Service Business Plans: Operations Concerns

Your service business plan should include an operations plan detailing how the business will function internally

. Consider the key aspects associated with your specific type of business, which may include one or more of the following:

Front Office/Back Office Split

For many types of services, there is a clear front-end to the business, consisting of a sales or service counter, or its equivalent. It may be very apparent what type of activities and transactions have to happen here, in view of the customer, but dont forget that money can be saved by taking care of other activities out of the customers view or even at another location. There is a lower cost associated with building out the spaces that are not in view of the customer (whether these are physical locations or the back-end of a website) because aesthetics are not as much of a concern. If certain tasks do not have to happen while customers wait, they can be performed in batches in the back-office, keeping costs down overall.

Yield Management

Yield management is applicable in businesses where a service is sold is a fixed, perishable resource, such as airline seats or hotel rooms. Yield management assists with pricing decisions in order to maximize revenue by charging customers based on what a service is worth to both the customer and to the business at the exact time the sale takes place. For example, the Bolt Bus, an East Cost bus service between major cities, sells at least one advance seat on each bus for $1, and prices increase steadily as the date of the trip approaches and its popularity increase.

Process Analysis

Certain processes will become key to the success of your business. These will depend on the service you provide. For example, if you provide retail service, waiting time management is necessary. By looking at the process of waiting, the service time for each customer, and the volume of customers you expect, the correct number of registers and lines can be determined to maximize your revenue.

by: Eric Powers

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