How to Write an Operating Plan

An operating plan explains how a company will manage its corporate activities in order to meet consumer expectations. This is slightly different from an operational plan, which explains specific department objectives within an active organization. Organizations write an operating plan to reduce risk, enhance productivity, create efficient systems and establish protocols. Effective planning considers the integration of internal and external support functions. These functions may include supplier purchases, marketing, finances, regulatory issues, human resources, product distribution methods and technology-based activities. Regardless of the product or service, consumer-focused operating plans contribute to better outcomes, environments and experiences.

Things You'll Need

• Word-processing software
• Quotes or invoices from suppliers
• Financial statements

Instructions

Company Background

1. 

   Provide a brief company background or write a company bio. Include the incorporation date, key management members, mission statements, products and services.

2. Give an overview of the end product or service being provided. Discuss how the product meets a demand and differs from competitors. Also note the primary activities of the organization.

3. Identify the functional group for which this plan is written. The operating plan is usually written for the entire organization, but can be written to address investors, vendors, directors, employees or another group. Be specific when addressing the intended audiences to avoid miscommunication about objectives.

4. Clarify the timeframe for the operating plan and summarize information that will be detailed later. This outline can be revised or written after the plan is complete.

Key Projects

1. 

   Gather information for key projects to include in an operating plan.

   Briefly describe the key project initiatives. For each project, write a brief overview, designate the work force, detail the equipment needed, propose service requirements from third-party contractors or any other financial or proprietary resource needed to develop the project.

2. Include a step-by-step framework and timeline for completing each project. Design flow charts and visual aids to demonstrate the operating process. This framework should sequentially clarify project research, evaluation, design, development, execution and evaluation.

3. Note management personnel assigned to the supervision of each task. Provide expectations and protocol that managers should use for communication before, during and after the project. Expectations may include the frequency of feedback, training or reporting. Protocol measures could be detailed as the method used to communicate, such as through email, conference calls or group meetings.

4. Include key success measures to establish expectations. For example, finishing a project on time and under budget is a common key success measure. Set benchmarks to determine if the results meet the overall project objectives.

Team Organization

1. 

   Operating plans include organizational and team structure.

   List all key management personnel and a brief bio highlighting their role within the company.

2. Design an organizational structure that illustrates who is responsible for managing specific employees. A leadership plan can also accompany the organizational chart. Leadership plans reflect experts, soft reports and interdependent relationships throughout the organization. For example, a technology designer may lead initiatives on website design and marketing, although he may not officially be a part of the marketing or advertising department.

3. List key external relationships with suppliers, vendors, nonprofit organizations and contractors. Note any residual dependencies that are contingent on a particular service. For example, a company may deliver their goods through mail. Shipping companies or the postal service would be listed as a key relationship because the shipping companies could not operate without courier services.

Appendix

1. Include a spreadsheet of financial projections for company growth, which includes cash flow and current assets. Also note potential and current customer sales where applicable.

2. Detail the budget breakdown for each key project. If supplier quotes were obtained, include them in this section.

3. Properly cite research reports, links to online resources, other relevant company documents and team member contributions.

Tips & Warnings

• Always get feedback from professional advisors, such as legal, financial and business development experts, to help reduce risks before proceeding with any operating plan. Regulations that affect operating guidelines vary in each state.

• Failure to abide by city, state, county and federal guidelines could result in fines.

• This article is for general reference only, and does not represent all sections that may be needed for an operating plan.

References

• "Entrepreneurship Strategy: Changing Patterns in New Venture Creation, Growth, and Reinvention"; Gundry & Kickul; 2007
• "Fundamentals of Operating Management"; Davis, Aquilano & Chase; 2003