Business Basics

The operation plan deals specifically with the internal operations and equipment necessary to produce your product or service. The following are selected areas that need to be addressed in this section:

Location: Where will your business be located? What square footage is needed, in how many locations? What type of space is it? Office, warehouse, manufacturing, or a combination? What is the advantage, if any, of your location?

Equipment: Outline and describe the significant equipment needed, including cost. What does the equipment do, how do the pieces function together, and how much can be produced? Will you purchase or lease your equipment? Why and from whom? Be sure to include manufacturing equipment, vehicles, computers, and office equipment.

Labor: How many employees will you need? Full-time? Part-time? Describe the skill sets needed. What are the salaries of those in management, production, distribution, sales and administration?
Consider including a start-up schedule, or if you are currently in business provide a schedule as to how your future plans will progress over the next 12 to 18 months. You may wish to include a chart in your business plan that outlines the time frame associated with specific operational steps and goals.

Common Mistakes to Avoid

The following are among the most common mistakes found in the operations plan:

>> Failing to clearly outline the process by which you manufacture, distribute and sell your product or service.
>> Failing to account for all production costs (direct and indirect).
>> Failing to assess the manufacturing process in terms of manufacturing costs, taxes, shipping, installation, maintenance, serviceability, etc.
>> Failing to properly plan the layout of the plant, the workflow process, and the handling procedures.