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Whether it is travel, study, cooking or any other activity involving a process, planning is usually the first step. The same holds true for business. Business plans are probably more important than the business itself. For example, the plan for a house is more important than the house itself, though it is the house that people remember and not the plan. But the house wouldn't stand without the plan, would it?.

Production/ Operation plan: The production/ Operation plan should include strategies for the following parameters ; Location and reasons for selecting the location ; Physical layout ; Cost and availability of machinery, equipments, raw material ; List of suppliers and, if possible, distributors ; Cost of manufacturing ; Quality management ; Production scheduling, capacity management and inventory management ; Changes in above in the case of expansion of business.

The business plan serves several purposes: Enables the entrepreneur to think through the business in a logical and structured way and to set out the stage in the achievement of the business objectives ; Enables the entrepreneur to plot progress against the plan ; Ensures that the resources needed to carry out the strategy and the times when they are required are both identified ; Preparing the business plan ensures that the entrepreneur has thought through the crucial aspects of the venture ; It is a means for making all employees aware of the business direction ; It is an important document for discussion with prospective investors and lenders of finance ; It links into the derailed, short-term, one-year budget.

For any organization, various functional plans-marketing, financial, human resources, production-have to be laid down, even though all the functional plans serve different purposes and all theses plans provide guidance and structure to the successful running of the business.

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