Sample Manufacturing Business Plan
This business plan format for a manufacturing business is based upon time tested planning techniques and this template is also approved by the UK banks.
It has many examples for research taken from opening available data sources as well as ideas you can use for your own business plan for bank finance.
The executive summary as the title says summarises the overall plan for your manufacturing business. It includes the following important elements
- Business vision
- Products produced with production costs and margins
- Financial summary
- Loan and investment requirements
The economy: - The external research includes factors about the economy specific to manufacturing in your sector. You'll need to describe the past, present and future over the course of your plan. Example trends you can use are as follows:
- The manufacturing sector contracted by 5.1% in Q4 2008 and output was 8.1% in Q4 2008 than a year earlier suggesting that a deep recession on the scale of the early 1980s may be in prospect.
- UK GDP is projected to fall by just over 3% in 2010 with gradual recovery over the course of that year and the recession is likely to persist throughout 2009 and affect all regions.
- Consumer spending growth is also likely to turn negative at -3% during 2009 due to the severe squeeze on consumer spending from the high street, rising unemployment and falling housing wealth. There is also forecast a slight reduction in consumer spending in 2010 with a gradual recovery thereafter as households look to reduce spending and increase savings
Source: PWC economic report
Market research: - Up to date market research is important in your plan. You should include overall data and data specific to your region. Here's some information about the manufacturing sector:
The pace of the downturn in manufacturing has accelerated in the first quarter of 2009 and shows no signs of easing. The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe declines. However, whilst few firms expect things to get better in the near future but they are also focusing on making sure they are ready to take advantage of the eventual recovery.
- Output and orders hit record lows
- Job cuts increase, 140,000 forecast losses in manufacturing in 2009
- Forward-looking balances lowest in series history
- Growth forecasts revised downwards for 2009 and 2010
- Output and orders the balances fell sharply to historic lows of -39% and -54%, respectively.
The decline in the total new orders balance was driven by a sharp decline in both domestic and export orders. Reflecting the significant downturn in the domestic economy, the balance of responses on domestic orders fell to -54%, from -26% in 2008q4, whilst the export orders balance declined to -43% from -10%.
From this research you create opportunities and threats. Of course the biggest threat to any manufacturing business currently is the recession.
This is where you concentrate on your own manufacturing business and develop your strengths and weaknesses. Example strengths may be your sales force, location of premises or relationships with suppliers, whereas weaknesses may be your lack of skills and the fact you may be a new brand entering the market place.
Your SWOT is simply a summary of your strengths, weaknesses, opportunities and threats you have discovered from the work above.
Plan out the main 6-8 objectives for your manufacturing business over the next 12 months. These may be to launch the business, launch a new production facility, enter a new market or open a new plant. What ever they are work through the SMART principles so that your objectives are:
- Specific - ie: open a new distribution centre
- Measurable - ie: recruit 6 people rather than recruit staff
- Accountable - ie: you must assign the objective to someone
- Realistic - ie: not to triple turnover in 2 months
- Time bound - ie: you set a target date for completion
This is where you detail what marketing promotional activities you'll undertake over the next 12 months in detail. Put together exactly who you are going to target with what type of marketing and what you expect the results to be. Add a cost against each item.
Staff and Management Team
Every business succeeds because of the people involved within it so add in brief CVs for the main management team members and senior members of staff. Anyone investing in your business is investing in the team as well as the ideas.
You'll need to prepare details financial plans for the next 12 months and yearly thereafter. You'll need the following statements:
- Profit and Loss Account Forecast
- Cash Flow Forecast
- Balance Sheet
If you can't do these yourself find someone who can because the bank or investor will go through these reports in detail.
Those are the basic sections in any manufacturing plan and remember to keep it concise and run to about 20 pages in total.