Planning Your Business Operations

April 13, 2006

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Your marketing plan sets forth the details of promoting, pricing, advertising, and physically reaching your customers. These core business activities focus on getting to the customer and providing the product or service that will generate income. But you also need to plan for the activities that support the primary business activities. An operations plan summarizes how you will create and deliver your product or service to your customers.

The types of operational issues that you'll face will vary tremendously based on the type of business you operate. For example, a consultant who deals primarily in assisting customers with network communications isn't going to have an extensive manufacturing or inventory control plan. A fast food vendor, in contrast, will have to carefully plan for inventory storage and turnover; the cooking process; wrappers, bags and beverage containers; employee sanitation; etc.

In most businesses, there is a lot going on in addition to the primary business of providing products or services to customers. You may find it useful to look at your business as if it were a linear process that starts with raw materials and ends with a delivery to a satisfied customer. You'll probably be surprised at how many steps there are and how critical the timing and duration of each step is.

While it is easy to relate to production issues in a manufacturing or other process where goods are fabricated, grown, or otherwise produced, the concept is also applicable to other types of businesses.

As a consultant you are engaged to help a company convert from a paper-based billing system to a computer-based system. The end "product" that you will deliver is assistance in selecting the appropriate software and hardware, training on that new equipment, and supervision of the process by which the data is converted to electronic format. You can do a great job without "producing" anything tangible beyond, perhaps, documentation of the process.

This doesn't mean that you can ignore "production." Consider all the work that you would have to do. First, a working knowledge of the client's existing system has to be acquired. Then, software and hardware combinations are evaluated in light of the client's needs and budget. A conversion process has to be developed so that those portions of the existing data that carry over to the new system are available in the new format. Documentation must be prepared to train the client's employees in using the new system. Whether you thought of them that way or not, each of these activities would be part of your production process.

Another production issue you may have to consider in drafting a plan is that there may be situations in which completing the job requires work outside your areas of expertise.

A self-employed plumber deals primarily in pipes, faucets, and fixtures. Those pipes have a nasty habit of being inside walls, and when the plumbing goes bad, the walls frequently stand between the plumber and the pipe. A good plumber knows that his production process goes beyond his primary area of expertise and will plan for the time and costs associated with the non-plumbing activities, such as plastering, required to satisfy customers. If you or someone else has to do it to finish the job, plan for the time and cost.