Smooth Operator

Keep your business running in high gear with a sound operating plan

Getting your business off the ground can be tough. Keeping it fully operational can be even tougher without the proper resources to produce and support your product or service.
The operating plan helps you think through what it will take to keep your business in motion. It describes in detail the product(s) or service(s) offered, its purpose and how and where the work will be performed. The average length of an operating plan is 20-30 pages, sometimes more. “But it all depends on the nature of the business,” says Kimberly Johnson, a business management consultant in San Diego. “If it is a production-oriented or product-oriented company, they’re usually pretty long.”

Tuesday Brooks, president of Ajoy Management Enterprise, a New York- based public relations and small business services support company, says her operating plan is only one page. “It’s kind of small because I’m basically a one-person operation,” says Brooks, who hires staff on a per- project basis. “In my operating plan, I have included the location of my business, equipment and technology, labor requirements, who has financial control and billing procedures.

No two businesses function the same way, so the contents of the operating plan can vary. However, some basic components include:
Product/service description:
Define your product or service, its purpose, any unique selling features and how the product/service compares to the competition. Also explain its benefits and strengths.

Facilities: When describing your location, include the amount of square footage, your reason for choosing a particular location, information on any similar businesses in the area, whether the location is rented, leased or owned, whether there is heavy foot and/or vehicular traffic and whether you have ample parking and accommodations for the disabled.
Administrative functions: Include the type of support (for example, clerical, technical, etc.) required to run your business and those responsible for carrying out the tasks. Also, add information regarding specific operating functions such as contract marketing, inventory management, scheduling and bidding.

Manufacturing and production: For both product- and service-oriented businesses, list your principal and alternate suppliers and their location, types of goods supplied and how materials are ordered. Discuss quality control procedures and all equipment or machinery used and how it will be maintained.

Product-oriented businesses should also describe each phase of product development, the handling and storage of the product and its shelf-life (the time it takes for your product to deteriorate). Also include inventory pricing methods.

Management information systems (MIS): Explain the type of computer system and software programs used to collect and process data about your product or service. Also include how your system is tested and maintained.

Information management systems (IMS): Describe in detail the information generated from your programs and how it affects your operation. List any data security systems that may be in place.
Warranties and guarantees: Discuss whether a written warranty or guarantee will be offered with your product or service. Clearly define what product parts or repairs will be covered, conditions of the warranty (for example, any limitations on personal use vs. business use), when the warranty expires, if refunds will

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