A Small Business Guide to Operational Planning

Good operational planning is the difference between achieving your vision as a business or missing it. This guide will help you do it right.

Updated May 13, 2020

Operational planning isn't glamorous, but it's a must for any small business. Without a roadmap, you’ll get lost when you set out to accomplish a goal.

But where do you begin with an operational plan? It sounds complicated, and in some ways it is. But you don't need to be a business genius to draft one.

An operational plan is about understanding your vision, creating goals, and laying out the concrete steps to realize them. This handy guide will help you get it right.

Overview: What is operational planning?

Operational planning refers to the creation of an outline of what activities a department or organization will focus on in the coming months.

An operational plan is the "how" to any organization's long-term vision. It lays out how a department will accomplish a specific project that is part of a larger effort in the company's vision.

A strategic plan sets big, grand goals for a vision, with major tasks you must complete over time to get there, while an operational plan serves as the blueprint for how a department will complete each task.

Operational planning vs. strategic planning: What's the difference?

An operational plan differs from a strategic plan in that the latter is more about your organization's vision, while the operational planning dives into the nuts and bolts of how that's going to play out day to day.

A strategic plan looks at long-term goals five years into the future or more, while an operational plan looks at what you will work on for the next, say, six months to a year.

An operational plan is also more department-focused than the strategic plan, which concentrates on organization-wide goals. The time involved may vary; annual operational planning is common, but an organization may just draw up a plan for the next three or six months.

Benefits of operational planning

Organizations that don’t spend time on operational and project planning are often winging it, which means they run into obstacles along the way and fail to achieve overarching goals. Here are three main benefits to doing this planning correctly:

1. It makes success more likely

Setting ambitious goals is important as an organization, as it gives you something to drive toward. But you won’t realize those goals without a practical, realistic plan. Drafting an operational plan makes it more likely the organization will succeed.

2. It improves teamwork and collaboration

With an operational plan in place, everyone has a role and teammates aren’t stepping on each other's toes. The plan lays out who is responsible for what and sets expectations on how and when these tasks are achieved.

3. It boosts productivity

Everyone is more productive when they have proper guidance on what they should be doing. An operational plan provides that direction to your team.

They’ll know what’s expected of them and understand the deliverables. They'll just flat out be more motivated to do the work when they understand and believe in the vision.

Types of operational plans

You’ll likely use two types of operational plans: single-use and standing.

A single-use plan is an operational plan relates to a particular project, and it’s discarded once the project is complete. Use this when the project doesn't match another project or isn't likely to be used again later. You can customize it to fit the individual project.

A standing plan is an operational plan that’s used repeatedly. A department will use this for projects or tasks that crop up frequently. Having these plans in place means you won’t have to "reinvent the wheel" each time, but you will sacrifice some flexibility.

How to create an operations plan for your small business

An operations plan is straightforward, but devote sufficient time to draft one — don't cut corners. These five basic steps can help you create your own:

Step 1: Examine your organization's vision

Any organizational project is a steppingstone to achieve a larger vision, so know and understand that vision before initiating any project. What is your organization trying to accomplish at a macro level?

Talk to leadership and find out what they consider important. Then think about how your project fits into that bigger picture.

Quick tips:

  • Ask leadership what success looks like to them: Frequently, a department manager's idea of success looks different than organizational leadership’s idea. That's not surprising, because leadership’s focused on the big picture while a departmental vision is a bit narrower. Ask leadership what they think success looks like for your project so you’re not guessing.
  • Create a vision for your own department: After that conversation, draft a vision for your department that’s closely aligned with the organization’s vision — like a localized version of it. As you draft it, constantly compare it to the organizational vision and make adjustments as necessary. This will ensure you have the proper focus before you begin the project.

Step 2: Define the goals and strategy

Now that you understand where your tasks fit into the big picture, figure out what the goals of this specific project should be. Then draft a strategy on how you'll get there as a department.

At this point in the operational planning process, draft a scope of work and identify stakeholders.

Quick tips:

  • Use project management software: Software can help you track the metrics you set in your goals to see if your team is meeting them. You can use other project management tools as well to help you during the project.
  • Use past projects as your guide: Examine an operating plan example from a previous project that’s similar to yours. What mistakes did they make you can learn from? What timeline did they work with and how successful were they in terms of sticking with it?

Step 3: Plan out activities

With vision, goals, operations strategy, and project scope handled, now you can get into actually planning the activities. You must be very specific, laying out what concrete plans to reach the end goal. Break these into small steps.

Quick tips:

  • Work backwards: Start with the goal, and then determine what the preceding step would look like. For example, if you set a goal "increase sales by 20%," the preceding step might be "pitch to 20% more leads," and the step before that might be "generate 20% more leads," and so on. Each larger step could have subsets to further break them up.
  • Identify resources: You must list all supplies, equipment, training, and other resources you will need to accomplish each task. Without these, you will fall behind.

Step 4: Assign roles and responsibilities

Next, assign roles and responsibilities to team members. Select and assign people to tasks based on their skills. Lay out communications strategies so you’re all on the same page. Be specific about team member reporting structures and deadlines you expect them to meet.

Quick tips:

  • Consult with each member of your team: After you draw up the plan and assign responsibilities, meet with members of your team individually for a gut check. Did you miss anything? Did you put too much on their plate (or not enough)? Did you assign tasks appropriately? Should you reassign tasks based on your meetings with team members?
  • Reward successes: Motivate your team by offering them rewards if they meet critical milestones: maybe a bonus or a pay raise, or something more modest, such as a gift card.

Step 5: Monitor and adjust

Monitor progress and adjust as necessary to ensure everything is on track. Hold your team to the deadlines you set, and if you miss a deadline, adjust the plan to keep from getting off track. Draft work reports throughout the project so you can properly analyze team performance.

Quick tips:

  • Be flexible: A rigid project is doomed to failure, so bake in room for adjustments. Be willing to drop some less-important goals for more important ones, and be prepared to shuffle people into different roles at a moment's notice.
  • Have a post-project meeting: When you’ve finished with the project, meet with your team to talk over what went right and what could be improved. Keep a positive outlook and encourage honesty so you can identify opportunities to execute the next project even better.

Set aside time to do operational planning right

The bottom line is that an operational plan is not rocket science, but you've got to put in the work. A good operational plan will be mapped out in great detail, spelling out manpower, resources and specific steps you must take.

This isn’t something you can whip up in a half hour on your lunch break. Set aside hours or even days to do the legwork, meet with stakeholders and leadership, and draw up a strategy, with detailed action steps.

It may seem like a lot of effort, but it will pay off in the end when your department completes a praiseworthy project on time and on budget.

The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.