Operations: The Invisible Foundation

"To create something exceptional, your mindset must be relentlessly focused on the smallest detail."— Giorgio Armani

Part 4 of This Is Not An MBA Business Plan series.

Key Phrase: Delivering on Your Promise

Overlooked: Detailing the Expenses

Although traditionally this is the fourth section of the business plan, I recommend placing it right after the Company Profile. In the Company Profile, you made a promise—or a series of promises—to a group of people.

The Operations section demonstrates that you can deliver. This is where the ideal begins to take shape, revealing the truth behind your promise.

Think of the Company Profile as the front end, the part everyone sees. Operations is the backend, the engine room of the business, which remains unseen.

While a timeline is important, too many entrepreneurs obsess over the launch date as if it’s a magical event that will catapult them to success. In most cases, I recommend a “soft launch” instead. Your business isn’t a one-time event; it’s an ongoing process where you earn while you learn.

The Operations section helps you understand all the costs you will face.

You’re not just starting; you’re building for the long haul.

Leverage Your Superpower in Operations

Marlee* was starting a yoga clothing line and came to me eager to launch. I asked her, "What’s your leverage?" Puzzled, she replied, "Not sure what you mean?" I explained: "Everyone has a degree of leverage and influence. It’s based on your credibility, skills, network, reputation, or a process you've created."

I asked Marlee to name a competitor she admired and to describe what they had that she didn’t. She listed a range of aspects: the ease of their website, the quality of their clothing, the testimonials from their clients. That is their leverage.

Some people call it a differentiator, but leverage is more than that; it’s the genuine ability to deliver on your promise.

Anyone can pitch me an innovative idea. Show me proof that you can execute—that’s leverage.

I pointed out to Marlee that her initial leverage would come from getting samples into customers' hands for feedback, securing the right supplier, and ensuring her website is professional and user-friendly.

"Oh, you mean my brand," she said. "No," I replied. "If you don’t have customers, you don’t have a brand. Leverage builds the foundation for a brand you can eventually be proud of."

Using the term "brand" too early can create the illusion that you have arrived. Leverage is what supports the entire iceberg beneath the surface, giving you real power.

What Is the Minimal Level of Credibility You Need?

It depends on the type of business you are starting. If you’re launching a consulting business, for example, you’ll need to have a few clients and testimonials to back up your expertise.

As I mentioned earlier in the Hands-on Business Plan series: If you can't make sales within the next three months, you still have work to do. This is precisely why, if you are still in the idea or development phase, you’re too early to be writing a full business plan.

Operations Will Look Different Depending on the Business

The Operations section can vary widely. Starting a childcare center will require much more due diligence than launching a web services business. You need to provide enough detail. Many entrepreneurs assume their business is self-explanatory, but it’s not. Spell it out for us. If you have more information than fits neatly into the section, add it to the Appendix.

Here are some important areas to consider (not a complete list):

• Regulations: What are the rules in your industry? How will you comply or plan for future changes?

• Insurance: Most businesses will need a liability insurance quote to cover lawsuits or accidents.

• Contractors and Employees: Who are you hiring? How many people, when, and at what pay rate?

• Responsibilities: If you have staff or partners, clearly list who is responsible for what.

• Location: If your business is tied to a location, provide the exact address. Why did you choose it? You will need to talk to the landlord first to get preliminary lease approval, which will help you estimate renovation costs. Note: No funder will give you money up front, just to go out and find a location.

  
  

Industry-Specific Operations Tips

Product-Based Businesses:

• Who are your suppliers?

• What are your minimum order quantities?

• What are the production, shipping, customs, and storage costs?

• What is the shelf life (for food or perishables)?

• When will you need to reorder inventory?

  
  

Software or Tech Businesses:

• What does platform maintenance cost?

• When will upgrades be needed, and what will they cost?

  
  

Service-Based Businesses:

Service businesses often underestimate the need for operations planning. You still need a clear process.

• How does a customer first contact you?

• What happens from inquiry to sale?

• What occurs when they land on your site? How do they follow up?

• If you offer payment terms, what are they?

  
  

Even if you offer customized products or services, your customers will still expect a consistent experience. You can’t keep all this in your head. Write it out.

If you believe you offer something exceptional, you need a system and a process that deliver that quality every time.

Be Specific with Your Expenses

List every expense clearly. Anything included under “outflow” in your cash flow projections should also be explained in the Operations section. Operations and cash flow are interconnected, and inconsistencies will trip you up.

For example, I often see entrepreneurs list a $75/month subscription fee in their cash flow, but that expense is either missing or listed differently in Operations. You need to be that specific. Your business's survival depends on it.

It doesn’t matter how you label the subheadings; what matters is that you include the details.

As Marlee and I dug deeper into her project, she realized that listing the “details” wasn’t just a chore. It was the real work of building the dream she wanted to live.

*Name and business changed for confidentiality.