Manufacturing Business Plan Template
If you want to start a Manufacturing business or expand your current Manufacturing company, you need a business plan.
The following Manufacturing business plan template gives you the key elements to include in a winning Manufacturing business plan.
Manufacturing Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here], is a manufacturing company specializing in a variety of nut, snack, and candy brands. The company is a contract manufacturer and supplier of packaged goods. As a private label manufacturer, [company name], will produce a full line of candy, nut, snack, and gummy products.
[Company name] was founded by [Founder’s Name]. Within the past few years, [Founder] has been working on the manufacturing company concept and began networking with grocery store clients and locating the land to build his manufacturing and distribution center.
Products Served
[Company Name] will provide a variety of different types of manufactured goods. Products will include candy, nut, trail mix, gummy products, and assorted chocolates.
Products will be sold in the snack and candy aisles at local grocery stores around [location].
Customer Focus
[Company Name] will primarily serve the residents within a 1 to 20-mile radius of our location. The demographics of these residents are as follows:
- 601,274 residents
- Average income of $42,000
- 52.4% married
- 46% in Mgt./Professional occupations
- Median age: 41 years
Of the above mentioned residents, about 62% of the population are families that have children in their household. Children regularly consume the snack products that [company name] manufactures.
Management Team
[Company Name] is led by [Founder’s Name], a local entrepreneur who has worked in various warehouses and manufacturing companies in [location]. Working in the manufacturing industry and in warehouses, [Founder] is very familiar with the processing and distribution of packaged foods. As a line manager that oversaw dozens of employees, [Founder] has the proper knowledge and experience to own, manage, and operate his own manufacturing company.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company will be manufacturing products of snack foods that do not have lots of competition in the local market.
- The company has already attained 4 Letters of Intent from the largest supermarket grocery chains in the local area.
- The management team has a track record of success in the manufacturing industry and is qualified to operate all of the production and distribution equipment.
- The pricing model is competitive with other wholesale manufacturers and the quality of products are made with higher quality ingredients.
- [Company Name] will be sold in most grocery stores in the local market.
Financial Highlights
[Company Name] is seeking a total funding of $1,100,000 of debt capital to open its manufacturing company.
- Manufacturing facility design/build-out: $400,000
- Equipment and supplies: $375,000
- Initial inventory: $100,000
- Working capital: $225,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here] is a newly established manufacturing company that will provide a variety of snack food items that will be sold in local grocery stores. The company has received commitment letters from the four largest supermarket grocery chains in the area and is ready to obtain the necessary financing to construct the manufacturing facility.
[Company Name] was founded by [Founder’s Name], a local entrepreneur who has over 20 years of experience working in various warehouses and manufacturing facilities. [Founder] has been a manager and supervisor of dozens of line employees for the past ten years. [Founder] has realized there is a lack of snack food manufacturing in [location] and the amount of competition is very small compared to other food and drink products.
[Founder] has saved his wages for the necessary down payment to receive local bank financing. He has also located a prime spot for the construction of a warehouse and distribution center. Due to his experience and reputation in the manufacturing industry, [Founder] has been able to receive written commitments from the local supermarket chains to sell [Company’s Name] snack products in their portfolio of grocery stores.
[Company Name]’s History
Once his market analysis was complete, [Founder’s Name] began surveying the local vacant warehouse space and decided on a parcel of land to construct the warehouse and distribution center. [Founder’s Name] incorporated [Company Name] as a Limited Liability Corporation on [date of incorporation].
Once the land is acquired for the warehouse space, construction can begin to build-out the manufacturing facility.
Since incorporation, the Company has achieved the following milestones:
- Located a vacant lot that would be ideal for a manufacturing facility
- Developed the company’s name, logo, and website located at [website]
- Hired a general contractor and architect for the build-out of the warehouse, small office, and distribution area
- Determined equipment and necessary supplies
- Determined beginning inventory
- Attained Letters of Intent from supermarket clients
- Began recruiting key employees with manufacturing and distribution experience
[Company Name]’s Products/Services
Below are [Company Name]’s product offerings:
- Hard candy
- Gummy candy
- Nuts
- Trail mix
- Assorted chocolates
- Dried fruit snacks
III. Industry Analysis
The Manufacturing sector’s performance is largely attributable to the value of the US dollar, commodity prices, policy decisions and US manufacturing capacity. Revenue for the Manufacturing sector is anticipated to increase at an annualized rate of 0.4% to $6.0 trillion over the next five years.
Commodity prices are anticipated to stabilize from coronavirus-induced volatility and renewed demand, both in the United States and global economies, which is anticipated to facilitate revenue expansion for manufacturers. Moreover, shifting technological change in the Manufacturing sector is anticipated to benefit large, developed economies, such as the United States.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [company location] and its surrounding areas.
The community of [company location] has thousands of households that have children. Statistics show that the main consumers of snack products are children of all ages. They are regularly placed in school lunchboxes, afterschool snacks and programs, and at weekend sporting events.
The precise demographics of the town in which our location resides is as follows:
| Glendale | Highland | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The Company will primarily target the following three customer segments:
- School age children: Most children enjoy snack food to complement their lunches or afterschool. Most households with children have varieties of snack foods in their pantries.
- College students: Snack foods are convenient and affordable for college students.
- Schools and recreational centers: Schools, gyms, and recreational centers like to keep a variety of snacks on hand to offer the children that frequent their facilities.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Snacks’n More
Snacks’n More is another local manufacturing company that provides snack food to the immediate area. Established over thirty years ago, the company has the knowledge and expertise in food processing, commercialization, and packaging. They are known as a recognized ingredient supplier for the foodservice industry. Their portfolio of products include a variety of nut, snack, confections, and dry-blend ingredients. As a private label manufacturer, Snack’s More produces a full line of non-chocolate candy, nuts, and fruit-flavored snacks. The company is known for their fruit flavored snacks, dried raisins, nut mixes, and producing ingredients for local restaurants and establishments. Their line of nuts and dried fruits are often used for baking purposes.
Jaxon’s Candy
Jaxon’s Candy is a manufacturer of all things candy related. As a contract manufacturer, the company works with many companies to create their custom designed confections. Their large 50,000 square foot facility produces over 300,000 pounds of candy every month. All of the products are highly concentrated either in sugar or chocolate, or both. Jaxon’s Candy also designs and manufactures their own custom packaging. The candy produced is also kosher certified, gluten free, peanut free, and non-GMO.
Jaxon’s Candy currently manufactures candy for the following brands – Tommy Candy, Laffy Town, Chocowhoawhoa, Jellylicious, Healtheee Candeee, and Sticky Teeth. Jaxon’s Candy can be found in grocery stores and convenient stores along the west coast of the United States.
Gimmy Candy
Gimmy Candy is located in the midwestern portion of the United States and boasts a facility of over 1 million square feet. Their fleet of transportation trucks distributes throughout the continental United States and is considered one of the largest candy manufacturers in the country. Their product portfolio includes assorted chocolates, gummy candy, hard candy, fruit candy, as well as gums and mints. Gimmy Candy was established in 1947 and has grown to be a model of manufacturing companies the industry uses as a model of sustainability and profitability. Their lineup of candy products can be found in every single grocery store and convenient store in the country. Gimmy Candy is considering expanding its distribution globally and start exporting its candy products to Asia, Canada, Europe, and South America. As one of the largest privately held companies in the United States, Gimmy Candy is also considered a top employer in the country and offers its employees a generous benefits package.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Taste: [Company Name]’s snack products will be made with the highest quality ingredients and offer quality over quantity.
- Price: [Company Name] is able to offer the highest quality snacks at a competitive price point.
- Community Relations: [Company Name] will be a pillar in the community and be heavily involved in family-related activities in the area.It will sponsor events, provide snacks for schools and daycares at a discounted price, and donate a portion of its proceeds to area family-related charities and organizations.
- Proprietary Technology: [Company Name] will invest heavily on the latest technology to manufacture the snack foods for distribution. It will ensure the food products are made safely and free from any harmful chemicals and ingredients.
VI. Marketing Plan
[Company Name] seeks to position itself as a high-quality snack provider in the manufacturing industry. Consumers can expect to receive high quality snacks from skilled manufacturers in [location] and developed with the latest technology and freshest ingredients.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Fresh and comforting taste
- Community family advocate
- Developed with proprietary technology
- Manufactured with fresh, quality ingredients
- Affordable price
Promotions Strategy
[Company Name] expects its target market to be family households living within a 20-30-mile radius of its location. [The Company’s} promotion strategy to reach these individuals includes:
Social Media
[Company Name] will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.
Major Publications
We will also invest in advertising in selected larger publications until we have achieved significant brand awareness. Advertisements such as billboards and commercials will be shown during peak tv watching time and the billboards will be placed in highly trafficked areas.
Website/SEO
[Company Name] will invest heavily in developing a professional website that displays all of the features and benefits of the snack products. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
School and Athletic Events
The company will have tables and booths set up at local school and athletic events to hand out free samples of the snack products to the families in attendance.
Sponsorships
[Company Name] will also invest in sponsoring certain athletic and school events so that their banners and collateral material are displayed all over the event where numerous parents and children are at.
Pre-Opening Events
Before opening the manufacturing facility, [Company Name] will organize pre-opening events such as an open house to draw future consumers to visit the facility and take a tour. When they witness the proprietary technology and understand how the snacks are made with fresh ingredients, they will be enticed to purchase their products at local grocery stores.
Pricing Strategy
[Company Name]’s pricing will be moderate so consumers feel they receive great value when purchasing the snack products.
VII. Operations Plan
Functional Roles
[Company Name] will carry out its day-to-day operations as a manufacturing and distribution center. There will also be numerous administrative functions involved.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company Name] anticipates using the services of X employees, divided into the following roles.
Service Functions
- Manufacturing factory personnel
- Packaging staff
- Drivers for distribution
- Operations manager on duty
Administrative Functions
- General and administrative functions including legal/compliance, marketing, bookkeeping, etc.
- Hiring and training staff
- Delivery coordination with retailers
- Brand management/social media
- Supply and materials procurement
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is owned by [Founder’s Name], a local entrepreneur who has worked in various warehouses and manufacturing companies in [location]. Working in the manufacturing industry and in warehouses, [Founder] is very familiar with the processing and distribution of packaged foods. As a line manager that oversaw dozens of employees, [Founder] has the proper knowledge and experience to own, manage, and operate his own manufacturing company.
[Founder] will utilize his past experience with developing staff roles and functions. He is also very familiar with the manufacturing equipment and plans to purchase the latest technology that is efficient and cost effective. His contacts have allowed him to gain concrete Letters of Intent from local supermarket chains to have his manufactured goods in their stores.
Hiring Plan
[Founder] will serve as the Owner and Manager of [Company Name]. In order to launch, he needs to hire the following personnel:
- Operations Manager: 1 full-time employee to manage the day-to-day manufacturing operations and assist [Founder] with managerial duties.
- Manufacturing and Packaging staff: 5-6 full-time factory employees who will work everyday from 8:00 am – 5:00 pm.
- Delivery staff: 3-4 full-time drivers who will be responsible for delivering the packaged snacks to the grocery stores and convenience stores.
- Office staff: 3-4 employees who will manage the phone calls, scheduling, accounting, marketing, clerical, bookkeeping, billing, and any administrative task required.
- Brand manager: 1 full-time employee who will be responsible for developing and launching the brand; manage the website, and social media accounts.
- Janitorial staff: 2 employees who will clean the manufacturing facility once it has closed for the day.
- Salaries
- Manufacturing supplies and equipment
- Inventory of snack ingredients
- Business Insurance
- Lease on business location and utilities
- Taxes
- Manufacturing facility design/build-out: $400,000
- Equipment and supplies: $375,000
- Initial inventory: $100,000
- Working capital: $225,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from its snack food sales. The company will sell the packaged snacks in local grocery stores and convenience stores. As the company’s revenues increase, it will look to gain a wider distribution area.
The land purchase, equipment, supplies, opening inventory, and labor expenses will be the key cost drivers of [Company Name]. The major cost drivers for the company’s operation will consist of:
Ongoing marketing expenditures are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking total funding of $1,100,000 of debt capital to open its manufacturing facility. The capital will be used for funding the land acquisition for the manufacturing facility, equipment, supplies, inventory, hiring initial employees, marketing and branding expenses, and working capital.
Specifically, these funds will be used as follows:
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of wholesale contracts per year | |
|---|---|
| FY 1 | 5 |
| FY 2 | 10 |
| FY 3 | 15 |
| FY 4 | 20 |
| FY 5 | 25 |
| Average order | $250 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
