A business plan is one of the main characteristics of manufacturing companies. It helps operators focus on details, know risks and identify future growth. Business plans are one of the assets that can help you obtain future financing.
By having a business plan in place, potential investors will notice that you are serious about growing your business. But, if you’re seeing this format for the first time, it can be difficult to figure out which elements to include.
You can create a business plan at any time, whether it’s just starting out or when your manufacturing business has been running for a while. Now, let’s help prepare you for this task and run through some basics.
Determine the duration of your business plan
It is essential to mention that the business plan can vary in length, depending on your requests. You can create a detailed business plan, a multi-page document, or design a basic plan that fits on one page. For example, if you are in the manufacturing sector, a one-page business plan will not cover your needs because you will need a detailed plan with multiple elements.
What should a business plan for a manufacturing company contain?
— Summary of the plan: a summary of the crucial points, accompanied by an explanation, for example, what is the purpose of your plan.
— Identity: it explains what the plan does.
— Market Analysis: This section includes economic outlook, customer profile, market segmentation and industry analysis. It is important to know the current needs and desires of customers.
— Products: What does your manufacturing company do to meet customer demands? Can it match capabilities to customer requirements?
— Marketing and sales: the two go hand in hand. For example, how will your manufacturing company advertise and sell its products? Be sure to include marketing strategies and partners in this part, as well as sales channels.
— Competition: your business plan should identify your main competitors and the competitive advantage you will have over them.
— Pricing structure: What aspects does your business need to change to stay ahead of the competition?
— Financing: Will you secure financing or finance your manufacturing business through savings? What type of financing will you acquire and what will you do with the funds? Are you going to invest in personnel or equipment?
— Future projections: when do you expect to see positive cash flow?
— Partnerships: Include a list of third-party partnerships, such as marketing agencies and logistics providers, necessary for the success of your manufacturing business.
— Milestones: this is a roadmap that indicates, for example, the objectives and targets you plan to achieve.
What are the 4 Ms of business planning?
Every business owner knows the 4Ps of marketing, but now let’s talk about the 4Ms of business and business plans. You will find many books written on the subject, including how to write and what to include. These days, business owners can even use templates or software to help them write their business plans.
Many owners consider a business plan to be one of those boring things you have to do to secure financing or plan future steps. If you want to create a detailed business plan, keep in mind that you will need a lot of time and patience.
A business plan is not a type of investment. This is a crucial element that makes you think, for example, of your custom machining business. If you can’t present and articulate your business plan, how do you plan to implement it? By doing this planning process, you avoid many costly trial and error approaches.
Now, let’s identify the 4 Ms and what they are:
— Management: who will do it?
— Marketing: recognizing and seizing the opportunity.
— Money: how much will it cost and how will you finance it?
— Money Machine: How will your manufacturing business operate like a slot machine?
What content and style should a business plan have?
When we mention a business plan, it will mean something slightly different to many people. A financier will properly look at the business plan from a financial perspective and view it as a financial plan, while the manager may view it from an operational perspective.
These people have different perspectives on how a business plan should be presented and organized. At the same time, they will also have a different perspective on important things. Generally, when writing business plans, you have to satisfy all of them.
A good plan is not only easy to understand, but different parties are involved in creating it. Many think it’s just about putting words to paper when it comes to style. But keep in mind that this is your selling point and your compass for direction.
Try to cover all the important points. Of course, there are many details to think about, but you can always group these details under one of the 4 Ms we mentioned earlier.
This brief guide illustrates only the important aspects of a business plan, and many will encounter them for the first time. If you find it difficult to follow, download a template and try to answer all the relevant questions and steps that we have mentioned in this article.