Operating Business Plans to Win in the Downturn: Smart Businesses that Plan Will Thrive During the Recession

Difficult economic times call for extraordinary insight and foresight. Smart business planning can be the key to succeeding, even survival, during the economic downturn.

The purpose of an operating business plan is to guide a company or not-for-profit organization in its day-to-day operations. The hard thinking and the tough decisions that go into a good solid business plan are more important in today’s challenging economic environment than ever before.

An operating business plan transforms carefully thought-out goals and objectives, usually from a previously developed strategic plan, into performance targets and the action plans to accomplish them. The very process of developing a good operating plan can in itself help a company sharpen its direction and focus.

Developed properly, it is an operations road map for the coming year that provides a common set of guidelines to be shared among the company’s leadership and decision makers. (It should be noted, a different kind of business plan is required when approaching lenders and investors for additional capital. It is more detailed and must answer a wider range of questions.)

Pulling together either type of business plan requires a substantial amount of organization and discipline — and hard work. The eight steps below, when developed, become the sections of an annual operating business plan:

  1. Overview

This is a summary, or abstract, of the completed operating plan for the year. It is among the first sections started and always the last one completed.

  1. Mission and Values

Describe what is different, and what will be different, about the company’s operating environment during the term of the business plan, usually one year.

This section should also include a revisit to the question, “what business are we really in?” If that sounds odd, numerous traditional telecommunications companies have disappeared over the past few decades because they failed to realize they were in the communications business, thinking wrongly they were just in the telephone business.

  1. Industry Scan/Risk Analysis

This is a critical section. Here a company must analyze trends affecting the company’s industry and markets, and the key opportunities and risks these present to the company, and what the company must do about them. This means changes to previous business activities, such as what the company will continue to do, what it will do differently, and what it will start doing and stop doing.

  1. Products and Services

This section is a discussion of how the company earns revenue, i.e. its products and services, and how these are delivered and why.

There should also be a comparison of the company’s products and services with competing products and services.

  1. Assets to Profits

Do an inventory of the physical assets such as buildings, inventories, leases, capital equipment, new capital and other resources needed to convert the company’s products and services into revenue.

The focus is on how to make the most efficient use of these assets in order to generate revenues and subsequently, profits.

  1. Operating Priorities

Describe operating priorities for the coming year, changes from past years, and why. What opportunities will present themselves in the coming months and how should the company capitalize on these.

This section should also discuss how operations can be affected by threats, trends, business cycles and other issues, and how will the company deal with them, i.e., capitalize on some, adjust to others, neutralize the rest.

  1. Marketing Plan

Include a summary of the marketing plan, focusing on marketing priorities, and how the company is differentiating itself, and its products and services, from competitors and competing products.

Describe the markets for these, and discuss the marketing strategies and tactical approaches the company is taking/will take.

Include also any issues that may affect the company’s ability to achieve sales and revenue targets, and what is being done about them.

  1. Financial Plan

This should contain a candid assessment of the company’s financial outlook for the coming year. The section is essentially a summary of the budget for the coming year, including capital requirements, revenues and expenses, and earnings.

It should also focus on financial issues related to the coming year’s operating priorities, and include clear financial performance measurements, by month, quarter and for the year.