Production plan in a business plan: description, functions, content

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

A document that gives the project a detailed rationale, as well as the opportunity to evaluate the comprehensively made decisions and planned activities as highly effective and allows you to answer positively the question of whether the project is worth investing money - the production plan. The business plan should reflect almost all the actions that will be needed when setting up production.

Functions

Firstly, you need to show that the service or product will definitely find a consumer, calculate the capacity of the sales market and draw up a long-term plan for its development. Secondly, it is necessary to accurately estimate the costs that will be necessary in the manufacture and sale of products or the provision of services or works on the market. Thirdly, it is necessary to determine the profitability of production in the future, showing all its effectiveness for the investor (enterprise), for the state, regional andlocal budget. And the production plan will help the entrepreneur in this. The business plan also contains its main functions.

1. It should be a tool through which the entrepreneur evaluates the actual results of a certain period of activity.

2. A production plan is also used in developing the concept of a promising business. The business plan has all the tools to attract investment.

3. The company's strategy is also implemented with its help.

Contents

In the planning process, the most important stage is the production plan. The business plan should contain everything necessary both for planning within the company and for substantiating the subsidizing of the enterprise from external sources, that is, money is received for a specific project - these are bank loans, budget allocations, equity participation of other enterprises for the implementation of the project.

That is why it is necessary to reflect absolutely all aspects of commercial and production activities and the financial results of the enterprise. The structure of this document is subject to unification according to the standards that any production plan provides. The business plan (an example will be given below) should contain certain sections. For clarity, let's take a standard sample.

CV

The first section is an overview. This is a resume. It is the most important, because it briefly reflects the essence of this project. Almost all success depends on the content of the first section, onwhat exactly is the production plan in the business plan. An example of refusal to cooperate after getting acquainted with the resume of an entrepreneur can be cited far from one. The first section should generate interest in the venture among potential investors.

The resume must include the following items. First of all - the purpose of this project and a brief description of the company. Then, also briefly outlined the most attractive points and positive aspects of the business idea that is proposed (here you need to select facts from all other sections, the business plan of a manufacturing enterprise is always drawn up like this). Next, indicate the volume of attracted credit resources and investments with the main financial indicators that can characterize the effectiveness of this project. Be sure to indicate the expected timing of the repayment of borrowed funds. List the dates and numbers of certificates and patents received. It is recommended to finish the summary with facts that confirm the economic and legal guarantees and the reliability of the future enterprise.

Description of the enterprise

The second section is devoted to a detailed description of the planned enterprise. This is not yet the production section of the business plan, but many points from there have been moved here in a compressed form - they seem to anticipate the gradual disclosure of the attractiveness of this object.

1. Profile: service sector, or trade, or production, the nature of the company and its main activities.

2. Business and its stagedevelopment.

3. The main goals of creating an enterprise, all its organizational and legal norms.

4. Offers with which the company will reach its customers.

5. If the company already exists, then you need to submit all the main economic and technical indicators for the past 5 years.

6. Today's geographical boundaries of activity and in the future.

7. Detailed coverage of competitiveness indicators: all services, products of similar enterprises for specific periods and markets.

8. Explain how this company differs from all the others in this profile.

Description of activity

In the third section, the business plan for production activities contains a detailed physical description of the services or products with the possibilities of their use. It is necessary to indicate all the most attractive aspects of the products and services that will be offered, to indicate the degree of their novelty.

It is very important to indicate the degree of readiness of the offered services or products to enter the markets (information from those consumers or experts who have familiarized themselves with the products and can give a written favorable review about them will be very appropriate here).

Marketing strategy

In the fourth section, the production plan of the business project should contain a detailed market analysis, it is also necessary to outline your own marketing strategy. The purpose of such an analysis is to clarify how the future business intends to affect the existingthe market, how it will react to the situation that is developing there, so that the sale of goods or services is ensured. This is primarily the definition of capacity and demand, analysis of competition and many other factors of influence. As a result of market research, sales forecasts should be given. Everything related to sales promotion, pricing, product promotion, that is, the entire sales strategy, including advertising, is relevant here.

There are many components to a marketing strategy. This is the result of market segmentation and new technologies, the pricing strategy for goods and services of the enterprise and price forecasts, market coverage, assortment development, resource strategy, the right choice of methods and methods for distributing products, stimulating its sales, advertising strategy and development prospects for this enterprise.

Production plan

In a business project, the production plan is the most meaningful part of it. The development of a production plan (business plan) begins with a general approach to organizing production: you need to indicate what materials and raw materials are needed, where their sources are and what are the conditions of supply. Next: describe the technological processes of the entire production with the necessary equipment and the designation of its capacity, list the labor resources and all the requirements in this regard (administrative, engineering, production personnel), indicating not only working conditions, but also the structure and composition of departments, including training and anticipated changes as development progressescompany.

A plan should also be drawn up for the renewal of manufactured products, describing scientific approaches, principles, systems, methods, technologies, justification of investment projects from the technical and economic side, indicators of competitiveness, resource intensity and product quality of competitors and this enterprise. There must be an R&D (research and development) plan.

In addition, the manufacturing business plan should include a section on product sales. Be sure to address the following questions:

1. Calculations of the production capacity of all departments of a given enterprise.

2. Operational calendar plans for product sales.

3. Detailed capacity utilization analysis.

The production section of the business plan should include sections relating to the technical level of the enterprise and its improvement, the organizational level in production, the development of the team in social terms, and a list of environmental protection measures is required. And finally - investment projects for the development of production. This is accompanied by work schedules with a list of the main stages of the implementation of the presented project, funding needs for implementation (in stages), a reflection of the planned time frame for work at each stage.

A section on production support is introduced into the production plan of business planning, with an analysis of efficiencyuse of resources and calculation of needs in their types. In terms of material and technical support of the enterprise, information management and regulatory and methodological support of activities, there should also be appropriate sections.

Organization and management

The seventh section of the business plan includes a description or listing with a brief description of all the main participants in the planned enterprise. This is the entrepreneur himself and his partners, investors, the board of directors and employees in key positions. A scheme of the organization of the company with all internal communications and division of responsibility should be presented, the procedure for selecting and training employees, as well as remuneration for their work.

The implementation of the business plan provides for such important points as the development, coordination and approval of programs for the implementation of the drawn up strategic plans. Accounting and control over the implementation of plans should be organized, as well as motivation for the plan to be implemented clearly on time, without losing the required quality and without increasing costs. The process of implementing the business plan must be adjusted if there are changes in the internal or external environment of the new production.

Finance

The eighth section of the business plan, consistent with the materials that were presented in all other parts of it, with generalizations and the provision of a cost expression for each section, is financial, and therefore it should include a forecast of sales volumes, a balance of income and expenses in monetary terms, financi althe budget of the entire enterprise and the forecast balance.

In addition, the financial section should present the operating budget of the company, its insurance, risk management, forecast for operations with securities, indicate the main indicators of the project in terms of its effectiveness, and this is the payback period and net present value, and internal rates of return, and profitability.

Risks

The ninth section is devoted to assessing the risks most likely for a given project, and, perhaps, a more accurate forecast of what these risks may result in in the event of force majeure.

Here, answers should be given to minimize risks and possible losses due to them. Usually in a business plan they are divided into two parts: the first describes organizational measures to prevent any risks, and the second describes a program of self-insurance or external insurance.

Second option

There are examples of a business plan with a more extended eighth and additional ninth and tenth sections. Regarding the financial plan, we can say that it is simply somewhat expanded. It reflects monthly, quarterly and for each year the change in the exchange rate of the dollar against the ruble, a list and tax rates are given, and ruble inflation is outlined. Information is given in detail on the formation of capital through loans, equity issues or equity, as well as the procedure for paying these loans and interest on them.

There are three main documents in the financial section: profit and loss statement (operatingactivities of the enterprise for each period), a plan for the movement of finances and a balance sheet on the financial condition of the enterprise at the moment. Attached: expected repayment schedules for interest-bearing loans, information indicating the assumptions and changes in working capital and payment of taxes. Additionally, calculations of solvency, liquidity and projected project efficiency are usually attached.