pre operating period business plan example

Search Search Please fill out this field.
Building Your Business
Becoming an Owner
Business Plans

How To Write the Operations Plan Section of the Business Plan

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.

pre operating period business plan example

Stage of Development Section

Production process section, the bottom line, frequently asked questions (faqs).

The operations plan is the section of your business plan that gives an overview of your workflow, supply chains, and similar aspects of your business. Any key details of how your business physically produces goods or services will be included in this section.

You need an operations plan to help others understand how you'll deliver on your promise to turn a profit. Keep reading to learn what to include in your operations plan.

Key Takeaways

The operations plan section should include general operational details that help investors understand the physical details of your vision.
Details in the operations plan include information about any physical plants, equipment, assets, and more.
The operations plan can also serve as a checklist for startups; it includes a list of everything that must be done to start turning a profit.

In your business plan , the operations plan section describes the physical necessities of your business's operation, such as your physical location, facilities, and equipment. Depending on what kind of business you'll be operating, it may also include information about inventory requirements, suppliers, and a description of the manufacturing process.

Keeping focused on the bottom line will help you organize this part of the business plan.

Think of the operating plan as an outline of the capital and expense requirements your business will need to operate from day to day.

You need to do two things for the reader of your business plan in the operations section: show what you've done so far to get your business off the ground and demonstrate that you understand the manufacturing or delivery process of producing your product or service.

When you're writing this section of the operations plan, start by explaining what you've done to date to get the business operational, then follow up with an explanation of what still needs to be done. The following should be included:

Production Workflow

A high-level, step-by-step description of how your product or service will be made, identifying the problems that may occur in the production process. Follow this with a subsection titled "Risks," which outlines the potential problems that may interfere with the production process and what you're going to do to negate these risks. If any part of the production process can expose employees to hazards, describe how employees will be trained in dealing with safety issues. If hazardous materials will be used, describe how these will be safely stored, handled, and disposed.

Industry Association Memberships

Show your awareness of your industry's local, regional, or national standards and regulations by telling which industry organizations you are already a member of and which ones you plan to join. This is also an opportunity to outline what steps you've taken to comply with the laws and regulations that apply to your industry.

Supply Chains

An explanation of who your suppliers are and their prices, terms, and conditions. Describe what alternative arrangements you have made or will make if these suppliers let you down.

Quality Control

An explanation of the quality control measures that you've set up or are going to establish. For example, if you intend to pursue some form of quality control certification such as ISO 9000, describe how you will accomplish this.

While you can think of the stage of the development part of the operations plan as an overview, the production process section lays out the details of your business's day-to-day operations. Remember, your goal for writing this business plan section is to demonstrate your understanding of your product or service's manufacturing or delivery process.

When writing this section, you can use the headings below as subheadings and then provide the details in paragraph format. Leave out any topic that does not apply to your particular business.

Do an outline of your business's day-to-day operations, including your hours of operation and the days the business will be open. If the business is seasonal, be sure to say so.

The Physical Plant

Describe the type, site, and location of premises for your business. If applicable, include drawings of the building, copies of lease agreements, and recent real estate appraisals. You need to show how much the land or buildings required for your business operations are worth and tell why they're important to your proposed business.

The same goes for equipment. Besides describing the equipment necessary and how much of it you need, you also need to include its worth and cost and explain any financing arrangements.

Make a list of your assets , such as land, buildings, inventory, furniture, equipment, and vehicles. Include legal descriptions and the worth of each asset.

Special Requirements

If your business has any special requirements, such as water or power needs, ventilation, drainage, etc., provide the details in your operating plan, as well as what you've done to secure the necessary permissions.

State where you're going to get the materials you need to produce your product or service and explain what terms you've negotiated with suppliers.

Explain how long it takes to produce a unit and when you'll be able to start producing your product or service. Include factors that may affect the time frame of production and describe how you'll deal with potential challenges such as rush orders.

Explain how you'll keep track of inventory .

Feasibility

Describe any product testing, price testing, or prototype testing that you've done on your product or service.

Give details of product cost estimates.

Once you've worked through this business plan section, you'll not only have a detailed operations plan to show your readers, but you'll also have a convenient list of what needs to be done next to make your business a reality. Writing this document gives you a chance to crystalize your business ideas into a clear checklist that you can reference. As you check items off the list, use it to explain your vision to investors, partners, and others within your organization.

What is an operations plan?

An operations plan is one section of a company's business plan. This section conveys the physical requirements for your business's operations, including supply chains, workflow , and quality control processes.

What is the main difference between the operations plan and the financial plan?

The operations plan and financial plan tackle similar issues, in that they seek to explain how the business will turn a profit. The operations plan approaches this issue from a physical perspective, such as property, routes, and locations. The financial plan explains how revenue and expenses will ultimately lead to the business's success.

Want to read more content like this? Sign up for The Balance's newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

At SmartCapitalMind, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.

Learn more...

What Are Pre-Operating Costs?

Pre- operating costs include any expenses incurred during the startup or formation of a new business . They include expenses related to the investigation of a potential new business, as well as the actual costs associated with forming or registering the company. Generally, these costs are limited to only those expenses that would be treated as normal business expenses under standard accounting principles if the company were already in operation. This helps to prevent firms from deducting costs that are unrelated to the business, such as the purchase of a luxury car that is used to explore a few potential office sites for the new business. Pre-operating costs are also known as startup costs or pre-opening expenses.

All types of business entities may incur pre-operating costs. These expenses often include consulting fees that are paid to experts and advisors during startup. They may also include money paid to lawyers, who draft up corporate and partnership agreements, create company by-laws, and file articles of incorporation for new companies. Pre-operating expenses may also include accounting costs incurred while preparing to apply for a business loan, or when evaluating the credit worthiness of potential investors.

Fees paid to government agencies may also be included in pre-operating costs. New businesses often spend money filing for permits from city, state, and federal authorities. State agencies typically charge a fee when new businesses file for incorporation, or register a business trade name. Partners or directors of a new company can also include expenses related to meetings and planning sessions as part of cost calculations.

In terms of financial reporting, pre-operating costs are treated differently on tax forms than they are in the company's accounting records. International financial reporting standards require companies to treat pre-operating costs as expenses as these costs occur. If the company prepays for startup services, the costs must be treated as assets on the balance sheet until the service has been received. At this time, it is treated as an ordinary expense.

For tax purposes, pre-operating costs are treated as assets. Given that these costs are part of the business owner's initial investment, tax codes lump these costs in with the costs of equipment and other forms of capital. Some tax codes allow the business to deduct a small portion of these expenses when they are incurred, while the remainder are listed as assets on the balance sheet. This asset an then be amortized over time just like other types of assets.

Recommended, as featured on:.

What Are the Different Types of Operating Costs?
In the Film Industry, what is Pre-Production?
What is a Pre-Seasoned Skillet?

Discussion Comments

Post your comments.

By: Stockninja Legal fees for drafting a partnership agreement are pre-operating costs.
By: corepics For an individual starting a taxi business, the expense of getting a taxi license is a pre-operating cost.
By: mangostock All expenses incurred in the formation of a new business are considered pre-operating costs.
By: fusolino Pre-operating costs include the price of any supplies needed to help set up a business.
By: .shock Manufacturing facilities must purchase or lease all of their equipment before opening.
By: amphotolt Office furniture is a pre-operating cost.

Pre-Operating Expenses

For many would-be investors, the cost of building a business from the ground up can be daunting–if only by virtue of the sheer amount of money it takes to launch a formidable venture. But the mental work needed to stake a sum of cash on an enterprise is only part of the prep-work; equally important is knowing how all that money spent factors into your books in the form of pre-operating expenses.

Defining Pre-Operating Expenses

As a general rule, purchases that would normally qualify as operating expenses but were incurred before the start of business (i.e. before charging rent, serving customers, etc.) are considered pre-operating expenses for the purposes of tax and accounting. As we’ll discuss later in this entry, these expenses are “capitalized” or subject to a treatment similar to depreciation.

It bears emphasis that these transactions are made before the official start of business, meaning rent-free periods for new apartment buildings and similar incentives for initial customers and clients are charged as pre-operating. Likewise, it’s important to note that capital expenses made before the start of business simply list as capital expenses, as do fees incurred in acquiring capital goods.

Common examples of pre-operating expenses include:

Recruitment and training of staff before opening
Market research
Site visits
Regulatory expenses (e.g. permits, licenses)
Administrative expenses (e.g. office rental, stationery)
Tuition for training programs, seminars, and other educational services
Minor, pre-opening repair work on buildings for rent

If you can distinguish between capital expenses and operating expenses, you should have no problem in accounting for this –simply note what OPEX transactions were made prior to the beginning of business.

Tracking Pre-Operating Expenses

You would track pre-operating expenses much in the same way as you would regular business expenses. Be diligent in keeping your receipts, and above all else, hire a competent accountant to do most of the heavy lifting.

It’s highly recommended that one keep a separate ledger for these expenses, if not solely for the sake of managing an organized set of books, then for its utility further down the line, should you choose to expand your business or start a new one from scratch.

Why Track Pre-Operating Expenses?

One major component of a successful venture is a firm grip on your business’ vital statistics. The amount of money a business spends before servicing the general public is no different, and plays an important role for a variety of reasons.

The most significant reason would be that special tax rules apply to this classification of spending. The next section will feature a more exhaustive explanation of how pre-operating expenses factor into a business’ taxable profit. For now, note that a particular level of pre-opening spending can save a business thousands of dollars in taxes in their first year.

Just as important is the fact that these expenses are a reliable reference point for businesses looking to expand. Whether you have a long-term plan to branch out into more locations, or are already on the verge of doing so, referring to the cost of setting up an earlier site is a good way to prepare for expansion and to do so more efficiently than before.

Finally, pre-operating expenses are necessary for calculating the EBITDA of a new venture. Earnings before interest, tax, depreciation, and amortization is a tool used by financial speculators and entrepreneurs alike to measure the strength of a business’ operations without having to factor in how said business navigates funding and expansion.

You have to account for amortization to get a view of how your business is doing in terms of the management end of things, and you have to see things from this perspective to troubleshoot and optimize your operation.

Pre-Operating Expenses and Taxation

As we’ve mentioned earlier, the IRS treats pre-operating expenses in a similar way to capital expenses. It can’t all be deducted in a single tax year, but there are significant deductions allowed at certain levels of spending.

If your start-up expenses amount to $50,000 or lower, you can take a $5,000 deduction on taxable profit in your first year of business. If your start-up expenses are greater than $50,000 but less than $55,000, you can take an immediate deduction amounting to the difference between your start-up expense and $50,000. Finally, if your start-up expenses are greater than $55,000, you take no immediate deduction. In any case, what remains of your start-up expenses after subtracting the immediate deduction will be divided and deducted over the next 15 years.

The following table should make this easier to understand:

As you can see, in order to get the most out of the conditions set by the IRS, it’s ideal that a new venture spend up to a maximum of $50,000 before formally opening up shop. A $5,000 deduction for a business that’s just started out can be a big deal, and offer that a slightly wider safety net and flexible spending.

One important caveat to this is that while we’ve been able to go through very basic, very general principles of how taxation works vis-a-vis pre-operating expenses, its practice can get very intricate. For example, if part of your expenses before opening includes a permit valid for one year, would it make sense to amortize it over the life of your business? In this instance, the value can be matched to the life of the asset and expensed accordingly (i.e. deducted in total within the first year of operation)–making the rules on taxation much more complicated.

The best way to go about taxation is, and always will be, to keep a CPA on your payroll.

How to Write an Operations Plan Section of your Business Plan

Free Operations Plan Template

Ayush Jalan

December 14, 2023

Your business plan is an elaborate set of instructions stating how to run your business to achieve objectives and goals. Each section describes a part of the process of reaching your desired goal. Similarly, the operations plan section of your business plan explains the production and supply of your product.

An operations plan is formed to turn plans into actions. It uses the information you gathered from the analysis of the market , customers, and competitors mentioned in the previous parts of your business plan and allows for the execution of relevant strategies to achieve desired results.

What Is an Operations Plan?

An operations plan is an in-depth description of your daily business activities centered on achieving the goals and objectives described in the previous sections of your business plan. It outlines the processes, activities, responsibilities of various departments and the timeframe of the execution.

The operations section of your business plan explains in detail the role of a team or department in the collective accomplishment of your goals. In other words, it’s a strategic allocation of physical, financial, and human resources toward reaching milestones within a specific timeframe.

A well-defined operational plan section of your business plan should be able to answer the following questions:

Who is responsible for a specific task or department?
What are the tasks that need to be completed?
Where will these operations take place?
When should the tasks be completed? What are the deadlines?
How will the tasks be performed? Is there a standard procedure?
How much is it going to cost to complete these tasks?

How to Write an Operations Plan Section?

Creating an operational plan has two major stages, both addressing different aspects of your company. The first stage includes the work that has been done so far, whereas the second stage describes it in detail.

1. Development Phase

In this stage, you mention what you’ve done to get your business operations up and running. Explain what you aim to change and improvise in the processes. These are the elements your development section will contain:

Production workflow

: Explain all the steps involved in creating your product. This should be a highly informative, elaborate description of the steps. Here, you also mention any inefficiencies that exist and talk about the actions that need to be taken to tackle them.

Supply chains

Quality control, 2. manufacturing phase.

The development stage acquaints the reader with the functioning of your business, while the manufacturing stage describes the day-to-day operation.

This includes the following elements:

Outline of daily activities:

Tools and equipment:, special requirements:, raw materials:, productions:, feasibility:, why do you need an operations plan.

An operations plan is essentially an instruction manual about the workings of your business. It offers insight into your business operations. It helps investors assess your credibility and understand the structure of your operations and predict your financial requirements.

An operations plan reflects the real-time application of a business plan.

Internally, an operations plan works as a guide, which helps your employees and managers to know their responsibilities. It also helps them understand how to execute their tasks in the desired manner—all whilst keeping account of deadlines.

The operations plan helps identify and cut the variances between planned and actual performance and makes necessary changes. It helps you visualize how your operations affect revenue and gives you an idea of how and when you need to implement new strategies to maximize profits.

Advantages of Preparing an Operations Plan:

Offers Clarity: Operational planning, among other things, makes sure that everyone in the audience and team are aware of the daily, weekly, and monthly work. It improves concentration and productivity.
Contains A Roadmap: Operational planning makes it much easier to reach long-term objectives. When members have a clear strategy to follow: productivity rises, and accountability is maintained.
Sets A Benchmark: It sets a clear goal for everyone about what is the destination of the company and how to reach there.

Operations Plan Essentials

Now that you have understood the contents of an operations plan and how it should be written, you can continue drafting one for your business plan. But before doing so, take a look at these key components you need to remember while creating your operational plan.

Your operations plan is fundamentally a medium for implementing your strategic plan. Hence, it’s crucial to have a solid strategic plan to write an effective operations plan.
Focus on setting SMART goals and prioritizing the most important ones. This helps you create a clear and crisp operations plan. Focusing on multiple goals will make your plan complicated and hard to implement.
To measure your goals, use leading indicators instead of lagging indicators. Leading indicators is a metric that helps you track your progress and predict when you will reach a goal. On the other hand, lagging indicators can only confirm a trend by taking the past as input but cannot predict the accomplishment of a goal.
It is essential to choose the right Key Performance Indicators (KPIs) . It is a good practice to involve all your teams while you decide your KPIs.
An operations plan should effectively communicate your goals, metrics, deadlines, and all the processes.

Now you’re all set to write an operations plan section for your business plan . To give you a headstart, we have created an operations plan example.

Operations Plan Example

Operations plan by a book publishing house

Track and Accomplish Goals With an Operations Plan

Drafting the operations plan section of your business plan can be tricky due to the uncertainties of the business environment and the risks associated with it. Depending on variables like your market analysis, product development, supply chain, etc., the complexity of writing an operations plan will vary.

The core purpose here is to put all the pieces together to create a synergy effect and get the engine of your business running. Create an effective operations plan to convey competence to investors and clarity to employees.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

What role does the operations plan play in securing funding for a business.

The operations plan defines the clear goals of your business and what actions will be taken on a daily basis 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.

What are the factors affecting the operations plan?

The mission of the company
Goals to be achieved
Finance and resources your company will need

Can an operations plan be created for both start-up and established businesses?

Yes, both a startup and a small business needs an operations plan to get a better idea of the roadmap they want for their business.

About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

How to Write a Business Plan Complete Guide

Write Products and Services Section of a Business Plan

How to Prepare a Financial Plan for Small Business?

Reach your goals with accurate planning.

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Popular Templates

An Ultimate Guide for Better Operations

Operates towards success
Describe business milestones
Plan such as financials, budget planning
Turn your goals into an actionable plan

Grasshopper

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 you to think about tactics and deadlines.

In the previous course, you outlined your company's strategic plan, which answers questions about your business mission. An operational plan outlines the steps you'll take to complete your business mission.

Your operations plan should be able to answer the following:

Who – The personnel or departments who are in charge of completing specific tasks.
What – A description of what each department is responsible for.
Where – The information on where daily operations will be taking place.
When –The deadlines for when the tasks and goals are to be completed.
How much – The cost amount each department needs to complete their tasks.

In this session, we explain each item to include in your operations plan.

Goals and Objectives

The key to an operations plan is having a clear objective and goal everyone is focused on completing. In this section of your plan, you'll clearly state what your company's operational objective is.

Your operational objective is different than your company's overall objective. In Course One , you fleshed out what your strategic objective was. Your operational objective explains how you intend to complete your strategic objective.

In order to create an efficient operational objective, think SMART:

Specific – Be clear on what you want employees to achieve.
Measurable – Be able to quantify the goal in order to track progress.
Attainable & Realistic – It's great to be ambitious but make sure you aren't setting your team up for failure. Create a goal that everyone is motivated to complete with the resources available.
Timely – Provide a deadline so everyone has a date they are working towards.

Different departments will have different operational objectives. However, each department objective should help the company reach the main objective. In addition, operational objectives change; the objectives aren't intended to be permanents or long term. The timeline should be scheduled with your company's long-term goals in mind.

Let's look at the following example for a local pizza business objective:

Strategic objective : To deliver pizza all over Eastern Massachusetts.
Technology department operational objective : To create a mobile app by January 2017 to offer a better user experience.
Marketing department operational objective : To increase website visitors by 50% by January 2017 by advertising on radio, top local food websites, and print ads.
Sales department operational objective : To increase delivery sales by 30%, by targeting 3 of Massachusetts's largest counties.

Sales department operational objective: To increase delivery sales by 30%, by targeting 3 of Massachusetts's largest counties.

Production Process

After you create your objectives, you have to think strategically on how you're going to meet them. In order to do this, each department (or team) needs to have all the necessary resources for the production process.

Resources you should think about include the following:

Suppliers – do you have a supplier (or more) to help you produce your product?
Technology team: app developing software
Marketing team: software licenses for website analytical tools
Sales team: headsets, phone systems or virtual phone system technology
Cost – what is the budget for each department?

In addition to the production process, you'll also need to describe in detail your operating process. This will demonstrate to investors that you know exactly how you want your business to run on a day-to-day basis.

Items to address include:

Location – where are employees working? Will you need additional facilities?
Work hours – will employees have a set schedule or flexible work schedule?
Personnel – who is in charge of making sure department tasks are completed?

Creating a timeline with milestones is important for your new business. It keeps everyone focused and is a good tracking method for efficiency. For instance, if milestones aren’t being met, you'll know that it's time to re-evaluate your production process or consider new hires.

Below are common milestones new businesses should plan for.

When you completed your Management Plan Worksheet in the previous course, you jotted down which key hires you needed right away and which could wait. Make sure you have a good idea on when you would like those key hires to happen; whether it’s after your company hits a certain revenue amount or once a certain project takes off.

Production Milestones

Production milestones keep business on track. These milestones act as "checkpoints" for your overall department objectives. For instance, if you want to create a new app by the end of the year, product milestones you outline might include a beta roll out, testing, and various version releases.

Other product milestones to keep in mind:

Design phase
Product prototype phase
Product launch
Version release

Market Milestones

Market milestones are important for tracking efficiency and understanding whether your operations plan is working. For instance, a possible market milestone could be reaching a certain amount of clients or customers after a new product or service is released.

A few other market milestones to consider:

Gain a certain amount of users/clients by a certain time
Signing partnerships
Running a competitive analysis
Performing a price change evaluation

Financial Milestones

Financial milestones are important for tracking business performance. It's likely that a board of directors or investors will work with you on creating financial milestones. In addition, in startups, it's common that financial milestones are calculated for 12 months.

Typical financial milestones include:

Funding events
Revenue and profit goals
Transaction goals

In summary, your operations plan gives you the chance to show investors you know how you want your business to run. You know who you want to hire, where you want to work, and when you expect projects to be completed.

Download the attached worksheet and start putting your timelines and milestones together on paper.

Talk about this lesson

Your operating plan is not a financial or fundraising document: It has to be a plan you actually believe you can execute. To run a successful startup, you absolutely need one.

Your operating plan is not a fundraising document.

Your operating plan is not where you show the hockey-stick growth that investors would love to see in all of their investments. Yes, there is a scenario where you exceed every goal and beat every milestone, but that’s not a plan . That’s a dream. Most startups see a gradual progression, and if your operating plan relies on short-term exponential growth, you’re setting yourself up for failure.

I see many detailed operating plans in which the fatal flaws are immediately apparent. For example, if I read that a hardware start-up has a functioning prototype in August and is planning to ship in February, I know the plan is unrealistic.

Above all, what a poor operating plan shows me is that the founders haven’t taken the time to question themselves honestly. If the knowledge required to make accurate forecasts doesn’t exist within your team, you must seek it out through experienced investors, advisors, peers, and mentors, who may have more experience in the field.

Creating your operating plan

There is no mystery to writing an operating plan. An operating plan is a list of everything you intend to do as a business over the next 6–12 months. Think of it as a month-by-month to-do list for all aspects of your company.

An operating plan is a spreadsheet with a column for each month that should include the information most important to driving your startup forward:

For which roles do you plan to hire, and when do you plan to make those hires?
How are you going to spend your funds?
What is your funding situation? (When will you run out of cash? When do you start raising your next round? How much are you raising, and by when do you need it?)
When do you realistically plan on shipping your product?
What are the intermediary milestones on the way to shipping?
How many units are you expecting to sell? If relevant, how does this affect production, inventories at hand, and logistics? How do your unit economics assumptions affect your business?
What are the key customer metrics that prove your business model? (NPS score? Sales? Monthly active users? Revenue? Annual recurring revenues?)
What are the key company value-creation milestones you intend to achieve?

The list above is simple, common-sense operational planning that you, as a founder, should have clear in your mind. In this post, I’ll outline some steps you can take to write a comprehensive, dynamic operating plan.

Plan for what you can see

No start-up has the foresight to see much beyond the next 6–12 months. Plan for what’s visible to you.

I think of operating plans as modular, rather than linear. Each module is a smaller milestone — I like to call them “gates’”— that describes a dependency. Being aware of these dependencies helps you focus on what needs to be done.

An example might be to achieve a target in monthly recurring revenue (MRR) before making a new hire. Make it explicit: You won’t hire a new engineer until you have an MRR above $20,000 for three months in a row. Other good examples are hitting a specific milestone on shipping products, customer acquisition milestones, the number of hires you’ve made, or closing a funding round.

Over the period of your ops plan, you must pass through certain gates before advancing to the next one, eventually landing you at the milestones that mark the true progress within your business. A good operating plan will have a few of these gates, which can help you make decisions based on objectively measurable criteria.

Update the plan regularly — but not too often

Your operating plan is never “done”. Things move quickly; circumstances change; and the second you finish writing the plan, elements of it are probably out of date. Updating is important, but it is possible to update the document too often. Aiming to update the operating plan twice per year is sensible. Create a plan at the end of the calendar year, and update it towards the middle of the year.

It’s important to be honest about falling behind on your plan.

You want to be able to work to your operating plan. This is important both at board meetings and to help guide your team. You also want to show how you’re performing against the plan. If you are falling behind, it’s important to be honest about that, rather than presenting a new plan where you’re suddenly “back on track,” but on a new timeline.

If something triggers re-planning, analyze why the re-planning is necessary. A plan that is updated continuously isn’t a plan at all: It is a to-do list. What was wrong about the assumptions in the original plan, and how can you avoid that in the future? If you’re always too optimistic in your planning and never able to hit your milestones, that’s not helpful. Overly aggressive timelines are nothing to be proud of: That doesn’t show ambition; it shows that you’re not good at planning.

As an investor, a startup falling behind on the plan usually doesn’t worry me — it happens all the time. Companies should get into the habit of tracking dates in the plan, versus the date when something was actually achieved. A good operating plan isn’t something you religiously adhere to — it helps to keep you honest — with investors, your team, and more importantly, with yourself, as a founder and leader.

Making trade-offs in your operating plan

The most important number to pay attention to is the cash flowing in and out of your business. If you have $900k in the bank and are steadily burning $55k per month, you have perfect predictability as to when you run out of cash — 16 months from now. The easiest way to work this into an operating plan is to operate with a max burn rate. Within that figure, you can choose to how to prioritize your spend.

A great operating plan helps you identify earlier when your burn rate is higher than you hoped. This buys you enough time to to course-correct.

Being strategic about fundraising is crucial. Ideally, you raise more funding from a position of strength, when you can, hand on heart, say “we don’t need money right now.” That means, ideally, that your fundraising process is well underway when you have nine months of runway left. If you are running out of money in January, you need to have closed the fundraising round by September. For that to happen, you have to start fundraising mid-summer.

If you are selling more than you expected, you have more money coming in, and that’s where the plan has a little bit more leeway. Perhaps you can make a hire earlier, spend more on consultants, or plow more money into marketing, to further accelerate your plans. If you’re selling less than expected — or if product development is costing more than you anticipated — the opposite should happen. Hit the brakes, and spend less on marketing, delay expanding the team, or let people go, in order to reduce your burn rate.

A set of equations with no solution

Maintaining the discipline to sit down and write a month-by-month operating plan is your best shot at hitting or exceeding your targets. If you believe you’re going to sell 10,000 units by the end of the year, work backward from that date. Setting high targets for yourself can feel like a noble endeavor, but impossible goals can leave you with a set of equations and no achievable solutions.

The most common mistake I see is that a lot of founders aren’t realistic about what it takes to ramp up. In the hardware space, for example, you’ll probably need a contract manufacturer. This means you have to bake a number of lead times into your plan, planning for tooling and manufacturing. You have to be aware of Chinese New Year, lead times for parts and components, and the time it takes to ramp up to full manufacturing speed with acceptable yields. And on top of all that, not everything can be parallelized. Nine women can’t make a baby in one month; throwing more resources at the problem doesn’t necessarily make things go faster. Hiring is another example of where I see a lot of naiveté in operating plans. A three-person company can’t hire five people in six weeks.

Creating a fundraising deck will be much easier if you are in the habit of working to a solid operating plan. In my experience, when founders struggle to formulate a compelling pitch, it is often because they haven’t had the discipline to think through the business operationally.

A sample operating plan

Every business is different, which means that there is no one-size-fits-all operating plan template. Having said that, below is a simple, high-level summary of an operating plan. Yours should be more detailed, and on a month-by-month basis, rather than quarterly.

Each cell in your operating plan should be a SMART goal , which means you can measure the company against the operating plan. The CEO will have an underlying monthly plan, with an in-depth analysis for each number, and specific plans for whom will be hired when, of course.

Bolt invests at the intersection of the digital and physical world.

Today we’re proud to announce that Bolt is leading the pre-seed round for Foundation Devices and will be backers on…

On March 15th, I had the opportunity to catch up with Aicha Evans, CEO of Zoox, for our most recent…

The best digitally native vertical brands are evolving from DTC enterprises to sophisticated tech-enabled omnichannel operations.

Operational Plan: Everything You Need To Know (2024 Guide)

Download our free Operational Strategy Template Download this template

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.

Free Template Download our free Operational Strategy Template Download this template

What Is An Operational Plan?

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.

Benefits of operational planning

Clear definition of relationships between cross-functional teams in different departments and responsibilities for each to eliminate duplicated efforts.
Tighter alignment between corporate or business unit strategic plans and on-the-ground execution, helping the organization meet its business targets.
Strong operating system that enables the company to quickly adapt, deliver operations goals, and monitor performance.

Operational planning vs. strategic planning

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

Kickstart Your Operational Planning Process: Lay The Foundation

The quality of your operational plan will depend on your input. A successful operational planning initiative will consider these aspects:

Who will be involved? Identify and include employees, customers, and the management team in the planning process to gain valuable insights from the front lines, ensuring better strategy and execution buy-in.
What are your internal capabilities? Assess internal capabilities by conducting an internal analysis , including resource requirements, operating budget, and talent skills. Talent management and employee engagement are just a few of the many challenges that COOs will have on their operations agenda.
What environment are you operating in? Conduct an external analysis (e.g., PESTLE or Porter’s 5 Forces ) to inform your approach and identify optimization opportunities and risks, keeping you agile in a changing market.
Is it aligned with your organization’s strategy? Ensure alignment of your operational plan with your organization’s strategic plan to actively support the company's long-term vision and contribute to key business metrics.

👉🏻 Once you’ve gathered this information, you can develop an operational plan to help you execute business strategies.

Key Elements Of Your Operational Plan

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:

Choose key metrics aligned with the company goals

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:

Communicate roles and responsibilities to all employees so they know how their efforts contribute to overall business success.
Identify and address operational bottlenecks and inefficiencies that could derail strategy execution.
Motivate and engage employees to work toward strategic objectives and deliver on business outcomes.

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.

Define the focus areas of your operational plan

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:

Administration
Human Resources

💡Tips to help define the focus areas of your operational plan:

Identify the business's key challenges and opportunities.
Consider the business's overall long-term strategy and key metrics and how the operational plan's focus areas can support these objectives.
Bring other people on board to help you identify what needs to be addressed by the operations plan.

Create strategic objectives for 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:

Reduce costs by 10% within the next year by implementing more efficient processes and streamlining the supply chain over the next year.
Launch three new products in the next fiscal year to expand your product lines and increase revenue.
Increase customer satisfaction scores by 5% within the next six months.

💡Tips for defining strategic objectives include:

Ensure your objectives are specific, measurable, achievable, relevant, and time-bound (SMART).
Consistently align objectives with your operational plan's focus areas and the company's goals.
Don’t be afraid to get input from other people about your objectives.

Identify and prioritize projects

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:

Localize sourcing for critical semi-finished materials.
Streamline the supply chain to reduce costs and improve efficiency.
Find and develop an alternative logistics channel.
Implement a new customer service training program to improve customer satisfaction scores.
Implement a new technology that will enable end-to-end supply chain visibility.

💡Tips for defining and prioritizing projects:

Identify the specific actions and activities needed to achieve each strategic objective.
Prioritize the projects based on their importance, feasibility, and potential impact on the business.
Involve stakeholders in defining and prioritizing the projects to ensure their needs and concerns are heard.

Identify and track key performance indicators (KPIs)

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:

Inventory costs
Costs of goods sold
Revenue growth
Employee retention rate
Customer satisfaction score

💡Tips for defining and tracking KPIs:

Align KPIs with your strategic objectives and focus areas so that you can track the plan's progress against these specific goals.
Add both lagging and leading indicators .
Instead of using multiple disconnected spreadsheets and project management tools, consider live dashboards or reporting systems to track the KPIs and monitor progress over time.

👉🏻 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.

Operational Plan Examples & Templates

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.

Master Operational Plan Example

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.

HR Plan Example

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.

IT Plan Example

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.

Marketing Plan Example

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.

Finance Plan Example

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.

5 Tips For An Effective Operational Plan And Its Execution

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

2. Keep moving forward and adopt a growth mindset

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.

3. Make strategic moves and change fast when you need to

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

4. Empower your operations team and boost efficiency

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.

5. If it isn’t measured, it isn’t managed

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.

example of an operations strategy dashboard in cascade

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.

Execute Your Operational Plan With Cascade 🚀

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.

Viva Goals Vs. Cascade: Goal Management Vs. Strategy Execution

What Is A Maturity Model? Overview, Examples + Free Assessment

How To Implement The Balanced Scorecard Framework (With Examples)

The Best Management Reporting Software For Strategy Officers (2024 Guide)

Your toolkit for strategy success.

What Are Pre-Operating Costs

Whether you are starting a franchise or an independent business venture, certain expenses before the opening day will occur. So, we will explain to all aspiring entrepreneurs what are pre-operating costs and what are characteristics and examples of it.

Key Takeaways:

Pre-operating costs incur before the opening day of the business.
Before a business sells its first product or service, all expenses made in that period fall in the category of the pre-operating costs
Pre-operating costs can’t be considered investments; only operative costs are investments.
Legal fees, office furniture, market research, utility, training, and accounting expenses all count as a pre-operating costs

What are Pre-Operating Costs?

Pre-operating costs are costs incurred before a business is launched or before a new initiative of an already existing business is launched. They can only be regular business investments agreed upon under the standard accounting principles.

Characteristics of Pre-Operating Costs

These types of costs are generated before the beginning of operations..

Pre-operative costs include money you spend before selling your first product or service. The money you spend after your services have begun is known as operative costs or capital.

Pre Operating costs are not investments

Pre-operating costs are always going to be expenses. They cannot be considered investments because, at the time of expense, the company or the new initiative doesn’t exist.

Investments can only be made to businesses or initiatives that already exist. However, the money spent looking for potential investors can be considered a pre-operating cost.

Must be necessary expenses

Since pre-operating costs sometimes can be subjected to tax deductions, they must be essential expenses. This is enforced to make sure businesses don’t evade taxes.

It would be wise for entrepreneurs to check what is and is not tax-deductible.

They are subject to a tax deduction.

These tax deductions are awarded to support new businesses or initiatives and ensure they have a chance of survival in a competitive market.

Must be classified correctly

This is also concerning tax deductions. Careful, correct classifications help reduce tax fraud.

Examples of Pre-Operating Costs

Before a business is launched, it needs to have the proper permits, licenses, NDAs, and drafted contracts, among other legal requirements.

Multiple lawyers may be needed to get all of this sorted out. Make sure the lawyers are familiar with local law to avoid any mix-ups. Some permits and licenses require you to pay a registration fee upon submission.

Expenses needed for materials

The office space you’re going to use needs supplies. These can be chairs, tables, pens and pencils, air conditioning, internet connection, and interior decorations. Factories may need machinery and storage space.

Employee training expenses

Your employees need to be trained before the business is launched. You will spend money on supplies, transportation, facilities for the trainees, and other administrative costs. The payments for employees before the company or initiative is launched can also be considered.

Location-related expenses

Finding and renting or buying a space for your business will have pre-operating costs. Traveling to examine spaces, discussions with owners, and evaluating the spaces will cost you money.

Preparing the space in a way best suited for the business will also cost money that can be considered a pre-operating cost.

Market research expenses

You may need to hire a professional for thorough market research and evaluation. Figuring out your market and how to communicate with them in their language will be important when planning future strategies and, subsequently, the success of your business.

Having a clear marketing plan is also essential when it comes to attracting prospective investors.

Promotional and marketing expenses

Letting your potential customers know when you’re starting a business and what your business is all about is an essential task.

You can tease the release of a product or service on social media or hire a celebrity to represent your brand and create buzz around your product. You can also take more traditional routes like e-mail marketing or TV advertisements.

Gaining the interest of potential investors

Potential investors are essential to the longevity of your business in the long run. Their expertise might come in handy when running your new business.

How do you get them interested? You must have a solid business plan, have a detailed marketing plan, be ready to explain these plans to prospective investors, and ask friends and family who believe in your plans to be investors.

The costs you will incur doing this can also be listed under preoperating costs!

Supply cost

Since pre-operating costs can include producing products to be sold, the money you spend producing and perfecting said product is counted under pre-operating costs.

Supplies can be raw material, packaging material needed, etc.

Accounting costs

Hiring an accountant as soon as possible is a wise decision. This can be before the business is launched because you will be dealing with money way before your business launches.

Hiring an accountant will ensure you’re conducting your money legally, reassure your potential investors, make paying taxes in the future a breeze and keep track of your accurate profit will be more effortless.

Technology costs

Buying computers and machinery necessary to run your business, as well as the cost of software and other programs, are counted under pre-operating costs.

Meeting and planning costs

The money spent by partners to meet and plan the direction, plans, and strategies of the business can be included as pre-operating costs.

Utility costs

Money spent on essential utilities such as water and electricity is accounted for under pre-operating costs.

Why should you segregate pre-operating costs?

It will give you an idea of how much starting up a single branch costs if you’re planning on franchising your business.

A detailed record of pre-operating costs will help the franchisee determine if they want to invest in your franchise. Even if you’re not franchising your business and you’re just expanding it to other states, this manual will be very helpful.

How much pre-operational cost will a business need?

What counts as a pre-operating cost can change from industry to industry and state to state, and it’s essential to check with a qualified local lawyer and accountant before commencing any business planning.

For example, opening a single coffee shop will have a pre-operating cost of $80,000-$300,000, but opening a pizza shop will have a startup cost of $95,000-$2.5 million.

Also, opening a franchise such as Mcdonald’s will demand more properating costs than starting an independent pizzeria.

Do your research well, and good luck!

Written by:

Stuart MacPherson

Hi, I'm Stuart. I've been running my own small business since 2019 after leaving a successful career in finance. I created FranchiseTheory to share my enthusiasm for franchising and the franchise business model.

Connect with me: Linkedin | Reddit | Twitter

Contact sales

Start free trial

Operational Planning: How to Make an Operations Plan

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 vs. Strategic 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.

What Is a Strategic Plan?

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.

What Is an Operational Plan?

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.

What Is Operational Planning?

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 .

How to Make an Operational 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.

Map business processes and workflows: What steps need to be taken at the operations level to accomplish long-term strategic goals?
Set operational-level goals: Describe what operational-level goals contribute to the achievement of larger strategic goals.
Determine the operational timeline: Is there any time frame for the achievement of the operational plan?
Define your resource requirements: Estimate what resources are needed for the execution of the operational plan.
Estimate the operational budget: Based on your resource requirements, estimate costs and define an operational budget.
Set a hiring plan: Are there any skills gaps that need to be filled in your organization?
Set key performance indicators: Define metrics and performance tracking procedures to measure your team’s performance.

Get your free

Operational Plan Template

Use this free Operational Plan Template for Word to manage your projects better.

What Should be Included in an Operational Plan?

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.

Executive Summary

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.

Operational Budget

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.

Operational Objectives

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 .

Processes & Workflows

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.

Operational Timeline

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.

Hiring Plan

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 .

Quality Assurance and Control

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.

Key Performance Indicators

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.

Risks, Assumptions and Constraints

Note any potential risks, assumptions and time or resource constraints that might affect your business operations.

Free Operational Plan Template

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.

What Are the Benefits of Operational Planning?

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.

How ProjectManager Can Help with Operational Planning

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.

business operations data on a Gantt chart

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.

Deliver your projects on time and under budget

Start planning your projects.

.css-s5s6ko{margin-right:42px;color:#F5F4F3;}@media (max-width: 1120px){.css-s5s6ko{margin-right:12px;}} Join us: Learn how to build a trusted AI strategy to support your company's intelligent transformation, featuring Forrester .css-1ixh9fn{display:inline-block;}@media (max-width: 480px){.css-1ixh9fn{display:block;margin-top:12px;}} .css-1uaoevr-heading-6{font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-1uaoevr-heading-6:hover{color:#F5F4F3;} .css-ora5nu-heading-6{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:flex-start;justify-content:flex-start;color:#0D0E10;-webkit-transition:all 0.3s;transition:all 0.3s;position:relative;font-size:16px;line-height:28px;padding:0;font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-ora5nu-heading-6:hover{border-bottom:0;color:#CD4848;}.css-ora5nu-heading-6:hover path{fill:#CD4848;}.css-ora5nu-heading-6:hover div{border-color:#CD4848;}.css-ora5nu-heading-6:hover div:before{border-left-color:#CD4848;}.css-ora5nu-heading-6:active{border-bottom:0;background-color:#EBE8E8;color:#0D0E10;}.css-ora5nu-heading-6:active path{fill:#0D0E10;}.css-ora5nu-heading-6:active div{border-color:#0D0E10;}.css-ora5nu-heading-6:active div:before{border-left-color:#0D0E10;}.css-ora5nu-heading-6:hover{color:#F5F4F3;} Register now .css-1k6cidy{width:11px;height:11px;margin-left:8px;}.css-1k6cidy path{fill:currentColor;}

Business strategy |
Learn how to do operational planning th ...

Learn how to do operational planning the right way

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.

What is operational planning?

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.

Operational planning vs. strategic planning

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.

Who should create an 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.

The benefits of operational planning

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.

5 steps to making an operational plan

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:

1. Start with a strategic plan

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 .

2. Narrow down your scope

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.

3. Identify key stakeholders

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.

4. Create the plan

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.

5. Share and update your operational plan

Once you’ve created the plan, share it with key stakeholders so they understand your team’s most important goals and the daily tasks it will take to get there. Manage your plan and updates in a shared tool that captures real-time progress, like Asana .

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 .

Get started with operational planning

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.

Related resources

9 steps to craft a successful go-to-market (GTM) strategy

Unmanaged business goals don’t work. Here’s what does.

How Asana uses work management to effectively manage goals

Beat thrash for good: 4 organizational planning challenges and solutions

Operational Plan for Business Plan

It is important for a business plan to have an operational plan. Your business functions will not be complete if you will not set action plans and strategies that will be used for your operations.

19+ Hotel Operational Business Plan Examples
11+ Operational Plan For Cleaning Services Examples

Business Operational Plan Template

Google Docs

Size: US, A4

Operational Plan Template

Startup Operational Plan Template

Having an operational plan can help you look into the quality standards and metrics that you need to consider to attain operational successes and other business goals and objectives. May it be a monthly, quarterly, or annual operational plan that you would like to develop or update as a part of your business plan, you always have to ensure that you are fully aware of the purposes of the document and how its usage can affect the actual operations of your business.

We have listed a number of operational plan for business plan examples that you can browse through and download in this post. Refer to these downloadable examples if you want to be more specific with the formatting and content development of your own operational plan.

Operational Plan and Budget for Business Plan Example

Size: 871 KB

Operational Plan for Business Plan Elements Example

Size: 172 KB

Operational Business Plan Example

Size: 91 KB

What Is an Operational Plan for Business Plan?

Just like a project operational plan , an operational plan for business plan promotes organization within all the processes that concerned stakeholders will be involved in. Every business should have an operational plan as this document can help point out operational goals, the gap that is needed to be filled during business operations, and the business condition that is needed to be achieved with the help of a proactive and productive workforce.

Here are some ways on how an operational plan for business plan can be defined:

1. An operational plan for simple business plan deals with the daily activities of the business. It helps prepare specific action plans that can be used to support the requirements, needs, and demands of the operations. This can help the workplace become more organized, functional, and appropriate for all the work processes that are needed to be done on a day-to-day basis.

2. An operational plan for business plan is an extremely detailed document that presents the tactics and strategies necessary to be implemented for operational growth and development.

For an operational plan to be highly usable, it needs to present the entities who will be responsible for the execution of particular call-to-actions, the details of the operational plan activities, the location where specific work functions will be implemented, and the time frames that are necessary to be considered when executing general action plans .

3. An operational plan for business plan ensures that the lower management is fully aware of the desired and demands of the upper management. With this document, there will be clarity with the direction where the operations will be brought which should be relevant and aligned with the objectives of the business. You may also see operational plan for restaurant examples .

4. An operational plan for business plan adheres to low-level management. This means that this document is helpful for single-area units like specific departments. As an example, a sales operational plan can help the sales team associate its professional goals , work processes, and action plans with the objectives of the business.

Annual Operational Plan for a Business Example

Size: 310 KB

Farm Operational Plan for Business Plan Example

Size: 350 KB

Bank Group Operational Plan for Business Plan Example

Size: 565 KB

Key Elements of an Operational Plan for Business Plan Example

Using an operational plan for business plan can help you define all the factors, elements, and components that you need to consider to ensure that all the objectives and goals of the upper management for its operations can be achieved. The same goes with how event management teams use an event operational plan to ensure that the workforce is well aware of what is expected from them.

Especially when dealing with potential operational successes, it is important for you to know how strategies and tactics can help business processes, operational workloads, and stakeholders’ relationships to be better. Here are the key elements that you should not forget to include in your own operational plan for general business plan :

The desired output of the upper management and the operational guidelines that the workforce can refer to so that they can provide all their deliverable needed during operations.
The strategies and tactics that you will incorporate in your business operations for you to yield better results and return of investments.
The tasks, obligations, and responsibilities that are needed to be done in a timely manner to ensure that specific operational goals and objectives will be realized.
The particular entities who will be assigned to take ownership of the incorporation of strategies or the execution of call-to-actions.
The timeline that will serve as guide within the entire execution of the operational plan for business plan.
The time frames or duration where particular operational activities are expected to be done, completed, and/or provided.
The amount that will be used for the implementation of the operational plan for business plan and the financial resources where the required budget will be coming from. You may also see event operational plan examples .
The performance indicators that can assess the quality of the results given by the workforce and other stakeholders with the help of the operational plan.

Operations and Maintenance Business Plan Draft Example

Business Plan Outline with a Thorough Operational Plan Example

Size: 12 KB

Things That You Need to Focus on When Developing an Operational Plan for Business Plan

It is essential for you to know the phases of the business management planning processes where you will incorporate the operational plan. You have to consider the different setups within various business areas so you can develop an operational plan that works for every department and division while still considering the overall corporate goal of the company. With this, you have to be keen with the development of your own operational plan for business plan.

Here are some of the things that you always need to look into when drafting the specified document:

1. Ensure that there is clarity with your objectives. You have to be aware of what it is that you truly want to achieve. If you can present the better goals that you have in mind for the operations of the business, then it will be easier for you to come up with strategies and process guides that can help your objectives be a reality.

2. Particularly and specifically present all the activities and functions that the operations team is expected to be delivered. The people that you will be working with must be knowledgeable of what you expect from them so that they can execute work processes accordingly. Having an operational plan for a business plan can also help the operations become more sensitive with the quality standards that they need to meet.

3. Speaking about quality standards, you have to set the measures and metrics that you will use for assessment and evaluation. It is essential for you to have a thorough process of identifying whether the operational plan is working for the benefit of the business, and not against the direction where the upper management would like the business to be at. You may also see annual operational plan examples .

4. List down all your desired outcomes. This should be based on your long-term and short-term goals . Specify the things that you would like to achieve in different time frames and periods. Through this, you can be aware of whether there is growth and development that is happening to the business and its operations with the usage of the operational plan that you have created.

5. It is important for you to consider the staffing needs of the operational plan for business plan that you will develop. You have to look into the current workforce pool of the company so that you can identify whether the plans that you have are realistic and attainable based on the number of people that you can work with. You may also like IT operational plan examples .

6. Present all the resource requirements, needs, and demands that are essential to be supplied within the actual implementation of the operational plan for business plan. You have to be aware of the resources that you will be needing, from the budget that you need up to the equipment and materials that are expected to be at hand and readily available, so that there will be a smooth execution of all your simple action plans for the business operations.

7. Develop an implementation timetable that can ensure the timeliness of all your work processes. You have to keep in mind that the daily operations of the business have particular requirements.

Hence, you have to make sure that all your listed work functions are time-sensitive. If you can present all the time frames for every operational action plan, then it will be easier for all point persons to execute their responsibilities in a timely manner. You may also checkout project operational plan examples .

8. Include all the processes, activities, programs, and efforts that are relevant to the operations of the business. You have to incorporate a particular success measure for monitoring the progress and growth of the business operations. Your b usiness operational plan should be evaluated and updated from time to time so you can ensure that the usage of the document is still effective.

Food Truck Operational Plan for Business Plan Example

Size: 45 KB

Business Planning: Operating Plan or Operations and Maintenance Plan

Size: 54 KB

Operational Plan for Business Plan Example

Size: 116 KB

Guidelines and Instructions for an Operational Plan for a Business Plan Example

Tips and Guidelines for the Creation of an Operational Plan for Business Plan

Whether you are making an operational plan for a restaurant or any other kinds of businesses, you always have to ensure that the document that you will come up with is understandable, specific, direct to the point, and complete with all the details that you would like to disseminate to your target audience. A few of the useful tips and guidelines that you can refer to if you want to start drafting your own operational plan for business plan are as follows:

1. Ensure that the discussion in the operational plan for formal business plan are divided into clauses or segments. You have to present key points and areas of consideration in an organized manner so that it will be easier for the document to be understood and interpreted accordingly.

2. Know the nature of your business operations and how your performance as a corporate entity pars up with your competition. Having the knowledge about your current operational conditions can give you an idea on how you can develop formal action plans that can bridge the gap between the state of the business right now and the condition that you would like to experience, business operations wise.

3. Browse through a selection of operational plan for business plan examples especially those that have been used by successful businesses in the same industry. Being able to see the trends or common denominators in the development of this document can help you come up with an effective operational plan of your own. You may also see importance of business plan .

4. Be specific with your plan discussion. Limit the content of the document to its bare minimum ensuring that your operational plan only contains relevant and necessary information.

With the help and guidance of the operational plan for business plan examples that we have compiled just for you, we hope that you can have an easier and faster time in developing your operational plan for sample business plan . You can always go back to the discussion specified above if you need to refresh your mind about the proper and efficient creation of an operational plan.

Download any of our examples and try to create a well-formatted and comprehensive operational plan for business plan now.

Text prompt

Instructive
Professional

Create a study plan for final exams in high school

Develop a project timeline for a middle school science fair.

Writing an operational plan for a bakery business

Table of Contents

Determine your objectives

Decide on a location, list your supplies and equipment , outline your structure , discuss your finances , accounting tools , determine a timeline , simplify your bakery finances with countingup.

If you plan to start a small bakery, it’s important to think about how you’ll turn your business idea into an operational success. An operational plan for a bakery business will help you determine what you need to make it run smoothly.

An operational plan details the physical requirement of running your business. It describes how you’ll organise your business day-to-day, achieve your tasks, and earn a profit. But if you’re not sure how to write one, we can help.

This article covers how to write an operational plan for a bakery business, including:

Objectives
Location
Supplies
Finances
Timeline

The first section to add to your operational plan is the bakery’s objectives . This part is essential to determining what to focus on and work towards with your business. List some short-term, medium-term, and long-term objectives.

To make your objectives strong and manageable, use the SMART method, meaning they’ll be specific, measurable, achievable, relevant, and time-based.

With your bakery business, short term objectives might be to source and prepare a bakery shop and design a strong website. Then, you could create a medium-term objective to sell more bakery products and develop an online shop with shipping. Long term goals could be to expand your shop to new locations or offer baking lessons or catering.

Next, you’ll need to outline the logistics of your business. What location will you use for your business? Provide an address if you already have one, and if not, outline where you’ll open your shop and why. If you plan to start a bakery from home, outline where and how you’ll sell your goods.

In this section, also list the operating hours of your business. Which days and what times will your shop be open to customers? You can also outline your baking hours or time spent managing your operations and finances after shop hours.

Also, consider how the shop will run. Will you offer seating for customers, or will it be only takeaway? Will you also offer drinks or just baked goods? Will you supply your baked goods to other cafes or restaurants?

Another essential part of your operational plan for a bakery business is outlining what you’ll physically need to run your small bakery. For example, aside from a shop with a kitchen, you’ll likely need bakery equipment like:

An industrial oven
An industrial refrigerator
An industrial stand mixer
Baking supplies and equipment (mixing bowls, measuring cups, whisks, spatulas, pans, baking trays etc.)
Proofing cabinets
Break slicers
Bakery cases
Plates and display trays
Takeaway packaging

Aside from sourcing the right equipment, consider what supplier you’ll use for necessary baking ingredients. These ingredients may vary depending on your recipes and the bakery goods you sell.

But generally, you’ll likely need a food supplier for:

Sugar
Butter
Flour
Yeast
Bicarbonate soda
Bicarbonate powder
Spices

As you outline what you’ll need, consider how you’ll manage this supply chain and organise your inventory . It’s crucial to stay on top of what you have and what you need to continue to make baked goods and meet your customer demand.

You might want to keep backups of dried goods that won’t go bad, like flour and sugar. This way, if there’s a shortage, it may not negatively impact your business.

Another thing to include in your operational plan for a bakery business is how you’ll structure your business and organise the daily workload. In this section, think about which baked goods you’ll sell and how much you’ll charge for them. Also, outline how you’ll accept payment from customers and manage your shop and baking needs.

Next, outline what it’ll cost to produce your baked goods and run your business overall. Consider each part of your operations and much money it’ll need.

First, think about startup costs, essential expenses to getting your business running. These costs could include necessary equipment, registration fees, marketing, and website building.

Then, you might outline the rent, electricity, water, and wifi charges of running your shop. Also, calculate the cost of your ingredient orders and how often you’ll need to restock.

Once you know the money you’ll need, consider how you’ll get it. So, you might include your plan to secure funding through an investor or lender.

On top of this, you’ll need to consider your financial accounting methods. It’s crucial to maintain accurate business records, which you can do by opening a business current account and using modern accounting software, like Countingup.

Countingup combines a business account with accounting software, making it easier to manage your finances in one place. You can save time with automatic features like automatic expense categorisation and cash flow insights. These tools help you track your spending and the cash coming in and out of your business over time. .

Consider the timeline of your business operations to give you structure and purpose each day. For example, you might outline the typical day at your small bakery, including when you get into the shop, bake your goods, and open and close the shop.

Discuss how you’ll juggle your tasks and organise your calendar to manage your time well . When will you spend time organising your bookkeeping or ordering from suppliers? With the right business management tools, like Google Workspace , you can organise your contacts, projects, and calendar altogether.

In summary, setting up your bakery’s operational plan will help you structure your business for success. Just be sure to outline the who, what, where, and how much so you have the essential detail to make it happen.

Countingup is the business current account and accounting software in one app. It automates time-consuming bookkeeping admin for thousands of self-employed people across the UK.

Save yourself hours of accounting admin so you can focus on growing your business.

Start your three-month free trial today.

Apply now .

Counting Up on Facebook
Counting Up on Twitter
Counting Up on LinkedIn

Related Resources

Bookkeeping and accounting tips for hairdressers.

As a self-employed hairdresser or salon owner, bookkeeping and accounting can be hard

What expenses can you claim as a childminder?

Being a childminder can be a great way to earn extra income or

How to get more clients as a freelance makeup artist

Whether you’re a professional makeup artist, a bridal makeup artist or a student

How to start a supported living business

Starting a supported living business is a challenging, but incredibly rewarding, way to

How To Start A Vending Machine Business In The UK

Starting a business is a great way to become your own boss and

How to start a dog daycare business

If you think dogs are a treat to be around, you’re not alone.

How to start a babysitting business

If you love spending time with children and offer to babysit for family,

How to start a cat sitting business

Did you know that 24% of the UK population own a cat? That’s

Money laundering regulations for estate agents

In December 2020, the government issued the National risk assessment of money laundering

How to become a freelance bookkeeper

If you enjoy balancing books and organising business finances, becoming a freelance bookkeeper

How to sell jewellery designs to companies

Do you enjoy creating unique jewellery designs? If so, you might want to

How to become a self-employed labourer

Do you enjoy working with your hands and like the idea of being

Operating Procedures in Business Plan

The operating procedures in a business plan help employees carry out an organization's daily operations. 4 min read updated on February 01, 2023

The operating procedures in a business plan help employees carry out an organization's daily operations. Essentially, it is a step-by-step instructional guide detailing how workers should complete any complex activities related to the business. It also helps keep companies stay in compliance with the regulations within their industry.

Standard Operating Procedures For a Business

A standard operating procedure (SOP) details the daily procedures for an entity. The Environmental Protection Agency (EPA) recommends that SOPs should always be written in an easy, step-by-step manner. Additionally, SOPs should be supported with flowcharts to clarify the relationship between departments and activities or interdepartmental relationships.

There are many potential components outlined in an SOP, such as:

Legal expenses.
Property tax assessments.
Directives for the management of accounting documentation.
Confidentiality agreements.
Bank account reconciliations .
Policies for wire transfers and credit cards.
How to handle travel and entertainment expenses.

Information regarding financial directives can also constitute as a component of an SOP. This may entail information regarding the directives for the board of directors or stockholder meetings and the company's financial reporting. Additionally, specifics regarding the release of any financial documents related to analysis, reporting, and forecasting may be included.

Sometimes information regarding computer and information technology (IT) may be outlined in the SOP. This would detail company policies regarding the following:

Hardware and software evaluations.
Training plans.
Company policy regarding internet use .
IT troubleshooting methods.
Standards to assess security risk breaches.

Human resource information is often part of an SOP. This includes guidelines for the following areas:

Background checks .
Outlining job descriptions.
Policies for job applications processes.
Describing the employee benefits and compensation policies.
Employee health insurance directives.
Retirement benefits.
Payroll policies.

With regards to the operations section, the basic rule is to simply cover the major areas and provide the most relevant details. This would include areas such as materials, equipment, labor, facilities, and processes. These are all components that are critical to the operations of a business and may offer a competitive advantage. Last, measures for maintaining security and safety may be detailed in an SOP. Generally, this would include emergency plans, ethic statements, and employee code of conduct manuals.

Writing the Operations Section of Your Business Plan

There are some steps to consider when writing the operations section of your business plan . First, remember that service and retail firms have very different operation requirements from manufacturers. Therefore, you will want to devote a considerable amount of time to outlining staffing and describing employment contracts for key service providers such as marketing experts, buyers, and designers.

Do not go into too much detail in your operations section. It is important to stick to the processes that are the most significant to the business, such as those that provide a significant advantage over your competitors or those that are essential to your production. Be sure to estimate the need for the materials required and adequately describe any agreements with suppliers. In your SOP, make a list of every potential piece of equipment you may need, including a description of its function, features, and cost.

Business Plan Procedure

The procedures of a business plan describe how to:

Prioritize short and long-term goals.
Manage the organization's growth.
Develop successful objectives and strategies.

The strategy team is responsible for developing the organization's business plan. A well thought out business plan helps employees understand how their daily responsibilities and tasks relate to the overall goals of the company strategy.

How to Write Business Standard Operating Procedures

The purpose of a standard operating procedure is to identify the tasks that will require detailed instructions in order to run the business smoothly. A well-written SOP should describe the activity and any necessary tasks involved acting in accordance with industry regulations, provincial laws, or even just the standards for running the business. Be descriptive when explaining how to complete the task. For example, in a clothing retailer operation, the instructions may be:

Verify all locks on the premises.
Hang or fold all disorganized clothes.
Make sure the floor is free from any debris.

Remember, it's important to identify the scope for each role in the organization. Also, make sure that the information that is supplied to each employee is relevant to their overall role in the business. All managers should:

Clearly understand the standard operating procedures.
Make sure standard operating procedures are followed.
Understand the significance of the standard operating procedures.

The standard operating procedures should be regularly reviewed at the business level to ensure that all updates in the operations are properly accounted for.

If you need help with operating procedures in business plan, you can post your legal need to UpCounsel's marketplace. Upcounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

What Is the Operational Plan Section of the Business Plan?
Management Plan in a Business Plan
Business Plan Management Structure: What You Need to Know
Business Operations Definition
How to Make a Business Plan Format
How Does a Business Operate: Everything You Need To Know
Details of a Business Plan
Service Business Plan
Parts of Business Plan and Definition
Creating a Business Plan

Free Operational Plan Templates

By Andy Marker | July 11, 2022

Share on Facebook
Share on LinkedIn

Link copied

We’ve rounded up the most useful collection of free organizational plan templates to record and track the goals and resource needs of your business or organization.

Included on this page, you’ll find a basic operational plan template , a nonprofit operational plan template , a three-year operational plan template , and a five-year operational plan template .

Basic Operational Plan Template

Download Basic Operational Plan Template Microsoft Excel | Microsoft Word

Use this basic, customizable operational plan template to create a detailed roadmap for your organization. With this template, the path to reaching your goals will be clear to all stakeholders, and team members will know exactly what tasks need to be completed and when.

Having efficient and clear processes in place is critical for reaching your organizational goals. Learn more in this guide to operational excellence principles .

Nonprofit Operational Plan Template

Download Nonprofit Operational Plan Template Microsoft Excel | Microsoft Word

Nonprofit organizations often have complex, long-term strategic goals. This operational plan template for nonprofits will help you develop a clear set of tasks and accountability measures to keep everyone apprised of next steps. Use this template to identify your goals, establish a clear plan, set and track your budgets, assign stakeholders, and implement reporting protocols.

This guide to operations strategies will give you an overview of the steps necessary to develop a comprehensive plan for your organization.

Three-Year Operational Plan Template

Download Three-Year Operational Plan Template — Microsoft Excel

Your operational plan might include long-term tasks and deliverables. Use this operational plan template to chart your organization’s needs over a three-year period. Enter specific goals, delivery dates, responsibilities, and necessary resources on this customizable template to track progress and ensure that you are on your way to reaching your strategic goals.

Your business or organization might also benefit from an operational audit, which is a chance to conduct a deep dive into strategic planning and to increase accountability. See this comprehensive guide to operational audits to learn more and gain access to additional resources and templates.

Five-Year Operational Plan Template

Download Five-Year Operational Plan Template — Microsoft Excel

Long-term planning is a key element of any organization. This five-year operational plan template gives you a detailed look at the steps and resources needed to reach your goals. Track deliverables, responsible parties, and resources in this customizable template. This template also helps team members visualize long-term needs and stay on top of their responsibilities and timelines.

See this guide to operations management for more information, tips, tricks, and future trends in managing your organizational resources.

What Is an Operational Plan Template?

An operational plan template is a form that captures key details about a work plan. An operational plan includes specific actions and resources needed to reach certain milestones. It is more detailed and specific than a strategic or business plan.

Operational plans help project managers identify resource needs, maintain accountability, implement a reporting process, and maintain a budget.

Operational plan templates templates vary by type but typically include the following:

Delivery Date: Enter target completion dates for each task in your plan.
Evidence of Success: Write a short statement explaining how you will know when the goal has been achieved.
Executive Summary: Describe the plan in a short paragraph that specifies how it differs from or relates to other plans in your organization.
Goals: Enter specific goals or milestones of your larger strategy or business plan.
Responsible Parties: Include the names of the stakeholders who are responsible for each task.
Resources Needed: Enter all resources necessary to complete each task, including on-hand resources and those you will need to procure.
Risks: Note any risks you may encounter.
Title: Enter the plan name or title.

Stay on Top of Operational Goals and Resource Needs with Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change.

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

IMAGES

Business Operational Plan Template
Annual Operating Budget Template , Operating Budget Template
Operational Plan for Business Plan
11+ Annual Operational Plan Template Examples
PRE OPERATING PERIOD
Operational Plan for Business Plan

VIDEO

Top 10 Business Plan Software for General Contractors (2024)
Top 10 Business Plan Software for Board Presentation (2024)
How to use an Advanced Business Plan Template by Paul Borosky, MBA
How to write a business plan, part 3
How To Write A Business Plan In 10 Simple Steps!
Top 10 Business Plan Software for Heavy and Detailed Financial Data (2024)

COMMENTS

A. & B. Pre-Operating and Operating Activities 1
Conducted Business Plan. The proponents will use its business plan conducted in the first month of the pre-operating activities to be able to assess all the possible business opportunity and if the company is ready to start a business. Conducted Feasibility Study. On the same month of the company pre-operating activities is the conducted of ...
How To Write the Operations Plan Section of the Business Plan
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.
What Are Pre-Operating Costs? (with pictures)
Pre-operating costs are also known as startup costs or pre-opening expenses. All types of business entities may incur pre-operating costs. These expenses often include consulting fees that are paid to experts and advisors during startup. They may also include money paid to lawyers, who draft up corporate and partnership agreements, create ...
PRE OPERATING PERIOD
PRE - OPERATING PERIOD Prior to the actual operation of the plant, it is part of the process to fulfil the necessary pre-operating requirements. Preparation is the vital key in the achievement of the success in a certain company. It includes careful planning from the very small detail up to the very important matter. Decision making skills are practice consistently to determine whether the ...
Pre-Operating Expenses
In any case, what remains of your start-up expenses after subtracting the immediate deduction will be divided and deducted over the next 15 years. The following table should make this easier to understand: Pre-Operating Expenses. (POPEX) $50,000 or lower. ($48,000) Greater than $50,000 and less than $55,000. ($53,000)
8 Pre-opening Priorities for Owners
Tracking progress to business plan and pre-opening budget. Holding regularly scheduled meetings to review construction progress with the project team. Staying informed is an owner's best defense ...
How to Create an Operations Plan: Business Planning
The first stage includes the work that has been done so far, whereas the second stage describes it in detail. 1. Development Phase. In this stage, you mention what you've done to get your business operations up and running. Explain what you aim to change and improvise in the processes.
How to Create a Business Operations Plan
Create a goal that everyone is motivated to complete with the resources available. Timely - Provide a deadline so everyone has a date they are working towards. Different departments will have different operational objectives. However, each department objective should help the company reach the main objective.
How To Create An Effective Annual Operating Plan (+Template)
Step 1: Do the initial research and analysis. To kick off the planning process, assess the current state of your organization. Review the previous year's performance, considering various data sources, including financial statements and operational reports . By doing a thorough business review, you ensure that your annual operating plan for next ...
How To Write A Business Plan (2024 Guide)
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 ...
Operating plans for pre-seed startups
Creating your operating plan. There is no mystery to writing an operating plan. An operating plan is a list of everything you intend to do as a business over the next 6-12 months. Think of it as a month-by-month to-do list for all aspects of your company. An operating plan is a spreadsheet with a column for each month that should include the ...
8 Business Plan Tools for Startups and Beyond
5. Growthink's Business Plan Template. Growthink offers both free and paid business plan templates. We'll focus on the free version in this article, but feel free to take advantage of their paid version, which adds on more features, including automatically generating your five-year financial forecasts.
Operational Plan: Everything You Need To Know (2024 Guide)
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 ...
What Are Pre-Operating Costs
For example, opening a single coffee shop will have a pre-operating cost of $80,000-$300,000, but opening a pizza shop will have a startup cost of $95,000-$2.5 million. Also, opening a franchise such as Mcdonald's will demand more properating costs than starting an independent pizzeria. Do your research well, and good luck!
Operational Planning: How to Make an Operations 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.
Learn how to do operational planning the right way
Free operations project plan template Operational planning vs. strategic planning. 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 ...
Operational Plan for Business Plan
Here are some ways on how an operational plan for business plan can be defined: 1. An operational plan for simple business plan deals with the daily activities of the business. It helps prepare specific action plans that can be used to support the requirements, needs, and demands of the operations.
Writing an Operational Plan for a Bakery Business
Another thing to include in your operational plan for a bakery business is how you'll structure your business and organise the daily workload. In this section, think about which baked goods you'll sell and how much you'll charge for them. Also, outline how you'll accept payment from customers and manage your shop and baking needs.
Operating Procedures in Business Plan
The operating procedures in a business plan help employees carry out an organization's daily operations. Essentially, it is a step-by-step instructional guide detailing how workers should complete any complex activities related to the business. It also helps keep companies stay in compliance with the regulations within their industry.
How To Make an Operational Plan (With Steps and Examples)
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 ...
Free Operational Plan Templates
Download Three-Year Operational Plan Template — Microsoft Excel. Your operational plan might include long-term tasks and deliverables. Use this operational plan template to chart your organization's needs over a three-year period. Enter specific goals, delivery dates, responsibilities, and necessary resources on this customizable template ...
Pre-Operating Period Sample Clauses
Pre-Operating Period. Sample Clauses. Pre-Operating Period. Not later than ninety (90) Days after the Effective Date, Operator shall prepare and submit to Owner, or update and revise if previously submitted to Owner, Operator's proposed Operating Plan for the Pre - Operating Period. The Operating Plan shall include (and each amendment thereto ...

How To Write the Operations Plan Section of the Business Plan

Stage of Development Section

Key Takeaways

Production Workflow

Industry Association Memberships

Supply Chains

Quality Control

The Physical Plant

Special Requirements

Feasibility

What is an operations plan?

What is the main difference between the operations plan and the financial plan?

What Are Pre-Operating Costs?

You might also Like

Related Articles

Discussion Comments

Pre-Operating Expenses

Defining Pre-Operating Expenses

Common examples of pre-operating expenses include:

Tracking Pre-Operating Expenses

Why Track Pre-Operating Expenses?

Pre-Operating Expenses and Taxation

Recent Articles

How to Write an Operations Plan Section of your Business Plan

Free Operations Plan Template

What Is an Operations Plan?

How to Write an Operations Plan Section?

1. Development Phase

Production workflow

Supply chains

Outline of daily activities:

Advantages of Preparing an Operations Plan:

Operations Plan Essentials

Operations Plan Example

Track and Accomplish Goals With an Operations Plan

Frequently Asked Questions

What are the factors affecting the operations plan?

Can an operations plan be created for both start-up and established businesses?

Related Articles

How to Write a Business Plan Complete Guide

Write Products and Services Section of a Business Plan

How to Prepare a Financial Plan for Small Business?

Popular Templates

An Ultimate Guide for Better Operations

Operations Plan

Goals and Objectives

Production Process

Production Milestones

Market Milestones

Financial Milestones

Talk about this lesson

Your operating plan is not a financial or fundraising document: It has to be a plan you actually believe you can execute. To run a successful startup, you absolutely need one.

Creating your operating plan

Plan for what you can see

Update the plan regularly — but not too often

Making trade-offs in your operating plan

A set of equations with no solution

A sample operating plan

Operational Plan: Everything You Need To Know (2024 Guide)

What Is An Operational Plan?

Benefits of operational planning

Operational planning vs. strategic planning

Kickstart Your Operational Planning Process: Lay The Foundation

Key Elements Of Your Operational Plan

Choose key metrics aligned with the company goals

Define the focus areas of your operational plan

Create strategic objectives for your operational plan

Identify and prioritize projects

Identify and track key performance indicators (KPIs)

Operational Plan Examples & Templates

Master Operational Plan Example

HR Plan Example

IT Plan Example

Marketing Plan Example

Finance Plan Example

5 Tips For An Effective Operational Plan And Its Execution

2. Keep moving forward and adopt a growth mindset

3. Make strategic moves and change fast when you need to

4. Empower your operations team and boost efficiency

5. If it isn’t measured, it isn’t managed