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How To Write the Operations Plan Section of the Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Stage of Development Section

Production process section, the bottom line, frequently asked questions (faqs).

The operations plan is the section of your business plan that gives an overview of your workflow, supply chains, and similar aspects of your business. Any key details of how your business physically produces goods or services will be included in this section.

You need an operations plan to help others understand how you'll deliver on your promise to turn a profit. Keep reading to learn what to include in your operations plan.

Key Takeaways

• The operations plan section should include general operational details that help investors understand the physical details of your vision.
• Details in the operations plan include information about any physical plants, equipment, assets, and more.
• The operations plan can also serve as a checklist for startups; it includes a list of everything that must be done to start turning a profit.

In your business plan , the operations plan section describes the physical necessities of your business's operation, such as your physical location, facilities, and equipment. Depending on what kind of business you'll be operating, it may also include information about inventory requirements, suppliers, and a description of the manufacturing process.

Keeping focused on the bottom line will help you organize this part of the business plan.

Think of the operating plan as an outline of the capital and expense requirements your business will need to operate from day to day.

You need to do two things for the reader of your business plan in the operations section: show what you've done so far to get your business off the ground and demonstrate that you understand the manufacturing or delivery process of producing your product or service.

When you're writing this section of the operations plan, start by explaining what you've done to date to get the business operational, then follow up with an explanation of what still needs to be done. The following should be included:

Production Workflow

A high-level, step-by-step description of how your product or service will be made, identifying the problems that may occur in the production process. Follow this with a subsection titled "Risks," which outlines the potential problems that may interfere with the production process and what you're going to do to negate these risks. If any part of the production process can expose employees to hazards, describe how employees will be trained in dealing with safety issues. If hazardous materials will be used, describe how these will be safely stored, handled, and disposed.

Industry Association Memberships

Show your awareness of your industry's local, regional, or national standards and regulations by telling which industry organizations you are already a member of and which ones you plan to join. This is also an opportunity to outline what steps you've taken to comply with the laws and regulations that apply to your industry. 

Supply Chains

An explanation of who your suppliers are and their prices, terms, and conditions. Describe what alternative arrangements you have made or will make if these suppliers let you down.

Quality Control

An explanation of the quality control measures that you've set up or are going to establish. For example, if you intend to pursue some form of quality control certification such as ISO 9000, describe how you will accomplish this.

While you can think of the stage of the development part of the operations plan as an overview, the production process section lays out the details of your business's day-to-day operations. Remember, your goal for writing this business plan section is to demonstrate your understanding of your product or service's manufacturing or delivery process.

When writing this section, you can use the headings below as subheadings and then provide the details in paragraph format. Leave out any topic that does not apply to your particular business.

Do an outline of your business's day-to-day operations, including your hours of operation and the days the business will be open. If the business is seasonal, be sure to say so.

The Physical Plant

Describe the type, site, and location of premises for your business. If applicable, include drawings of the building, copies of lease agreements, and recent real estate appraisals. You need to show how much the land or buildings required for your business operations are worth and tell why they're important to your proposed business.

The same goes for equipment. Besides describing the equipment necessary and how much of it you need, you also need to include its worth and cost and explain any financing arrangements.

Make a list of your assets , such as land, buildings, inventory, furniture, equipment, and vehicles. Include legal descriptions and the worth of each asset.

Special Requirements

If your business has any special requirements, such as water or power needs, ventilation, drainage, etc., provide the details in your operating plan, as well as what you've done to secure the necessary permissions.

State where you're going to get the materials you need to produce your product or service and explain what terms you've negotiated with suppliers.

Explain how long it takes to produce a unit and when you'll be able to start producing your product or service. Include factors that may affect the time frame of production and describe how you'll deal with potential challenges such as rush orders.

Explain how you'll keep  track of inventory .

Feasibility

Describe any product testing, price testing, or prototype testing that you've done on your product or service.

Give details of product cost estimates.

Once you've worked through this business plan section, you'll not only have a detailed operations plan to show your readers, but you'll also have a convenient list of what needs to be done next to make your business a reality. Writing this document gives you a chance to crystalize your business ideas into a clear checklist that you can reference. As you check items off the list, use it to explain your vision to investors, partners, and others within your organization.

What is an operations plan?

An operations plan is one section of a company's business plan. This section conveys the physical requirements for your business's operations, including supply chains, workflow , and quality control processes.

What is the main difference between the operations plan and the financial plan?

The operations plan and financial plan tackle similar issues, in that they seek to explain how the business will turn a profit. The operations plan approaches this issue from a physical perspective, such as property, routes, and locations. The financial plan explains how revenue and expenses will ultimately lead to the business's success.

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Production Plan in Business Plan: A Comprehensive Guide to Success

Last Updated:  

May 20, 2024

In any business venture, a solid production plan is crucial for success. A production plan serves as a roadmap that outlines the steps, resources, and strategies required to manufacture products or deliver services efficiently. By carefully crafting a production plan within a business plan, entrepreneurs can ensure optimal utilisation of resources, timely delivery, cost efficiency, and customer satisfaction. In this article, we will delve into the intricacies of creating an effective production plan in a business plan , exploring its key components, strategies, and the importance of aligning it with overall business objectives .

Key Takeaways on Production Plans in Business Planning

• A production plan : a detailed outline that guides efficient product manufacturing or service delivery.
• Importance of a production plan : provides a roadmap for operations, optimises resource utilisation, and aligns with customer demand.
• Key components : demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance.
• Strategies : lean manufacturing, JIT inventory, automation and technology integration, supplier relationship management, and continuous improvement.
• Benefits of a well-executed production plan : improved efficiency, reduced costs, enhanced product quality, and increased profitability.

What is a Production Plan?

A production Seamless Searches plan is a detailed outline that specifies the processes, resources, timelines, and strategies required to convert raw materials into finished goods or deliver services. It serves as a blueprint for the entire production cycle, guiding decision-making and resource allocation. The production plan considers factors such as demand forecasting, capacity planning, inventory management, and quality assurance to ensure efficient operations and optimal customer satisfaction.

Why is a Production Plan Important in a Business Plan?

The inclusion of a production plan in a business plan is vital for several reasons. First and foremost, it provides a clear roadmap for business operations, helping entrepreneurs and managers make informed decisions related to production processes. A well-developed production plan ensures that resources are utilised efficiently, minimising wastage and optimising productivity.

Additionally, a production plan allows businesses to align their production capabilities with customer demand. By forecasting market trends and analysing customer needs, businesses can develop a production plan that caters to current and future demands, thus avoiding overstocking or understocking situations.

Furthermore, a production plan helps businesses enhance their competitive advantage. By implementing strategies such as lean manufacturing and invoice automation , companies can streamline their production processes, reduce costs, improve product quality, and ultimately outperform competitors.

Key Components of a Production Plan

To create an effective production plan, it is crucial to consider several key components. These components work together to ensure efficient operations and successful fulfilment of customer demands. Let's explore each component in detail.

Demand Forecasting

Demand forecasting is a critical aspect of production planning. By analysing historical data, market trends, and customer behaviour, businesses can predict future demand for their products or services. Accurate demand forecasting allows companies to optimise inventory levels, plan production capacity, and ensure timely delivery to customers.

One approach to demand forecasting is quantitative analysis, which involves analysing historical sales data to identify patterns and make predictions. Another approach is qualitative analysis, which incorporates market research, customer surveys, and expert opinions to gauge demand fluctuations. By combining both methods, businesses can develop a robust demand forecast, minimising the risk of underproduction or overproduction. Utilising a free notion template for demand forecasting can further streamline this process, allowing businesses to organise and analyse both quantitative and qualitative data efficiently in one centralised location.

Capacity Planning

Capacity planning involves determining the optimal production capacity required to meet projected demand. This includes assessing the production capabilities of existing resources, such as machinery, equipment, and labour, and identifying any gaps that need to be addressed. By conducting a thorough capacity analysis, businesses can ensure that their production capacity aligns with customer demand, avoiding bottlenecks or excess capacity.

An effective capacity plan takes into account factors such as production cycle times, labour availability, equipment maintenance, and production lead times. It helps businesses allocate resources efficiently, minimise production delays, and maintain a consistent level of output to meet customer expectations.

Inventory Management

Efficient inventory management is crucial for a successful production plan. It involves balancing the cost of holding inventory with the risk of stockouts. By maintaining optimal inventory levels, businesses can reduce carrying costs while ensuring that sufficient stock is available to fulfil customer orders.

Inventory management techniques, such as the Economic Order Quantity (EOQ) model and Just-in-Time (JIT) inventory system, help businesses strike the right balance between inventory investment and customer demand. These methods consider factors such as order frequency, lead time, and carrying costs to optimise inventory levels and minimise the risk of excess or insufficient stock.

Resource Allocation

Resource allocation plays a pivotal role in a production plan. It involves assigning available resources, such as labour, materials, and equipment, to specific production tasks or projects. Effective resource allocation ensures that resources are utilised optimally, avoiding underutilisation or overutilisation.

To allocate resources efficiently, businesses must consider factors such as skill requirements, resource availability, project timelines, and cost constraints. By conducting a thorough resource analysis and implementing resource allocation strategies, businesses can streamline production processes, minimise bottlenecks, and maximise productivity.

Quality Assurance

Maintaining high-quality standards is essential for any production plan. Quality assurance involves implementing measures to monitor and control the quality of products or services throughout the production process. By adhering to quality standards and conducting regular inspections, businesses can minimise defects, ensure customer satisfaction, and build a positive brand reputation.

Quality assurance techniques, such as Total Quality Management (TQM) and Six Sigma , help businesses identify and rectify any quality-related issues. These methodologies involve continuous monitoring, process improvement, and employee training to enhance product quality and overall operational efficiency.

In addition to the core components of a production plan, it's also important for businesses to consider the broader aspects of their business strategy, including marketing and advertising. Understanding the costs and returns of different marketing approaches is crucial for comprehensive business planning. For instance, direct response advertising costs can vary significantly, but they offer the advantage of measurable responses from potential customers. This type of advertising can be a valuable strategy for businesses looking to directly engage with their target audience and track the effectiveness of their marketing efforts.

Strategies for Developing an Effective Production Plan

Developing an effective production plan requires implementing various strategies and best practices. By incorporating these strategies into the production planning process, businesses can optimise operations and drive success. Let's explore some key strategies in detail.

Lean Manufacturing

Lean manufacturing is a systematic Seamless Searches approach aimed at eliminating waste and improving efficiency in production processes. It emphasises the concept of continuous improvement and focuses on creating value for the customer while minimising non-value-added activities.

By adopting lean manufacturing principles, such as just-in-time production, standardised work processes, and visual management, businesses can streamline operations, reduce lead times, and eliminate unnecessary costs. Lean manufacturing not only improves productivity but also enhances product quality and customer satisfaction.

Just-in-Time (JIT) Inventory

Just-in-Time (JIT) inventory is a strategy that aims to minimise inventory levels by receiving goods or materials just when they are needed for production. This strategy eliminates the need for excess inventory storage, reducing carrying costs and the risk of obsolete inventory.

By implementing a JIT inventory system, businesses can optimise cash flow, reduce storage space requirements, and improve overall supply chain efficiency. However, it requires robust coordination with suppliers, accurate demand forecasting, and efficient logistics management to ensure timely delivery of materials.

Automation and Technology Integration

Automation and technology integration play a crucial role in modern production planning, as well as mobile app development . By leveraging technology, businesses can streamline processes, enhance productivity, and reduce human error. Automation can be implemented in various aspects of production, including material handling, assembly, testing, and quality control.

Continuous Improvement

Continuous improvement is a fundamental principle of effective production planning. It involves regularly evaluating production processes, identifying areas for improvement, and implementing changes to enhance efficiency and quality.

By fostering a culture of continuous improvement, businesses can drive innovation, optimise resource utilisation, and stay ahead of competitors. Techniques such as Kaizen, Six Sigma, and value stream mapping can help businesses identify inefficiencies, eliminate waste, and streamline production workflows.

Frequently Asked Questions (FAQs)

What is the role of a production plan in business planning.

A1: A production plan plays a crucial role in business planning by providing a roadmap for efficient production processes. It helps align production capabilities with customer demand, optimise resource utilisation, and ensure timely delivery of products or services.

How does a production plan affect overall business profitability?

A2: A well-developed production plan can significantly impact business profitability. By optimising production processes, reducing costs, and enhancing product quality, businesses can improve their profit margins and gain a competitive edge in the market.

What are the common challenges faced in production planning?

A3: Production planning can present various challenges, such as inaccurate demand forecasting, capacity constraints, supply chain disruptions, and quality control issues. Overcoming these challenges requires robust planning, effective communication, and the implementation of appropriate strategies and technologies.

What is the difference between short-term and long-term production planning?

A4: Short-term production planning focuses on immediate production requirements, such as daily or weekly schedules. Long-term production planning, on the other hand, involves strategic decisions related to capacity expansion, technology investments, and market expansion, spanning months or even years.

How can a production plan be adjusted to accommodate changes in demand?

A5: To accommodate changes in demand, businesses can adopt flexible production strategies such as agile manufacturing or dynamic scheduling. These approaches allow for quick adjustments to production levels, resource allocation, and inventory management based on fluctuating customer demand.

In conclusion, a well-crafted production plan is essential for business success. By incorporating a production plan into a comprehensive business plan, entrepreneurs can optimise resource utilisation, meet customer demands, enhance product quality, and drive profitability. Through effective demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance, businesses can streamline production processes and gain a competitive edge in the market.

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How to Write an Operations Plan Section of your Business Plan

Free Operations Plan Template

Ayush Jalan

• December 14, 2023

Your business plan is an elaborate set of instructions stating how to run your business to achieve objectives and goals. Each section describes a part of the process of reaching your desired goal. Similarly, the operations plan section of your business plan explains the production and supply of your product.

An operations plan is formed to turn plans into actions. It uses the information you gathered from the analysis of the market , customers, and competitors mentioned in the previous parts of your business plan and allows for the execution of relevant strategies to achieve desired results.

What Is an Operations Plan?

An operations plan is an in-depth description of your daily business activities centered on achieving the goals and objectives described in the previous sections of your business plan. It outlines the processes, activities, responsibilities of various departments and the timeframe of the execution.

The operations section of your business plan explains in detail the role of a team or department in the collective accomplishment of your goals. In other words, it’s a strategic allocation of physical, financial, and human resources toward reaching milestones within a specific timeframe.

A well-defined operational plan section of your business plan should be able to answer the following questions:

• Who is responsible for a specific task or department?
• What are the tasks that need to be completed?
• Where will these operations take place?
• When should the tasks be completed? What are the deadlines?
• How will the tasks be performed? Is there a standard procedure?
• How much is it going to cost to complete these tasks?

How to Write an Operations Plan Section?

Creating an operational plan has two major stages, both addressing different aspects of your company. The first stage includes the work that has been done so far, whereas the second stage describes it in detail.

1. Development Phase

In this stage, you mention what you’ve done to get your business operations up and running. Explain what you aim to change and improvise in the processes. These are the elements your development section will contain:

Production workflow

: Explain all the steps involved in creating your product. This should be a highly informative, elaborate description of the steps. Here, you also mention any inefficiencies that exist and talk about the actions that need to be taken to tackle them.

Supply chains

Quality control, 2. manufacturing phase.

The development stage acquaints the reader with the functioning of your business, while the manufacturing stage describes the day-to-day operation.

This includes the following elements:

Outline of daily activities:

Tools and equipment:, special requirements:, raw materials:, productions:, feasibility:, why do you need an operations plan.

An operations plan is essentially an instruction manual about the workings of your business. It offers insight into your business operations. It helps investors assess your credibility and understand the structure of your operations and predict your financial requirements.

An operations plan reflects the real-time application of a business plan.

Internally, an operations plan works as a guide, which helps your employees and managers to know their responsibilities. It also helps them understand how to execute their tasks in the desired manner—all whilst keeping account of deadlines.

The operations plan helps identify and cut the variances between planned and actual performance and makes necessary changes. It helps you visualize how your operations affect revenue and gives you an idea of how and when you need to implement new strategies to maximize profits.

Advantages of Preparing an Operations Plan:

• Offers Clarity: Operational planning, among other things, makes sure that everyone in the audience and team are aware of the daily, weekly, and monthly work. It improves concentration and productivity.
• Contains A Roadmap: Operational planning makes it much easier to reach long-term objectives. When members have a clear strategy to follow: productivity rises, and accountability is maintained.
• Sets A Benchmark: It sets a clear goal for everyone about what is the destination of the company and how to reach there.

Operations Plan Essentials

Now that you have understood the contents of an operations plan and how it should be written, you can continue drafting one for your business plan. But before doing so, take a look at these key components you need to remember while creating your operational plan.

• Your operations plan is fundamentally a medium for implementing your strategic plan. Hence, it’s crucial to have a solid strategic plan to write an effective operations plan.
• Focus on setting SMART goals and prioritizing the most important ones. This helps you create a clear and crisp operations plan. Focusing on multiple goals will make your plan complicated and hard to implement.
• To measure your goals, use leading indicators instead of lagging indicators. Leading indicators is a metric that helps you track your progress and predict when you will reach a goal. On the other hand, lagging indicators can only confirm a trend by taking the past as input but cannot predict the accomplishment of a goal.
• It is essential to choose the right Key Performance Indicators (KPIs) . It is a good practice to involve all your teams while you decide your KPIs.
• An operations plan should effectively communicate your goals, metrics, deadlines, and all the processes.

Now you’re all set to write an operations plan section for your business plan. To give you a headstart, we have created an operations plan example.

Operations Plan Example

Operations plan by a book publishing house

Track and Accomplish Goals With an Operations Plan

Drafting the operations plan section of your business plan can be tricky due to the uncertainties of the business environment and the risks associated with it. Depending on variables like your market analysis, product development, supply chain, etc., the complexity of writing an operations plan will vary.

The core purpose here is to put all the pieces together to create a synergy effect and get the engine of your business running. Create an effective operations plan to convey competence to investors and clarity to employees.

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Frequently Asked Questions

What role does the operations plan play in securing funding for a business.

The operations plan defines the clear goals of your business and what actions will be taken on a daily basis to reach them. So, investors need to know where your business stands, and it will prove the viability of the goals helping you in getting funded.

What are the factors affecting the operations plan?

• The mission of the company
• Goals to be achieved
• Finance and resources your company will need

Can an operations plan be created for both start-up and established businesses?

Yes, both a startup and a small business needs an operations plan to get a better idea of the roadmap they want for their business.

About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

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Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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• Grasshopper

Operations Plan

• Lesson Materials Operations Plan Worksheet
• Completion time About 40 minutes

The operations section of your business plan is where you explain – in detail – you company's objectives, goals, procedures, and timeline. An operations plan is helpful for investors, but it's also helpful for you and employees because it pushes you to think about tactics and deadlines.

In the previous course, you outlined your company's strategic plan, which answers questions about your business mission. An operational plan outlines the steps you'll take to complete your business mission.

Your operations plan should be able to answer the following:

• Who – The personnel or departments who are in charge of completing specific tasks.
• What – A description of what each department is responsible for.
• Where – The information on where daily operations will be taking place.
• When –The deadlines for when the tasks and goals are to be completed.
• How much – The cost amount each department needs to complete their tasks.

In this session, we explain each item to include in your operations plan.

Goals and Objectives

The key to an operations plan is having a clear objective and goal everyone is focused on completing. In this section of your plan, you'll clearly state what your company's operational objective is.

Your operational objective is different than your company's overall objective. In Course One , you fleshed out what your strategic objective was. Your operational objective explains how you intend to complete your strategic objective.

In order to create an efficient operational objective, think SMART:

• Specific – Be clear on what you want employees to achieve.
• Measurable – Be able to quantify the goal in order to track progress.
• Attainable & Realistic – It's great to be ambitious but make sure you aren't setting your team up for failure. Create a goal that everyone is motivated to complete with the resources available.
• Timely – Provide a deadline so everyone has a date they are working towards.

Different departments will have different operational objectives. However, each department objective should help the company reach the main objective. In addition, operational objectives change; the objectives aren't intended to be permanents or long term. The timeline should be scheduled with your company's long-term goals in mind.

Let's look at the following example for a local pizza business objective:

• Strategic objective : To deliver pizza all over Eastern Massachusetts.
• Technology department operational objective : To create a mobile app by January 2017 to offer a better user experience.
• Marketing department operational objective : To increase website visitors by 50% by January 2017 by advertising on radio, top local food websites, and print ads.
• Sales department operational objective : To increase delivery sales by 30%, by targeting 3 of Massachusetts's largest counties.

Sales department operational objective: To increase delivery sales by 30%, by targeting 3 of Massachusetts's largest counties.

Production Process

After you create your objectives, you have to think strategically on how you're going to meet them. In order to do this, each department (or team) needs to have all the necessary resources for the production process.

Resources you should think about include the following:

• Suppliers – do you have a supplier (or more) to help you produce your product?
• Technology team: app developing software
• Marketing team: software licenses for website analytical tools
• Sales team: headsets, phone systems or virtual phone system technology
• Cost – what is the budget for each department?

In addition to the production process, you'll also need to describe in detail your operating process. This will demonstrate to investors that you know exactly how you want your business to run on a day-to-day basis.

Items to address include:

• Location – where are employees working? Will you need additional facilities?
• Work hours – will employees have a set schedule or flexible work schedule?
• Personnel – who is in charge of making sure department tasks are completed?

Creating a timeline with milestones is important for your new business. It keeps everyone focused and is a good tracking method for efficiency. For instance, if milestones aren’t being met, you'll know that it's time to re-evaluate your production process or consider new hires.

Below are common milestones new businesses should plan for.

When you completed your Management Plan Worksheet in the previous course, you jotted down which key hires you needed right away and which could wait. Make sure you have a good idea on when you would like those key hires to happen; whether it’s after your company hits a certain revenue amount or once a certain project takes off.

Production Milestones

Production milestones keep business on track. These milestones act as "checkpoints" for your overall department objectives. For instance, if you want to create a new app by the end of the year, product milestones you outline might include a beta roll out, testing, and various version releases.

Other product milestones to keep in mind:

• Design phase
• Product prototype phase
• Product launch
• Version release

Market Milestones

Market milestones are important for tracking efficiency and understanding whether your operations plan is working. For instance, a possible market milestone could be reaching a certain amount of clients or customers after a new product or service is released.

A few other market milestones to consider:

• Gain a certain amount of users/clients by a certain time
• Signing partnerships
• Running a competitive analysis
• Performing a price change evaluation

Financial Milestones

Financial milestones are important for tracking business performance. It's likely that a board of directors or investors will work with you on creating financial milestones. In addition, in startups, it's common that financial milestones are calculated for 12 months.

Typical financial milestones include:

• Funding events
• Revenue and profit goals
• Transaction goals

In summary, your operations plan gives you the chance to show investors you know how you want your business to run. You know who you want to hire, where you want to work, and when you expect projects to be completed.

Download the attached worksheet and start putting your timelines and milestones together on paper.

Talk about this lesson

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

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One-page plan template

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Sample business plan library

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Production Company Business Plan Template

Written by Dave Lavinsky

Production Company Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their production companies.

If you’re unfamiliar with creating a production company business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a production company business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Production Company Business Plan?

A business plan provides a snapshot of your production company as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Production Company

If you’re looking to start a production company or grow your existing production company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your production company to improve your chances of success. Your production company business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Production Companies

With regards to funding, the main sources of funding for a production company are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for production companies.

Finish Your Business Plan Today!

How to write a business plan for a production company.

If you want to start a production company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your production company business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of production company you are running and the status. For example, are you a startup, do you have a production company that you would like to grow, or are you operating a chain of production companies?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the production industry.
• Discuss the type of production company you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of production company you are operating.

For example, your production company might specialize in one of the following types of production companies:

• Feature Film Production Company : this type of production company handles all of the necessities that go with producing a major film – hiring on-screen and off-screen talent, writers, musicians, location scouts, a team for pre-production, post-production, legal, etc.
• Commercial Production Company: this type of production company can produce stock footage, short corporate videos, training videos, and creative projects such as music videos and short films
• Post Production Company: this type of production company handles video editing, special effects, color correction, sound mixing, and editing to eventually produce the final video.
• Niche Production Company: this type of production company focuses on one specific niche that it has perfected. They often combine the best of animation, commercial, and post-production companies.

In addition to explaining the type of production company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of films with positive reviews, reaching X number of clients served, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the production industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the production industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your production company business plan:

• How big is the production industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your production company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your production company business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, companies, filmmakers, studios.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of production company you operate. Clearly, small businesses would respond to different marketing promotions than filmmakers, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Production Company Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other production companies.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes social media platforms, web developers, apps and even college or university students. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of clients do they serve?
• What type of production company are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide concierge services or customized packages for your clients?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a production company business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f production company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide video editing, music editing, pre-production, or post-production services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your production company. Document where your company is situated and mention how the site will impact your success. For example, is your production company located in New York or Los Angeles, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your production company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Be part of filmmaker associations and networks
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your production company , including client communication and interaction, planning and producing production services, billing clients, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your production company to a new city.  

Management Team

To demonstrate your production company’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing production companies. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a production company or successfully running a small filmmaking company.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you book 5 films or videos per day, and/or offer production packages ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your production company, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a production company:

• Cost of equipment and production studio supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your studio location lease or a list of production services you plan to offer.  

Writing a business plan for your production company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the production industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful production company.  

Production Company Business Plan FAQs

What is the easiest way to complete my production company business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your production company business plan.

How Do You Start a Production Company Business?

Starting a production company business is easy with these 14 steps:

• Choose the Name for Your Production Company Business
• Create Your Production Company Business Plan
• Choose the Legal Structure for Your Production Company Business
• Secure Startup Funding for Your Production Company Business (If Needed)
• Secure a Location for Your Business
• Register Your Production Company Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Production Company Business
• Buy or Lease the Right Production Company Business Equipment
• Develop Your Production Company Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Production Company Business
• Open for Business

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to hire someone to write a business plan for you from Growthink’s team.

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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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What Is Production Planning & Why Is It Important?

Business success often hinges on making the products that customers want in a timely and cost-effective way. Production planning helps companies achieve those goals. It maps out all the processes, resources and steps involved in production, from forecasting demand to determining the raw materials, labor and equipment needed. Production planning helps companies build realistic production schedules, ensure production processes run smoothly and efficiently, and adjust operations when problems occur.

What Is a Production Plan?

A production plan describes in detail how a company’s products and services will be manufactured. It spells out the production targets, required resources, processes and overall schedule. The plan also maps all of the operational steps involved and their dependencies. The goal is to design the most efficient way to make and deliver the company’s products at the desired level of quality. A well-designed production plan can help companies increase output and save money by developing a smoother workflow and reducing waste.

What Is Production Planning?

Production planning involves developing a comprehensive strategy for making the company’s products and services. Initially adopted by large manufacturers, production planning has since become more popular among small and midsize businesses in multiple industries — largely because technology has made it easier to plan and track production processes with less effort. Production planning covers many different aspects of production, from forecasting demand to determining the raw materials, workforce, equipment and steps needed to make the company’s products.

Production Planning vs. Production Scheduling

While production planning provides an overview of what the company plans to do, production scheduling creates a more detailed view of exactly how the company will do it. The production schedule describes when each step in the production plan will occur, as well as the workers, machinery and other specific resources assigned to the job. Production scheduling can be extremely complex, especially when there are many interdependent production steps and the company is making multiple products simultaneously. Production scheduling software (opens in new tab) can help businesses create complex schedules, monitor progress in real time and quickly make adjustments when necessary.

Key Takeaways

• Production planning describes in detail how a company’s products and services will be manufactured.
• A production plan defines the production targets, required resources and overall schedule, together with all the steps involved in production and their dependencies.
• A well-designed production plan helps companies deliver products on time, reduce costs and respond to problems.
• Technology has made it easier for small and midsize companies in multiple industries to use production planning to optimize operations.

Product Planning Explained

Production planning is a broad discipline that involves much more than a focus on manufacturing process efficiency. It is intertwined with nearly every other aspect of the business, including finance, sales, inventory and human resources. Production planning activities include demand forecasting to determine the right mix of products to meet customer needs, as well as selecting the optimal approach to building those products. Production planning also assesses the resources needed to meet production goals and lays out in detail all the operations in the production process. Production plans must include the flexibility to make operational adjustments when problems occur — such as machine breakdowns, staffing shortages and supply-chain problems.

Why Is Production Planning Important?

A well-constructed production plan can help to boost revenue, profit and customer satisfaction, while a poorly designed plan can cause production problems and perhaps even sink the company. Specific benefits of production planning include:

• Knowledge. A production plan provides a framework for understanding the resources and production steps required to meet customer needs. It also helps companies understand the potential problems that may occur during production and how to mitigate them.
• Efficiency. Detailed production planning reduces bottlenecks and helps minimize costs. It also helps ensure the high quality of a product, and it keeps expenses on budget.
• Customer satisfaction. Production planning helps ensure that the company can make and deliver products to customers on time, leading to higher customer satisfaction and a greater likelihood of repeat business.

Types of Production Planning

The design of a product plan depends on the production method that the company uses, as well as other factors, such as product type, equipment capabilities and order size. Here are three of the main types of production planning:

Batch production planning.

Refers to manufacturing identical items in groups rather than one at a time or in a continuous process. For some businesses, batch production can greatly increase efficiency. A bakery creating items for sale the next day might first make a batch of chocolate chip cookies, then move on to oatmeal raisin cookies followed by loaves of semolina bread. A clothing manufacturer making goods for the summer might first set up its cutting and sewing machines to make 500 navy-blue T-shirts, then switch to red fabric and thread to make 400 tank tops. A good production plan for batch processing should look out for potential bottlenecks or delays when switching between batches.

Job- or project-based planning.

Used by many small- and medium-sized businesses, job production planning focuses on the creation of a single item by one person or team. Job-based planning is typically used where the specificity of each client’s requirements means it is difficult to make products in bulk. Many construction businesses use this method. Makers of custom jewelry and dresses are other examples of businesses that may use job production planning.

Flow production planning.

In flow production, also known as continuous production, standardized items are continuously mass-produced on an assembly line. Large manufacturers use this method to create a constant stream of finished goods. During production, each item should move seamlessly from one step along the assembly line to the next. Flow production is most effective at reducing costs and delays when there’s steady demand for the company’s products. Manufacturers can then readily determine their needs for equipment, materials and labor at each stage along the assembly line to help streamline production and avoid delays. The automotive industry and makers of canned foods and drinks are among the companies that use this method.

5 Steps to Make a Production Plan

Production planning is a robust undertaking that starts with forecasting and includes process design and monitoring. Here are five typical production planning steps:

Forecast product demand.

Estimate how much of each product you’ll need to produce over a designated period. Historical data can help with forecasting, but you’ll also need to pay attention to other factors that can affect demand, such as market trends and the economic situation for your customer base. Demand planning software can help companies make more informed decisions about the right amount of product needed to meet demand.

Map out production steps and options.

This step determines the processes, steps and resources needed to produce the required output. At this stage, the company may also examine different options for achieving its production goals, such as outsourcing some stages. The production mapping identifies which steps are interdependent and which can be performed simultaneously. Let’s say the job is to produce 1,000 children’s bicycles. Manufacturing the bicycle frames consists of a series of steps that must happen in sequence — cutting metal tubes, welding and painting — while other activities like assembling wheels can occur in parallel. Do you have all the right equipment? What happens if a machine breaks down? Are your suppliers able to meet your demand?

Choose a plan and schedule production.

Select a production plan after comparing the cost, time required and risks for each option. Sharing the selected plan with all necessary stakeholders typically helps assure a smoother production process since all the stakeholders are aware of what’s needed. Create a detailed production schedule that lays out in detail how the company will execute the plan, including the resources and timing for each step.

Monitor and control.

Once production has begun, you’ll need to track performance and continually compare it against the targets described in the production plan. Careful monitoring helps the company to detect any issues as soon as they pop up, so they can be quickly addressed.

Adjust accordingly.

It’s almost inevitable that production will be affected by events that you can’t plan for or predict. Those events can include changes to client specifications, supply chain lags, equipment failures and worker illness. You may also see ways to improve the production plan after seeing it in action for a while. So it’s vital to keep production plans flexible enough to allow for adjustment when needed. Football coaches often make adjustments to their game strategy at halftime — and the same holds true for production planning.

3 Common Product Planning Mistakes

Being aware of potential pitfalls ahead of time can help companies avoid or mitigate problems once production has started. Here are three of the most common production planning mistakes.

Not anticipating hiccups along the way.

In any complex production process, plans can go awry. Production planning should therefore include risk management strategies, including backup plans companies can rely on in the event of problems. Failing to do so can result in serious problems. For example, if a machine breaks on the line and you didn’t budget for repairs and workforce overtime, the issue may strain the company’s financial resources.

Keeping your distance.

Though production management software can provide real-time visibility into a company’s production status, it’s a good idea to supplement that information with in-person visits to the production line. Those visits can provide valuable insights into how production works in practice — insights that you might not gain if you’re stuck behind a desk.

Failing to maintain equipment.

There’s a tradition in football that the quarterback buys presents for his offensive linemen at the end of each season. Why? Because they protect him and enable him to do his job. Your manufacturing equipment is your company’s offensive line, so don’t neglect it. Tracking usage and paying for regular preventive maintenance helps ensure that your machines can keep your business functioning.

Production Planning KPIs

Key performance indicators (KPIs) are important metrics that help companies track the health of their production processes. By monitoring KPIs and comparing them to target values defined in production plans, businesses can determine whether production is on track and pinpoint problems that need to be addressed. Typical production KPIs include:

This key efficiency metric tracks the percentage of time that production is not occurring during scheduled operating hours. Causes include machine breakdowns, tool adjustments and accidents. Some downtime may be necessary for functions such as machine maintenance, but generally, the less downtime the better.

Setup time.

Also referred to as changeover time, this is the amount of time it takes to switch between jobs. Setup time impacts overall productivity because production is halted during these periods. Production schedules should consider how much time and effort it takes to reconfigure production for each job, including changes to the equipment, raw materials and workforce. Designing production schedules to minimize changeover time can increase efficiency.

Production rate.

In a manufacturing environment, this is typically measured as the number of units produced during a specific period. Comparing the actual production rate for each process with the planned rate can help businesses identify strengths and weaknesses and begin to address problems.

Overall equipment effectiveness (OEE).

This is a measure of overall manufacturing productivity that accounts for quality, performance and availability. The formula for OEE is:

OEE = Quality x performance x availability

Quality is typically measured as the percentage of parts that meet quality standards. Performance is how fast a process is running compared to its maximum speed, which is expressed as a percentage. Availability is the percentage of uptime during a company’s scheduled operating hours. Increasing OEE can be achieved by lowering downtime, reducing waste and maintaining a high production rate.

Rejection rate.

This is the number or percentage of products that failed to pass quality checks. Depending on the nature of the product and the problem, it may be possible to salvage some rejected items by reworking them, while others may need to be scrapped.

On-time orders.

Production delays can be costly both in terms of money and reputation. Generating products on schedule means you’re less likely to need costly expedited shipping or other emergency measures to meet deadlines. And delivering orders on time helps keep customers happy, which means they’re more likely to keep doing business with your company.

Production Planning Tools

Businesses rely on a variety of tools to build production plans and track progress, ranging from visualization tools to sophisticated software that automates many of the steps involved. Typical tools include:

Gantt charts.

A Gantt chart is a detailed visual timeline of all the tasks scheduled for a particular job. More than 100 years since its invention by mechanical engineer Henry Laurence Gantt, this chart remains integral to manufacturing and many other industries. Production planning involves coordinating and scheduling many tasks , and the Gantt chart visually represents when each task will take place and how long it will last. Manually creating and updating Gantt charts to reflect complex, ever-changing production schedules can be a time-consuming and error-prone job, however.

Spreadsheets.

Small companies sometimes start out by tracking simple production plans using spreadsheets. However, for most companies, the inherent complexity of production planning quickly outstrips the capabilities of spreadsheet software.

Production planning software.

Production planning involves a wide range of activities, including forecasting, managing the supply chain, tracking inventory and scheduling jobs. Those activities require information from across the company and beyond. Production planning information is integral to business operations and is used by other groups within the company, including finance. That’s a key reason many companies use enterprise resource planning (ERP) application suites that include production planning software and provide a single solution for managing the entire business.

Manage and Optimize Production With NetSuite

NetSuite cloud-based production management software helps companies maximize manufacturing productivity and minimize cost. NetSuite provides real-time visibility into each aspect of the production process, from inventory tracking and monitoring the production floor to fulfilling orders. Production scheduling capabilities let businesses create and update complex real-time production schedules with minimal effort. Because NetSuite production management software is part of an integrated suite of ERP applications , businesses can share production progress with the entire organization and link production processes to financial reports, inventory management and order management.

Production planning is an important function that can boost profitability and customer satisfaction as well as efficiency. It helps companies match output to demand, optimize production processes and determine how to overcome production problems.

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Production Planning FAQs

What are the 5 steps in production planning.

Here are five typical steps in the production planning process:

• Forecast the short- and long-term demand for your product.
• Map out the various options and processes for manufacturing these goods
• Choose the option that checks as many boxes as possible, and develop a production schedule.
• Monitor production against the plan.
• Adjust the plan where needed. In other words, if it’s broken, fix it.

What are the 3 activities of production planning?

Production planning activities can be divided into three main areas: Develop a production process and strategy; gather the resources needed, from raw materials to machinery and personnel; and select and train the necessary people.

What are the types of production planning?

Three of the main types of production planning are batch planning, job planning and flow or continuous planning . The choice depends on your resources as well as the nature of the product. Batch planning makes the same item in bulk before moving on to another item. Job planning, also called project-based planning, focuses more on custom design and single-item production. Flow production involves a steady stream of mass-produced items moving along the line.

What is the role of production planning?

Production planning is critical to ensure the production process runs smoothly and efficiently and delivers products on time. Planning allows a business to make certain that all necessary preparation is completed before starting production.

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• Write Your Business Plan | Part 1 Overview Video
• The Basics of Writing a Business Plan
• How to Use Your Business Plan Most Effectively
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
• What to Include and Not Include in a Successful Business Plan
• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
• 6 Tips for Making a Winning Business Presentation
• 3 Key Things You Need to Know About Financing Your Business
• 12 Ways to Set Realistic Business Goals and Objectives
• How to Perfectly Pitch Your Business Plan in 10 Minutes
• Write Your Business Plan | Part 2 Overview Video
• How to Fund Your Business Through Friends and Family Loans and Crowdsourcing
• How to Fund Your Business Using Banks and Credit Unions
• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• Write Your Business Plan | Part 3 Overview Video
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• Write Your Business Plan | Part 4 Overview Video
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• Write Your Business Plan | Part 5 Overview Video
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

Write Your Business Plan | Part 5 Overview Video In this section, you'll learn how to organize your business.

By Dan Bova May 1, 2024

This is part 1 / 12 of Write Your Business Plan: Section 5: Organizing Operations and Finances series.

How does your business work?

That's the question you want to answer for investors — and yourself — in the operations section of your business plan .

The basic goal of this section is to provide investors with an overview without going too deep in the weeds. You'll want to cover just the major areas — labor, materials, facilities, equipment, and processes — and also provide the major details of things that are critical to operations or that give you a competitive advantage.

You want to answer investor questions about operations without overwhelming them. Here are some of the main points you're going to want to hit:

• Facilities: Where you will run your business — from home? A brick-and-mortar shop? A warehouse? — and the associated real estate costs.
• Income statement: This is your business's bottom line: your total revenue from sales minus all of your costs.
• Balance sheet: This shows your total assets, essentially what your business is worth.
• Cash flow statement: This shows the sources of your funds and the use of those funds.
• Break-even point: This is the point at which your gross profits cover all your fixed expenses.
• Operations: This is essentially a list of tasks that need to be done daily, weekly, or monthly.
• Personnel: Who will you need to run this business and how much will you need to pay them.

These are just some of the main aspects of your business plan's operations section. Read on for details on getting yourself organized or order a copy of Write Your Business Plan from the Entrepreneur.com Bookstore .

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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Production Planning 101: Making a Production Plan (Example Included)

As the creation of products and services has become more extensive and varied, the manufacturing industry has become more competitive. There are many things to keep an eye on such as material requirements planning, supply chain management and inventory control. Operations continue to become more complex, meaning manufacturing companies require more thorough production planning.

A production plan is the best way to guarantee you deliver high-quality products or services as efficiently as possible.

What Is Production Planning?

Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. In other words, it’s how you plan to manage your supply chain, raw materials, employees and the physical space where the manufacturing process occurs.

Production planning is important for manufacturers as it affects other important aspects of their business such as:

• Supply chain management
• Production scheduling
• Material requirements planning
• Production lead time
• Capacity planning

ProjectManager is project management software that helps manufacturers cover every aspect of production planning. Plan with Gantt charts, execute with kanban boards and manage resources along the way. No other software offers sophisticated project and resource management features in one intuitive package. Get started today for free.

Why Is Production Planning Important?

If a manufacturing operation wishes to expand, that evolution demands careful production planning and scheduling. Someone must take on the responsibility of managing resources and deciding how they’ll be allocated. This process is a big part of capacity planning —how much can be made in a certain period, with the available resources?

Without production planning, it’s easy to use too much of a resource for one product and not leave enough for another, or fail to schedule your resources properly, which results in delays that affect your overall production management process. It’s just as easy to let resources go to waste. These issues indicate a lack of efficiency in your production planning process.

Production planning is the best way to ensure resources are used appropriately, products and services are high-quality and nothing goes over budget . In most organizations, a production manager manages the production planning process.

What Does a Production Planner Do?

A production planner is a team leader who oversees the production planning process, which defines how an organization will approach major areas of production management such as production scheduling, resource capacity planning, production control and production budgeting to manufacture products.

To better understand what a production planner does and the importance of this role in any manufacturing organization, let’s dive into each of the steps of the production planning process.

10 Steps of the Production Planning Process

The production planning process consists of an organization’s actions to make a production strategy that allows it to manufacture products most efficiently and profitably. Here are 10 key steps you should follow when planning your production process.

1. Use Production Forecasting Methods for Estimating Customer Demand

The first step of the production planning process is to forecast the customer demand for your product for a future period like a year or a quarter. To do so, manufacturers rely on quantitative and qualitative techniques such as Delphi method, historical analogy method, moving average method and the analysis of business data and sales forecasts.

This process is known as demand planning , which helps manufacturers be better prepared to meet the demand for their products and manufacture the right quantity so they can minimize production and operational costs.

2. Gauge Your Production Capacity

The term production capacity refers to the maximum quantity of product a manufacturing company can produce based on its available production resources such as raw materials, labor, equipment and machinery.

Once you better understand the customer demand for your product, you’ll need to gauge the total quantity of product that needs to be manufactured and then evaluate if your production capacity is sufficient.

3. Map Out the Shop Floor Layout

Now think about the steps of the production process itself. Outline the production tasks that must be executed to transform raw materials, parts and components into a final product and the physical route that those elements will follow to move across the shop floor. This will allow you to pick a production floor layout that minimizes the time and effort required from your employees.

4. Make a Production Budget to Find the Optimal Production Volume

The next challenge in the production planning process is determining the exact number of units to manufacture to keep up with customer demand and maintain your desired stock levels.

This requires a production budget , a document used to calculate the number of units that should be produced by a company to meet the customer demand for a period such as a month, quarter or even a year.

Creating a production budget involves assessing the current product inventory, the production capacity, sales forecasts and the ending inventory that should remain at the end of the period. Once you analyze these variables and use the production budgeting formula, you’ll know the required production level for a given time.

5. Choose a Production Costing Technique

Choose a costing method for your production process such as activity-based costing, process costing, job costing or simply standard costing. Each has its pros and cons depending on your organization’s particular characteristics.

6. Create a Production Schedule

Now it’s time to make a production schedule that allows your organization to create a stock inventory, deliver products to distribution channels, fulfill customer orders and meet the obligations of any manufacturing contracts the organization has in place for the production timeline you’re planning for.

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7. Establish a Production Control System

Next, it’s important to establish standard operating procedures and key performance indicators and use a variety of production control tools to create a system that allows you to track the production process to ensure your products meet quality standards and are manufactured on time and under budget.

8. Set Production Reporting Guidelines

After you’ve decided what KPIs will be used to monitor the efficiency of your production process, you’ll need to determine what types of reports will be used to communicate these metrics with stakeholders and the frequency in which they’ll be produced.

The documentation from each of these production planning stages, such as the production budget and production schedule are gathered in a larger document called the production plan.

What Is a Production Plan?

A production plan is a document that describes how production processes will be executed, and it’s the outcome of the production planning process. It describes the human resources, raw materials and equipment needed and the production schedule that will be followed.

The person responsible for production planning must also be very familiar with the operation’s inner workings, project resources and the products/services they produce. This usually entails collaborating with people on the floor, in the field or in different departments to create products and deliver services.

Production Plan Example

The best way to illustrate this process is through an example. When you set out to create a production plan, make sure to follow these steps to make it as robust as possible.

Sales Forecast

Making a sales forecast greatly helps you decide which product planning method is best for your operation given your production capacity. You’ll need to use diverse sales forecasting techniques to better understand what will be the future demand for your product. From here, you can estimate which resources are required and how they’ll be used in the manufacturing process to begin the production capacity planning process.

Inventory Management Plan

Accessing inventory is about more than simply taking stock: you should make an inventory management plan for your production inventory and work-in-progress inventory so that you don’t experience shortages that might halt production or let things go to waste. For this step, focus on the inventory control and inventory management techniques you can use to handle inventory in the most efficient way possible.

Production Budget

Most manufacturers use the production budgeting formula below to make a production budget that indicates the ideal production volume based on a starting inventory, sales forecasts, production capacity and expected ending inventory levels.

Required Production = Sales Forecast Expected Units + Desired Ending Inventory – Beginning Inventory

Resource Plan

A successful production plan requires you to be familiar with the resource planning details of the manufacturing process, which is why you’ll need to make a resource plan that outlines what resources such as labor, raw materials, equipment and any other capital assets are available for production and when they’re scheduled to be utilized.

Production Cost Estimate

Once you’ve determined what the required level of production is and the resources that will be needed, you’ll need to estimate the cost of production . It’s important to ensure the production process will be profitable before creating a production schedule.

Production Schedule

As stated above, a production schedule is key to making sure your manufacturing team delivers products on time, but also guides efforts in other areas such as supply chain management and logistics management.

Production Control Plan

A production control plan should describe all the metrics, procedures, guidelines and tools that will be utilized to monitor how the results compare to the production schedule and resource management projections. This is something that should continually take place and be documented during the production process.

Types of Production Planning

Every operation is unique, and the same production plan isn’t right for everyone. To get the most from project planning, you decide which method is best for your manufacturing process. Here’s a quick intro to the different types of production planning.

The job method is often used when manufacturing a single product, for which a unique production plan is created. This production planning method is generally used in smaller-scale productions, but it can also be applied to larger manufacturing facilities. The job method is especially advantageous when a production order requires specific customizations.

Batch Production Method

Batch production consists of manufacturing goods in groups, instead of being produced individually or through continuous production . This method is useful when manufacturing products on a large scale.

Flow Method

The flow method is a demand-based manufacturing model that minimizes the production lead time by speeding up the production line. The manufacturing process starts based on work orders, and once it starts, it doesn’t stop until all finished goods are produced. This is called continuous production and it’s achieved by using machinery and little intervention to minimize waiting time.

Process Method

The process method is more or less what most people picture when they think about production—an assembly line. With the process method, there will generally be different types of machinery that complete separate tasks to put together the finished goods.

Mass Production Method

The mass production method primarily focuses on creating a continuous flow of identical products. It’s similar to the flow method, but at a much bigger scale, which cuts production costs. When uniformity is just as critical as efficiency, use “standardized processes” to guarantee all products look the same.

Production Planning Best Practices

No matter what product or service is being manufactured, there are many tried-and-true best practices to increase your operational efficiency . When creating a production plan, keep these two in mind.

Make Accurate Forecasts

When you don’t properly estimate the demand for your product or service, it’s impossible to create a detailed production plan. Demand planning is never static. Consider buying trends from previous years, changes in demographics, changes in resource availability and many other factors. These demand planning forecasts are the foundation of skillful production planning.

Know Your Capacity

Capacity planning means knowing the maximum capacity your operation can manage—the absolute most of a product or service it can offer during a period of time. This is the only way to anticipate how much of each resource you need to create X amount of products.

When you don’t know the production capacity, your production planning is like taking a shot in the dark.

Common Production Planning Mistakes

Stay vigilant of common missteps as you go through the production planning process. Here are three mistakes often made during production planning. Luckily, they can be prevented.

Not Expecting the Unexpected

This means having risk management strategies in place if things go awry. The goal is to never have to employ them, of course, but it’s better to have them and not need them. Production planning is incomplete if it doesn’t anticipate risks, issues and changes. When you plan for them, you’re ready to problem-solve if and when they happen.

Getting Stuck Behind the Desk

You should work with intelligent production planning tools, but that doesn’t mean you should only rely on enterprise resource planning software for production planning and not oversee resources and manufacturing operations in person. When production planning is only done from behind a screen, the result won’t be as informed as it could be. The best production planning is active and collaborative.

Neglecting Equipment

To get the most from your equipment, you need to take care of it. This means tracking usage and keeping up with regular maintenance. This looks different depending on the industry and product or service, but the principle is the same: continually take care of your equipment before it becomes a problem that slows down production.

Use ProjectManager for Production Planning and Scheduling

As the nature of manufacturing goods and services changes, you need modern tools to plan production and make schedules. ProjectManager is award-winning project management software that offers all the tools you need for excellent production planning and scheduling. With it, you can plan projects, create schedules, manage resources and track changes with one tool.

Plan With Gantt Charts

Manage your product manufacturing across a timeline with our Gantt chart view. With it, you can view your resources to help you track your cost of production to ensure you’re never overspending. You can then link any dependent tasks to avoid bottlenecks in your manufacturing.

Get a Bird’s-Eye View

To keep your production plan on track, you need a high-level view to pinpoint setbacks before or as they occur. Our real-time dashboard collects data and converts it into colorful graphs and charts that give you at-a-glance analytics.

Easily Measure and Report Your Progress

Any operation will have stakeholders who want to be kept in the loop. ProjectManager’s project status reports make it easy to share key data points. They can be generated in a single click, making it simple to generate them before important meetings.

Related Production Planning Content

The production planning process involves many different activities such as estimating the quantity of goods to be produced, the resources needed, the production schedule and much more. That’s why we’ve created dozens of blogs, guides and templates on production management topics. Here are some of them.

• Production vs. Manufacturing
• How to Make a Production Flow Chart for Manufacturing
• Best Production Scheduling Software Rankings
• How to Create a Master Production Schedule (MPS)

Manage every detail of your operation with ProjectManager’s powerful online project management tools. Our suite of tools is trusted by tens of thousands of teams, from NASA to Volvo, to aid them in the planning, scheduling, tracking and reporting on the progress and performance of their production plans. Our software lets you get out from behind your desk and make adjustments on the go. Try it for yourself for free for 30 days!

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• Entrepreneurship

How to Write a Production Plan for a Business?

A production plan is a critical component of any business that involves manufacturing, construction, or other forms of production. It outlines how a company will produce its goods or services, and it provides a roadmap for success. In this article, we’ll take a look at how to write a production plan for your business.

1. Understand Your Product

The first step in creating a production plan is to understand your product. What are you producing? What are its components? How is it made? Answering these questions will help you determine what resources you need, how long it will take to produce, and how you will produce it.

Before creating a production plan, make sure you have a clear understanding of what you are producing. This will help you make informed decisions about the production process and ensure that you are using the right resources.

2. Determine Your Production Capacity

Once you understand your product, you need to determine your production capacity. How much of your product can you produce in a given period? This will depend on the resources you have available, such as equipment, personnel, and materials.

To determine your production capacity, you should consider the following factors:

– The capacity of your equipment – The availability of raw materials – The number of personnel available – The amount of time required to produce each unit

By understanding your production capacity, you can create a production plan that is realistic and achievable.

3. Create a Production Schedule

With a clear understanding of your product and production capacity, you can create a production schedule. This schedule should outline when you will produce each unit of your product, as well as the resources required to produce it.

When creating a production schedule, you should consider the following factors:

– The production capacity of your equipment – The availability of raw materials – The number of personnel available – The amount of time required to produce each unit – The demand for your product

By creating a production schedule, you can ensure that you are using your resources effectively and efficiently.

4. Determine Your Material Requirements

To produce your product, you will need to determine your material requirements. This includes the raw materials needed to produce each unit, as well as any additional materials required for packaging or shipping.

When determining your material requirements, you should consider the following factors:

– The number of units you plan to produce – The amount of raw materials required for each unit – The cost of the raw materials – The availability of the raw materials

By understanding your material requirements, you can ensure that you have the resources you need to produce your product.

5. Develop a Quality Control Plan

Quality control is an essential component of any production plan. It ensures that your product meets the standards set by your company and your customers.

When developing a quality control plan, you should consider the following factors:

– The standards set by your company and your customers – The methods you will use to ensure quality – The personnel responsible for quality control – The equipment required for quality control

By developing a quality control plan, you can ensure that your product meets the highest standards of quality.

6. Determine Your Personnel Needs

To produce your product, you will need personnel with the right skills and experience. When determining your personnel needs, you should consider the following factors:

– The number of personnel required – The skills and experience required – The cost of personnel – The availability of personnel

By understanding your personnel needs, you can ensure that you have the right people in place to produce your product.

7. Develop a Maintenance Plan

Equipment maintenance is an essential component of any production plan. It ensures that your equipment is in good working order and reduces the risk of breakdowns.

When developing a maintenance plan, you should consider the following factors:

– The frequency of maintenance – The personnel responsible for maintenance – The cost of maintenance – The equipment required for maintenance

By developing a maintenance plan, you can ensure that your equipment is always in good working order.

8. Determine Your Cost of Production

To determine the profitability of your product, you need to determine your cost of production. This includes the cost of raw materials, personnel, equipment, and any other expenses associated with production.

When determining your cost of production, you should consider the following factors:

– The cost of raw materials – The cost of personnel – The cost of equipment – The cost of maintenance – The cost of overhead

By understanding your cost of production, you can ensure that your product is profitable.

9. Monitor and Adjust Your Production Plan

Once you have created your production plan, you need to monitor its effectiveness. This involves tracking your production output, monitoring your costs, and making adjustments as needed.

When monitoring and adjusting your production plan, you should consider the following factors:

– Production output – Cost of production – Quality control results – Equipment maintenance issues

By monitoring and adjusting your production plan, you can ensure that your product is produced efficiently and effectively.

10. Benefits of a Production Plan

A production plan offers several benefits to your business, including:

– Increased efficiency – Improved quality control – Reduced costs – Increased profitability – Better resource management

By creating a production plan, you can ensure that your business is producing its products or services in the most efficient and effective way possible.

Frequently Asked Questions

Here are some common questions and answers about writing a production plan for a business:

What is a production plan?

A production plan is a document that outlines the steps a business will take to manufacture or produce a product. It includes details about the materials needed, the timeline for production, and the resources required to complete the project. A production plan is essential for ensuring that a business can efficiently and effectively produce goods.

When writing a production plan, it’s important to consider factors like the demand for your product, the availability of resources, and the complexity of the manufacturing process. By taking these factors into account, you can create a plan that will help your business succeed.

What should be included in a production plan?

A production plan should include a detailed timeline for production, a list of the materials needed for manufacturing, and information about the resources required to complete the project. It should also outline the steps involved in the manufacturing process and any quality control measures that will be used to ensure that the final product meets the necessary standards.

Additionally, a production plan should include information about the expected demand for the product, as well as any potential challenges that may arise during production. By including these details in your plan, you can ensure that your business is prepared to meet the needs of your customers and overcome any obstacles that may arise.

What are the benefits of a production plan?

Having a production plan in place can provide several benefits for a business. For one, it can help ensure that the manufacturing process is efficient and cost-effective, as it allows you to identify any potential issues and address them before they become major problems. Additionally, a production plan can help you manage your resources more effectively, as it provides a clear timeline for production and ensures that you have the necessary materials and personnel in place to complete the project.

Finally, a production plan can help you stay on track and meet your deadlines, which is essential for maintaining a positive reputation with your customers and stakeholders. By creating a detailed plan and sticking to it, you can ensure that your business is able to deliver high-quality products on time and within budget.

How can I create a production plan?

To create a production plan, start by identifying the materials and resources you will need to manufacture your product. Then, create a detailed timeline for production that includes key milestones and deadlines. Be sure to consider factors like the complexity of the manufacturing process, the availability of resources, and the expected demand for your product.

Once you have a basic plan in place, review it carefully to identify any potential issues or challenges. Make adjustments as needed to ensure that your plan is realistic and achievable. Finally, communicate your plan clearly to your team and stakeholders to ensure that everyone is on the same page and working towards the same goals.

How often should I update my production plan?

It’s important to review and update your production plan regularly to ensure that it remains relevant and effective. Depending on the nature of your business and the products you produce, you may need to update your plan on a monthly, quarterly, or annual basis.

When updating your plan, be sure to consider any changes in demand, resources, or production processes that may have occurred since the last update. This will help you ensure that your plan remains accurate and effective, and that your business is able to meet the needs of your customers and stakeholders.

Production Plan

To create a successful production plan, start by identifying your goals and objectives. Consider factors such as customer demand, production capacity, and available resources. From there, break down your plan into manageable steps, and set realistic timelines for each stage of production.

Lastly, remember that your production plan is not set in stone. As your business grows and evolves, your production plan will need to evolve with it. Be prepared to make changes and adjustments to your plan as needed, and don’t be afraid to seek out help and advice from experts in the field. With the right approach and a solid plan in place, you can take your business to the next level and achieve lasting success.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

Production Company Business Plan Template

Written by Dave Lavinsky

Production Company Business Plan

You’ve come to the right place to create your Production Company business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their production companies.

Below is a template to help you create each section of your Production Company business plan.

Executive Summary

Business overview.

ABQ Reels Video Production is a startup production company located in Albuquerque, New Mexico. The company is founded by Mark Johnson, an entertainment industry veteran who has over 25 years of experience working in video production. Now that Mark has experienced managing a production business, he is ready to start his own company, ABQ Reels Video Production. Mark is confident that his video production skills, combined with his understanding of business management, will enable him to run a profitable production company of his own. Mark is recruiting a team of highly qualified professionals to help manage the day-to-day complexities of video production – sales and marketing, client relationship management, budgeting, financial reporting, and project management.

ABQ Reels Video Production will provide a full suite of production services for small scale video projects in the Albuquerque area. ABQ Reels Video will be the go-to production studio in Albuquerque for its tailored approach and client-first focus. The company will be the ultimate choice for customer service while ensuring the highest quality standards for production in the area.

Product Offering

The following are the services that ABQ Reels Video Production will provide:

• Content Development
• Sourcing & Hiring Film Crew
• Planning & Logistics
• Post-Production Services

Customer Focus

ABQ Reels Video Production will target businesses and individuals in Albuquerque that are looking for video production services for small-scale projects, commercials, and social media. No matter the customer, ABQ Reels Video Production will deliver the best communication, service, and customized production tailored to fit each project’s needs.

Management Team

ABQ Reels Video Production will be owned and operated by Mark Johnson. Mark is a graduate of New Mexico University with a degree in Film Production. He has over 25 years of experience working in video production, and over ten years as a production manager. Mark will be the company’s Chief Executive Officer and Production Manager. He will oversee the production process, production equipment, and production staff’s activities.

Mark has recruited a business management expert, Emily Martinez, to be the company’s Chief Operating Officer and help oversee the production business operations. Emily will handle the day-to-day operations, including budgeting, client relationships, and logistics.

Mark and Emily have recruited an experienced marketing director, Steve Smith, to become a member of the ABQ Reels Video Production management team. Steve is a graduate of the University of California with a bachelor’s degree in marketing. Mark and Emily rely on Steve’s expertise to execute the company’s marketing plan and advertising strategies.

Success Factors

ABQ Reels Video Production will be able to achieve success by offering the following competitive advantages:

• Skilled team of production experts and project management professionals who will oversee each project from start to finish and ensure the customers’ needs are met.
• ABQ Reels Video Production is able to provide production services for a wide range of purposes using the latest production technology.
• The company is able to leverage the expertise of its leadership team to provide customers with the best possible production services from knowledgeable industry veterans.

Financial Highlights

ABQ Reels Video Production is seeking $800,000 in debt financing to launch its production business. The funding will be dedicated towards securing the production facility and purchasing production equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff and marketing expenses. The breakout of the funding is below:

• Facility build-out: $340,000
• Production equipment, supplies, and materials: $280,000
• Three months of overhead expenses (payroll, utilities): $160,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph below outlines the pro forma financial projections for ABQ Reels Video Production.

Company Overview

Who is abq reels video production.

ABQ Reels Video Production is a newly established production company in Albuquerque, New Mexico. The company will provide a full suite of production services for small scale video projects in the Albuquerque area. ABQ Reels will be the go-to production studio in Albuquerque for its tailored approach and client-first focus.

The company will be the ultimate choice for customer service while providing the highest quality standards for production in the area. ABQ Reels Video Production will be able to guarantee the highest quality standards for all of its productions thanks to the latest and most innovative production equipment and oversight from industry veterans. The company’s team of highly qualified professionals experienced in production and project management will oversee each project from start to finish.

ABQ Reels Video Production History

ABQ Reels Video Production is owned and operated by Mark Johnson, an entertainment industry veteran who has over 25 years of experience working in video production. Now that Mark has experienced managing a production business, he is ready to start his own company, ABQ Reels Video Production. Mark is confident that his video production skills, combined with his understanding of business management, will enable him to run a profitable production company of his own. Mark is recruiting a team of highly qualified professionals to help manage the day-to-day complexities of video production – sales and marketing, client relationship management, budgeting, financial reporting, and project management.

Since incorporation, ABQ Reels Video Production has achieved the following milestones:

• Registered ABQ Reels Video Production, LLC to transact business in the state of New Mexico
• Has identified the ideal facility for lease to set up the business operations
• Reached out to numerous contacts to include former colleagues, employees, and production assistants to start putting a skilled core team together
• Began recruiting a staff of accountants, production assistants, and sales personnel to work at ABQ Reels Video Production

ABQ Reels Video Production Services

Industry analysis.

The production industry in the U.S. is a $26B market with approximately 6.3K businesses and over 46K employees nationwide. The outlook for the production market is positive with demand expected to remain steady over the next several years.

The production industry can be categorized by type of production. Some of the most common types of production companies are film production, TV production, commercial production, and post-production. Production companies perform a wide range of services including scripting, casting, hiring, planning, and logistics. Some production companies handle large-scale projects like major motion pictures, while others specialize in small-scale projects like commercials.

Some of the most significant demand drivers are the growing popularity of streaming content, consumer preferences for viewing on smartphones, and social media influence. All of these factors have contributed to increased demand for content, which leads to increased demand for production services.

Customer Analysis

Demographic profile of target market.

ABQ Reels Video Production will target businesses and individuals in Albuquerque that are looking for video production services for small-scale projects such as video for commercials and social media.

The precise demographics for Albuquerque, New Mexico are:

Customer Segmentation

ABQ Reels Video will primarily target the following customer profiles:

• Small Businesses in Albuquerque in need of commercial production services
• Mid-Sized Businesses in Albuquerque in need of commercial production services
• Individuals and groups of people in Albuquerque who need video production services for small personal or professional projects

Competitive Analysis

Direct and indirect competitors.

ABQ Reels Video Production will face competition from other companies with similar business profiles. A description of each competitor company is below.

VIEWR 1st Video Production

VIEWR 1st Video Production is one of the largest commercial production companies in Albuquerque, New Mexico. The company provides a variety of production services including content development, logistics, and film crew recruitment. VIEWR 1st Video Production specializes in creating commercials for local businesses to use in their advertising campaigns. VIEWR 1st Video Production aims to deliver high quality production through the latest production equipment and experienced crew. VIEWR 1st Video Production’s team of production professionals are well-known in the area for their outstanding commercial work.

Albuquerque’s Best Productions

Albuquerque’s Best Productions is a small production company established in 2005 that caters to local businesses and residents in Albuquerque, New Mexico and surrounding areas. Albuquerque’s Best Productions provides pre-to-post-production services for projects of various sizes and purposes. The company also provides tours of the production facility to local residents, businesses, and schools for a nominal fee. The owners of Albuquerque’s Best Production are former production assistants of some of the biggest production companies in the nation so they understand the production process from start to finish.

SPESHAL EFFEX

SPESHAL EFFEX is a trusted Albuquerque, New Mexico-based production company that provides superior production services to clients in Albuquerque and the surrounding areas. Established in 2018, the company is able to provide a wide variety of production services using its state-of-the-art production equipment. SPESHAL EFFEX serves local business owners, students, and individuals on small-to-large scale video projects. The company prides itself on being the number one choice for innovative special effects used in all of its videos.

Competitive Advantage

ABQ Reels Video Production will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

ABQ Reels Video Production will offer the unique value proposition to its clientele:

• The company is able to leverage the expertise of its leadership team to provide customers with the best possible production process from knowledgeable industry veterans and project management professionals.

Promotions Strategy

The promotions strategy for ABQ Reels Video Production is as follows:

Social Media Marketing

The company’s marketing director will create accounts on social media platforms such as LinkedIn, Twitter, Instagram, Facebook, TikTok, and YouTube. He will ensure ABQ Reels Video Production maintains an active social media presence with regular updates and fun content to get customers excited about production.

Professional Associations and Networking

ABQ Reels Video Production will become a member of professional associations such as the American Production Company Association, Albuquerque Video Production Society, and the New Mexico Video Production Association. The leadership team will focus their networking efforts on expanding the company’s vendor and client network.

Print Advertising

ABQ Reels Video Production will invest in professionally designed print ads to display in programs or flyers at industry networking events. The company will also send direct mailers to local businesses who are in the target market.

Website/SEO Marketing

ABQ Reels Video Production will utilize the in-house marketing director that designed the print ads to also design the company website. The website will be well organized, informative, and list all the services that ABQ Reels Video is able to provide. The website will also list information on the company’s events and client success stories.

The marketing director will also manage ABQ Reels Video’s website presence with SEO marketing tactics so that when someone types in a search engine “Albuquerque production company” or “video production near me”, ABQ Reels Video Production will be listed at the top of the search results.

The pricing of ABQ Reels Video Production will be moderate and on par with competitors so customers feel they receive value when purchasing the company’s production services.

Operations Plan

The following will be the operations plan for ABQ Reels Video Production.

Operation Functions:

• Mark Johnson will be the CEO and Production Manager of the company. He will oversee the production staff, production process, and the production equipment. Mark has spent the past year recruiting the following staff:
• Emily Martinez – Chief Operating Officer who will manage the budgeting, vendor and customer relationships, and day-to-day logistics.
• John Miller – Accountant/Bookkeeper will provide all accounting, tax payments, and monthly financial reporting.
• Steve Smith – Marketing Director who will oversee all marketing strategies for the company and manage the website, social media, and outreach.

Milestones:

ABQ Reels Video Production will have the following milestones complete in the next six months.

12/1/2022 – Finalize lease on the facility

12/15/2022 – Finalize personnel and staff employment contracts for the ABQ Reels Video Production management team

1/1/2023 – Begin build-out of the facility, purchase equipment, and set up for production

1/15/2023 – Begin networking at industry events and implement the marketing plan

2/15/2032 – Finalize contracts for initial production assistants, sales personnel, and office staff

3/15/2023 – ABQ Reels Video Production officially opens for business and starts taking on projects

Financial Plan

Key revenue & costs.

The revenue drivers for ABQ Reels Video Production are the fees charged to customers in exchange for the company’s production services. When it comes to pricing, the studio will monitor production costs, average prices charged by competitors, and market demand to ensure its prices will generate a healthy profit margin.

The cost drivers will be the overhead costs required in order to staff a production company. The expenses will be the payroll cost, utilities, equipment and supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of minutes produced per month: 12,000
• Average fees per month: $36,000
• Overhead costs per year: $840,000

Financial Projections

Income statement, balance sheet, cash flow statement, production company business plan faqs, what is a production company business plan.

A production company business plan is a plan to start and/or grow your production company business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your production company business plan using our Production Company Business Plan Template here .

What are the Main Types of Production Companies?

There are a number of different kinds of music companies , some examples include: Feature Film Production, Commercial Production, Post Production, and Niche Production Company.

How Do You Get Funding for Your Production Company Business Plan?

Production companies are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. This is true for a business plan for a film production company  or a film production company business plan.

What are the Steps To Start a Production Company?

Starting a production company  can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Video Production Business Plan - The first step in starting a business is to create a detailed video production company business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your production company . This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your production company  is in compliance with local laws.

3. Register Your Production Company   - Once you have chosen a legal structure, the next step is to register your production company  with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your production company , so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Production Company Equipment & Supplies - In order to start your production company , you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your production company . This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

• Development

How to Create a Production Company Business Plan [FREE Template]

H ighly successful video companies start with a strong production company business plan. Whether your company has been around for a while, or you’re a freelancer ready to take your services to the next level, this post will provide you with actionable strategies for success to compete more effectively right now.

It all beings with formulating the business plan that will get you where you want to go. If you don’t have a business plan, don’t worry. We provide a  free business plan template below and will walk you through it. 

Step by step.

• Production Company Business Plan
• The Executive Summary
• Perform a Video Company Self Assessment
• How to Get Started
• Financing a Video Production Company
• Marketing Plan
• Day to Day Operations

Freebie: Business Plan Template for Video Production

Download your FREE printable business plan template for your video production. Just enter your email address and we'll instantly send it to you!

business plan template

1. what is a production company business plan.

Essentially it's a tool for raising funds, creating a roadmap, or altering course and plotting out the next steps.

One purpose of any business plan to so convey to investors, or a bank, why they should put money into this business.

Think of creating a business plan you could bring to them

What does that mean?

It means you need this business plan for a production company to prove that you will make money. To prove it to you, but also to any investors.

After all, nobody invests to lose money. Or break even. So with that in mind, let's forge ahead into the actual writing of the business plan.

how to make a business plan

2. what is an executive summary.

Every business plan starts from the top down, with an executive summary.

What is that, exactly?

An executive summary is a short part of a larger proposal or report that summarizes the main points so the reader can become quickly educated on the whole document without having to read it all.

So it’s a detailed overview.

Of course, "executive summary" has a nice ring to it...

Your job here is to lay out the big picture of your plan. Some questions to ask yourself: Why do you want this business in the first place?

Similarly, what inspired you to start it? What's going to make it work?

Next, start to answer the questions your investors might have. Try getting into their head-space.

"Why would YOU invest in this business?"

You might want to write about the competition. The targeted demographic. Be specific here.

What need does your business fill? Which kinds of customers and clients are you targeting?

Think about your target market

Furthermore, what else sets you and your business apart?

Especially relevant is using concrete examples and not only ideas. Can you cite previous work you've done?  

This brings us to...

Your production companies competition

What does the rest of the field looks like. Your investor will want to know if they don't already.

What sets this company and this production company business plan apart from others?

Knowing the entire field of competitors you have is a good idea, even if it's a very long list.

Your production company business plan must factor in what else is being offered. That way you can adjust, and target a more specific niche.

Or, you can figure out what you can do better.

For example: what can you identify in your competitor's list of services that you know you can nail?

This is what your video company plan needs to convey.

Finally, remember to think of it from the investor's standpoint. How is this an opportunity for them?

how to create a business plan

3. why a video company self-assessment.

This step is easy to do, but hard to do well.

Can you take a good long look at your video production studio? With the intent to circle problems? Areas that need improvement?

The second part of this step might be easier. Find the areas where your video production studio can really shine.

In contrast, you don't want to elaborate on weaknesses in your video production company business plan. Rather, you want to identify them so you can find ways to address them.

You need to have answers to the questions these flaws might bring to the mind of your investors.

  You are not required to sing “Man in the Mirror” 

Then go beyond looking in the mirror.

Look back at the field before you.

This is a business plan for a production company. What opportunities exist for that?

Most of all, try and tailor this production house business plan to specific needs.

Here are a few methods of company self-analysis:

This is a way to identify changes in your industry, to target potential growth opportunities. The acronym stands for:

P olitical Factors

E conomic Factors

S ocial Factors

T echnological Factors

 P roduction company business plan would include a PEST

We've mentioned elements of SWOT:

W eaknesses

O pportunities

The one to focus in on here is threats. Don't assume everything will work out for the plan just the why you'd like it to.

Because it won't. Investors will know that. You should not only know it, you should expect it.

Most important of all: prove that you're prepared for whatever may happen.

Here's a cool way to approach your SWOT analysis. Try applying your strengths to your opportunities and see what kind of leverage you can create.

Then theoretically expose your weaknesses to your threats. Are you in trouble? Do you need to address something to better protect your company?

Think of this as planning for a battle. Therefore, you don't want to ignore cracks in the wall if your enemy is bringing a battering ram.

Business plan can benefit from SWOT

Strategy, structure, systems, style, shared values, staff, and skills.  The 7S model  was developed by business consultants  Robert H. Waterman Jr. and Tom Peters . It's also known as the McKinsey 7S framework.

The idea here is that your business needs these elements to be aligned and "mutually reinforcing". Let's go over each "S".

Strategy: How does this business plan to gain an advantage.

Structure: How do you divide the various operations of the company.

Systems: Procedure for measurement, reward and resource allocation.

Skills: the companies core and distinctive capabilities.

Staff: Human resources.

Style: Behavior patterns of the key groups like managers.

Shared values are in the middle of them all on the diagram. It's somewhat self-explanatory.

In theory, using these methods of self-analysis will help you a great deal. Due to them you'll know, and decide, all sorts of things about your production company.

The 7 S model of analysis

Start putting these ideas onto paper now! If you haven’t already…

Gentlemen, start your engines

4. how to get started.

A business plan for a production company must lay out how you will get started. This is also referred to as a "roll out plan".

How you engineer your beginning is critical to your cash flow. What do you need to get started?

And can you start at a sustainable level?

Will you open a physical office space right off the bat?

Overhead is a major cost. If this is more of a production house business plan then you’ll want to factor that in.

Do you have existing clients?

Equipment or gear already in place?

A video production business plan suggests that your focus will be on video production. Things like equipment will be critical.

In addition to considering this an entertainment production company business plan you may also want to focus on creative development.

How you want to focus effects how you want to phrase things. And it matters almost immediately.

START FEES YOU CAN AVOID

It's a good idea to propose that you start small.

There are two reasons for this.

The first is that you will scare away investors if you ask for too much up front, almost without fail they can tell if you are asking for more than it seems like you need.

It also throws into question how serious you are about sustaining success.

Which leads to the second reason.

It'll be much harder for you to sustain success if you ask for big upfront funding that you aren't sure you can earn back plus profit.

Let's say because you know of a few jobs you'll have early on, that you ask for less up front.

You'll be able to get rolling right away, earning back the initial investments and then some.

Above all you want to start off with easy wins.

Or as close to easy wins as you can get when launching or re-launching a video production business plan.

Seems like it would somewhat obvious not to ask for more than you can earn back...

Rather, it's a mistake people make all the time.

Speaking of which...

do have the capital?

5. financing a company.

Any business needs capital. As a result, you need a section where you lay out the cash flow for the production house business plan.

What kind of money do you expect to have coming in, and how much do you expect to be spending?

Make the budget, while also estimating how you'll be earning.

If you can't demonstrate this, then you need to go back to the drawing board.

Just pose like this and you’ll reassure any investor

You will want to get involved with an accountant at some point soon.

But remember, this is a business plan for a production company. So you may have a lot of costs coming at you early just to get started.

What is a marketing plan?

Your video production business plan is almost complete. Another section worth including would be one on marketing.

Here is a good additional resource on small business accounting .

You want to prove that business will be coming in, and not assume it will on faith alone.

Building a strong portfolio is a must. Consider again what niche you may be able to serve best. Find a solid "bread and butter" to start with.

Remember, good businesses expand when they need to. They don't bite off more than they can chew right out of the gate.

INVEST IN A GOOD WEBSITE

Do some research on how you’ll be building the best website for your product.

Get your production company a few social media accounts, and start trying to create a presence there. You'll need to find many ways to attract clients, and show your work.

Do some additional research on how to market a production company.

All this needs to find its way into the marketing section of your production company business plan.

what's your daily workflow?

7. day to day operations.

The day to day operations are a critical part of the plan. Have you visualized what the daily workflow will be?

Now is the time to do that. Who is going to be on your team, and how will it grow and change over time?

Determine what tasks will take priority each day, and how to best utilize your resources and finances.

This will be a key step in determining if your production company business plan is sustainable.

Ask yourself a few of the following questions:

How much time per day will you spend building your client base? What elements of each job will you tackle in-house? Which tasks might you outsource?

What equipment and gear do you own?

When will it need to be replaced and/or upgraded?

Are you going to hire anyone to start? Will they be full-time employees?

Will you hire independent contractors per project? How many, roughly?

As mentioned in the finance section, you need to know how you'll plan your reporting for taxes and your bookkeeping process.

These questions will help you start to determine what each "day at the office" will look like.

The clearer a picture you can paint here, the better.

Write a Business Plan

Get as specific as possible in each section of your entertainment company business plan. The more you know... right?

Now, let's get a little more advanced. In our next post we'll dive into writing a 4 part business plan. 

Up Next: Write a 4-Part Business Plan →

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Production Process

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PRODUCTION PROCESS

The production process is a component appearing under the operating plan of the overall business plan.  The production process is the process a product or service takes in order for it to become ready for customers to buy.  Production will certainly depend on the type and nature of your proposed business. Generally, a manufacturer will have a more sophisticated production process compared to a retailer or service provider. This is not to say that retail and service based businesses are simple, but rather, these types of businesses usually require fewer "processes".

The production process of a manufacturer, in its simplest form, may consist of the following steps.

• 1.   Fabrication (where individual parts are made into raw materials) 2.   Assembling the raw materials into finished products 3.   Quality Control (inspections) 4.   Testing of finished products 5.   Packaging the finished products 6.   Shipping the finished products to retailers, wholesalers, etc.

The above items are major events that occur when manufacturing a typical product. But many other, smaller events may occur during the production process and can be briefly described in the Operating Plan. For example, welding, machinery setup, heating, molding, cooling, wiring, sodering, melting, bending, scratching, drying and cutting, just to name a few. When writing the production process section of the operating plan, a manufacturer must carefully explain each step of the process so that the business plan reader fully understands how the product will be produced.  When explaining the production process in the operating plan, try to avoid technical jargon or terms only people within the industry would know. In addition, try to be concise and to the point - you do not want to bore the reader.

As mentioned earlier, the production process is usually less demanding for retailers and service providers. For example, a clothing retailer would simply purchase their products from a supplier, unpack the products as they are shipped, place the products in storage, place the products on the shelves as they are needed, and finally sell the products. This process is so obvious that many retailers write a one sentence description in the operating plan to describe their production process. In addition, such retailers would also discuss one or two major aspects of the process, such as inventory control and ordering.

In conclusion, if you are planning on establishing a retail business or a service business, simply provide in your operating plan a one sentence description of the production process and discuss your planned inventory practices and ordering policies.  Also, if you are proposing a unique production process or a structure different from your competitors, be sure to fully explain it.

For additional information relating to the Components of the Operating Plan, please refer to section named Operating Plan .

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