Everything that happens in a company to operate and make money is collectively called business operation. Business plans often include an operations section so that company founders understand the systems, equipment, people, and processes they need to run the organization.
Elements of Business Operations
Business operations vary by business type, industry, size, and so on. Traffic for a brick-and-mortar store, for example, will look different than traffic for an online retailer. The former will need point-of-sale terminals to process purchases, for example, while the latter will need e-commerce software that provides electronic shopping cart services. However, business operations for most businesses take into account the following elements:
- Process
- Staffing
- Location
- Equipment or technology
Process is important because it affects productivity and efficiency. Processes done manually that can be done faster with software or that duplicate work done by other departments can cost a business time and money. Operational processes should be documented department by department so that operations managers can study them and find areas for improvement, consolidation or cost savings. Documentation also helps companies train new employees.
Staffing is determined by processes. Who has to do the work outlined in the work processes and how many are needed? A small business may need a few people who are generalists, while a large company will need many more people who are specialists.
Location is more important to certain types of businesses than others – and the reason for location will vary. A solopreneur consultant might only need a desk space at home, a pet sitter will need a place with parking, and a software developer will need to be located in a region with access to the right talent.
Equipment or technology required for optimal business operations will often affect location. A groomer with staff and multiple stations will need more space and different equipment than a mobile groomer that offers services provided at the pet’s home. A carpet cleaning business will not need a storefront, but will need a garage to store its trucks and office space to manage business operations.
Analysis of Business Operations
Once a business is established, and especially after rapid growth, it is important to regularly evaluate and analyze business operations to identify inefficiencies and improve communication. Benchmarking against industry benchmarks and best practices can help a company ensure that its business operations are optimal.