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Without an execution strategy, the rest of your plan is meaningless. Like the Marketing Plan, your Operational Plan is essential to the success of your business. It will be important not just to would-be lenders and investors, but also to you, to management and to your employees.
You can't take for granted that anyone, including you, understands exactly how to run your business on a day-to-day basis unless you've thought it through and made your expectations clear.
A key difference between an Operational Plan you would prepare for internal use and one you will give to potential lenders and investors is that you do not need as much detail in the latter. Here are the key components to address in an operations plan that will be used externally.
Location In the business description, you provided the address where your business will be or already is located. If you have a retail location, describe the surrounding area and explain what makes this location effective.
For example, you might be located on a major road that people drive on the way home from work, making it convenient for them to pick up groceries or a hot prepared meal on the way home.
If your business only has an online presence — perhaps you run a service that dispatches independent contractors to clean homes — explain who operates the website and handles customer service, from where and why that arrangement makes sense. Also describe where your contractors live and how quickly they can reach your customers.
Note any disadvantages or possible problems presented by your location and what, if anything, you have done or will do to counteract these negatives.
Does traffic back up so badly on the road where your store is located that cars struggle to exit the parking lot during rush hour?
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Do you have enough parking spaces to handle peak volume? For an online business that uses independent contractors, what are the drawbacks associated with not having all your employees operating from a single location?
What are the advantages? State whether you own or lease the property your business operates out of and provide the terms of your mortgage or lease.
Present information such as the monthly payment, the length of the term, whether you are legally able to sublet and the terms of the early termination clause. If you rent, state whether your lease is net, double net, or triple net — in other words, is it you or the landlord who will be responsible for property taxes, insurance and maintenance?
If your company is responsible for any of these items, how much do they cost? Provide details such as the square footage of the property, how your store or facility is laid out, what type of loading area it has to receive merchandise if applicable and the number and location of parking spaces.
Also provide data about vehicle and pedestrian traffic, accessibility from major roads and highways, related nearby businesses that provide synergy or competition, and anything else that affects your location. If your business has more than one location, be sure to describe each one.
Also discuss the major fixtures and equipment your business requires and how they integrate with your space. Note whether you are likely to outgrow the space, and if so, how you plan to handle a move or expansion. Supply and Inventory Management If you sell a product, the inputs that go into making it will be your supplies and the final product will be your inventory.Operating Agreement.
The LLC operating agreement is a vital document for all LLCs, and attaching your operating agreement to your business plan for internal purposes can help you to get a more comprehensive strategic overview of your LLC.
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Short-term liabilities resulting from the primary business operations of a firm. They are non-interest bearing and comprise of accounts payable, accrued expenses, and income tax payable. Operating liabilities are deducted from total assets to determine the net operating assets.
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