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Operations Plan: Your Business Operations Strategy

The Operations Plan is one of the critical business plan components to include in your plan as it presents the Company’s action plan for executing its vision. Your business operations plan must detail:

1. The processes that are performed to serve customers every day (short-term processes) and

2. The overall business milestones that the company must attain to be successful (long-term processes).

Everyday Processes (Short-Term Processes)

Every company has processes to provide its customers with products and services. For instance, Wal-Mart has a unique distribution system to effectively move products from its warehouses to its stores, and finally to its customers’ homes. Technology products manufacturers have processes to convert raw materials into finished products. And service-oriented businesses have processes to identify new areas of customer interest, to continually update service features, etc.

The processes that a company uses to serve its customers are what transform a business plan from concept to reality. Anyone can have a concept. And more importantly, investors do not invest in concepts — they invest in reality. Reality is proving that the management team can execute the concept better than anyone else, and the Operations Plan is where the plan proves this by detailing key operational processes.

Business Milestones (Long-Term Processes)

The second piece of the Operations Plan is proving that the team will execute the long-term company vision. This is best presented as a chart. On the left side, there should be a list of the key milestones that the Company must reach, and on the right, the target date for achieving them. Sample operational milestones include expected dates when:

  • New products and services will be introduced to the marketplace
  • Revenue milestones will be attained
  • Key partnerships will be executed
  • Key customer contracts will be secured
  • Key financial events will occur
  • Key employees will be hired



Additional text should be used, where necessary, to support the projections laid out in the chart.

The milestone projections presented in the Operations Plan must be consistent with the projections in the Financial Plan. In both areas, it is important to be aggressive but credible. Presenting a plan in which the company grows too quickly will show the naivete of the management team, while presenting too conservative a growth plan will often fail to excite the potential investor who will require a high rate of return over a relatively short time period.

By including your operation strategy in your business plan you a) show investors/lenders you have a real plan for executing upon your vision upon funding and b) have a roadmap to follow to ensure your long-term success.

 

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