Business Plan Organization And Management

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The first area is the organizational structure of the company, and the second is the expense and capital requirements associated with its operation.

The financial tables that you'll develop within the operations plan include:*The operating expense table*The capital requirements table*The cost of goods table There are two areas that need to be accounted for when planning the operations of your company.

Therefore, if NE represents the number of employees and EE is the expense per employee, the following equation can be used to calculate the sum of each overhead (OH) expense: OH = NE × EEIn addition to the expense table, you'll also need to develop a capital requirements table that depicts the amount of money necessary to purchase equipment you will use to establish and continue operations.

It also illustrates the amount of depreciation your company will incur based on all equipment elements purchased with a lifetime of more than one year.

With these capital elements in mind, you need to determine the number of units or customers, in terms of sales, that each equipment item can adequately handle.

This is important because capital requirements are a product of income, which is produced through unit sales.In fact, every business is different, and each one must be structured according to its own requirements and goals. Mc Garty in his book, , lists four stages for organizing a business:1.Establish a list of the tasks using the broadest of classifications possible.2.Generally, there are seven major components that make up a business plan. This is critical to the formation of financial statements, which are heavily scrutinized by investors; therefore, the organizational structure has to be well-defined and based within a realistic framework given the parameters of the business. The organizational structure of the company is an essential element within a business plan because it provides a basis from which to project operating expenses.In order to meet sales projections, a business usually has to invest money to increase production or supply better service.In the business plan, capital requirements are tied to projected sales as illustrated in the revenue model shown earlier in this chapter.For instance, if the capital equipment required is capable of handling the needs of 10,000 customers at an average sale of each, that would be 0,000 in sales, at which point additional capital will be required in order to purchase more equipment should the company grow beyond this point.This leads us to another factor within the capital requirements equation, and that is equipment cost. Financial factors The operations and management plan is designed to describe just how the business functions on a continuing basis.Although every company will differ in its organizational structure, most can be divided into several broad areas that include:*Marketing and sales (includes customer relations and service)*Production (including quality assurance)*Research and development*Administration These are very broad classifications and it is important to keep in mind that not every business can be divided in this manner.


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