|SKIP NAVIGATION | TABLE OF CONTENTS||PREVIOUS PAGE NEXT PAGE|
The Operations Plan
The operations plan explains how the work will be done, how the business will be managed, and the business's location. It also describes the manufacturing process including materials used in the process and employees and their duties.
"Inputs" are materials, suppliers, and arrangements with suppliers. This section describes them and lists prices, volume discounts, and payment options that might influence the decision to trade with a higher-priced vendor.
"Facilities" include location of the business and its physical layout.
This section describes the location, features of the building and site,
ownership, lease arrangement, remodeling needed (and costs), other businesses
in the area, and zoning. It discusses why the location was selected
and its advantages and disadvantages. It should include a floor plan.
Questions that should be answered here include: Is the business located
outside of the home? Is parking adequate? Are modifications necessary
to accommodate the business owner's disability or to ensure ADA compliance?
This section describes, and lists costs for, all utilities (heat, light, telephone and water) to be used by the business for production and operation.
Licenses, Permits, Zoning, Insurance, Taxpayer Number, and Corporation Status
The types of licenses, permits, insurances, and taxes paid vary according to the business. But it is likely that a business will require one or more of these to operate. Some neighborhoods do not allow home-based businesses, while others allow them if there is not a large increase in neighborhood traffic. Some business locations are unable to handle operations that discharge large amounts of water. City, county, state, or federal permits may be required for discharging water or smoke into the environment. Many businesses need federal and state tax identification numbers. Businesses with employees must pay workers' compensation. It is wise to insure the business and business vehicle(s) against fire, theft, robbery, vandalism, accident liability, product liability, and disability. An incorporated business must have state corporation status.
Capital equipment includes permanent items that the business keeps and uses for many years. These include equipment, furniture, and fixtures needed to start and run the business. This section describes each piece, discusses why it is necessary, and lists its cost and supplier.
This section describes both the tools used for making the products or performing the service and the work space(s), including the amount of room needed for each employee; the labor needed to produce the product or provide the service; methods for monitoring quality; and methods for complying with environmental and safety regulations.
This section describes how the business will be managed. It discusses
the business owner's knowledge, skills and experience for completing
day-to-day business functions and obtaining specialized services.
This section describes staffing requirements for both production and business management. It discusses the type of work to be done, qualifications needed for the job(s), recruitment plans for filling open positions, wage rates, and benefits package(s).
This section describes the types and costs of outside services provided by non-employees, such as lawyers, bookkeepers, CPAs, and business managers.
Chapter 6 Business Plan Study Guide: Operations Plan
© July 1998, 1st Revision June 1999, 2nd Revision February 2001
|TOP OF PAGE|