An effective plan for your business operations is a critical aspect of every long-term business strategy and achieving your company's broader strategic vision. However, developing a successful annual operating plan can be overwhelming for small business owners or start-ups. This is why we've compiled this guide to annual operating plans.
Annual operating plans - explained
An annual plan refers to a strategy defending your company's financial, physical, and staff resources required to achieve your defined short-term goals. Annual planning can be a useful reference point in identifying the daily activities required to achieve a company's objectives. Annual plans cover one year and can be used to decide what staff member needs to attack what task, what risks you are currently faced with, and how these can be mitigated. Your company's annual plan will be linked to your strategic plan.
Your annual plan also needs to work with your company's annual budget. Those documents must be in synch. Your annual plan will lay out a business's key targets and activities, while the annual budget plans out the resources required to carry out these activities.
Developing an annual plan
Your annual plan should include several elements - activities, desired outcomes and objectives, quality standards, resource requirements, timetables, and processes for monitoring. There are several different templates available for this, varying in format. Search online for annual plan templates that you can use for your strategic plans.
When starting your strategic planning, there are many steps involved in developing an annual operational plan.
Firstly, you need to ensure you base your annual plan on a strong business plan and strategic priorities. Creating a well-formulated annual plan is essentially developing a tool to carry out the strategic plan.
In the next step, you need to define the strategic goals your organization is striving to achieve. It is advisable to create a shortlist of simple goals. You can then start identifying the initiatives required for those goals to be achieved. (eg quality control measures, faster delivery times, improved fraud protection, and increased employee training).
You then have to define key performance indicators (KPIs) to measure success. It is advisable to focus on so-called leading KPIs (predictive measures showing what you can expect from the future) instead of lagging KPIs (which measure and confirm a pattern after it’s already in progress).
Of course, these KPIs need to be measured to be effective. Implement tracking systems to evaluate and measure the progress of your annual plan. You could eg use calendars, dashboards, and weekly/bi-weekly meetings.
Last but not least, clear communication is crucial for keeping your workforce united. Set aside time to discuss how to measure the progress of your annual plan. Your team must understand how you are planning to maximize your company's success. Keeping them informed will improve your company's culture.