The production plan in the business plan: description, functions, content

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

Functions

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

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

2. The production plan is also used in the development of the concept of prospective business conduct. The business plan has all the tools to attract investment.

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

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

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

Summary

The first section is an overview. This is a summary. It is the most important because it briefly reflects the whole essence of this project. Almost all success depends on the content of the first section, on what exactly the production plan in the business plan is. There are many examples of refusal to cooperate after reading an entrepreneur's resume. The first section should arouse interest in the venture from potential investors.

The following points must be displayed in the summary. First of all, the goal of this project, and then also briefly outlined the most attractive moments and positive aspects of the business idea that is proposed (here you need to choose facts from all other sections, the business plan of a manufacturing enterprise is always drawn up like this). Further, indicate the volume of attracted credit resources and investments with the main financial indicators that can characterize the effectiveness of this project. Be sure to indicate the expected time frame for the return of borrowed funds. List the dates and numbers of certificates and patents received. It is recommended to finish the resume with facts that confirm economic and legal guarantees and the reliability of the future enterprise.

Description of the enterprise

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

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

2. Business and the stage of its development.

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

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

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

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

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

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

Description of activities

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

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

Marketing strategy

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

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

Production plan

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

Risks

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

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

Second option

There are examples of drawing up a business plan with a more extended eighth and additional ninth and tenth sections. Relatively, we can say that it is just slightly expanded. It reflects monthly, quarterly and for each year the change in the exchange rate of the dollar against the ruble, a list and tax rates are given, and ruble inflation is outlined. Detailed information is provided on the formation of capital through loans, issues of shares or own funds, as well as the procedure for the payment of these loans and interest on them.

There are three main documents in the financial section: the income statement (the operating activities of the enterprise for each period), the plan of financial flows and the balance sheet of the financial condition of the enterprise at the moment. Attached are: estimated repayment schedules for loans with interest payments, information indicating the assumptions and changes in working capital and tax payments. In addition, they usually attach calculations of the indicators of solvency, liquidity and the projected efficiency of the project.