What Is Operational Planning In Business 

What is operational plan in business

Running a business involves a lot of planning. As a business owner, you know that the best way to ensure everything works as smoothly as possible is to have a clear vision of your goals and objectives. But there are so many types of business planning that it is almost impossible to keep track of all of them. Among the various types of business plans, operational plans are among the most important business plans that any business owner should know about. This is why this article will answer the question, “what is operational planning in business”. 

Not only will this article answer this question, but it will also discuss several other things that you should know about this topic, including; 

  • Its importance to its main types, 
  • How to start an operational planning process
  • and How to create an operational plan. 

This article is packed with many interesting things you should know about this topic. 

So, ensure that you stick with us to the end. 

Meaning of Operational Planning – What is Operational Planning in Business 

Operational planning refers to the business process of creating effective steps that will help an organization or team achieve its strategic goals. 

This process typically covers the daily, weekly, and even monthly tasks and projects for every department and team within the organization. 

During this process, the person in charge would also make milestones that they believe will help them reach the company’s goals

The document that is created during operational planning is an operational plan. 

Operational plans outline the company’s main objectives and goals. 

It also outlines the steps the workforce would take to achieve these objectives and goals.

This means it details the different day-to-day activities that different teams have to carry out to achieve the company’s objectives and goals. 

The objectives and goals in this document could be long-term or short-term goals. 

Clarity is an essential element of this document. 

This will ensure that every workforce member knows and understands their obligations and duties. 

Not only does this document help employees to know their obligations, but it also ensures that they know the best ways to execute these obligations. 

It also helps them know the defined timeline to perform these obligations. 

This is why this process and documents are fundamental to helping a company stay on track when carrying out its processes. 

Strategic Planning Vs Operational Planning 

Operative planning relates to strategic planning in several ways. 

So, it is almost impossible to discuss the former without mentioning it. 

However, while these two types of planning share some relationship, they often focus on different things. 

Operational planning is all about the daily activities within an organization. 

And how these activities will help the organization achieve its goals. 

Strategic planning, on the flip side, is more futuristic. 

It focuses on foreseeing upcoming situations and how the business can plan for them. 

The relationship between both, however, is that operational plans are used to implement strategic plan goals. 

It is through operational plans that organizations can convert their strategic goals into technical goals. 

Therefore, a company needs operational plans to meet its strategic goals. 

Importance of Operational Planning – What is Operational Planning in Business 

At this point, you most likely can make an accurate guess of how important operational planning is to any business.

But the question now is, why is this process so important? 

A company needs an operational plan if it wants to carry out a specific project or even its daily processes smoothly. 

This plan makes sure that everyone knows the company’s goals. 

This would help ensure everyone, including you, the business owner, other key stakeholders, managers, and the entire workforce, is on one page. 

This way, everyone would align with the business’s goals, mission, objectives, and so on. 

And that they also know what they need to do to achieve these goals. 

Benefits of Operational Planning 

When everyone knows their obligations and what they have to do to carry out these obligations, they won’t wait to be told what to do. 

They will do the needful, aiding productivity and efficiency. 

Both of which are necessary ingredients for business success and growth. 

Also, if the plan is as detailed and structured as it should be, it will help a company stay on track. 

It won’t matter whether it is one project or different tasks for the proper running of the company. 

Another important thing about this process is that it can help you evaluate your business. 

It can help you identify areas that you need to improve. 

It could be that you can make things work more smoothly in that aspect. 

Or you could discover that the area is a problem that is making your company lose money or not generate as much revenue as it should. 

You can notice these things and then think of the best strategy to help you tackle them. 

Operational plans can also help a company use its resources effectively. 

Suppose a company wants to embark on a project to meet a long-term goal. 

After determining the resources they need to facilitate this project, they can use this plan to determine the best way to allocate them. 

This would help them reduce waste. 

Finally, this plan can help a company mitigate risks using contingency plans. 

If a strategy isn’t going the way it should, the company can use a contingency plan to switch directions and achieve other goals. 

Types of Operational Plans – What is Operational Planning in Business 

There are two main types of operational plans depending on the purpose of the plan; ongoing plans and single-use plans.  

Knowing the different types of this plan will help you figure out the type you are using in different situations. 

This way, you would know what the plan should and should not include. 

With that said, let’s look at them below.

Ongoing Plans 

Ongoing plans target recurring issues. 

These include issues like cost reduction, efficiency, productivity, customer satisfaction, sustainability, and any other issue that would keep popping up in a business. 

These issues are often long-term, so the company needs to use a step-by-step method to solve them. 

For example, a company wants to increase its sales team productivity. 

This is not something that the company would achieve in the blink of an eye. 

The sales team would have to create an ongoing plan detailing the different steps they need to take to reach this goal. 

Even when the company reaches this goal, it may get to a point where they have to tackle the issue again. 

So, the company needs ongoing plans to tackle these issues whenever they come up. 

Single-use Plans  

These are specifically created for a particular purpose. 

If a company needs to tackle a unique challenge that it is experiencing, then it would need a single-use plan to do so. 

As you can guess from the name, you cannot use these plans more than once. 

Once you address and solve the issue you created this plan for, you will have to discard it. 

Tips on Creating an Operational Plan – What is Operational Planning in Business 

An operational plan should have realistic expectations for it to be successful. 

Apart from this, the plan should have other necessary elements to work smoothly. 

Clarity is one of these necessary elements. 

The plan has to be clear in outlining its objectives. 

If the plan lacks realistic expectations and clarity, there is a big chance it won’t produce the desired results. 

This is why you need to take your time and be meticulous when creating an operational plan. 

The tips in this section of this article will help you when creating the plan. 

Have a Relevant Strategic Plan   

Your operational plan is a tool for reaching your strategic plan’s goals. 

This is why you need a strategic plan before creating your operating plan. 

If you already have a strategic plan, then you need to ensure it is relevant. 

Your strategic plan should direct your operating plan. 

If you do not have a strategic plan, you need to create one. 

Read this article to learn more about strategic planning.

Define your Objectives and Goals 

Next, you need to determine the objectives and goals you wish to reach with the plan. 

This means that you have to define your objectives and goals. 

To do this, you need to ask and answer the following question. 

What do I intend to achieve with this plan? 

To answer this question, you need to look into the future. 

What do you think your business would be? 

Do you wish to increase your revenue or want to increase productivity?

Take your time to analyze your business’s current position and the position you want it to be in after a particular time. 

How do I achieve these things? – What is Operational Plan in Business 

Next, you need to ask yourself the steps you have to take to reach these goals. 

What do you need to do to get what you want? 

For example, let’s say you aim to cut down costs.

There are several ways that you can achieve this. 

For instance, you can invest in a software application that will automate a certain process to reduce labour costs. 

Or, if you aim to increase your revenue, you could invest in machinery that will aid productivity and reduce the backlog. 

What is My Budget? 

Another important thing that you should consider when defining your objectives is your budget. 

You need to figure out how much you need to achieve your goals. 

Be sure that your company can cover whatever budget you settle on. 

Also, you need to ensure that you stick to your budget throughout the process. 

If you spend more money than you intend to, you can put a financial strain on your business; this may shake your company’s stability. 

If you do not have the resources to reach your objectives, then you can explore many business funding methods. 

Can My Team Handle This? 

To successfully run a business, you need resources. 

And your resources go beyond finances.

It also includes your workforce. 

So, when creating an operational plan, you also have to ensure your team or workforce can handle it. 

If you find out that your workforce is lacking after you evaluate them, you have to find the best way to make up for this. 

If you do not have enough employees, you should consider hiring more. 

Or if your employees are underqualified for the job, you would need to train them. 

You could also employ a specialized worker if that solves the issue. 

The most important thing is ensuring your workers can handle the operational plan. 

Focus on the Most Important Goals – What is Operational Planning in Business 

After evaluating your objectives and goals, you need to prioritize. 

You should focus on the most important ones. 

Do not make the mistake of creating a plan with several unclear and unnecessary goals. 

This would complicate the whole plan and make it difficult for you to achieve anything worthwhile. 

So, evaluate your objectives and goals and focus on those that matter the most. 

Do not stretch your team thin trying to make them work in different areas. 

Instead, they focus on the most important areas by completing smaller tasks. 

This can also help you optimize the use of your resources. 

Assign Resources 

Now that you have a clear outline of your goals and objectives and know the steps you should take to achieve them, you need to allocate your resources accordingly. 

Make sure that you consider every goal when allocating your resources. 

Remember, resources include your finances and workforce. 

Ensure your budget is accurate, as this will help you correctly assign your employees to specific tasks and allocate your other resources. 

Practice Consistent Communication 

Communication is an essential tool in business. 

Clear and open communication reduces the chances of people misunderstanding instructions and doing something else. 

So, during an operative plan, you should ensure that communication between you, your managers, and your employees is clear and consistent. 

This way, everyone on board will work together effectively and with one mind to reach common goals. 

Determine your KPI – What is Operational Planning in Business 

You would need to evaluate your plan’s progress once it is in motion. 

To do this, you need key performance indicators (KPIs)

There are different indicators you can use for this purpose. 

You just need to figure out the one that would suit your needs the most. 

You should consider getting input from others, like your team managers.  

Discuss the objectives and goals of the plan and let everyone brainstorm on the right measurements. 

You should also consider using leading indicators instead of lagging indicators. 

Leading indicators focus on the future. 

They include things like customer satisfaction, new products, and so on. 

On the other hand, lagging indicators focus on the past.  

It includes the previous month’s operating costs, the number of attendees in a past event, and so on. 

Leading indicators will help you identify issues before the issues become critical and start affecting your company’s performance. 

Monitor Your Progress 

Finally, once your plan is in motion, you need to ensure you get the desired result. 

Your plan can only be effective if you monitor it and update it to address any new situation or occurrence. 

This is where your KPIs come in. 

Use them to analyze the plan results and make amends in areas you have to. 

If you are not achieving the goals you set out to achieve, you should devise alternative strategies to help you achieve them. 

How to Write an Operational Plan – What is Operational Planning in Business 

If you want to draft your operational plan, this section should help you do so effectively. 

These are the important sections that your plan should have. 

Title Page 

The first thing you need to do when writing an operational plan is to write your title page. 

This page will contain the document title, your company’s name, the document’s writer’s full name, and the designation. 

Executive Summary 

The executive summary typically gives a brief rundown of what the document is about. 

Anyone who picks up the document to read can read the executive summary to get an idea of the document. 

This section should be clear and concise but still, explain the entire document’s essence. 

Mission and Goals 

Next, you should outline your company’s mission and goals. 

Describe the goals in detail. 

You may also use this section to describe the importance of the plan. 

And what you want to achieve through it. 

Key Performance Indicators – What is Operational Planning in Business 

State your KPIs in this section. 

Evaluate every aspect of your business or the area the plan focuses on and how these metrics will help you measure results in this area. 

Financial Summary 

This section is a summary of the projects that’ll be carried out in this plan and the financial resources needed to execute them. 

Ensure this section’s information is as detailed as possible. 

You also need to ensure your company has the finances to execute the plan. 

Risks 

Plans do not always go as you visioned. 

Some problems may come up at one point or the other. 

You need to prepare for them by analyzing the plan to see where you may experience challenges. 

You should then come up with the best ways to prevent the challenge. 

Or solve it if it still pops up despite your efforts to prevent it. 

This way, your entire workforce will be able to properly tackle any possible challenge that may come up during the plan. 

Once you have written all of these sections, you should have proofread the document to ensure everything is fine. 

Conclusion on What is Operational Planning in Business 

This article discusses everything you need to know about operational planning as a business owner. 

If you wish to write and implement an operational plan in your company, follow the tips in this article.