Business Operations: Definition, How To Improve Them and Tips

By Indeed Editorial Team

Updated November 22, 2022

Published November 30, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

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Companies of all sizes prioritize their business operations to define and track the procedures and resources that help them succeed. These systems help teams contribute to a company's overall planning, productivity and profits. Learning more about how business operations work in various industries can improve your knowledge and skills, which can help you advance in your career.

In this article, we discuss what business operations are, provide examples of how different industries use them, and list some steps and tips you can use to improve a company's business operations.

What are business operations?

Business operations are all the actions and systems that work together for a company to generate revenue. Business operations vary based on the circumstances of each organization. For instance, a large-scale steel manufacturer with 50,000 employees will likely have different business operations than a small, locally-own ice cream parlor. Investing in business operations can help companies in many ways, such as improving productivity, streaming processes, reducing costs, optimizing investments and encouraging operational innovation.

An organization's business operations often change frequently and significantly based on the current state of the market or economy. Despite the different factors that determine them, business operations typically define four elements that are necessary for productivity across all industries:

  • Process: A company's processes are important because they determine the steps for employees to follow when developing products or services. A well-defined process can give employees the confidence to complete their tasks with little error or supervisor guidance.

  • People: The staff of a company contributes significantly to its business operations. Assigning tasks to employees and ensuring everyone works on projects that fit their skill set are important for promoting productivity and profits.

  • Equipment: The technology and machinery for running a company also are key elements of its business operations. Understanding the demands of the industry and what equipment it requires is an important consideration when outlining a business' operations and budget.

  • Location: The location of a business is another crucial component of business operations because certain locations can work better for certain businesses than others. For example, a small business that produces handmade yarn scarves may require only a craft room at the business owner's home. In contrast, a large-scale automotive company may require a multi-story factory.

Related: Steps To Becoming a Manager of Business Operations

Business operations in different industries

Here are examples of different industries and how they incorporate business operations into their processes:

Science and technology

In science and technology, many organizations have business operations that focus on the components of people and equipment. This industry focuses especially on hiring highly qualified individuals with innovative ideas who can create revolutionary and profitable goods or services. The tech industry uses a substantial amount of computer and software systems, tools and applications to develop products and meet consumer demands.

Related: Five Types of Operations Metrics for Improving Your Business

Retail

In retail, one of the primary goals is to produce items to meet the demands of the public, which is why processes are important in this industry. Determining the best processes for production is an essential component of retail business operations because it directly affects the speed of production and the ability to sell. Most retailers curate their business operations to avoid potential dead stock, an accumulation of products with little demand.

Related: Retail Operations: Definition, Functions and Job Opportunities

Manufacturing

The manufacturing industry uses business operations to determine the proper processes, technology and settings to develop their goods. Manufacturers determine their business processes to aim for the highest amount of efficiency possible, which directly correlates to the number of products they can sell. The equipment and physical settings for manufacturing often depend on the scale of the business, with some requiring high-tech equipment and vast factory space.

Related: 20 Essential Business Roles Within an Organization

How to improve business operations

Here are some steps you can follow to help improve the business operations of an organization:

1. Set attainable goals

Setting realistic goals for productivity and profit is vital for success in any industry. Each department in a company may have its own goals, depending on the work it does. For example, the marketing department at a business can have the goal of reaching 100,000 followers on social media. In contrast, the sales department may aim to reach $1 million in sales. Goals can help motivate people to work hard and eventually receive recognition for their efforts.

Read more: How To Set Realistic Goals

2. Stay informed

Regardless of industry, every business tries to stay informed on the latest trends and progress in their field. Changes in local laws or regulations can have a major impact on the processes and staffing of a business, so it's important to always stay informed of any updates to the system. Additionally, staying informed on the market and economy can help create goals and determine price points for goods or services.

Related: Operations Management: Everything You Need To Know

3. Consider switching to a management software

Many companies are trying to implement management software programs to operate their businesses. These programs can help management with various tasks, such as payroll, benefits, sales data, employee productivity, tracking inventory and shipments and any other element of operating a business. Integrating your business operations into a software program can streamline many processes and activities into a single, typically user-friendly system that saves time and money.

Related: How To Become a Business Operations Specialist in 6 Steps

4. Invest in a strong company culture

Company or work culture is a term that refers to the overall attitudes and beliefs that create the dynamic of a work environment. A strong company culture may include an emphasis on team-building activities, regular check-ins between employees and management, feedback surveys, social events and employee perks, such as weekly catered lunches or company-branded clothing. Work culture can make employees feel comfortable and appreciated at their job and encourage them to succeed for the company's good.

Related: 15 Essential Operational Management Skills

Tips for improving business operations

Here are some tips you can follow to help improve business operations:

  • Stay organized. Creating systems for improved organization can help a company better store important paperwork, such as schedules, budgets or project files. This can make locating and using these documents easier, saving valuable company time and helping it streamline other processes.

  • Practice communication. Ensuring employees and managers know how to contact one another and have productive, professional conversations can help everyone understand their responsibilities and the best way to complete them.

  • Re-evaluate operations. Especially during economic, employment or market change, consistently analyzing your processes and finding areas of improvement can help a company maintain efficiency and prevent any issues.

  • Recruit high-quality employees. Finding and hiring the right employees can help a company become more efficient and avoid mistakes. Consider using online tools or companies that can help you find strong candidates and convince them to work with you.


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