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1.1.1 Business Planning

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1.1.1 Business Planning

Business planning attempts to bring a new idea to fruition within an organisation. Such a plan needs to be divided up into sections which would allow the business managers to understand what you are trying to accomplish and the direction that you will take to get there. You will find an example on the simulated business Bounce Fitness website under the Documents tab.

Two plans involved in business planning are the strategic plan and the operational plan. A strategic plan is responsible for setting the direction of an organisation. Through this plan, goals and objectives are devised, and the strategies in achieving these are identified. Likewise, this plan takes into account the goals and priorities of the stakeholders. By its very nature, this plan does not cover the day-to-day tasks and activities involved in running the organisation but merely serves as a general guide for management. 

The objectives presented in the strategic plan – strategic objectives – are essentially the long-term organisational goals which help transform the organisation’s mission statement from a broad vision to specific and feasible plans and projects. Strategic objectives set benchmarks for success. They are designed to be measurable and realistic manifestations of the organisation’s mission statement. Usually, strategic objectives are developed as part of an organisation’s two- to four-year plan.  These objectives also guide management in decision-making.

On the other hand, an operational plan presents highly detailed information that directs employees in performing the day-to-day tasks and activities necessary in running the organisation. It presents information that both the management and staff can and should frequently refer to as they carry out their daily work. There are four key pieces of information that can be found in your operational plan. These are:

Like strategic objectives, operational objectives set benchmarks for success. However, operational objects do so on a daily, weekly, or monthly basis. Operational objectives, which are also referred to as tactical objectives, are specifically designed to break down a strategic goal into workable tasks that organisational members can perform. For instance, a strategic goal of a 30 per cent increase in revenue would require the completion of several operational objectives, such as the development and execution of an effective advertising strategy.

Just like strategic objectives, operational objectives must be specific, measurable, attainable, relevant and time bound. The most significant difference between the two lies in the timeframe. While operational objectives are short-term goals that have a narrow focus, strategic objectives are long-term goals and are too broad to be used for daily operations. Despite this key difference, however, they are closely related and must be jointly used. 

An organisation is unlikely to achieve a strategic objective if it fails to translate it into workable operational objectives effectively. Likewise, operational objectives will not be cohesive if they are not aligned with the strategic objectives. In other words, strategic objectives only become functional when they are translated into operational objectives, and operational objectives only become effective when they are designed to serve a strategic objective.