Do I Really Need an Operations Section in My Business Plan?

by Feb 29, 20160 comments

The marketing and financial sections of your business plan are the areas that receive the most focus. Securing customers and managing the money are often described, and deservedly so, as the lifeblood of a business. However, just as important is your operations plan for your business. This section describes the support activities required for the business to function and service its customers. To make the task easier, follow these simple steps.

Describe Process for Producing Products/Services

First, the process for producing products/services is different depending on the type of business you have. If you are a service business, most of what you provide to your customers is dependent on people. As such, in the operations section of your plan you should identified the skills required for the persons responsible for providing services to customers and a summary of tasks involved in executing the services.

business man designing a plan on a screen

In the case of a retail business, you will identify the sources (vendors/suppliers) for products you will sell; describe the terms and conditions (i.e. payment terms, purchasing requirements, etc.). In addition, define your staffing requirements.

As for manufacturers, you want to explain the processes and systems for producing your products. Do not attempt to list every detail in your processes and systems. Focus on those that are key to your production or those that provide you some advantage over others. You should detail the raw material suppliers, their capabilities, terms of your agreement and their experience. If you have developed backup supplier and production strategies you should include a description of those strategies and provide the same information you detailed about your primary source(s). Also include a description of any major equipment and identify where and how you plan to obtain it.

Describe Your Facilities

You should include a description of Operations facilities that are housing your business. In the description include details such as:

  • Building location, size, special amenities, etc.
  • Lease or purchase cost, terms
  • Describe access to location features that are key to your business operation (e.g. public transportation, highways, labor force, etc.)
  • Special requirements (e.g. water needs, drainage, ventilation, licensing, major regulatory requirements, zoning, etc.)

Business Operation

Management and Expertise

List the company management and describe:

  • The area of responsibilities
  • Person’s experience, education, training and expertise
  • List other consequential areas of responsibility along with the experience, expertise, etc. of the person responsible

Other Operational Issues

The day to day operations of your business will include many moving parts. In your business play you want to list those that have key significance. Some examples are:

  • Intellectual property – List patents, trademarks, copyrights, proprietary processes
  • Prototype/product testing results
  • Maintenance requirements

Remember, the operations section of your business plan is as important as marketing and financial management. Be knowledgeable about the functions and expertise required to execute the business day to day and success will follow

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