Growthink Explains the Importance of the Operations Plan Section of Your Business Plan
May 1 2005 According to Growthink the Operations Plan is a critical component of any business plan as it presents the Company's action plan for executing its vision The Operations Plan must detail 1 the processes that are performed to serve customers every day shortterm processes and 2 the overall business milestones that the company must attain to be successful longterm processes
Every company has processes to provide its customers with products and services For instance Wal Mart has a unique distribution system to effectively move products from its warehouses to its stores and finally to its customers' homes Technology products manufacturers have processes to convert raw materials into finished products And serviceoriented businesses have processes to identify new areas of customer interest to continually update service features etc
According to Growthink the processes that a company uses to serve its customers are what transform a business plan from concept to reality Anyone can have a concept And more importantly investors do not invest in concepts they invest in reality Reality is proving that the management team can execute the concept better than anyone else and the Operations Plan is where the plan proves this by detailing key operational processes
The second piece of the Operations Plan is proving that the team will execute the longterm company vision This is best presented as a chart On the left side there should be a list of the key milestones that the Company must reach and on the right the target date for achieving them Sample milestones include expected dates when
New products and services will be introduced to the marketplace
Revenue milestones will be attained eg date when sales will surpass million dollar mark
Key partnerships will be executed
Key customer contracts will be secured
Key financial events will occur future funding rounds IPO etc
Key employees will be hired
Additional text should be used where necessary to support the projections laid out in the chart
The milestone projections presented in the Operations Plan must be consistent with the projections in the Financial Plan In both areas it is important to be aggressive but credible Presenting a plan in which the company grows too quickly will show the naivet of the management team while presenting too conservative a growth plan will often fail to excite the potential investor who will require a high rate of return over a relatively short time period
About Growthink
Since its inception Growthink has developed over 200 business plans Growthink clients have collectively raised over $750 million in financing launched numerous new product and service lines and gained competitive advantage and market share Growthink has become the firm of choice for venture capital firms angel investors corporations and entrepreneurs in the know For more information please visit httpwwwgrowthinkcom
Growthink Explains the Importance of the Operations Plan Section of Your Business Plan
