How to Write the Operations Section of Your Business Plan
Operations involves the way in which you buy, build and prepare products and services for sale. This could include anything from sourcing raw materials to hiring labor to shipping the goods. This also varies according to whether you’re a manufacturer, retailer or service-based company. Basically, you need to cover the major areas and provide anything that puts you ahead of the competition.
Operations for Retail and Service Firms
Retail and service firms are different when it comes to operations needs than manufacturers. This sector typically has higher labor content and lower investments in equipment. In this regard, then, people are the main drivers of production. As a result, your focus is on staffing so you’ll need to provide background information and give details on employment contracts. This will help others understand how your business works and how you deal with your customers.
Operations for Manufacturers
The process of production will be the big driver here. You’ll need to have strong systems in place in order to have enough personnel and materials. Don’t get bogged down with the details, though. Just provide the broad processes that are critical to production, estimate what you need for materials and talk about your agreements with suppliers.
How you run your processes and the people you hire to do that is also an important component. How many people do you need to carry out your operations plans? What type of employee? What do the local labor groups look like? How about unemployment rates and wage levels?
Understandably, you need a lot of equipment to run your plant. You’ll need to go into detail about your trucks, ovens, drill presses, forklifts, printing presses and more that your investors will be interested in.
The Facilities Section
When it comes to the facilities in which your business will operate, such as land and buildings, you’ll have to determine how much space you need, including future plans for expansion. You’ll also have to describe your transportation needs, such as how close you are to railways, highways, or airports. You’ll also need to come up with the cost to run those facilities. This will depend on whether you decide to lease or buy, but remember to include any brokerage fees and moving costs. Think about utilities costs too, such as phone, electric, gas, water, and trash pickup.
Once you have your business plan in place, contact us to learn about financing solutions for small businesses.