New Business Development > Starting a Business > Feasibility and Business Plans

Create Your Own Business Plan -- Operations

File C5-69
Updated March, 2010

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Facility Requirements and Site Selection

In this section you can describe where you will locate your business. Use the points below to help you prepare this section.

1. Availability and Suitability of the Site

  • Describe the access to markets.  
  • Describe the access to raw materials.  
  • Describe the access to transportation.
  • Describe the access to labor supply. 
  • Describe the access to production inputs (electricity, natural gas, water, etc.).

2. Determine Facility Needs

  • Describe the general design and technical requirements.
  • Outline the size and type of production facilities.
  • What is the need for related buildings, equipment, rolling-stock, other.

3. Other Factors

  • Describe the relationship of the business to the surrounding area. 
  • Describe any emissions concerns and how you will address them. 
  • Was an environmental impact assessment conducted? 
  • Describe any regulatory requirements. 
  • Describe any economic development incentives you will receive. 
  • Describe and quantify the economic and social impact on local communities or states.

Technical Analysis

In this section you can describe the technology involved in production, processing, manufacturing or other aspects of the business.  Use the points below to help you prepare this section.

1. Current Industry State of the Art

  • Describe how the industry creates similar products today 
  • Describe the evolution of technology trends (eg, speed of developments, rate of change adoption, expected future developments, etc.)

2. Technology to be Utilized

  • What is the status of the proposed technology – idea stage, development stage, prototype, pilot facility, proven commercially.  How was the proposed technology procured? 
  • How does it offer unique value and what is that value? 
  • Has it been applied successfully elsewhere?  What are its challenges? 
  • When using the technology, what are the ramifications to other aspects of the company’s operations?

3. Suitability of Production Technology

  • Explain the reliability and competitiveness of the technology in making your product.
  • Outline how you chose your technology providers. 
  • Describe limitations or constraints of the technology.
  • Identify any performance agreement you have in place.

4. Proprietary Protection/Rights/Claims

  • Will you protect proprietary information as a trade secret?  How secure is your trade secret against reverse engineering or other method of accessing the information?
  • Describe any existing patents or patent applications. Will you be able to financially defend these by legal action against infringement by competitors?
  • Describe any copyrights, trademarks, non-compete agreements or other aspects of intellectual property. 
  • Describe any rights (e.g. licenses) to use technology exclusively or on preferred terms. 
  • If no proprietary rights exist, how long will the technology offer unique marketplace value before being adopted by others? 
  • Describe other emerging technologies that may compete with or displace the technology to be used, and the expected time-frame for introduction of those technologies.
  • Be careful not to disclose any trade secrets or other confidential information in your business plan.

Operations Plan

Your operations plan describes how you will deliver value to your customer. As a result, it is closely linked to your marketing plan. For example, if quality is one of the attributes you are bringing to the marketplace, the operations plan is where you will create this attribute. Or if product service is your hallmark, the operations plan is where you deliver service. Because most of your employees and capital will be focused on operations, it is an important section.

1. Description of operations

  • Outline the operations activities of your business.
  • What activities will be conducted in-house and which will be outsourced (make or buy decisions).
  • Describe your relationship with venders, suppliers, others.
  • Are there any contracts or letters of intent in place?
  • Describe how operations will meet the needs of the customers in your target market.
  • Specify how operations will deliver dimensions such as quality, cost, timeliness, service, flexibility, etc.
  • If your operations plan gives you a competitive advantage, describe it.
  • Describe the operating costs and assumptions that will be used in the financial section.  

2. Determine facility needs

  • Describe the general design and technical requirements.
  • Determine the size and type of production facilities.
  • Assess the need for related buildings, equipment, rolling-stock, etc.

Production Inputs

In this section you can describe how you will access raw materials and other production inputs.  Use the points below to help you prepare this section.

1. Production Inputs

  • Describe the amount, type and quality of production inputs needed. 
  • Outline the current and future availability and access to these production inputs. 
  • Describe the concentration and competitiveness of input suppliers and product/service providers. 
  • Describe the production inputs procurement plan.  This includes specific names of key suppliers, the type, quantity and quality of inputs supplied, their background and reliability, the expected credit and delivery policies, and the need for backup suppliers.   
  • What is the cost of production inputs (including the input price and price variability due to seasonality, weather variability, etc.)? 
  • Describe the extent to which inputs will be contracted or hedged to mitigate risk of price or supply volatility. Identify and describe actual or expected contract arrangements for production inputs.

2. Member Suppliers (for businesses where members/owners are the suppliers of commodity or specialty product inputs). 

  • Describe how much of the commodity or specialty product inputs will be supplied by members/owners.  How much supplied by non-members?
  • If a Uniform Marketing Agreement will be used to access supplies from member/owners, describe the provisions. 
  • If a special quality grid (or other method) will be used to measure quality, describe it. 
  • If special production and handling practices will be used (ie. identify preservation, certification, etc.), describe them and the process for rejecting inputs not meeting specifications.
  • For perishable commodities/products, describe the plan for coordinating timing of the input to processing needs.

Labor Plan

Use this section to describe where and how you will access labor for your business.  Use the points below to help you prepare this section.

  • Describe the type and amount of labor needed for the business. 
  • Determine the accessibility of labor including wage rates, skills level, etc. 
  • Describe any labor training programs you plan to provide. 
  • Describe the projected wage rate and benefits programs you plan to provide. 
  • Describe the extent to which organized labor may be a potential issue for the business.

Regulatory and Environmental Requirements

Many value-added businesses face regulatory and environmental issues.  Use the points below to help you prepare this section.

  • Describe any regulatory approvals or permits that must be sought or maintained for the business to operate. 
  • Is the business subject to ongoing oversight by any Federal or State regulatory body?  What are some of the key compliance requirements? 
  • Identify permits/inspections that must be obtained for operations. Have you obtained these permits? 
  • What are the current regulatory requirements and trends of this industry? 
  • What are the environmental challenges facing the business?
  • What are some of the company’s primary strategies for dealing with environmental issues? 
  • Are there intellectual property rights existing or pending.


Don Hofstrand, retired extension value added agriculture specialist,