Existing business or starting business, all business is based on a business plan. The business plan paves the road for how the business should be formed and controlled. The operations plan is an irreplaceable part of the Business plan. The operation plan is the segment of the business plan where technical information is discussed.
This is the segment where conceptual aspects are disregarded and practical aspects are given priority. The operating plan should explain strategies for management, staffing, production, inventory and other elements related to the operation of the business on a day-to-day basis.
Luckily most business owners have a better grasp of their own operations plan than any other factors of the business. After all, a business owner is constantly racking their brains to run the business more effectively and efficiently.
The main target is to answer these following questions:
- What Provisions, Machinery, and the stock do the business need?
- What is the organizational structure of the business?
- Who is in charge for which aspects of the business?
- Is R&D necessary, either during start-up or as an ongoing operation? If so, how will the business complete this work?
- What is the primary number of staff business needs?
- When and how will the business add staff?
- Who will the business establish corporate relationships with sellers and suppliers?
- How will these relationships influence the business’s day-to-day operations?
- How will business operations change as the company evolves?
- What steps will business take to cut costs if the company originally does not operate up to desired results?
Two things need to be done for the audience of the business plan in the operations section. Explain what Have been done to date to get the business functional and that the business is aware of what else needs to be done. Demonstrate that the administration knows the Production process of manufacturing products
Tips to Write an Operations Plan for Your Small Business
So split the operating segment of the business plan into two portions. Such as:
1.The phase of the Development segment.
2. Manufacturing process segment.
1. A phase of Development segment
This segment describes what the business owner has done till today to keep the business function along with a description of what improvements need to be done in the future. This segment should also include:
This part will explain in detail the steps or processes by which the product or service will be performed. It also includes the detection of obstacles that can affect the production process.
There should be a subsection included titled as “RISK” which will present the possible problems that might affect the manufacturing process and what should be done to nullify these risk.
If the manufacturing process may danger the employees then it must be described how the staff will be trained to tackle safety issues. If Dangerous materials will be used then an explanation should be given on how this material will be stored and taken care of.
Industry Association Memberships
Demonstrate the business’s appreciation of the industry’s local, territorial or national rules and regulations by explaining the industry organization the business is already a part of and which organizations the business plan to join in future and telling what action has been taken to respect the laws and regulations that apply the business.
This part describes the suppliers of the business. It shows the major suppliers of business. Terms and conditions of supply, the rate of supplies.
The alternative response to take when any unfavorable situation will occur in the case of major suppliers’ failure to provide materials. Such as Back-up suppliers and contingency plans to handle any unexpected situation.
This part explains how the business will ensure quality control that has been installed or will be installed. Such as: If the business desire to acquire quality control certificate of ISO 9001 then provide an explanation on how it will be achieved.
The number of staff currently working under the company and what roles they have in the operational activities should be explained in this part. Is the current staff enough? Are they highly skilled? Such a question should be answered in this part as well.
2. Manufacturing process segment.
This segment provides detailed information on the business’s daily operations. The main reason for preparing this part of the business plan is to show the comprehension of production or delivery process of the products and services by the business authority.
Therefore all information should be presented in such a way that the audience can understand that. The details given below should be included in the business’s operations:
Provide a brief of the business’s daily activities. For example:
- The operations period
- Number of days business will be open
If the business is seasonal in nature, it must be included in this part.
The Physical Plant:
This part describes the sites of the production process. The size of the plant and its location. If possible, Insert photos of the buildings, copies of lease contracts etc.
The amount of land and buildings required by the business and their market value. There should be an explanation of the significance of these lands and buildings to the business.
There should be a detailed explanation of the equipment used by the business and their necessity. a list that should be provided that shows the market value of the equipment and their operational costs and financing arrangements taken for this equipment.
Provides a list of all the assets owned by the business. Such as Factory building, delivery trucks, Machinery, Equipment etc. There should be a legal description of all the assets along with their market value.
This part explains if the business has any special needs. Such as water supply, power supply, ventilation system, and drainage facility etc. Provide a detailed explanation of such need in the operating plan what steps have been taken to meet these needs.
This part details the origin of the materials used for productions and what terms and conditions have been negotiated with the suppliers for such materials.
This part explains the production period of products and when the business will begin its production. Methods of production or service will also be included.
It also explains the factors that might affect the production period and how the company will tackle potential problems such as urgent orders. A brief explanation of the related inventory has with the production and its control.
This part explains how the company will manage its inventory. Will it follow FIFO (First In-First Out) or LIFO (Last In-First Out) method.
The anticipated levels of inventory are also discussed. and management of Turnover rate of inventory and its condition in lead times. And how the inventory is effected during seasonal fluctuations in demand.
This part explains the research and development of the product. It includes all types of experiments on the product, the price of the product and the new product prototype that have been performed.
This part provides details of overall product cost and estimation of the cost that will incur in near future.
Shipping And Fulfillment
This part will explain if the business will take responsibility for delivering the finished goods to the customers or use a third party channel to deliver the products.
In the case of the third party, there should be a detailed explanation of who they are and what is their role in the distribution process. In the case of direct delivery to the customer, an explanation should be given how such delivery will be carried out.
This part discusses how the business will support it’s current and potential customers.There are many kinds of customer support. Such as support request, refunds, complaints.how the company plans to handle all this and also perform their daily activities should be described here.
Now that we have dealt with the type of information that should be included in the operations plan. Now it’s time to focus on how to present this information to the audience in such a way that it will pique their interest.
Needless to say, there is a lot of information and the audience will not read it letter by letter. there will be limited concentration by the audience. The operations plan must be prepared in such a way that it can catch the attention of the audience in that limited concentrated period.
Here are a few tips that can help. The operations plan should:
- Definite – Be clear on what message all the information is directed towards.
- Assessable– Be able to quantify the aims and missions in order to trail its advancements.
- Achievable & Realistic –include goals and targets that can be accomplished by using the current resources of the business. There is no need to go beyond the limits of business and make a false promise just to impress the audience.
- Expedient – Provide time limits for each operational activities so the audience can have a general idea of the present situation & future progress of the operations
Operations plan vary from business to business . after all not all business is engaged in the production of the same product or provides the same services. A successful operations plan greatly depends on how deeply one knows the operations of its business.
If the knowledge is vast, They can easily turn a single factor of operations into an opportunity to explains the best feats of operational planning. It all depends on the person who prepares the operations plan.