The Operations Plan is a critical component of any business plan as it presents the Company's action plan for executing its vision. The 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.
Five Steps to An Effective Business Plan
By Vishal P. Rao You have an idea for a business. You know what you want to sell, who you can sell it to, and how much you stand to earn from it. Theres just one more thing you need: a business plan..
By Vishal P. Rao You have an idea for a business. You know what you want to sell, who you can sell it to, and how much you stand to earn from it. Theres just one more thing you need: a business plan..
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 milestones include expected dates when:
• New products and services will be introduced to the marketplace • Revenue milestones will be attained (e.g., date when sales will surpass million dollar mark) • Key partnerships will be executed • Key customer contracts will be secured • Key financial events will occur (future funding rounds, IPO, etc.) • 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 naiveté 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.
Home Cleaning Business Plan
By John OCallaghan Copyright 2005 John OCallaghan Until about 10 years ago, business advice gurus used to say that the best business to be in was the one you knew most about! That statement is d..
By John OCallaghan Copyright 2005 John OCallaghan Until about 10 years ago, business advice gurus used to say that the best business to be in was the one you knew most about! That statement is d..
- New products and services will be introduced to the marketplace - Revenue milestones will be attained (e.g., date when sales will surpass million dollar mark) - Key partnerships will be executed - Key customer contracts will be secured - Key financial events will occur (future funding rounds, IPO, etc.) - Key employees will be hired
About the Author:
GT Business Plans [ http://www.growthink.com] has developed over 200 business plans for clients that have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. GT Business Plans is the sister site of GT Venture Capital [ http://www.gtsecurities.net]