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How to Define Operations in Your Business Plan

In the lineup of key business capabilities in your business plan, the term operations describes the processes and resources that you use to produce the highest quality products or services as efficiently as possible.

Business operations typically include four key areas:

  • Location: Where you do business — physically and online

  • Equipment: The tools you need to get the job done

  • Labor: The human side of business operations

  • Process: The way you get business done, including your systems for quality control and improvement

The importance of each of these areas depends on the nature of your company. For example, physical location is critical to a retail outlet that lives or dies by walk-in customers, while physical location may not matter a bit to an Internet-based company — unless the business depends on highly skilled talent or the kinds of resources that cluster in places like the Silicon Valley or other technology hubs.

If your plan is for a start-up company, include a description of your strategy for developing each of the four key operational areas. For established companies, detail what operational changes are necessary to achieve the new goals and objectives detailed in your business plan and how you plan to implement and fund an expansion of your operation.

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