Outlining Operational Strategies in a Business Plan
The Operational Strategies section of a business plan describes a business's operations. It includes plans for ordering, storing, selling, and producing. A service company describes how its services are offered and performed. Essentially, the objective of this section is to walk the reader through the process of daily business operations.
The operations plan should include:
- Responsibilities for handling specific tasks
- The physical setup for the business
- Inventory details
- Manufacturing details
- Pricing details
- Safety precautions
- Outsourcing to subcontractors or freelancers
The key to the operations section of your business plan, however, is not only to explain how you will do business but to explain your strategies and how they best facilitate the type of business you plan to do. Your reasoning behind the operations plan is as important, if not more so, than the actual description of how business will be conducted.
Your business methods should show:
- The benefit to your customers
- How the methods expedite transactions
- The delivery of quality customer service
- Its positioning to give you a competitive advantage
Almost every business has a need to interact with other companies. You should include the other companies, vendors, partners, and distributors that your business will rely on to complete transactions. If, for example, you are taking sales orders online and using a fulfillment house, you should include a description of the fulfillment house that you are working with and how they benefit your operation. Again, the listing of vendors or outside services with which you do business is less significant than why you have made specific choices.
Additionally, a contingency plan of action should also be included if your business is highly sensitive to weather conditions or factors that are beyond your control. For example, the owner of a vendor-driven weekly flea market or carnival might include the business plan contingency arrangements in the event of inclement weather.
Over the life of the business, the manner in which you do business changes significantly, as you address competitors and changes in technology, the economy, and marketing trends. In addition, your business may grow from a small one- or two-person operation into a larger scale business with the need for additional space and staffers. Businesses evolve. A business plan written 10 to 15 years ago, for example, did not include sales efforts via the Internet or the need for computer-savvy employees to handle such sales. For this reason, you should include some general projections of your expectations in the operational plans of your business to change and grow over time to meet the demand for increased sales.
