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Operational issues in a business plan

Updated April 12, 2017

The operations or business description section of a business plan tells the reader how a company works -- which divisions and which key personnel are responsible for each stage in readying the product or service for delivery to the customer. Most operations sections cover the location of the business, the kind of equipment the business uses, human resources and what process delivers the product or service to market.

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Company location

This part of the section should answer the question of whether the location of the business is appropriate. For example, a long-haul trucking company should be close to a motorway and have good access to service roads. Companies that ship by rail should have access to rail lines. The workforce should not face unusually long distances to travel to and from work. Business facilities should be large enough to allow for future expansion.

Equipment

There should be a comprehensive description of the equipment the company uses to accomplish its work. For example, a business that distributes a variety of products to customers by truck will require a sophisticated warehouse operation. If it employs an automated order-filling system, it would be appropriate to describe how that system works. Follow an order step by step -- from the time it is received by telephone or other means until it is ready for shipment at the loading dock.

Human Resources

This part of the business plan should cover the company's workforce, including salaried and hourly personnel, whether the company is unionised and the special skills required by anyone on the payroll. The plan should also point out any special licensing that is required by law and whether the company is required to conduct periodic instruction to keep certification up to date. The plan should inform readers about any key personnel who hold positions in industry organisations in addition to their duties at the company.

Manufacturing or service

The operations section should discuss any manufacturing or assembly of the products the company makes or licenses out to others. Report floor space, major steps in the manufacturing or assembly process and how the company sources raw material. If there are any partner companies involved in the process, describe their role. For services, discuss the development process that led to the finished service, how the company delivers the service to end-users and how the company manages the overall service.

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About the Author

Charles Crawford, a former commercial banker, has been a business writer in New York since 1990. He has produced marketing materials for an executive outplacement firm, written the quarterly newsletter of a medical nonprofit organization and created financing proposals/business plans. Crawford holds a Bachelor of Arts in English and a Master of Science in international affairs from Florida State University.

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