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A business plan serves as your roadmap to success. Starting a manufacturing business without a business plan is like driving off on a road trip without a destination in mind. It’s critical to put time and effort into building a worthwhile business plan. We will explore how to build a manufacturing business plan. Plus, explore why you need one in the first place.
- A business plan is a document you create as a roadmap to your business goals.
- You can use your business plan to brainstorm solutions for potential problems on paper.
- While you will likely make adjustments along the way, a business plan puts you on the path to success.
Understanding Manufacturing Business Plans
Businesses of all shapes and sizes create business plans. Without a business plan, you are essentially flying blind as you build out your business. A carefully thought-out business plan can help you avoid potential pitfalls.
What’s the Purpose of a Manufacturing Business Plan?
A manufacturing business plan is a document that will help you chart a course to success.
- Chart a course to success: You can use this document to define success and make a clear path to achieving those goals.
- Consider potential challenges: You can use the document to find solutions for problems before they throw a wrench in your business.
- Showcase your idea: While potential investors and lenders might ask to see this document, it’s also a useful tool for business owners to outline their vision of success.
Who Needs a Manufacturing Business Plan?
Everyone who wants to build a manufacturing business should create a manufacturing business plan. Here’s a look at the process:
- Getting started: If you are just diving into your business idea, a business plan serves as a useful way to organize your thoughts.
- Along the way: If you jumped into your business without creating a plan, it’s never too late. Consider building a business plan from where you currently are.
Important Factors to Consider When Writing a Business Plan for a Manufacturing Company
As you write your business plan, keep these factors in mind.
- Patience: It can take time to build out a comprehensive business plan. That’s okay. Be patient with yourself throughout the process.
- Stay flexible: Your business will not operate in a vacuum. When things change, stay flexible and make any necessary adjustments along the way.
Essential Elements of a Manufacturing Business Plan
Every manufacturing business plan should include some basic elements. Below is a breakdown of what should be included.
An executive summary involves a short description of your manufacturing business.
- Why it matters: You can use the executive summary to make a good impression on readers.
- What to include: Get the ball rolling by providing your mission statement, a summary of your business financial situation, and the products you plan to manufacture.
Chase the vision, not the money, the money will end up following you. – Tony Hsieh, Zappos CEO
A description of your business goes beyond your goals, it gets into a detailed description of the products you plan to offer.
- Why it matters: Even if you don’t have a physical product in hand, this section should illuminate exactly what you plan to sell. Anyone who reads this document should know exactly what you are selling.
- What to include: Share what makes your product special, from a customer’s point of view. While this idea might be your baby, you need to create a product that customers want to buy.
The only thing worse than starting something and failing… is not starting something. – Seth Godin, Squidoo founder, author and blogger
An overview of the competition can help you understand where your business can stand out.
- Why it matters: Scope out the competition to determine where you can outshine your competitors. For example, if your competitors are missing a key product feature, try to include that in your product.
- What to include: Find statistics about the industry, potential customer demographics, and current industry trends.
Marketing and Sales Strategies
You don’t have a business until you make sales to your customers.
- Why it matters: Outline exactly how you plan to get your product into the hands of eager customers.
- What to include: Build out a strategy on how you plan to reach customers and make sales. Maybe you already have a list of people who have asked about this type of product, or you know exactly where your target customer hangs out online.
The operational plan includes how you plan to go from idea to delivered product.
- Why it matters: Manufacturing businesses rely on efficient operations to create worthwhile profits.
- What to include: Map out how you will get your hands on a physical product that meets all of your requirements. Don’t forget to write down the final steps of getting that physical product in your customer’s hands.
Management and Organization
The right team can make all the difference to your business.
- Why it matters: Any potential investors or lenders will want to confirm your team has the necessary experience to succeed.
- What to include: Start by highlighting any management team members. From there, include an organizational hierarchy that highlights any decision-makers and a complete staffing plan.
Finally, your business plan should include some basic financial projections.
- Why it matters: Anyone with a stake in the company, including yourself, wants to know what the potential rewards are.
- What to include: Share your financial projections in great detail. At the very least, you should include any manufacturing loans, equipment financing plans, start-up costs, revenue projections, a sample profit and loss statement, a balance sheet, and a break-even analysis. Be realistic when tallying up any of these numbers.
Benefits of Having a Manufacturing Business Plan
- Providing a roadmap: A business plan gives you some direction to aim for as you build your business.
- Attracting investors and securing funding: Investors and lenders will want to see a carefully developed business plan before committing to any funding.
- Guiding day-to-day operations and decision-making: As you build the business, you can refer to this document as a guide when it’s time to make decisions.
- Mitigating risks: You can potentially spot problems before hitting the obstacle in real life. This gives you a chance to think of effective solutions.
- Identifying opportunities: When you evaluate the market, you should look for any opportunity to stand apart from the crowd.
- Monitoring progress and setting measurable goals: It’s easy to get lost in the process of building your business. A written plan gives you a way to measure your progress.
Anything that is measured and watched, improves. – Bob Parsons, GoDaddy founder
How to Write a Manufacturing Business Plan
As you build out your business plan, here are some steps to follow:
- Start with a template: A free online template can give you a starting point if you aren’t sure where to get started.
- Visualize success: As you write out each section, you should keep your vision of success in your mind’s eye. Consider building a vision board to keep on hand during the process.
- Make the time: It will take time and energy to build a worthwhile business plan. Give this task the time it deserves.
Tips for Crafting a Compelling Manufacturing Business Plan
- Do your homework: Back up all of the claims you make in your business plan with facts. A business plan isn’t the place to dream, it’s the place to set realistic goals.
- Focus on your competition: A close look at your competition is a useful way to see where you can make your own mark on the industry. Look for gaps in their strategy that you could fill for customers.
- Be conservative with your numbers: It’s better to exceed expectations than to miss the mark.
- Ask for help: If you run into questions, reach out to a mentor for help.
Mistakes to Avoid When Creating Your Manufacturing Business Plan
- Don’t skip legal advice: The legal structure of your business might require a professional opinion. It’s a good idea to reach out to professionals with any questions you have.
- Don’t skimp on the numbers: The financial projections are a key component of your business plan. Always be realistic and honest with yourself as you build out these projections.
- Avoid industry jargon: Anyone should be able to understand your vision when they read your business plan clearly.
A manufacturing business plan offers a roadmap that points to your ultimate business success. It’s tempting to do a sloppy job on this document that only you might read. But it’s critical to do your research and organize your thoughts in a business plan. If you are starting a manufacturing business, don’t skip this step.