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Operations Plan

Operations plan

Part of your business plan should be dedicated to the day to day operations and logistics of your business

This module focuses on what to include in an operations plan, including information on your businesses location, equipment, supply and inventory management, and how you will produce and distribute your products.

The module also covers the Personnel section of your operations plan. The personal plan details of structure of your business in terms of people, including personal responsibilities.

Your operations plan is an outline of how you will run the business efficiently. It shows potential investors that you have considered logistics.

Topics to be covered

  • Operations
  • Production
  • Inventory of supplies
  • Distribution
  • Location
  • Credit policies
  • Legal aspects
  • Personnel

Operations

Your plan should start with general overview of how your business will run day to day.

You should include

  • Details of daily activities
  • Hours of operation
  • Days the business will be open
  • Shifts
  • Time of year the business will run if seasonal

You won’t need to go into too much detail: it just provides a paragraph or two to show you have planned a structured daily routine.

Production

In this section you should explain how do you make your products and or services. if you plan to sell products, describe how you intend to create the products, any supplies you plan to use. Also detail what’s your inventor he will look like on a regular basis.

If you plan to provide a service, define what resources you will need, including staff, equipment, etc. State how you plan to measure productivity and quality. Explain your production process. It is time and cost efficient? What makes your goods and all services high quality? Are you and your staff exceptionally skilled at what they do? What Equipment do you need to ensure you achieve a high standard?

Inventory management plays a huge part in the efficiency of production process, so you must plan it well.

Your production section should cover:

  • Production techniques and development-describe each stage of production, including and outsourcing you’ll use.
  • Equipment-list the technology and equipment you’ll require to produce goods and or services and run the business.
  • Costs-outline how much it’ll cost in terms of money and time to produce products and provide services.
  • Quality control-explain how you intend to check quality. Market analysis should help you figure out the standard you must meet.
  • Suppliers-explain the rationale for the suppliers you plan to use and discuss how you will work with them
  • Staff-define how you and your staff will sell products and services to customers
  • Inventory control-plan how much inventory you will need at any given Time and use a system to keep track.
  • Distribution-if you plan to supply your goods for resale, explain how you will do so.

Inventory and supplies

Think about what kind of inventory your business will keep.

Note down the average quantity and value of your stock, the rate of turnover, and how this compares to the industry average. Consider whether these are seasonal build ups and what your lead time for ordering will be.

Be sure to identify your key supplies, including their;

  • Names and addresses
  • Type and amount of inventory
  • Credit and delivery policies
  • History and reliability

Outline any terms you have established with your supplier regarding payment, delivery, and returns.

Also consider having more than one supplier as a backup for critical items in place of shortages, delivery problems, or fluctuating costs.

Distribution

Detail how you plan to get your products and services to your customers or clients.

Selecting the right distribution method is imperative for ensuring your target market has access what you have to offer.

Methods of distribution you may use include:

  • Retail outlets-for example, via your own store or selling your stock in an existing shop.
  • Online sales, which can be desirable if you want to run a business from home
  • Wholesale, which can help you get a lower rates with retailers.
  • Your own sales force
  • Agents
  • Independent representatives

Your primary and secondary research should help you determine what method is best for your type of business.

Location

Consider what you and your customers want and need in a business location.

Many start-up businesses can run successfully from home in the initial stages, although this may not be practical for you if you plan to shift a lot of stock and employ multiple people.

Your business needs to be accessible by your core customer base and not too close to the competition, although some businesses may be better situated near competition, such as fast food restaurants.

Aspects of the location to consider include:

  • The amount of space available
  • Areas for loading and unloading
  • Proximity to suppliers Dash proximity can make supplies more interested in working with you and help costs down.
  • Any facilities required that are not currently present Accessibility-your premises should have on site or nearby parking, walk in access, and disabled access.
  • Also consider your proximity to motorways, airports, and shopping centres.
  • Utilities, including electricity and gas The surrounding area Any negatives and how you’ll combat them Whether you will rent or buy and, if you plan to rent, what type of lease you will Scalability-are you likely to outgrow the location quickly? If so, do you need multiple sites

Credit policies

If your business plans to sell on credit, you need to have policies in place that detail who can get credit and how much?

Consider how you will credit check your customers, the terms you will have, and if you will offer promptly payment discounts. Make sure you have built costs into your pricing.

Be sure to age your accounts payable. An aging report details when payment is due for each of your suppliers and by when. It helps you plan your payment schedule, which is important as paying to early can deplete your cash, while paying late can cost valuable discounts and damage your credit.

Do you need a policy for dealing with slow paying customers? Think about Your business plans to sell on credit, you need to have policies in place that detail who can get credit and how much.

If you extend credit, you should manage your accounts payable on a monthly basis to check how much of your money is tied up in credit and to alert you to slow payment problems.

Legal aspects

Include details about legal regulations that you have identified relating to your business, particularly its location and products

You should detail the following

Licensing and bonding requirements

Permits

Health and workplace or environmental regulations Special regulations covering your industry or protections Zoning or building code requirements Trademarks, copyrights, or patents Insurance coverage

Personnel

Your business plan needs to outline the structure of your business in terms of paper.

The personnel section of your operations plan can be simple if you plan to run the business alone or with one or two other partners. State what you and your partners are responsible for and what skills you have to fulfil your roles.

If you plan to have multiple partners or employees, you need to explain who will fill certain job roles. List everyone’s key skills and responsibilities and describe the existing knowledge of experience

They have to make them suitable for the role.

In short, you need to provide a series of brief job descriptions.

You should also list any people to whom you’ll outsource tasks, such as building a website or creating designs for logos.

Explain why you expect the need for new staff and how you will pay them. Your personal plan should cover the number of employees you will have, their hours and salaries, and projected team price.

Include information about whether staff a permanent, full-time, part-time, contract workers, or otherwise, and list their allotted hours. Provide some brief information about the schedules. List the summaries of everyone in the team and how you expect them to rise. Also detail how many people you expect to add to the company over the first few years. Explain when you expect to need new staff and how you will pay for them.

Also discuss the recruitment and training process.

Include time skills and costs of recruitment and training and explain how your recruitment process helps you find the right people. For example, with a well written job add a thorough interview process.

Be sure to detail how you will maximize employee retention.

A well written section regarding your recruitment and training process ensures that you consistently recruit for talent, maximize employee’s potential, and treat them with respect. Skilled, well organized people bring your ambitions to fruition.

Include time scales and costs of recruitment and training and explain how your recruitment process helps you find the right people. For example, with a well written job advert and a thorough interview process.

Summary

In this section of the course, you have learnt that:

  • A general overview of your businesses day to day operations should include details of daily activities, ours is operation, days the business will be open, shifts, and time of the year the business will run.
  • You should explain how you will produce your products and or services. List suppliers you plan to use, outline costs, quality control, and inventory control.
  • Your plan should cover how are you I am to distribute your products and all good. Methods of distribution include retail outlets, online sales, wholesale, a salesforce A general overview of your businesses day to day operations should include details of daily activities, ours is operation, days the business will be open, shifts, and time of the year the business will run.
  • You should explain how you will produce your products and or services. List suppliers you plan to use, outline costs, quality control, and inventory control.
  • Your plan should cover how are you I am to distribute your products and all good. Methods of distribution include retail outlets, online sales, wholesale, a sales force, agents and independent representatives.
  • When you consider your business location, take into account: space, accessibility, utilities, the surrounding area, and space for loading and unloading.
  • Include details of your credit policies and any other legal factors relevant to your location and products.
  • Your operations plan should detail the structure of your business in terms of people. Provide a job description to everyone who were a part of the business and include details about your training and recruitment process.