Assignment:
Instructions: Operational Plan
This section explains the daily operation of your business, including its location, equipment, personnel and processes.
1. Production
How will you will produce your product or deliver your service? Describe your production methods, the equipment you'll use and how much it will cost to produce what you sell.
2. Quality control
How will you maintain consistency? Describe the quality control procedures you'll use.
3. Location
Where is your business located? You briefly touched on this in the Company Overview. In this section, expand on that information with details such as:
A. The size of your location
B. The type of building (retail, industrial, commercial, etc.)
C. Zoning restrictions
D. Accessibility for customers, employees, suppliers and transportation if necessary
E. Costs including rent, maintenance, utilities, insurance and any build out or remodeling costs
F. Utilities
4. Legal environment
What type of legal environment will your business operate in? How are you prepared to handle legal requirements? Include details such as:
A. Any licenses and/or permits that are needed and whether you've obtained them
B. Any trademarks, copyrights or patents that you have or are in the process of applying for
C. The insurance coverage your business requires and how much it costs
D. Any environmental, health or workplace regulations affecting your business
E. Any special regulations affecting your industry
F. Bonding requirements, if applicable
5. Personnel
What type of personnel will your business need? Explain details such as:
G. What types of employees? Are there any licensing or educational requirements?
H. How many employees will you need?
I. Will you ever hire freelancers or independent contractors?
J. Include job descriptions.
K. What is the pay structure (hourly, salaried, base plus commission, etc.)?
L. How do you plan to find qualified employees and contractors?
M. What type of training is needed and how will you train employees?
6. Inventory
If your business requires inventory, explain:
• What kind of inventory will you keep on hand (raw materials, supplies, finished products)?
• What will be the average value of inventory (in other words, how much are you investing in inventory)?
• What rate of inventory turnover do you expect? How does this compare to industry averages?
• Will you need more inventory than normal during certain seasons? (For instance, a retailer might need additional inventory for the holiday shopping season.)
• What is your lead time for ordering inventory?
7. Suppliers
List your key suppliers, including:
A. Names, addresses, websites
B. Type and amount of inventory furnished
C. Their credit and delivery policies
D. History and reliability
E. Do you expect any supply shortages or short-term delivery problems? If so, how will you handle them?
F. Do you have more than one supplier for critical items (as a backup)?
G. Do you expect the cost of supplies to hold steady or fluctuate? If the latter, how will you deal with changing costs?
H. What are your suppliers' payment terms?
8. Credit policies
If you plan to sell to customers on credit, explain:
A. Whether this is typical in your industry (do customers expect it)?
B. What your credit policies will be. How much credit will you extend? What are the criteria for extending credit?
C. How will you check new customers' creditworthiness?
D. What credit terms will you offer?
E. Detail how much it will cost you to offer credit, and show that you've built these costs into your pricing structure.
F. How will you handle slow-paying customers? Explain your policies, such as when you will follow up on late payments, and when you will get an attorney or collections agency involved.