Business operations plan
Business operations section of the business plan should explain how your business operates, including how you make the products or provide the service. It should also outline your company’s approach to research and development. Include details on the location and size of your facilities.
Factors such as the availability of labour, accessibility of materials, proximity to distribution channels, and the availability of Government grants and tax incentives should be mentioned. Describe the equipment used or planned. If more equipment is required in response to production demands, include plans for financing.
If your company needs international distribution, mention whether the operations facility will provide adequate support. If work will be outsourced to subcontractors eliminating the need to expand facilities state that too. The investor will be looking to see if there are inconsistencies in your business plan.
If a prototype has not been developed or there is other uncertainty concerning production, include a budget and timetable for product development. The private equity firm will be looking to see how flexible and efficient the facility plans are. The private equity firm will also ask such questions as:
• If sales projections predict a growth rate of 25% per year, for example, does the current site allow for expansion?
• Are there suppliers who can provide the materials required?
• Is there an educated work force in the area?
These and any other operational factors that might be important to the investor should be included.
Business operations plan explains to investing private equity entity how the business will be run.