Explain the nuts and bolts of the business and outline how it is going to run.
Investors will want to see that you comprehend the detail of the operation and
the systems you will use to manage these.
Give enough information to ensure that the investor can "see" you
runing the operation. Cover the basics. Remember even if you are running a market
stall - which days of the week, between which hours, what are the mecrchandise
replenishment tasks, what are the closing down and book-keeping tasks? How will
you cope when you are sick?
The more complex the operations technology is the more costly it will be.
Explain/illustrate
The nature/size and layout of the premises.
The equipment needed to carry out the operation. Define acquisition and
running costs, depreciation and capacity. What will be the maintenance and
insurance costs?
detail other fixed assets.
Specify building work to be done. Put in the estimates. How critical is the
work to your start-up schedule.
Explain your supply chain and purchasing arrangements.
Indicate your capacity and production/service schedules (consider hours in a
day and how much work can be done). What will be the characteristic features of
manufacturing. Where might be the bottlenecks? Will you be making to order or
making to stock? In a service operation what will be the peak and off-peak demand
times?
What raw materials, work-in-progress and finished goods stocks will be
involved?
What will be your storage, distribution and sales operational needs? .
what computer equipment will you will need?
what staff do you need to deliver your operation? What key people, what
skills, how may hours, what rewards, what kinds of employment contracts?
What will be your office/admin. requirements - phone, cleaning, rent,
insurance, secretarial help, book-keeper accountant?
what are the health and safety aspects of operations? Include refuse
collection!
What security controls do you need?
there are many more operations oriented questions
The operating plan identifies your fixed and variable costs - key start up costs
and costs of running your operation each week. It links closely with your cash
flow forecast. You will not be able to keep your operation going unless you have
enough cash to maintain raw material supplies and get your product to the
customer!
