‘Business operations’ is a common buzzword when talking about businesses. Do you know exactly what this term encompasses?
If you’re starting a business in South Africa, you’ll need to understand the term, what it means, and what different types of business operations look like.
The term ‘business operations’ covers many different things. Any type of business, no matter what scale it runs at or what it does, is made up of different tasks that work together. These tasks are what make up the business, and it’s these duties that determine how successful and profitable the company is.
In this guide, we’ll explore a few different concepts and categories around business operations.
What Does it Mean?
Business operations are a broad term that covers everything an enterprise does on a daily basis to keep running and making money. It includes all of the processes, actions, systems, and people that make up a business and how it functions. When creating a business plan, the duties required to achieve the goals of the company need to be clearly defined.
While business operations can include many different activities, they all follow the same aim: to increase the value of the company and make a profit. All duties and tasks should work strategically with each other to help the enterprise grow.
What are Business Operations Examples?
Business operations include any daily activities that teams within a company focus on. Some typical business operations examples include:
- Marketing
- Inventory management
- Sales
- Product development
- Accounting
- Customer service
- Order management
- Web development
- Obtaining private or government funding
Specific operations will change with each different venture and its plan. As long as the activities contribute toward the functioning and objectives of the business, then it is classified as a business operation.
What are the Types of Business Operations?
As you can imagine, the term ‘business operations’ covers a vast area. To narrow this down, there are three main areas, or types. These are:
- Service: Service business operations are all about providing intangible products. These services include things like bookkeeping, marketing, IT services, maintenance and repair, cleaning, and so on.
- Merchandising: Merchandising business operations are focused on selling tangible products to customers. This includes working with any physical products or goods that are sold by a company.
- Manufacturing: Manufacturing business operations focus on developing new products and goods from raw materials. This involves specialist technology and skills to transform materials into something of greater value. Any kind of product sold goes through a manufacturing process first.
Some ventures involve all three areas of operations, while some only focus on one. Within these three types, many different processes exist.
Specific business operations of any organisation could also typically fall under three main categories. These are:
- Processes: Any activities that are necessary for the survival and daily running of the business. Processes are required to stay productive and generate a profit. This is the essential foundation of business operations.
- Human resources: Human resources ensure the business has the right workforce to follow through with its vital processes. This involves building, developing, and retaining the right workforce for the enterprise to achieve its goals.
- Technology: A business will also need some form of equipment, alongside its staff, to achieve its objectives. This covers all of the necessary tools and equipment needed to maintain operations and keep them efficient.
Within these categories, all kinds of specific duties can exist for different types of businesses.
What are Key Business Operations?
Key operating activities refer to the essential areas of operations that a company needs to perform to generate revenue. This includes any activities involved in selling a product, making sales, and performing necessary administrative and maintenance tasks.
Key daily tasks include manufacturing, sales, marketing, and advertising. These processes form the operating expenses of a business. When the operating expenses are deducted from the business’s operating revenue, you get the business’s operating income, which is shown on its financial statements.
No business can function without an organised set of tasks. Business operations are necessary for helping a company function through its day-to-day tasks, achieve its objectives, and generate revenue. These duties should be carefully planned in the initial stages of setting up the company.
The specifics of business operations are unique to each company model and plan. However, the same general principles apply across the board. Understanding the main categories and types of operations that exist is important for optimising and strategically planning the way your business functions.
