What Are Business Operations? Definition and Guide

what are business operations

Business operations is a broad term that describes everything that happens within a company to keep it running and earning money. Business plans often include a section dedicated to operations so that company founders understand the systems, equipment, people, and processes need to make the organization function.

Business operations elements

Business operations vary according to business type, industry, size, and so on. Operations for a brick-and-mortar store, for example, will look different from operations for an online retailer. The former will need point of sale terminals to process purchases, for example, while the latter will need e-commerce software that provides electronic shopping cart services.

Business operations for most businesses, though, take into account the following elements:

  • Process
  • Staffing
  • Location
  • Equipment or technology

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. Documentation also helps companies train new employees.

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 small business might need a few people who are generalists while a large company will need many more people who are specialists.

Location is more important to certain types of businesses than to others – and the reason for the location will vary. A solopreneur consultant might only need room for a desk at home, a pet groomer will need a location with parking, and a software developer will need to be located in a region with access to appropriate talent.

The equipment or technology needed for optimum business operations will often have an impact on location. The pet groomer with a staff and several grooming bays will need more space and different equipment from the mobile groomer who offers services provided at the pet’s home. A carpet cleaning business won’t need a storefront, but it will need a garage to store its trucks plus office space for business operations management.

Business operations analysis

Once a business is established, and particularly after a growth spurt, it’s important to periodically assess and analyze business operations to identify inefficiencies and improve communication. Comparisons with industry benchmarks and best practices can help a company make sure its business operations are optimum.

What Are Business Operations? FAQ

What do business operations mean?

Business operations refer to the activities and tasks that organizations use to produce goods and services. This includes planning, organizing, directing, coordinating and controlling the various aspects of production, such as procurement, manufacturing, distribution and marketing. In order to run an efficient and successful business, operations must be well planned, organized and managed.

What are business operations examples?

  • Accounting and finance: Accounting and finance activities such as budgeting, forecasting, and payroll processing.
  • Human resources: Hiring, training, and managing employees.
  • Manufacturing: Producing goods or services.
  • Marketing and sales: Developing and executing marketing strategies to attract customers and promote products or services.
  • Supply chain: Managing the flow of materials and goods from suppliers to customers.
  • Information technology: Developing, maintaining, and managing technology infrastructure and systems.
  • Customer service: Handling customer inquiries, complaints, and feedback.
  • Regulatory compliance: Ensuring compliance with local, state, and federal laws and regulations.

What are 3 types of business operations?

  • Production: creating goods and services for customers.
  • Administrative: managing the day-to-day operations of a business.
  • Financial: managing money and investments, handling accounting and taxes.

What are the 4 types of business operations?

  • Production: creating goods or services.
  • Financial: managing the money and resources of the business.
  • Marketing: promoting and selling products or services.
  • Human Resources: managing the people who work in the business.