Saturday, 16 February 2013

Starting a business – setting up operations

This where the rubber hits the road in starting a new business – and where the costs start to add up if you get it wrong.  Your operations plan needs to ensure that the objectives of your business plan can be achieved on schedule and within established financial targets.

Key operational areas you need to focus on include:
  • Buy or lease business premises
  • Order and purchase stock
  • Establish production, sales, and distribution operations
  • Set up record keeping and accounting systems
  • Purchase insurance and other risk protection measures
  • Set up corporate governance processes
  • Recruit and manage staff
Each of these areas varies significantly in complexity as your business grows.  When starting out, for example, the business could be just you working part time from home in a service-based role, with minimal stock, minimal income, and few reporting obligations.  As your business expands, you could take on additional staff, acquire separate business premises, and require formal sales and distribution operations.  With these come greater financial commitments, risk, and governance requirements.

I’ll discuss each area in further detail below.

Premises

Location, location, location …

As a start-up business, you may be able to work from home.  However, as you grow, you will need separate business premises.