Annual Operating Plan (AOP)

The agreed financial and operational plan for the year: targets, headcount, spend and the assumptions connecting them.

It is a contract between functions

The AOP commits marketing to pipeline, sales to conversion, and finance to funding. Its value is that the dependencies are explicit — when one commitment slips, the affected parties can see it immediately rather than at quarter end.

Record the assumptions

The plan's numbers are outputs. The assumptions — conversion rates, ramp, attrition — are what should be revisited when reality diverges, and they are usually not written down.

RELATED TERMS

Capacity Planning

Translating a revenue target into the number of productive selling resources required to hit it, accounting for ramp, attrition and expected attainment.

OKRs for Revenue

Objectives and key results adapted to revenue teams, expressing goals that are not simply the number.

Annual Planning

The process producing the operating plan: target setting, capacity modelling, territory and quota design, and budget allocation.

Quota

The revenue target assigned to an individual rep for a period. The most consequential number in a seller's working life, and the mechanism translating a company target into individual accountability.

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