6 elements your manufacturing business plan needs
Operating a manufacturing business without a plan is somewhat like getting into a car, shutting your eyes and starting to drive. You just wouldn’t do it, and if you did, you’d likely not survive for long.
I recently raised this topic with an associate who has two decades of experience working in and with large organisations. We discussed at length the merits of planning and scheduling in business.
Given that most of his clients have been large publicly listed organisations, I was astounded to hear, that in his experience, large organisations do not differ significantly from small and medium-sized enterprises; there is routinely an absence of business planning and deployment through the organisation.
Business planning – is it really worth it?
So, in the 21st century, is there really any need for businesses to plan? Surely with the pace of change continuing to accelerate, doesn’t planning take a business’ most valuable resources away from getting on with responding to the rapidly-evolving environment in which they operate?
Now, more than ever – an organisation’s ability to identify their strategy – their reason for existing and then be deliberate in how they go about operating their business every day, week, month and year (planning), is crucial to surviving and thriving in an increasingly reactive world.
The business plan:
So, with that being said, what elements should a business plan contain?
Purpose – why does the business exist?
A manufacturing business plan must include the purpose – a recognition of why the business exists in the first place. This helps an organisation remain aligned with why they do what they do.
It is not about the dollars, it’s about what the leaders are passionate about and providing to their best customers. Generally, the purpose remains unchanged over years or until the end of the organisation.
Vision – the business in the future
The vision is a description of the business at a future time. Until recently this has been three to five years, although there is now animated discussion about shorter time frames, such as one to two years, or even longer times – 10 years and more.
The longer time frame provides a better opportunity to respond to the evolving external trends – being open to the quantum of opportunities available to those open to them when they present.
The vision should be revisited regularly, at least yearly; and describes how the business will look from the outside to its customers and from the inside to the team.
Mission – what do you want to achieve?
Put simply, the mission is an expression of the numbers. Ask yourself what you want to achieve – what sales levels, what profit numbers, how many customers, what locations, how many teams?
The best organisations have short, medium- and longer-term numbers, which are used to inspire, motivate and provide feedback regarding how the manufacturing organisation is proceeding toward the overall vision.
Values – be clear and deliberate about how the business operates
Whilst often considered the soft and fluffy stuff of a business, leading organisations, both small and large, are very clear and deliberate about the way the business operates. It provides a set of guiding principles about how the people in the organisation go about doing the work of business.
The business plan must include a clearly documented list of values. The team uses the values to assess their performance and maintain a sense of reality as they respond to the environment in which they are operating.
Priorities – maintain a clear set to achieve improvement
Many businesses stop planning because they get too busy. Experience will show that it is difficult to predict what will happen in the short term.
Those businesses that maintain a longer term perspective of their vision and mission, prioritise the business in the shorter term to drive the business in the right direction. Maintaining a clear set of priorities allows the organisation to focus its resources to achieve improvement and change to take advantage of those opportunities that arise.
Goals – structure to achieve traction
The goals are the short-term activities that define the work of the people in a manufacturing organisation. By focusing the team’s goals on the critical few priorities a business can provide a structure to achieve traction, get the right stuff done and provide a positive feedback about progress in the short term.
A business plan helps focus on bringing goals to reality
Every business should have an up-to-date and functional business plan. It will document where the business is going and how it’s going to get there. It will focus the efforts of the leadership and the rest of the team on the drivers that will bring those goals to reality.
The planning component however is the regular, systemic review of the plan, over time by the right people in the team to ensure it remains relevant, on track and consistent with the purpose, vision and mission of the business.
For manufacturing businesses who may be wrestling with scaling up, general planning or have ongoing stress, I provide business strategy and consulting services that create clarity, drive profitability and deliver work-life balance.
Get in touch to find out how I can support your business or book in for a 60 Minute Growth Session.