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The Operations Plan is one of the most essential components of the business plan. It essentially tells the reviewer how you are going to get your product/service out to market. That is, it outlines how you are going to get your product out of the production stage, and on to the doorstep of your target customer. As an internal planning document, the Operations Plan should be detailed and in-depth. The Operations Plan should highlight the important facts for potential investors. The relative importance of an Operations Plan will depend on the nature of the business. For example, a production facility will probably require significant attention to detail in the Operations Plan.
What’s in It?
The Operations Plan will give you a detailed outline about the structure of your business. It will also answer the following questions about your product:
How will your product be made and then delivered to the customer?
What regulations and organizations are there to monitor the industry?
How do you plan to stay up-to-date?
Who are your suppliers?
How do you receive the product?
How long will it take?
How much does it cost?
What is your backup plan?
What quality control measures do you have in place?
An Operations Plan also acts as a guide book on inventory management and purchasing procedures.
Why’s it Important?
The purpose of the Operations Plan is to describe the where’s and how’s of your business, meaning where you will locate the business (along with any physical necessities) and how you will produce your products or services for your clients. Business plan reviewers know the importance of a well thought-out Operations Plan, and place considerable weight on this section since it can predict the success or failure of a business. This document will also give the entrepreneur an opportunity to work out as many potential problems on paper as possible prior to commencing operations.