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A good business plan, which should be updated annually, shows bankers and other lenders and advisers that you are serious about your business, and that you have a clear, known path by which you will achieve success. Also, studies have shown that small firms which do plan consistently do better than those which don’t - planning increases our chances of success by focusing on the 5 areas which we sometimes overlook:

• Realism - it is easy to be over-optimistic about new ideas, and planning focuses us on the facts of the matter.

• The need for outside advice - planning enables us to recognise problems that call for outside sources of information and advice.

• Recognising change - planning helps us to recognise the changing nature of the market and customer needs.

• Balancing growth - small businesses tend to either grow too fast for their capital base, or too slowly to maintain cash flow. Planned growth allows us to plan our capital needs in advance and to ensure that funds are available when we need them.

• Result-orientation - a detailed business plan enables us to monitor results against an established set of goals and performance standards.

A good business plan has several sections:-
The Operational Plan, the Marketing Plan, the Staff Plan, the Financial Plan, and Break-even Analysis.

In this article we look at the Operational Plan.

THE OPERATIONAL PLAN

Where are you now?

• The introduction, oddly enough, should be written last - it is only a brief summary explaining the contents and purpose of the operational plan.

• A description of the business does not only cover name, address, telephone number, and a general outline of main activity - far more than that! We must identify which customer needs we intend to satisfy, not which products and/or services we wish to sell. We must be able to identify our own strengths and weaknesses, distinctive competence and competitive advantage over others in a similar field in our locality.

• A profile of the principals should highlight, for each partner, their strengths and experience. It should demonstrate time commitment, skills, abilities, potential and achievements.

• The information base outlines the types of records that are kept, and demonstrates the managerial control that you have, and the type of information that can be extracted from your records.

• The professional support lists, with full contact details, your accountant, solicitor, banker, insurance representative, business consultant, and any other key professionals who assist you in running your business.

Where do you want to be in the future?
The business objectives should be clearly defined, measurable, achievable, challenging, brief, and with targets for reaching each one. They will preferably be a mix of short-term (up to 12 months), and long-term (up to 5 years). Areas to look at here might include occupancy rate, gross income, profitability, assets, staffing, efficiency, market share, value of the business, and size of customer base.