Creating an Operating plan for execution

This is the most fascinating time of our start-up. We are working to consolidate our business streams and make them bigger, more predictable and profitable. Its like growing muscles and becoming adult from a kid.  In first two years, we had come up with an operating plan or resource allocation in 2 days and then go straight to execute it. And we expected the unexpected, knowing well that managing it will be key to our survival. I think we have been moderately successful at that. Some of the top of mind examples are :
a)  First edition of  Used Car price guide from the 100,000 plus car transaction database which we had was one such
thing.  A meeting with VC, where they suggested us to create Kelly's Blue book for India, made it happen. We changed gears fast enough to accommodate the project. We have served around 3 million used car values so far and its becoming increasingly useful to thousands of used car buyers in India.
b) Instant On road price quote for a new car buyer was another such project. An idea that sruck me while having showers, was implemented in a week's time after putting everything on hold.

So though we had a plan we relied a lot on intuition and on managing the unexpected.  And today, when we are burning mid night oil to create our budget and operating plan for the next fiscal, its quite different. We have vice presidents who have been part of MNCs where they have planned and executed it 'As planned and on time'. And we have founders who have managed it as it came. So it gives us the planning attitude and skills and it also helps us looking at contingency with innovation and creativity.

Here is what I learn making a thorough budget:
1. Budget should translate into operating plan for the year that simply means: who is accountable for what and how its going to be measured.
2. Who will get what resources to achieve what they are responsible for.

Here are steps we took:
1. We look at what goals we want to achieve in the year in terms of revenue, cost and margin and the brand.  It asks for getting what board/stake holders
2. Then we had all business heads working with their team to come up what they can deliver towards these goals. The very important thing was to list all the assumptions behind their plan.

As a team we questioned and identified the most vulnerable assumptions and believing that they are going to go wrong, what gap we have to meet our revenue, cost and margin goals. So we took the worst assumptions on revenues and  worked our costs again to see where we would like to be in a bad scenario.  We still have some gaps to fill but the new opportunities we are working on, will make up for them. For a week we had numbers scribbled in most of the white boards, desks and where ever a bunch of us met and discussed.

Its actually exciting to see the business a year in advance and then go about giving it the shape we committed for.