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Retail and service firms have different operations requirements from manufacturers.Companies that maintain or repair things, sell consulting or provide health care or other services generally have higher labor content and lower investments in plants and equipment.
Operations is concerned with how you buy, build and prepare your product or service for sale.
That covers a lot of ground, including sourcing raw materials, hiring labor, acquiring facilities and equipment, and shipping the finished goods.
offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture, and what it takes to ensure success.
In this edited excerpt, the authors discuss what type of information you should include in the operations section of your business plan.
Include a description of its features, its functions, and, of course, its cost.
Be ready to defend the need to own the more expensive items.The cost of providing a service is largely driven by the cost of the labor it entails.A service-firm plan, then, has to devote considerable attention to staffing.Then show that you can reasonably expect to be able to hire what you need.Look at local labor pools, unemployment rates and wage levels using information from chambers of commerce or similar entities.Estimate your needs for materials and describe the agreements with suppliers, including their length and terms that you have arranged to fulfill those needs.You may also give the backgrounds of your major suppliers and show that you have backup sources available should problems develop.Manufacturing a product naturally requires equipment. Naturally, investors are very interested in your plans for purchasing equipment.Many plans devote a separate section to describing the ovens, drill presses, forklifts, printing presses and other equipment they’ll require.So you don’t have to do as much explaining as, say, someone who’s manufacturing microprocessors.For service and retail firms, people are the main engines of production.