When we talk about operations management in a small business, we’re talking about a lot of moving parts. So what is operations management? It refers to all the activities, processes and controls a small business uses to produce its products and services. The components of operations management include:
New product or service development
Tips for creating an operations management plan for your small business
Whether your small business is in retail sales, manufacturing or a service company – or anything in between – you need an operations management plan. Of course, the operations plan for a hair salon won’t be quite the same as that of a small manufacturing business, but a plan is vital. How will you source your suppliers? How will your inventory get to your location? Who will control purchasing? Is it the same person who will control distribution? The list goes on! The components of operations management are interlinked, so a well-crafted operations management plan will ensure you are prepared.
Sounds complicated, but there’s a silver lining – entrepreneurs and small start-ups can design and implement new and innovative operations processes without having to overcome outdated ways of doing things. Older, larger businesses are always looking for ways to cut costs and improve operations. Small firms are fast and flexible, and can quickly gain the upper hand over the competition if they can deliver more efficiently too.
Have more questions about operations management? See what questions have already been answered in our Ask an Expert – Operations Management section. If you don’t see your question there – ask! We love talking operations management with fellow entrepreneurs.
So you’ve had your A-ha! Moment. You’ve come up with a great small business idea and are ready to start a small business.
But, are you?
Before you start your small business, you need to create a business model – your roadmap for small business success. And no, a business model is not a business plan. You can’t even begin to write a business plan until you’ve created a “blueprint” for your success with a business model. Confused? Let’s take a closer look at a business model.
A business model is a blueprint for small business success
Building a business is a lot like building a house – and who can imagine a house built without preliminary sketches? Creating a small business model means planning – on paper – the fundamentals of your business. It helps you, as an entrepreneur, to put aside the excitement and make a realistic evaluation of the potential success of your business idea. A proper business model helps you to figure out elements such as: Your business concept – what problem are you solving for whom; how you will create customer value; how your product or service will get to customers; how your business will stay competitive; and all revenue and costs you can anticipate.
Take your time creating a business model
You may have a few ideas scribbled down on a sheet of paper – name ideas, product prices and ideal locations. This is a great start, but a proper business model takes time. Starting a small business is exciting, but you also need the strongest foundation possible to ensure small business success. Don’t guess what your business’ customer value will be – research! Survey your friends and work your business network to find the true value of the solution that your product or service offers to the marketplace. Taking your time creating your business model will ensure you don’t underestimate – or overestimate – anything.
Consider all possible areas of concern
There are many moving parts when it comes to running a business and you don’t want to be caught unprepared. For example, how exactly will your product make its way to your customers? Make sure your business model is thorough and covers all the bases. Once you’ve proven the feasibility of your new business or your business expansion plan on paper with a business model, you’re ready to write a more comprehensive business plan. Proper planning takes time and effort, but you’ll see the return on that investment when your great idea has become the great, successful small business you envisioned.