s what we strive to deliver."
Strive also plans to expand and enhance its products and services using Cantor Fitzgerald's "deep institutional relationships and proven market expertise," and will provide a seat on its board of directors for it and Deason Capital Services.
BIDEN'S WITHDRAWAL COULD PUT DEMOCRATS' ECONOMIC PLATFORM IN FLUX
Matt Cole, CEO of Strive Enterprises, Inc. (Strive Enterprises, Inc. / Fox News)
"We are strategically investing in fascinating companies — like Strive — that are working to shape our future," Cantor Fitzgerald, L.P. Chairman Howard Lutnick told FOX Business. "We look forward to partnering with Strive on their exciting growth opportunities and believe the wealth management industry is primed for an offering that focuses solely on maximizing value and returns for clients."
Strive made news earlier this year when it announced it would offer a new 401(k) retirement plan for medium and small businesses that would focus purely on maximizing shareholder profits and forego "woke" ESG investing priorities.
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Strive Enterprises, Inc. announced $30 million in Series B funding, as well as a new wealth management offering. (Strive Enterprises, Inc. / Fox News)
The company said at the time that the plan, in partnership with financial services provider Ameritas, would "allow employers to offer a customized 401(k) plan specific to their company’s needs while allowing their employees to enjoy Strive’s investment philosophy of prioritizing shareholder value maximization over the interests of other stakeholders."
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How to start an online business.
Table of content
Online business models, aspects to consider when setting up an online business.
Setting up an online business requires attention to fields as varied as logistics, marketing, legal, and IT security. It is necessary to have financial and legal knowledge, business strategy and marketing, operations and logistics, development and hosting, customer service and data analysis.
In short, you need a holistic approach, a 360° vision to ensure success in today's competitive digital world. If you are interested in this field, the master in Digital Business at Universidad Europea will train you to meet the challenges of the business world. In this post, we’ll take a look at the factors to consider when starting an online business.
An online business is a company that operates in the digital realm. Unlike businesses with a physical presence, online businesses use digital platforms to reach their customers and conduct transactions.
Among their advantages are that they require less initial investment than physical businesses. In addition, they can reach customers all over the world, thus facilitating international business expansion .
On the other hand, these businesses present significant challenges. A wide range of skills and a 360° profile are necessary for a successful business.
There are several online business models, each with its own characteristics and strategies.
Each online business model has its advantages and disadvantages. Choosing the right model will depend on the type of product or service, the target market and the resources available.
When we consider how to set up an online business, we have to consider many different aspects. In addition, it is necessary to follow a series of procedures and comply with the applicable regulations in whatever country your legal base will be be able to operate within the law.
Start by identifying a market need or an opportunity that you can take advantage of. Study your target audience , analyse the competition and choose the business model that best suits your idea. Then develop a business plan with objectives, strategies and growth projections.
We must choose the appropriate legal form for the business. For those looking to set up business in Spain, there are a number of options including self-employed, Limited Liability Company (SL), Sole Proprietorship (SLU) or Public Limited Company (SA) .
If you choose to be self-employed, you must register with the Tax Authorities and Social Security, as well as obtain the necessary licences or permits for your specific business activity.
In the case of a Limited Company, you must apply for the company name certificate, draw up the articles of association, deposit the share capital, sign the public deed, register the company in the Mercantile Register and obtain the Tax Identification Code (CIF).
Next, it will be necessary to select a domain name , contract a hosting service and design an attractive and easy-to-navigate website.
Another important aspect is the security of the website and the customer's data. An SLL certificate can authenticate the identity of the website and enable an encrypted connection.
Every website must comply with data protection regulations (GDPR) and implement cookie and privacy policies . Clear contracts and terms of use should also be drawn up for both the website and the services offered.
Finally, consider registering trademarks, patents or any other intellectual property relevant to the company.
Search engine optimisation (SEO) is essential to improve the visibility of the website and attract organic traffic.
Search engine marketing and social media are also a great ally in this regard. Creating valuable content and promoting it through social media and online advertising campaigns increases visibility or Google Ads campaigns.
Efficient inventory management and offering secure payment options ensure a satisfactory shopping experience. In addition, a smooth and error-free shipping system must be established. It is therefore a matter of using and implementing what is known as ecommerce logistics in business.
It is mandatory to keep accounts and issue invoices in accordance with current regulations. In addition, regardless of the type of business, if you have employees, you must comply with occupational health and safety regulations.
You must offer efficient customer service through different communication channels. These channels also serve to collect feedback that helps us to continuously improve products and services.
In a competitive digital market, analytics tools such as Google Analytics are key to monitoring website performance and marketing campaigns.
We should also perform regular A/B testing and optimisation to ensure we don't fall behind.
If you are interested in this business field, Universidad Europea has a wide variety of business and technology masters where you can choose the option you like best.
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By. Susan Ward. Updated on September 13, 2022. Fact checked by David Rubin. In This Article. How To Write the Operations Plan Section of the Business Plan. Stage of Development Section. Production Process Section. The Bottom Line.
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 ...
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
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.
Operations Plan. Lesson Materials Operations Plan Worksheet; Completion time About 40 minutes; The operations section of your business plan is where you explain - in detail - you company's objectives, goals, procedures, and timeline. An operations plan is helpful for investors, but it's also helpful for you and employees because it pushes ...
Business operations. The operations section describes the necessary requirements for your business to run smoothly. It's where you talk about how your business works and what day-to-day operations look like. ... If you intend to use your business plan for internal management purposes, you don't necessarily need a full 25-50 page business ...
Tips on Writing a Business Plan. 1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively. 2.
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing. A business plan should follow a standard format and contain all ...
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. ... Siloed information and goals don't help anyone—instead, track your action items and goals in a work management tool. Free operations project plan template. Related resources ...
Consider your Business Goals. Write out each goal. Read them as you decide which processes to include in your operations plan and think about how soon you will want to meet the company goals. Create a Process List. Look at the list of components and decide how to make them into a list for your own business.
Effective operational business plans rely on the commitment of the entire team or department. This buy-in ensures issues are promptly reported, goals are identified, timelines are adhered to, and business collaboration is optimized. ... Finance collaborating with sales, marketing, operations management, and other vital areas to align strategies ...
The management section of a business plan helps show how your management team and company are structured. The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation. The internal management section shows the department heads, including sales, marketing, administration, and production.
A business plan to implement operations includes the company's daily procedures and strategies to realize its strategic goals. It portrays how these operational areas, including production, marketing, finance, and human resource management, will support the business goals. 2. Why is a business operating plan important?
Strategy. Most business strategies have an operations component. For example, if a train manufacturer develops a plan to expand revenue by 50% that plan will include a marketing, sales and operations component. The operations component of the plan would include procurement, manufacturing and logistics strategies that enable the firm to boost ...
5. Design and development plans. 6. Operations and management plans. 7. Financial factors. The operations and management plan is designed to describe just how the business functions on a ...
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 ...
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 ...
Here are a few steps you can take to create an effective operations plan: 1. Create a strategic plan. Creating a strategic plan before an operational plan can help you clearly outline long-term goals and expectations to ensure alignment with business processes, values and initiatives. Your operations plan can then help you accomplish the goals ...
The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability. Your ops plan should ...
Every business plan has key sections such as management and marketing. It should also have an executive summary, which is a synopsis of each of the plan sections in a one- to two-page overview.
Operations Strategy: 5 Key Elements of an Operations Strategy. Written by MasterClass. Last updated: Dec 17, 2021 • 3 min read. Learn how businesses use operations strategies to identify and implement cost-effective processes for creating and distributing products and services. Learn how businesses use operations strategies to identify and ...
Here is a guide to help you get started on your business plan: 1. Executive Summary. What It Is: This section summarizes your business plan as a whole and outlines your company profile and goals.
A Standing Plan: Also called a multiple-use plan, it can be used repeatedly whenever a similar situation arises. This plan comprises standards and procedures to ensure smooth workflow in daily operations and can undergo modification as per the business needs. Examples: A plan for handling customer service inquiries.
An operations management plan is a business document that contains all the plans of action, strategies, and tactics that your organization needs to execute for the development of your operations. Hence, this document presents the responsibilities and obligations that your team members should take ownership of so that particular objectives can ...
The finance team creates the proposed plans and business partners provide feedback via the workflows in the platform, discussing potential risks, opportunities, and trade-offs. Once the plan is approved, it becomes the official S&OP plan for the upcoming quarter, guiding the company's operations.
EXCLUSIVE: Strive Asset Management, an Ohio-based financial services company that specializes in non-woke, anti-environmental, social, and governance (ESG) investing, announced on Tuesday it had ...
As such, a business continuity plan is a comprehensive organizational strategy that includes the DRP as well as threat prevention, detection, recovery, and resumption of operations should a data breach or other disaster event occur. Therefore, BCP consists of five component plans: Business resumption plan; Occupant emergency plan
Optimize your fleet operations with fleet management solutions combining real-time vehicle tracking, telematics and more on T-Mobile's Nationwide 5G network ... Fit your telematics needs with T-Mobile's variety of plans. Contact us 1-877-559-7983 ... Any company that manages vehicle assets can benefit from using any of the T-Mobile for Business ...
Operations and logistics. Efficient inventory management and offering secure payment options ensure a satisfactory shopping experience. In addition, a smooth and error-free shipping system must be established. It is therefore a matter of using and implementing what is known as ecommerce logistics in business. Financial and health and safety ...