Operational plan

• The organizational and operating

plan describes:

1. how you will structure your company

2. how you will actually carry out everything
you present elsewhere in your business plan.
 Operational plan
• Without an execution strategy, the rest of your
plan is meaningless. 

• If you don’t know how the operation of your

business is conducted you can’t succeed.

• If you don’t know who’s doing what, again,

your going to fail
 Operational plan
• Operating Plan is important for:

1. Investors/ Banks
 Here is where you determine your equipment
costs
 What are your production costs
 What are your start-up costs
 Does your idea “work”
 Operational plan
Operating Plan is important for:

2. Owners (you)
 You get to see how efficient your product / service
can be produced .
 You determine what you need in personnel
 You determine what design your location should have
 Operational plan
Operating Plan is important for:

3. Management
 Everyone knows their role & responsibilities
 Hierarchy of responsibilities
 Operational plan
Operating Plan is important for:

4. Employees
 Everyone knows their role & responsibilities
 Hierarchy of responsibilities
 Operational plan
Operating Plan is important for:

5. Customers
 Is their product delivered on time
 Is the service completed efficiently
 What happens if the customer needs service?
 Operational plan
Operating Plan is important for:

6. Suppliers
 What payment terms are available
 Do you get credit
 Operational plan
• Do not take for granted that you, understand
exactly how to run your business on a day-to-
day basis.

• Think it through and make your expectations

clear.
 Operational plan
• You can prepare 2 operational plans:

1. For internal use

• Policies & Procedures

2. For lenders & Investors

• $$ required for production and delivery
Key Components in an Operations Plan
Key Components in an Operations Plan
Key Components in an Operations Plan
Location

• Provide the address where your business will be

located.
• Describe the surrounding area
• Explain why this location will be effective.
Key Components in an Operations Plan
Location (con’d.)

• Also, note any disadvantages or possible problems

presented by your location.
• What, if anything, you have done or will do to
counteract these negatives.

• If you have a virtual business, you should explain

why you have chosen to operate this way.
Key Components in an Operations Plan

Location (cont’d)

• Develop a graphic plan.

• Show drawing
• Details

• For a virtual location show the web site

Key Components in an Operations Plan

Location (cont’d)

• Will you own or lease?

• What are the terms?
• Square footage
• Floor plan
Key Components in an Operations Plan

Location (cont’d)

• Loading area
• Shipping /receiving area
• Parking
• Entrances
• Disability access
Key Components in an Operations Plan

Location (cont’d)

• Major fixtures and equipment your business

requires

• More than one location

• Expansion Plans
• Office space? Warehouse?
Key Components in an Operations Plan
Key Components in an Operations Plan

Supply and Inventory Management

• Who will be your suppliers/vendors?

• Do you have multiple options available, or are

you beholden to a single supplier
Key Components in an Operations Plan

Supply and Inventory Management

• What terms have you established with your

suppliers?
• What kind of reputation do your suppliers have?
• Will they extend credit to your business, and if
so, how much and on what conditions? 
Key Components in an Operations Plan

Supply and Inventory Management

• How will you manage your inventory?

• Inventory systems?

• What is your relationship with your suppliers?

Cole Hardware
https://youtu.be/1d0O8MAMyAM

Barcode: ABC Simple Inventory Tracking

Demonstration
https://youtu.be/3rnX-AE8WgE
Key Components in an Operations Plan
Key Components in an Operations Plan

Production and Distribution

• How will your production process work?

• Describe each major stage of production
• Are there any processes that are outsourced?
• Any technologies you use?
Key Components in an Operations Plan

Production and Distribution

• Detail what you will produce,

• how much of it you will produce and
• how long it takes to produce each unit. 
Key Components in an Operations Plan
Production and Distribution

• What methods of quality control you will implement, both

during and after production.
• Describe how will you distribute and sell your product or
service.
• And if it's a product you're selling, in what stores will you sell
them?
• Consider any arrangements that are already in place, and how
you will get your product to the stores.
• Production Planning
https://youtu.be/cPJP3P4FWY8

• American Apparel - Factory Tour - Product Development

https://youtu.be/735uH-zCgyw

Apple (Production)
Apple - Manufacturing Process Mac Pro [Making Of]
Key Components in an Operations Plan
Everything you must consider includes

1. Production
2. Labour
3. Revenue
4. Capital Expenditures
5. Marketing Programs
6. Transport
7. Anything else that involves the development of your
product/service
Up next…

Management & Organization Plan