An Examination of the Basic Elements of a Successful Business Plan for a Small or Medium Size Manufacturing Company

This study focuses on the basic elements of a successful business plan for a small or a medium size manufacturing company. A thorough review of the literature dealing with this topic is examined and presented. It was found that all sources agree on many of the the basic format of the acceptable and a successful business plan for a manufacturing company. The generally recommended and acceptable structure must include a concise and a detailed description of l) the company 2) markets and competition 3) the product 4) selling and distribution methods 5) manufacturing and production 6) financial data and 7) type and amount of the investments needed. The study examines in detail the two most important sub-plans of the business plan - The financial plan and the marketing plan. In reviewing the related literature dealing for the financial plan, there was also a general agreement among the authors that the financial plan must project at least five years in the future, and preferably more. That, it must include a pro forma balance sheet, pro forma financial statement, pro forma cash flow statement and a break-even analysis for those projected periods. A special attention is given to venture capitalists since they provide emerging manufacturing companies with the important source of equity funds. It was reported that venture capitalists expect a return on their money between 35% to 60% compounded annually depending on the risk of the investment. Marketing planning is also examined and a comprehensive summary of a marketing plan is presented