OPERATING PLAN IN YOUR BUSINESS PLAN

The operating plan, whether simple or complex, should be explained to a lender so that they fully understand how the business will acquire its products and how it will make them ready for resale. Explaining this operating plan or production process should also make the business plan reader aware that the entrepreneur has the expertise to pass on the businesses' products or services to its customer base.

The more complex the business operations, the more the lender will have to be convinced that the entrepreneur and his/her management team can handle the required tasks of the operating plan. This also means the reader will have to be better educated on the proposed business venture.

Explaining the production process or the operating plan can be difficult especially when the reader lacks the knowledge of the industry in which you intend to enter. When writing this section of your business plan, make sure all operating issues are fully planned and explained in simple terms.  Also be prepared to discuss the the operating plan and the operating process required when meeting with the lender in person.  

If you are in a business whose operations are complex, explaining them thoroughly may make the difference in getting the desired funding or being turned down. Furthermore, if the lender is confused about the operating plan, they will not likely see the potential for the proposed business.  For more complex operating plan, you might choose to create a flow chart or some other type of visual presentation.  The visual aspect may make the process a little easier to grasp for the reader.

Below discusses several areas of interest when developing the operating plan of business plan.

COMPONENTS OF THE OPERATING PLAN:

The components discussed under the operating plan generally include the following; Legal Business Form, Direct Materials, Planned Facility, The Production Process, Capital Equipment Required, Time-lines, Threats to the Business, Current Product, Research & Development, Licenses & Permits, Insurance Required, Proprietary Information (patents, trademarks, copyrights) and After Sale Service.  Please Note: some of the components of the operating plan discussed below will not apply to certain businesses. If any component does not apply to your specific business, simply omit it. 

Below provides links to the components of the operating plan of a business plan.

OPERATING PLAN EXAMPLES:

J&B Incorporated
Scholarship Information Services
The Internet Company
Maple Syrup Company