The operations plan is an important section of your business plan where an overview of your workflow, supply chains, and similar aspects of your business are presented. Any key details about how your business produces goods or services will be included in this section.
How to Write the Operations Plan Section of the Business Plan
In your business plan, the operations plan section describes the actual necessities for your business such as the geographical location, facilities, and equipment. Depending on the type of business you will be doing, it may also include information about inventory requirements, suppliers, and a description of the manufacturing process.
Development Stage Section
When writing this section of the business plan, you should start by explaining what you have done so far to make the business operational, then follow up with what needs to be done next. The following should be included:
Production Workflow
A detailed description of how your product is made or your service is delivered, highlighting any potential problems that may occur during the production process. This should be followed by a section titled “Risks,” where the potential issues that could hinder the production process are outlined and what you will do to overcome these risks. If any part of the production process could expose employees to hazards, explain how staff will be trained to address safety issues. If hazardous materials will be used, explain how they will be stored, handled, and disposed of safely.
Industry Association Memberships
Demonstrate your awareness of local, regional, or national standards and regulations for your industry by referencing the industry associations you are already a member of and those you plan to join. This is also an opportunity to clarify the steps you have taken to comply with the laws and regulations that apply to your industry.
Supply Chains
An explanation of your suppliers, their prices, terms, and conditions. Describe what alternatives you have arranged or will arrange if those suppliers fail you.
Quality Control
An explanation of the quality control procedures you have established or will establish. For example, if you intend to obtain a quality control certification such as ISO 9000, explain how you will achieve that.
Production Process Section
While you can consider the development stage a general part of the business plan, the production process section outlines the details of your daily business operations. Remember, your goal in writing this section of the business plan is to demonstrate your understanding of the manufacturing or delivery process of your product or service.
General
Prepare a chart of your daily business operations, including working hours and the company’s working days. If the business is seasonal, be sure to mention that.
The Actual Facility
Describe the type, location, and site of your business’s building. If appropriate, include drawings of the building and copies of leases and recent property appraisals. The value of the land or buildings required for your operations should be shown, along with an explanation of why they are important to your proposed business.
Equipment
The same applies to equipment. In addition to describing the necessary equipment and the quantity needed, you should also include its value and cost, along with an explanation of any financing arrangements.
Assets
Create a list of your assets such as land, buildings, inventory, furniture, equipment, and vehicles. Include the legal description and value of each asset.
Special Requirements
If your company has any special requirements such as needs for water, electricity, ventilation, or drainage, provide details in your business plan, along with what you have done to secure the necessary permits.
Materials
Identify where you will source the materials needed to produce your product or service and explain the terms you have negotiated with suppliers.
Production
An explanation of the time taken to produce a unit and when you will be able to start producing your product or service. Include any factors that may affect the production timeline and explain how you will handle potential challenges such as rush orders.
Inventory
An explanation of how you will track inventory.
Feasibility
Describe
What product testing, price testing, or prototype testing have you done for your product or service?
Cost
Provide details of your product cost estimates.
Summary
Once you complete this section of the business plan, you will have not only a detailed business plan to present to readers, but you will also have a handy list of what needs to be done next to make your business a reality. Writing this document gives you the opportunity to visualize your business ideas into a clear checklist you can refer back to. As you check off items on the list, use it to articulate your vision to investors, partners, and others within your organization.
Frequently Asked Questions (FAQs)
What is a business plan?
A business plan is one section of a company’s overall business plan. This section outlines the actual requirements for your company’s business operations, including supply chains, workflows, and quality control processes.
What is the main difference between a business plan and a financial plan?
The business plan and financial plan address similar issues, as both seek to explain how to achieve profitability. The business plan tackles this issue from a physical perspective, such as property, pathways, and locations. The financial plan explains how revenue and expenses will ultimately lead to business success.
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Source: https://www.thebalancemoney.com/operating-section-of-business-plan-2947031
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