Operating Plan

Account for all of the resources that will be required to make your products, or provide your services.

Operating Plan

Your Operating Plan is where you account for all of the resources that will be required to make your products, or provide your services. The objective is to think through the requirements for every step and communicate in your plan how you will meet these requirements. The question to be answered by this section is, “Has the business owner anticipated everything that will be required to create a fully functional business capable of serving customers and generating revenue?” The concern would be that something was overlooked, only to become obvious after the business was started.

Most of us remember starting that first Kool-Aid stand with dollar signs in our eyes, only to realize after the table was set up and the sign was made that we would need Kool-Aid, a pitcher, ice and some cups. Something was always missing. An operating plan would have saved the day!


Business Plan Outline for Operating Plan Should Include:

  • Overview of the Customer Engagement Process
  • Labor Requirements
  • Facilities Requirements
  • Equipment Requirements
  • Outside Resources (Suppliers, Outsourced Services)
  • Critical requirements


Important Considerations

Overview of the Customer Engagement. In this section, you can refer briefly to your Sales and Marketing plan (which covers how you will generate new business), and quickly turn your focus to the point where a prospect becomes a customer. Describe the steps the customer will take to request, receive and pay for their purchase.

For example, if your business is providing bookkeeping services, your overview might say:

Our marketing plan identified how we will generate local inquiries for small-business bookkeeping services. Prospects will typically complete an online form requesting a call, or they will call us directly for more information. Prospects who become clients for our bookkeeping services will expect to be able to send us information related to their expenses on a daily basis, via fax and email. The information will need to be received, scanned and entered into the proper accounting records. Customers typically expect to be able to speak by phone to a knowledgeable person familiar with their books, the same day they call. On a monthly basis clients would expect someone to sit down with them individually and review the prior month’s financial statements. Minor corrections are made, and final statements are reviewed by a senior accountant before being emailed to the client. An invoice is prepared and sent each month with the final statements. All client information has to be stored securely and backed up offsite on a daily basis.

In a succinct paragraph, we have addressed how customers send their information, the level of support they expect, how their work is processed, the quality control process, and billing. The reader can now follow along as you describe the required labor, facilities, equipment and outside resources.

Labor Requirements. Your labor requirements should describe a position, the number of people required in that position ,and a brief description that lets the reader link this person back to your overview. By looking at your labor summary, the reader should be able to see that every aspect of the product or service delivery has been addressed.

Using our previous example of the bookkeeping service, below is an example of the level of detail recommended for each position.

Finance Administrators, 2

Each finance administrator will have two or more years’ experience with a major accounting software application, including data entry, reconciliations and preparation of financial statements. They will be the primary contact for up to 20 customers each.

Facilities Requirements. Our bookkeeping company indicated that they need to have a place to receive phone calls and email, perform accounting data entry, and meet with clients. Maybe all of this could be done remotely with client meetings held at the client’s site. What is your plan? Show in this sub-section that you have the facilities to provide the products or services described in your business plan.

For manufacturing or retail businesses, this becomes much more important. You would want to show that you have the right location, the right size facility, proper zoning and any other requirements for physical space.

Equipment Requirements. Even in our simple example of the bookkeeping service, we indicated a need for a telephone system, fax capabilities, computers, secure data storage and backup capabilities. Will client meetings require a conference room? How will that room be equipped? Will the offices have access to wireless Internet? How will the team’s computers be networked? What kind of tenant improvements will be required to prepare the office?

Again with retail and manufacturing businesses, the requirements will be more exhaustive. Will your business require delivery vehicles, special racks or storage equipment, climate control? Think through all of the significant requirements for your business and include them in this section.

Outside Resources. In today’s competitive marketplace, businesses are turning more and more to outside resources for non-core activities. Here are just a few examples.

Ten years ago, a small-business phone system could easily have cost $5,000 or even double that. Today, a small business can set up a virtual phone system, with an automated receptionist, “follow-me” call routing, dial-by-name directory, voice mail, individual fax numbers and more for less than $100 per month.

Instead of having a delivery vehicle, a retail business might use an outside courier service for local deliveries. While that might not work for a pizza restaurant—where fast delivery is a core task—it might work extremely well for an upscale retail clothing store, or furniture consignment shop.

Some computer equipment makers never touch the products you might think they “make.” Parts are manufactured by several suppliers, shipped to another outsource partner for assembly, and shipped directly to the customer without any component ever entering the company’s warehouse.

Look for ways to make your business more efficient by outsourcing non-core tasks. This is not about “cutting corners;” rather, it’s about finding ways to get the product or service to the customer better, faster or cheaper, while conserving cash.

Note the Critical Requirements. In the previous subsection we addressed outsourcing non-core tasks. In this subsection, identify the specific nonnegotiable, core requirements of your operating plan. If you’re running a retail business, you could find a cheaper location, but talk about why the ideal location is essential. If you’re opening a limousine service, support your decision to purchase or lease a specific type of vehicle. If you’re a manufacturer, is low cost the primary driver of your component or ingredient selections, or will your strategy be driven by quality issues?

When writing your critical operations requirements, look back to your SWOT analysis.

The Most Important Consideration for Your Operating Plan

When you’ve written and fine-tuned your operating plan, be sure that it is in sync with your financial projections. Everything you’ve outlined in your Operating Plan must be accounted for in your financial forecasts. As we said at the beginning of this section, the reader will want to be sure you’ve “thought of everything.” Their next question will be, have you budgeted for it?

Want a small business plan template you can complete in one day?

Click “Get it Now” to the right to access our great fill in the blank business plan. Our template is in-depth and covers all the details you need to develop a foundation for many businesses of various industries. We are so confident you will like this plan that we even offer a full money back guarantee.