Writing a production business plan requires a thorough analysis of asset needs and capital needs. Since physical products are produced, it is necessary to identify the physical location where production will take place, the type of facilities needed, and the necessary equipment. The business plan needs to also address inventory requirements, and domestic and global distribution channels. Asset and capital needs are outlined in the operating and financial sections of the business plan. It is necessary to demonstrate expert knowledge of the production process to potential investors, who are likely to include banks or finance companies, equity investors, or venture capitalists.
Requirements to the production business plan
In the business plan:
- Describe the product to be produced
- Identify potential production problems and advance preparations to resolve them efficiently
- Describe the industry and where the new production process fits within it
- Explain how potential environmental and other regulatory laws are met
- Describe the suppliers and how the business has ensured it has access to essential materials and suppliers
- Describe the quality control strategies put in place
- Explain the production process itself and demonstrate planning and thoroughness
- Describe the physical location and equipment, and whether it will be purchased or leased
- Describe prototypes produced or to be produced and testing requirements
Also, are there any unusual risks associated with the production process? If so, they need to be carefully outlined in the production business plan to show that all “tees” have been crossed and all “I’s” dotted. Nothing should be left to the imagination in the business plan in that it must have a detailed operating and financing plan that details why this will be a successful operation. Of course, other sections of the business plan will address product distribution channels, marketing strategies, sales goals, and so on. In addition, it is still necessary to explain the market need, what solution is presented through production of the business products, and why the sales projections are reasonable.
OGS Capital professionals have many years of experience working with startup production businesses or companies planning on expanding production activities. Given the typical heavy capital investment required for production processes, the production business plan must include extensive and detailed research of the industry, target market, and competition. It also needs highly accurate operations forecasting for the first five years of business so that investors are comfortable that investment risk has been minimized. Completing the simple online OGS Capital form will put you in touch with a consultant who can help you through the business plan process.
Illustrative business plan samples
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.