Running a small business is no easy task. Planning is an essential part of any successful business, and the operating plan is an important part of that. An operating plan outlines the day-to-day activities of a business and is critical for small businesses for success. Take the time to think through the daily experiences your customers, employees, and colleagues will have in your business. Think of your Operations plan as the user manual for your business. In this article, we will discuss the importance of an operating plan for small businesses and how to create and use one.
What is an Operating Plan?
An operating plan is a detailed document that outlines the day-to-day operations of a business. It includes the goals, strategies, and activities that are necessary to achieve success. It also outlines the resources, such as personnel, materials, and equipment, that are necessary to carry out the plan. In addition, it also lays out the timeline for the plan and the expected outcomes. Each section in your operations plan will cover 6 basic areas: Goal, Strategy, Activity, Resources, Expected Result, and Review.
Goal: What are you striving for?
Strategy: What tactic will you use to achieve your goal?
Activity: What actions do you take to implement the strategy?
Resources: What resources are needed to take action?
Expected Result: What do you expect to happen when strategy, activity, and resources are combined?
Review: What processes do you have in place to ensure this plan remains effective?
Why is an Operating Plan Important for Small Businesses?
An operating plan is important for small businesses because it provides a roadmap to your success. It helps you identify your goals and objectives and think about how you’re going to get there.
An operating plan also helps you stay focused on your core competencies. When you first start your business, you are going to find yourself doing all the jobs. It’s helpful to have a guiding document that sets boundaries around the time you spend focused on ancillary duties.
Finally, an operating plan helps you stay on track and measure your progress. It allows you to start practicing being proactive. You’ll need to know how to stay proactive when things get challenging and there is nothing like muscle memory to lean on in a clutch.
Components of an Operating Plan
An operating plan consists of several components. It should include the following:
• Goals and objectives: This section should outline the short- and long-term goals of the business, as well as the strategies that will be used to achieve them.
• Resources: This section should outline the personnel, materials, equipment, and costs that will be necessary to carry out the plan.
• Expected Results: This section should outline the timeline for the plan, including milestones, deadlines, and expected outcomes.
• Strategies and tactics: This section should outline the strategies and tactics that will be used to reach the goals, as well as the resources that will be necessary to carry them out.
• Activities: This section should outline the personnel needed for the plan, describing how the activity leads to the stated outcomes.
• Review: This section should outline how progress will be tracked and how adjustments will be made as necessary.
How to Create an Operating Plan
Creating an operating plan for a small business can seem like a daunting task. However, it doesn’t have to be. Here are some steps to get you started:
• Set clear goals and objectives: Before you can create an operating plan, you need to have a clear understanding of your goals and objectives. Think about what you want to accomplish and how you plan to do it.
• Identify the necessary resources: Once you have identified your goals and objectives, you need to identify the resources that will be necessary to achieve them. This includes personnel, materials, and equipment.
• Set a timeline: After you have identified the necessary resources, you need to set a timeline for the plan. This should include milestones, deadlines, and expected outcomes.
• Develop strategies and tactics: Once you have identified the necessary resources and set a timeline, you need to develop strategies and tactics to achieve the goals. This should be tailored to the strengths and weaknesses of the business.
• Develop a budget: Once you have identified the strategies and tactics, you need to develop a budget for the plan. This should include the costs associated with personnel, materials, and equipment.
• Track progress: Finally, you need to track the progress of the plan and make adjustments as necessary. This will help you stay on top of your goals and objectives and ensure that you remain on track.
Operating Plan Strategies
Once you have developed an operating plan for your small business, there are a few strategies you can use to make sure it is successful. Here are some tips to help you get started:
• Communicate: Make sure that everyone involved in the plan is aware of their roles and responsibilities. This will help ensure that everyone is on the same page and working towards the same goals. We will discuss creating a communication plan later in this series.
• Be flexible: Life is unpredictable. Be prepared to make adjustments as necessary. This will help you stay on top of your goals and objectives and ensure that you remain on track.
• Have a backup plan: It’s important to have a backup plan in case something goes wrong. This will help you stay prepared for any unforeseen circumstances.
• Track progress: It’s important to track the progress of the plan and make adjustments as necessary. This will help you stay on top of your goals and objectives and ensure that you remain on track.
• Review and revise: It’s important to review and revise the plan regularly. This will help you stay up to date on any changes that need to be made.
How to Use an Operating Plan to Your Advantage
You made the plan and now you have to use it. Here are some tips to help you get the most out of your plan:
• Visualize: Using your operating plan, create a visual workflow of your processes. Each step should flow into the next and lead to your expected outcome. This will help you identify areas of misalignment in your processes (grab a copy of our vision workbook to learn more about alignment in your business) and maximize your time and resources to ensure that you are working towards your goals.
• Prioritize: Prioritize your tasks and resources to make sure that you are focusing on the most important activities. This will help you maximize your time and resources and ensure that you are working towards your goals.
• Focus: Stay focused on the goals and objectives of the plan and don’t let yourself get distracted. This will help you stay on track and ensure that you are working towards success.
• Adjust: Make adjustments as necessary and don’t be afraid to make changes if something isn’t working. This will help you stay on top of your goals and objectives and ensure that you remain on track.
• Evaluate: Evaluate the progress of the plan regularly and make adjustments as necessary. This will help you stay on top of your goals and objectives and ensure that you remain on track.
Operating Plan Template
Creating an operating plan for a small business can seem like a daunting task. Do not get hung up on style, find a template you like and get to writing.
An operating plan template is a document that outlines the basic sections of an operating plan. It might include pre-written narratives that you can build on or placeholder text. Think about your intended audience and use a template that is adaptable to different forms of media. Most people use an MS Word template; however, you can use any software to create your plan. MS PowerPoint, Google Slides, or any graphic software is great for visual learners. Try using our operating plan template to get started.
Don’t reinvent the wheel. Find a template you like and move on to the next task on your list. Feel free to use ours if you like.
Conclusion
An operating plan is important for helping you activate your business. It provides clarity and direction and helps you stay focused on your core competencies. It also helps you exercise your proactive muscles.
Hopefully, we’ve made the task of creating an operating plan less daunting. Find a template and get started. Refer frequently to your plan and start a change log to document adjustments. You’re only going to update your plan after a significant event or at the one-year anniversary; time is always an important factor during the review process.
Running a small business is no easy task. However, with an operating plan in place, you can ensure that you are on track and on your way to success. So, what are you waiting for? Get started on your operating plan today and get one step closer to achieving your goals.
Schedule a coaching session with us if you want some help with your planning.