How to write operations of a business plan
Operations is an essential section in your business plan document. Operations has to do with everything that’s involved in the process of delivering value to your customers. In other words, the operations of a business plan details the “What”, the “Who”, the “Where”, the “When”, and the “How much” of your day to day business activities as you strive daily to meet customers’ expectations, and probably even exceed them.
Operations is all about how you get your products and/or services ready for sale – from “raw materials to the market”, and that means different things to different businesses depending on your industry, your style, and the overall goal your business is trying to achieve. From sourcing for raw materials, securing the tools and equipment you’ll use, acquiring facilities, hiring staff, etc. Operations can be a complex thing to dive into but you can simplify by looking at it as a whole bundle of a linear and continuous process which can be broken down into categorized sets of activities that are interdependent and working together to achieve a common goal.
Questions to ask when writing the operations of a business plan
Depending on your industry and what your day-to-day activities involve, what need to include in the operations section of your business plan will differ from one business to another. Some businesses are service-based while others are product based and the daily processes that culminate in the delivery of value are different for the two types of business. Furthermore, even within each of the two types of businesses, what still goes into operations for different businesses are not the same. This is to say that, without the understanding of your specific kind of business and what your goals are, writing an operations plan that will achieve that goal becomes impossible. So, what I am going to do here is try to give a general guideline that might be applicable for any kind of business. However, to be specific, the peculiarities of your business as well as your goals and business objectives must be known. Let’s take a look at the following questions as a guide.
- The “What?” question.
This is a question of what is to be achieved. This varies from business to business like said earlier. You must ask yourself, as we open business daily, as staff resumes their daily functions, “What exactly are we working to achieve?” “To what end is all of these daily activities unto?” That must be very clear to you and the people or the team you’re working with. Take this simple example of a restaurant business. Assuming that’s your business, what are you trying to achieve opening your restaurant every day? A good answer to that question might sound like this: “To cook delicious food (whatever variety of menu that consists of) and get it ready before 10 am when our customers will begin troop in.” That’s some sort of a goal that a restaurant should strive to achieve daily, right? So, here, food is the “What”. This is quite important because that is what every other thing hangs on. If the question of “What” isn’t dealt with, you cannot proceed to deal with other questions that help you to design a good operations plan.
- The “How” question
This is a question of how the “What(s)” will come to be. This helps you to answer the question of what steps, procedures, actions or activities will result in the creation of your “What”. Back to our restaurant example, the “How” question might be answered like this – in the following sequence:
- Open the office
- Clean the environment
- Clean the utensils
- Get the raw food items and the ingredients out of the store into the kitchen
- Get the recipe for the various menu of the day
- Cook the foods
- Pack the food to the service area
- Start selling to customers
The set of steps above definitely has achieved our goal which is to get the menu ready for sales at a given time, however, some elements are still missing which we will look at shortly.
- The “Who” question
This question is critical to your business operation because no processes can move without a human being moving them. So, the question of “Who does what?” is a critical one to your business operations. Tasks and responsibilities must be assigned to persons or departments and each one must know what they are responsible for, and the deliveries that are expected as a result of their activities. So, if we go back to our restaurant example, and you take our process for getting the food ready again (our “How”, remember?), all we need to do is assign each of the listed tasks to an individual or a department. In operations, a department or individual’s tasks must be well defined and properly documented, if the operations of the company will be smooth and no problems caused.
- The “Where” question
This question addresses the issues around locations and places, that is, where to locate what. The physical design of your business space is very critical to operations and it must be so done to enhance it. Think about it, Why is the physical design and arrangement of a bank is different from that of a hospital? The type of activities they do daily is what informs the physical arrangement. Furthermore, it is the operations that determine the exact place where certain activities will be done. In our restaurant example, it is operations that determine which part of the restaurant is used as the kitchen, which part will be used as the eating area and which part is used as the serving point, and so on.
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- The “When” question
This question has to do with timelines, deadlines, and schedules. When should an activity or a process commence and when should it end? When is a deliverable expected to be ready? All these things should be determined and documented.
- The “How Much” question
This is another important question that must be answered for operations to be successful. This is a question of limits and boundaries. How much rice should the restaurant cook such that there is enough to sell to customers and how little should be cooked to ensure that there are no excesses that waste? How many staff does the restaurant hire such that there are enough hands to get the job done at the right time and cost? And how do we ensure we do not hire more hands than is required such that we are spending unnecessarily on extra hands that we do not need? How do we determine the exact resources needed by persons or departments to achieve their daily goals? This is very important.
As we can see so far, what I have presented here is supposed to be a general guide but may not cover all you need to define the operations of your business, more specific details need to be considered for various industries, businesses, and goals. When writing the operations plan for your business, you may need to provide detailed strategies for managing various aspects such as staffing, manufacturing or production processes, order fulfillment, inventory, how and where to source raw materials, transportations, logistics, consulting, after-sales service, name it – all kinds of stuff involved in operating your business on a day-to-day basis.
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