While you can think of the Stage of Development part of the operating plan as an overview, the Production Process section lays out the details of your business' day to day operations.
Remember, your goal for writing this section of the business plan is to demonstrate your understanding of the manufacturing or delivery process for your product or service, so you need to let the readers of your business plan know that you've crossed all your 'tees'.
Make sure you include all these details of your business' operation:
General: Do an outline of your business' day to day operations, such as the hours of operation, and the days the business will be open. If the business is seasonal, be sure to say so.
The physical plant: What type of premises are they and what is the size and location? If it's applicable, include drawings of the building, copies of lease agreements, and/or recent real estate appraisals. You need to show how much the land or buildings required for your business operations are worth, and tell why they're important to your proposed business.
Equipment: The same goes for equipment. Besides describing the equipment necessary and how much of it you need, you also need to include its worth and cost, and explain any financing arrangements.
Assets: Make a list of your assets, such as land, buildings, inventory, furniture, equipment and vehicles. Include legal descriptions and the worth of each asset.
Special requirements: If your business has any special requirements, such as water or power needs, ventilation, drainage, etc., provide the details in your operating plan - as well as what you've done to secure the necessary permissions, such as zoning approvals.
Materials: Tell where you're going to get the materials you need to produce your product or service, and explain what terms you've negotiated with suppliers.
Production: Explain how long it takes to produce a unit, and when you'll be able to start producing your product or service. Include factors that may affect the time frame of production and how you'll deal with potential problems such as rush orders.
Inventory: Explain how you'll keep track of inventory.
Feasibility: Describe any product testing, price testing, or prototype testing that you've done on your product or service.
Cost: Give details of product cost estimates.
When you're writing this section of the business plan, you can use the headings above as subheadings and then provide the details in paragraph format. If a topic does not apply to your particular business, leave it out.
The best part is that once you've worked through this business plan section, you'll not only have a detailed operating plan to show the readers of your business plan but have a convenient list of what needs to be done next to make your business a reality.
