Join Whitney Johnson for an in-depth discussion in this video Gearing up operationally, part of Entrepreneurship Foundations.
Now that you've run the numbers and are confident that you've got the makings of a real business, let's drill down on the what, where and when. A great way to do this is to prepare an operational checklist based on your business plan. For your reference, I've included this checklist in the Exercise files. For example, what are the processes and procedures you will use to produce your product or provide your service? What inputs do you need, whether physical goods or information? How will you source these materials? Who are your suppliers or vendors? How will you choose them? Next, take a look at inventory management or how you'll track what you sell.
If you have physical goods, where will you store them? Will you build to order or build to stock? You'll then want to consider logistics and delivery. Once you have something to sell, what are the logistics involved to get the product or service to the customer? For example, what are your delivery channels? Will you deliver the products yourself or will you outsource? If you're delivering a service or information, how quickly will that delivery happen? It seems like an obvious question, but when you think about your online experiences, speed and simplicity are paramount.
One of the most important elements of operations is Customer Service. In preparing a business plan, you articulate why customers will prefer you to any would-be competitors. How do you need to operate your business so that they actually do prefer you? And, as you add your first and second employees, what are your expectations around service? We sometimes think of the customer experience as marketing. Marketing is what we say we are. Operations is about making our marketing true.
It's the day-to-day details of running a business. As an idea person, operations may not be your thing. In a large organization, delivering day-to-day results would typically fall to the COO or Chief Operations Officer, while the CEO focuses on long-term strategy. At some point, you may want to bring on a co-founder or employee who can be the tactical yin to your strategic yang. In the meantime, as you look to get your business up on its feet, remember to focus, not only on the "why," but the "how."
- Cite the steps that can help you find an unmet need.
- Differentiate between a business and a hobby.
- Recognize how to decide between an online business and a brick and mortar business.
- Describe how to protect your intellectual property.
- Explain the best practices for hiring the right people.
- Recall the importance of tapping into networks of expertise.
- Cite the best practices for building a business website.
- Summarize the best metrics to use for your online business.