How to define operations in your business plan

Put just before Content editable region Purpose of an Operational Plan It is important to understand the difference between an "operational plan" and a "strategic plan". The strategic plan is about setting a direction for the organisation, devising goals and objectives and identifying a range of strategies to pursue so that the organisation might achieve its goals.

How to define operations in your business plan

Without an execution strategy, the rest of your plan is meaningless. Like the Marketing Plan, your Operational Plan is essential to the success of your business. It will be important not just to would-be lenders and investors, but also to you, to management and to your employees.

A key difference between an Operational Plan you would prepare for internal use and one you will give to potential lenders and investors is that you do not need as much detail in the latter.

How to Define Operations in Your Business Plan In the lineup of key business capabilities in your business plan, the term operations describes the processes and resources that you use to produce the highest quality products or services as efficiently as possible. In this edited excerpt, the authors discuss what type of information you should include in the operations section of your business plan. Operations is concerned with how you buy, build and prepare. An operational plan is the basis for, and justification of an annual operating budget request. Therefore, a five-year strategic plan would typically require five operational plans funded by five operating budgets. Operational plans should establish the activities and budgets for each part of .

Here are the key components to address in an operations plan that will be used externally. Location In the business description, you provided the address where your business will be or already is located.

If you have a retail location, describe the surrounding area and explain what makes this location effective. For example, you might be located on a major road that people drive on the way home from work, making it convenient for them to pick up groceries or a hot prepared meal on the way home.

If your business only has an online presence — perhaps you run a service that dispatches independent contractors to clean homes — explain who operates the website and handles customer service, from where and why that arrangement makes sense.

Define Operations Management in Your Plan

Also describe where your contractors live and how quickly they can reach your customers. Note any disadvantages or possible problems presented by your location and what, if anything, you have done or will do to counteract these negatives. Does traffic back up so badly on the road where your store is located that cars struggle to exit the parking lot during rush hour?

Do you have enough parking spaces to handle peak volume? For an online business that uses independent contractors, what are the drawbacks associated with not having all your employees operating from a single location?

What are the advantages? State whether you own or lease the property your business operates out of and provide the terms of your mortgage or lease. Present information such as the monthly payment, the length of the term, whether you are legally able to sublet and the terms of the early termination clause.

If you rent, state whether your lease is net, double net, or triple net — in other words, is it you or the landlord who will be responsible for property taxes, insurance and maintenance? If your company is responsible for any of these items, how much do they cost?

Operational planning: the Purpose of an Operational Plan According to the U.
Importance Shutterstock The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability. Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory

Provide details such as the square footage of the property, how your store or facility is laid out, what type of loading area it has to receive merchandise if applicable and the number and location of parking spaces.

Also provide data about vehicle and pedestrian traffic, accessibility from major roads and highways, related nearby businesses that provide synergy or competition, and anything else that affects your location. If your business has more than one location, be sure to describe each one.

Also discuss the major fixtures and equipment your business requires and how they integrate with your space. Note whether you are likely to outgrow the space, and if so, how you plan to handle a move or expansion.

Supply and Inventory Management If you sell a product, the inputs that go into making it will be your supplies and the final product will be your inventory.

The difference between and operational and strategic plans

Who will your suppliers be? Do you have multiple options available, or are you beholden to a single supplier, which may subject you to shortages and give you little bargaining power with regard to price and delivery schedule?

What terms have you established with your suppliers? For example, do you pay cash on delivery, or do you have 10 days or even 30 days to pay? Do you get a discount for early payment? What kind of reputation do your suppliers have? Will they extend credit to your business, and if so, how much and on what conditions?

Can you return unused supplies and if so, within what timeframe?Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory all the stuff involved in operating your business on a day-to-day basis.

Digital Library > Operations and Technology > Procedures and practices"How to Write an Operations Manual".

how to define operations in your business plan

A procedures manual for your company protects you from trusting too much in particular employees to operate your business, serves as a guide for new trainees, and provides an emergency recovery plan.

Define Operations Management in Your Plan. Your business operations need to be detailed in your operating plan; it's the core function of your organization. When writing a business plan, define operations management tools and strategies, as well as your target operating profit margin.

- Definition, Types & Examples In this lesson, you will learn about the purposes and content of operational plans. We also will define their place within the overall management planning process. Low-level managers who understand the day-to-day operations of their specific component of the overall business usually prepare a highly detailed operational plan.

Oct 23,  · If you’ve reviewed what a business plan is, and why you need one to start and grow your business, then it’s time to dig into the process of actually writing a business plan.

In this step-by-step guide, I’ll take you through every stage of writing a business plan that will actually help you achieve your goals/5().

How to Write an Operational Plan for Your Small Business | attheheels.com