Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of manufacturing business you run and how it’s going. For example, are you a new business, do you own a manufacturing company that you want to grow, or do you run a chain of manufacturing companies?
Next, give an overview of each part of your plan that follows. For instance, you could briefly describe the manufacturing industry. Talk about the kind of manufacturing business you run. Detail your direct competitors. Describe the people you want to reach. Give a quick summary of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your business analysis, you will explain what kind of business you are running.
There are many different kinds of businesses that make things.
- Putting together clothes
- Garment manufacturing
- Creating food products
- Diaper manufacturing
- Tile manufacturing
- Toy production Soap and detergent production
- Mobile accessories manufacturing
- Putting together mattresses
- Bicycle manufacturing
- How pillows are made
- The making of bricks
- Toilet paper manufacturing
- Furniture manufacturing
- Peanut butter is made.
- The making of cosmetics
- The making of shoes
In the Company Analysis section of your business plan, you need to explain what kind of manufacturing business you will run and give background information about the business.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? Some examples of milestones are the number of customers served, the number of good reviews, the number of wholesale contracts, etc.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A sole proprietorship? Tell us about your legal structure.
In your industry or market analysis, you need to talk about the manufacturing industry as a whole.
Even though this may seem pointless, it has more than one use.
First of all, learning about the manufacturing industry makes you smarter. It gives you a better idea of the market you are in.
Second, market research can help you make your strategy better, especially if it shows you market trends.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section, you should answer the following questions:
- How much money does the manufacturing industry make?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big could your manufacturing business’s market be? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the customer analysis section, you need to explain who you serve and/or who you hope to serve.
Target market segments include wholesalers, other manufacturers, exports, and retailers.
As you might guess, the type of manufacturing business you run will depend a lot on the customer segment(s) you choose. Retailers would react differently to marketing campaigns than, say, export markets.
Try to figure out who your target market is by looking at their demographics and how they think and feel. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve. Because most manufacturing businesses mostly serve people in their own city or town, it’s easy to find this kind of demographic information on government websites.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other companies that make things are their direct competitors.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes businesses that make their own products as well as those that make things for other niches. You should also talk about this competition.
When it comes to direct competition, you should list the other manufacturing businesses that you compete with. Most likely, your closest competitors will be people who buy and sell houses.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- What types of goods do they make?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you use high-quality production methods?
- Will you offer things that your competitors don’t?
- Will you treat your customers better?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. For a business that makes things, your marketing plan should include:
Product: In the product section, you should repeat the type of manufacturing company that you wrote about in your Company Analysis. Then, give specifics about the products you’ll be selling. For example, do you offer services like research and development, design, prototyping, or anything else?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place: This is where your manufacturing company is located. Write down where you are and how that will affect your success. For instance, is the place where you make things close to a place where things are sent out? Talk about why your location could be the best for your customers.
Promotions: The last section is about promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Contacting local websites
- Social media marketing
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the tasks that go into running a manufacturing business, such as finding raw materials, designing processes, managing production, coordinating logistics, and meeting with potential buyers.
Long-term goals are the goals you want to reach in the future. These could be dates like when you think you’ll get your 1,000th contract or when you hope to make $X. It could also be when you want to start making things in a new city.
To show that your manufacturing business can be successful, you need a strong team. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
Ideally, you and/or other members of your team have managed manufacturing businesses before. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have experience making things or running small businesses successfully.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For instance, will you offer short-run production, or will you only do long-run? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 to expand your manufacturing business, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing a manufacturing business:
- Location build-out, which includes construction, design fees, etc.
- Cost of supplies and equipment
- Payroll or wages given to employees Business insurance
- Taxes and licenses:
- Legal expenses