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Writing The Business Plan: Section 7

Part 1: The Operating Plan Section Of The Business Plan

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When writing the business plan, the operating plan section describes the physical necessities of your business' operation, such as your business' physical location, facilities and equipment. Depending on what kind of business you'll be operating, it may also include information about inventory requirements and suppliers, and a description of the manufacturing process.

Keeping focused on the bottom line will help you organize this part of the business plan; think of the operating plan as an outline of the capital and expense requirements your business will need to operate from day to day.

You need to do two things for your readers in the operating section of the business plan: show what you've done so far to get your business off the ground (and that you know what else needs to be done) and demonstrate that you understand the manufacturing or delivery process of producing your product or service.

So divide the operating section of the business plan into two parts, starting with the Stage of Development section.

In this section, describe how your product or service will be made, and identify the problems that may occur in the production process.

Then show your awareness of your industry's standards and regulations by telling which industry organizations you are already a member of and/or which organizations you plan to join, and telling what steps you've taken to comply with the laws and regulations that apply to your industry.

Explain who your suppliers are and their prices, terms, and conditions. Describe what alternative arrangements you have made or will make if these suppliers let you down.

Explain the quality control measures that you've set up or are going to establish.

When you're writing this section of the operating plan for the business plan, start by explaining what you've done "to date" to get the business operational, followed by an explanation of what still needs to be done. Follow this with a subsection titled "Risks" that outlines the potential problems that may interfere with the production process and what you're going to do to negate these risks. The rest of the development stage part of the operating plan will be divided into subsections such as "Industry Association Membership", "Suppliers" and "Quality Control".

The second section of the operating plan part of the business plan is the Production Process section. Details of how to prepare and write this section of the business plan are on the next page.

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