What Are Business Operations?

‘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 ‘business operations’, 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 operates at or what it does, is made up of different business operations that work together. These operations are what make up the business, and it’s these operations that determine how successful and profitable the business is.

In this guide, we’ll explore a few different concepts and categories around business operations.

What is the Meaning of Business Operations?

Business operations is a broad term that covers everything a business does on a daily basis to keep running and make money. Business operations include all of the processes, actions, systems, and people that make up a business and how it functions. When creating a business plan, the business operations required to achieve the goals of the business 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 business operations should work strategically with each other to help the business 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 business 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, of business operations. 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 a customer. This includes working with any physical products or goods that are sold by a business.
• 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 businesses involve all three areas of operations, while some only focus on one. Within these three types of business operations, many different processes exist.

Specific business operations of any organization 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 business 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 operations can exist for different types of businesses.

What are Key Business Operations?

Key operating activities refer to the essential areas of operations that a business 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 business operations 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.

Summary

No business can function without an organized set of operations. Business operations are necessary for helping a business function through its day-to-day tasks, achieve its objectives, and generate revenue. These operations should be carefully planned in the initial stages of setting up the business.

The specifics of business operations are unique to each business 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 optimizing and strategically planning the way your business functions.