Lesson 5: Nutting out your operations plan
In today’s lesson, we’ll focus on the details you need to include in the operations plan – your objectives, goals, procedures, and timeline.
Your operations plan section is not only important for your investors: it’s also valuable for showing any staff how you want the business to run. Essentially, you’re systemising how objectives are going to be met.
We know you may just be a one-person show right now, so an operations plan could sound like overkill, but stay with it! It’s a great exercise in envisioning the future of your business. If you're a business owner who wants to start with expansion in mind, by the end of this lesson, you’ll be able to pinpoint your business objectives and outline the strategies, known as your main standard operational processes (SOPs), that will get you there.
Let’s start by asking some useful questions to get your mind firing.
What are your business objectives?
Do you want to launch a new product? Create a new service? Or grow to a new location? Use these questions as inspiration when creating your business milestones. Will you have a sales department? If so, what are the key functions and roles of this department? What equipment, technology or software do your staff need? Who will be in charge of making sure all tasks are completed? Where will you and your staff be working?
Activity 1: Spend 20 minutes answering these questions
For each department that applies to your business, take three minutes to write the operational goals for your first year of business using the SMART acronym. If you haven’t already done course one, Developing Your Business Idea, go back and complete that now.
The next step is to create a strategy around how to meet your objectives. This will ensure you (and your staff) will have all the necessary resources for putting the operational plan in place.
It’s useful to ask yourself these questions; do I have a supplier/s to help me produce my product? Does each team member have the necessary equipment, technology and software to meet objectives?
Next, look at your costs. What is the budget for each department?
Take Kelly, for example:
Kelly’s business, Scakes, needs these necessary tools:
- Point of sales system and bookkeeping software
- Software licenses for website analytical tools
- An oven, bench space, sink and a refrigerator
Next, look at your costs. What is the budget for each department?
We’re moving on to look at the finer day-to-day details. Then we’ll make them into step by step processes.
- Location: where are employees working? Will you need additional facilities?
- Work hours: will employees have a set schedule or a flexible work schedule?
- Personnel: who is in charge of making sure department tasks are completed? What kind of people do you need to run your business? What types of roles are there? Who are your current staff? What is their remuneration? How will you attract new employees? And what’s the onboarding and/or training system?
Setting your milestones
Making timelines is a great tracking method for efficiency and keeps yourself and your staff focused on the end goal. Go back to your worksheet from activity 1 and make sure you’ve put a date next to each objective.
Next, take some time to organise the information into clear and concise paragraphs, ready to put in your operations plan section. Remember to specify what they are, including what goals you want to achieve and when you plan to achieve them by.
Clear and consistent systems mean more freedom for you
In order to make yourself replaceable (let’s think about having holidays and letting someone else run your business or bringing on a manager to run the day-to-day activities), you’ll want to create a manual that details the policies and procedures required to run your business.
What are your business costs?
What are the operating costs? How about cost controls? Administrative and financial controls? Detail them all in this section.
What are your businesses legal requirements? Do you need any licenses and permits? Think about occupational health and safety, as well as environmental requirements. What are your industry and professional regulations? Building code or insurance requirements? How about copyrights, trademarks and or patents?
How will you manage and store inventory to meet customer or production demands?
Include your suppliers, their contact details, what they provide, and alternatives if they can’t meet your requirements.
Who are the suppliers, what is the supply chain like? What threats are there? (For example, seasonal threats like bushfires.)
Let’s use Kelly as an example.
Kelly buys bulk from a food co-op in her local area. She sources her piping bags and gift boxes from a supplier in China.
This section includes information on who owns the company, and information on its management, addressing questions like: Who owns shares? Who has outstanding loans? Who are the employees and key collaborators? What is the name of your accountant or lawyer? Do you have a board of directors?
Let’s take a look at Kelly's operation plan:
Kelly is the co-owner and baker at this stage of her business. She knows she needs to focus on what she's good at and not try to do everything all at once. Sarah is the marketer and accountant at this point, however, she knows she’s not strong at keeping the numbers.
Kelly nuts out her ideas and decides she either needs to think about bringing in a partner who has experience or hire out an accountant to help her with her business set up; someone’s who’s experienced in the food industry, so they can hit the ground running.
She has a vision that in six months time, she’ll need a virtual assistant for about five hours a month to help with the admin side of running her business.
She plans for growth in the first three years and decides she’ll need a bookkeeper and marketing expert on her team so she doesn’t become a bottleneck to her own success.
Why limit yourself?
Don't limit your ambition if you have it! Start to think about whether you want to franchise your business in the future.
MYOB has some other great resources. Use the search term ‘franchise’ to find out more.
Final tip: When creating your systems start from the end result and work backwards!
In the next lesson
We'll take you through sorting out your finances and what you’ll need to showcase in order to get funding. By the end of the next lesson, you’ll be able to take all the information from our previous groundwork and summarise it into a clear and concise executive summary; one that will make potential investors, lenders and business partners want to keep reading about your unique business.