Your plan needs to address the day-to-day running of your business. If your idea is still at an early stage, completing this section of the plan will help you to list the steps required to develop your product or service. Or, if you have already made some progress toward developing your product or service, this section of your business plan will help you to create a checklist of tasks that still need to be done.
The Operations section of your business plan should have two subsections:
Stage of Development
You need to identify what stage your business is at. In other words, are you still in the thinking or idea stages, or are you already manufacturing your product or developing your service? This part of your plan simply outlines the steps you have taken toward developing your business and what remains to be done.
Your Stage of Development section should cover the following:
- How will your product or service be made? Describe the workflow in the creation of your product or service.
- What are the problems that might occur in the development of your product or service? Have you created a checklist to ensure these problems are discovered?
- Have you gone over your work site to identify potential hazards and ways to eliminate them?
- Have you planned any health and safety training for your employees to prevent work injuries?
- Outline which industry associations you will be or already are a member of. Are there industry guidelines that you must follow? Are there government regulations that you must follow? Have you contacted these necessary industry associations? For example, does your business need to register with your provincial workers' compensation board/commission? Most businesses are legally obliged to do so. Employers who should register but do not are subject to fines, penalties and, in some cases, prosecution.
- Who are your suppliers? Do you have alternate suppliers if one doesn't work out? What are their prices, terms and conditions?
- What quality control measures have you instituted?
Regardless of your type of business, you need to walk through the process of creating your product or delivering your service. This part of your business plan allows you to show an understanding of the process of manufacturing your product or delivering your service.
Your Production Process section should cover the following:
- What are the basic requirements for your business? Consider land, equipment, office space etc. If you own or need land, buildings or equipment, you should explain what it's worth or costs, how it is to be financed (e.g. bought or leased) and why it is vital to the success of the business.
- When can you start producing your product or service? How long does it take to produce a unit or a set number of units of your product?
- Where will you get the materials to produce your product/service? How much do they cost? Have you negotiated terms with suppliers?
- What factors can affect your anticipated time frame for production (e.g. rush orders, material shortages)?
- Will you make or buy the components necessary for the production of your product or service? Why?
- What will you do if the demand for your goods or services fluctuates?
- Have you conducted feasibility testing on your product (i.e. tested the process, prototyping and pricing)?
- How will you keep track of inventory? Will this be computerized or manual?
To see the Operations section of a sample business plan, click on any of the company logos below: