Understanding Business And Management Operations (Guide)

All businesses share a measure of complexity. There are ongoing activities, business operations, involved in the production of value for all stakeholders. The intended outcome of these business operations is to harvest the value from the assets owned by the business. These assets can be intangible or physical but the effort it takes to harvest it. 

To win in today’s market and ensure future viability, it’s essential organizations capture value quickly, change direction at pace, shape and deliver new products and services. As well as, maximize the use of "always on" intelligence to sense, predict and act on changing customer and market developments.

Once a business owner learns how to increase company value and generate a stabilize income, their business will continue to increase in success. The activities of a company can never be said to be a simple and smooth ride from point A to point B; activities should rather be regarded as an intricate web of processes. 

Operations start as words on a piece of paper. They are—for all intents and purposes—essential to the success of any business endeavour. Everything that happens within a company to keep it running and earning money is referred to collectively as business operations. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize profit.

Thus, operations management balances costs with revenue to achieve the highest net operating profit possible. It typically include four key areas:

Location: Where you do business — physically and online. Location is more important to certain types of businesses than to others – and the reason for the location will vary. This can differ from company to company.

Equipment: The tools you need to get the job done. The equipment or technology needed for optimum business operations will often have an impact on location.

Labor: The human side of business operations. Staffing is determined by the processes. Who needs to do the work outlined in the work processes and how many of them are needed? A Start-up might need few people who are generalists while a large company will need many more people who are specialists.

The importance of each of these areas depends on the nature of your company. For example, physical location is critical to a retail outlet, while physical location may not matter a bit to an Internet-based company — unless the business depends on highly skilled talent or the kinds of resources in places such as cyber centers.

Process is important because of its impact on productivity and efficiency. Processes done manually that can be done quicker with software or that duplicate work done by other departments can cost a business time and money. Business operations processes should be documented department by department so that operations managers can study them to find areas for improvement, consolidation, or cost-savings.

For startups, operations can be critical to success. They help with assigning clear-cut roles and responsibilities, with the management of risk, resources, and allocation as well as with revealing the best course of action at all times. It serves as a guide, ensuring that a company stays within its budget and that departments cooperate effectively to:
  • Generate recurring income
  • Increase the value of the business assets
  • Secure the income and value of the business

If your plan is for a start-up company, include a description of how you plan for each of the above key operational areas. For established companies, detail what operational changes are necessary to achieve the new goals and objectives detailed in your business plan and how you plan to implement and fund an expansion of your operation.

During the 1990s, when the business world was buzzing with talk about a new economy and new business rules, people — even business gurus — seemed to forget the part about making money, and business people side-lined the use of effective business operation models. But, when the dot-com boom began to bust, suddenly effective business operation models became necessary. 

Expecially, the way business gets done, including systems for quality control and improvement. Sooner rather than later in the business-planning process, you need to invest a good sum of time delving into the nitty-gritty details of your company’s finances — your income statements, balance sheets, cash flow, budgeting, and all the details that can make or break your company’s future. At this point, however, your assignment is way more basic:

  • Figure out where your revenue will come from.
  • Who will pay? How much? How often?
  • What portion of every sale will make its way to your bottom line in the form of profit?

The more recurring income an asset generates, the more valuable it becomes. For example, the products that sell at the highest volumes and prices are usually considered to be the most valuable products in a business's product portfolio. The more valuable a product becomes the more recurring income it generates. For example, a luxury hotel room can be leased out at a higher rate than a motel.

The intrinsic value and income-generating potential of an asset cannot be realized without a way to secure it. For instance, petroleum deposits are worthless unless processes and equipment are developed and employed to extract, refine, and distribute it profitably. To keep out of the red ink, you need enough revenue coming in to cover all your costs.

But to break into the black, you need to price your goods and services to cover your costs plus a little (or more than a little) for your bottom line. Don’t leave your business operation plan without it. How you expect to make money is one part, but when you expect the money to roll in is another important factor.

Some companies run up costs and spend cash months (even years) before a revenue stream begins to flow. For that reason, your business operation model must include a timeline that takes the following into account:
  • How will you generate revenue?
  • What’s your cost structure?
  • What’s your profit margin?
  • Who’s your target customer?
  • What customer problem or challenge do you solve?
  • What value do you deliver?
  • How will you reach, acquire, and keep customers?
  • How will you define and differentiate your offering?
Monitoring business operations, helps organisations to be better-informed and more adept at managing solutions and processes. This can lead to an increase in market profit and return on investment. It provides management leaders with a up-to-date view of business processes and operations.

It encompasses measuring business performance, monitoring real-time and completed processes, detecting and resolving problems in the execution of business processes, and reporting on business operations to enable cyclical improvements. It helps you to identify business problems, correct exceptions, and change processes to increase business competitiveness by improving process efficiencies.

Business process monitors tell us not only whether we can order goods, but also if they are being delivered to our customers. Business process monitoring answers the questions of whether the business is performing well. It enables the proactive and process oriented alerting for issues that could potentially disrupt the flow of your core business processes.

A tracking sheet is required to outline all output indicators for key activities along with target values for those output indicators. The targets could be divided into quarters/years. Progress is tracked for two reasons:
  • To see whether the business is on-track or off-track
  • To assess whether time-critical activities are taking place as per the calendar or not.

The aim of monitoring business operations is to ensure that business goals related to revenue, such as expenses, profit, and customer satisfaction, are met. Create a hub that holds information about the business performance management aspects of a business model, including the business measures that are required for monitoring.

Evaluating the business measures of your processes is crucial for achieving your objectives. The values of these business measures can provide extensive information about performance. Monitoring business operations within each department will require tools which can:


Monitor account balances and send an alert if a balance meets or exceeds threshold;
Notify someone in the accounting department when and if a new GL account is added to the accounting system;
Notify customers when their accounts receivable balance becomes aged beyond a specified number of days;
Send an email to an AP vendor when their invoice has been identified as paid in the accounting system.

In Accounting, General Ledger Accounts (GLs) are account numbers used to categorize types of financial transactions. Most commonly used GLs are revenues and expenses. It is basically, a bookkeeping ledger in which accounting data are posted from journals and aggregated from subledgers, such as accounts payable, accounts receivable, cash management, fixed assets, purchasing and projects.

Moreover, accounts payable vendor (Ap Vendor) is a company or individual who provides goods and/or services to another company or organization

Sales And Marketing

Automatically notify customers when an order has been fulfilled or shipped from warehouse. Match customer profiles with goods and services and notify customers when new goods or services are available that they might benefit from. Automatically send customer statement or invoice upon completion of work. Auto respond to customer inquiries via website feedback form.

Human Resources

Monitor payroll and time and alert managers if an employee exceeds maximum hours allowed or falls below minimum requirements. Monitor vacation and other employee benefits SHR and notify employee when vacation or sick time benefits are about to expire or when thresholds are about to be met.

Automatically notify employees of key company events such as holidays or open enrollment periods;
Monitor employee setup and notify HR manager is information is missing or inconsistent with company policy and procedures.

Proper monitoring help maintains quality assurance which provides confidence to the organization that its projects, programmes and portfolios are being well managed. It validates the consistent use of procedures and standards, and ensures that staff have the correct knowledge, skills and attitudes to fulfill their roles and responsibilities in a competent manner. 

It verifies that the deliverables conform to specification, are fit for purpose and meet stakeholder expectations. For this to be effective, specifications must be under strict configuration control. It is possible that, once agreed, the specification may need to be modified. 

Commonly this is to accommodate change requests or issues, while maintaining acceptable time and cost constraints. Any consequent changes to acceptance criteria should be approved and communicated.

A monitoring plan as long as business operation is concern should detail not only what the benchmarks are, but who’s responsible for meeting them and which stakeholder has the authority to confirm standards are being met. This accountability helps mitigate the risks that a businesses won’t satisfy the client, finish on budget or stick to the schedule. A quality checklist that stays with the leaders can be used to serve as a reference. This helps lessen the risk of unwelcome surprises later on in the business.

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