When You Write a Business Plan Focus on Operations & Management Section

Parts of a Business Plan

Here are the typical sections of a business plan that you should consider when writing a business plan:

  1. Business Plan Cover
  2. Purpose of the Plan
  3. Table of Contents
  4. Executive Summary
  5. Description/Location of the Business
  6. Market Analysis
  7. Products and Services
  8. Organization and Management
  9. Marketing and Sales Management
  10. The Financials of the Business
  11. Appendices of Supporting Documents

When you write a business plan, even the smallest company has many "moving parts" that need to mesh together. While your readers—the bankers and potential investors in your business—will all want to know how your firm will make a profit (their main focus is evaluating business plans for funding), they also will want to know how all of the moving parts of your company will function as a whole. Your Operations and Management Section of the business plan is crucial in explaining how it all fits together and works together--just like a fine Swiss watch!

Your Company’s Operations

As you write a business plan, depending on the type of business you are in (or going into), you can break out your operations into the following subject areas as SCORE.org suggests:

  • Production
  • Location
  • Legal Environment
  • Personnel
  • Inventory
  • Suppliers and
  • Credit Policies

Naturally, these areas need to be customized depending on your business such as aa mortgage company business plan, bowling alley business plan, law firm business plan, winery business plan, call center business plan, landscaping business plan, sample restaurant business plan, martial arts business plan or a dental business plan. Depending on your business, search out free sample business plans that relate to your business. Never copy a business plan but if they are available on the internet, download them and study them. Let's say you are forming a record company and want to create a record company business plan. Search for these business plans on the internet. If business plans for your business are not immediately available for download, then check for business plan freeware or a free internet business plan template. There are a lot of resources to help you create the perfect business plan!

Production--In this section, you must describe how you produce your products or services, talking about production costs, quality control, customer service, inventory control and production development. Be as specific as possible when you write a business plan about your products and/or services to give your readers a real understanding about this area of your business. (If you will start a business, this part of the business plan can be very helpful to you in carefully thinking through the production process.) If you are strictly a new service company, this careful exercise will help you in producing proposals for your services in the weeks and months ahead.

Location--When you write a business plan, talk about where you will produce your products or services. Is it in an office or a manufacturing plant? An incubator space? From a home-based location? How big is your space? If you are planning to rent space, how much will it cost on a square foot basis? What is the total cost? What kind of lease do you have and for how many years? Are you near highways and airports? Is that important to the business? What else about your location is important? What type of power and/or internet service do you have coming into the facility? How reliable are they? What kind of back up is on hand in case power and internet go out? What about parking for employees? Do you need trucks coming into the area? Are you clear on zoning and permitted uses? Include a layout of your facilities, perhaps a simple drawing in this section and a more extensive one in the Appendix of the business plan. Will you construct a facility to produce your products or services? Do you have the money available to do it or will you have to borrow it?

Personnel--Create an organizational chart and a narrative to detail who does what at your company when you write a business plan. Detail the number of employees, pay structure, job descriptions, schedules, written procedures and training methods. Of course, if you are a single-person start-up, you can talk about your role and perhaps the role of outside contractors or consultants who you will hire to help you. Even if you are a two-person company, as you write a business plan, detail who does what at the company.

Inventory -- Depending on your business, talk about inventory and inventory controls when you write a business plan. If you are in manufacturing, detail raw materials and supplies that you use; value of the stock and lead time in ordering more materials. If you are a retail store, you can talk about the value of inventory of finished goods, lead time in ordering, season build up and seasonal depletion. For a services firm, you can de-emphasize this section.

Suppliers and vendors -- List your suppliers along with names and addresses and back up suppliers for critical items. List the type and quantity of materials or products each supplier or vendor supplies, history, credit policies.

Credit policies -- What are your credit policies? When you write a business plan, you really need to discuss this, particularly in the tight credit markets of today. How do you check customers on their credit and what terms and discounts do you offer? What is your policy on accounts receivable and accounts payable? What does it cost you to extend credit? What type of line of credit do you have so that you can extend credit?

Organization

If you are a one-person operation at the moment, it is obvious how the place is managed. But what if you have more people, how do things get done? What experience do you bring to the business if you are doing it by yourself? If you have others helping you, what specific experience do they have in management? What are their competencies? Is there a continuity plan in place to runt he business if something should happen to you or your other top managers?

If you have more than 10 employees, create a chart of organization. On the chart, should the reporting structure. Detail who is the person responsible for various key functions.

Do You Have a Board of Directors?

If you are just starting a business, the idea of having a board of directors may draw nothing more than a chuckle from you as you write a business plan. However, on other pages in this website we talk about the importance of building a team. When you are just starting out, that team you assemble could be critical to your success. Click here to learn more on building a team.

How to Create a Management Profile of People in Your Business

The key contributor to how well your business will do is you and other talent that you hire. When you create the Organization & Management Section of your business plan, include a resume on everyone involved in the business. Include the following information:

  • Name
  • Position
  • What is the primary responsibility and authority of this individual
  • Educational background of individual
  • Include prior employment history
  • Highlight special skills or experience individual has
  • Track recording including specific accomplishments that relate to their job
  • Community involvement and business community involvement
  • Unless company is new, number of years working for company.

Glossary of Terms

Definition of Business Plan--A publication composed of a set of documents put together by a company's management that details the firm's financial and operations structure. A typical structure for the business plan might include a cover page, purpose of the plan section, table of contents page, executive summary section, description/location of the business section, market analysis section, products and/or services section, organization and management section, marketing and sales management, Financials section and Appendix of additional documents. For existing businesses, the financial section will typically capture the last three years of the firm's operation and include pro-forma balance sheet, income statement and cash flow statement. For new businesses, the financial section is a projection. A well thought out business plan can serve as a blue print to guide the firm's strategies and policies. The best business plan is regularly updated to take into account new strengths, weaknesses, opportunities and threats.

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