How to Write a Business Plan for Your Machining Company
A business plan is one of the key features of manufacturing companies. It helps operators focus on details, get to know the risks, and pinpoint future growth. Business plans are one of the assets that can assist you in securing future funding.
By having a business plan set in place, potential investors will notice that you are serious about your company’s growth. But, if you see this format for the first time, it can be challenging to determine what elements to include.
You can create a business plan anytime, whether at the beginning or when your manufacturing business has been already operating for quite some time. Now, let’s help you prepare for this task and go through some basics.
Determine the length of your business plan
It’s essential to mention that business plan can vary in length, depending on your demands. You can create an extensive business plan, a document containing multiple pages, or design a basic plan that fits a single page. For instance, if you are in the manufacturing business, a single-page business plan won’t cover your needs because you will need a detailed plan with several elements included.
What should a business plan for a manufacturing company contain?
— Summary of the plan: a summary of crucial points, along with an explanation, for instance, what’s the purpose of your plan.
— Identity: it explains what the plan does.
— The market analysis: this section includes economic outlook, customer profile, segmentation of the market, and industry analysis. It’s important to know the current customers’ needs and wants.
— Products: what does your manufacturing business do to satisfy clients’ demands? Can it match capabilities to the client’s requirements?
— Marketing and sales: these two go hand in hand. For example, how will your manufacturing business advertise and sell its products? Make sure to include marketing strategies and partners in this part, along with sales channels.
— Competition: your business plan should identify your main competitors and what competitive edge you will have over them.
— Rate structure: what aspects your business needs to change to stay ahead of the competition?
— Finance: will you secure funding or finance your manufacturing business through savings? What type of funding will you acquire, and what will you do with the funds? Will you be investing in personnel or equipment?
— Future projections: when do you expect to see a positive cash flow?
— Partnerships: include a list of third-party partnerships, like marketing agencies and logistic providers, necessary for the success of your manufacturing business.
— Milestones: This is a roadmap that shows, for example, goals and targets you plan to accomplish.
What are the 4 M’s of Business Planning?
Every business owner knows the 4P’s of marketing, but now let’s talk about the 4 M’s of Business and Business Plans. You will find many books written on the subject, including how to write and what to include. Nowadays, business owners can even resort to templates or software to help them write their business plans.
Many owners consider a business plan as one of those boring things that one must do to either secure the funding or roadmap future milestones. If you want to create a detailed business plan, keep in mind that you will need a great deal of time and patience.
A business plan isn’t a type of investment. This is a crucial element that makes you think, for instance, about your custom machining business. If you can’t lay out and articulate your business plan, how do you think of implementing it? By performing this planning process, you avoid a lot of costly trial and error approaches.
Now, let’s identify the 4 M’s and what they are:
— Management: who is going to do it?
— Marketing: recognize and seize the opportunity.
— Money: how much will it cost, and how will you finance it?
— Money Machine: how will your manufacturing business operate as a money machine?
What content and style should a business plan have?
When we mention a business plan, it will mean a slightly different thing for many people. A financer will properly look at the business plan from a financial aspect and think of it as a financial plan, while the manager may look at it from an operational point of view.
These people have different viewpoints and 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 need to satisfy all of them.
A good plan isn’t only easy to understand, but different parties are involved in its creation. Many believe it’s just putting words on the paper when it comes to a style. But, keep in mind that this is your selling point and compass for the management.
Try to cover all the important points. Of course, there are many details that one has to think about, but you can always group those details under one of the 4 M’s we mentioned previously.
This brief guide only illustrates important aspects of a business plan, and many will face them for the first time. If you find it hard to follow, download a template and try to answer all the relevant questions and steps we mentioned in this article.