Should Manufacturing Companies use Business Plans?
January 24th, 2017
At a recent networking meeting that I attended with a group of local manufacturing SMEs the ‘state of trade’ was being discussed.
There was the usual mix of comments, ranging from ‘we are very quiet due to reduced sales/market’ to ‘we are very busy and can’t get enough people/capacity’. Clearly, in some cases these extremes are the result of circumstances that are outside the company’s control, but in other cases I suspect it is the result of poor or non-existent business planning .
One company struggling to find business commented that they don’t do any sales or marketing and that ‘work has just come to them’. It is hardly surprising then, as their usual sources of business reduce and they are dependent on a small number of key clients, that they don’t have the skills to generate new business. It is too late to simply start sales and marketing when business is needed.
Another example at the other extreme was the lack of capacity to meet demand. Again I know I’m over simplifying the situation, but it would have been useful to identify potential solutions via sub-contracting, temporary staff etc. at the planning stage.
The business climate is influenced by many factors, but one thing that can be guaranteed is change. Identifying how a business can benefit from change is perhaps the most fundamental part of any business plan and usually involves investing in new products and services.
Our own focus is helping clients to improve their products and manufacturing process using simulation technologies. This is a fast-moving area and we don’t always get our predictions about the market demand correct, but they certainly form the corner stone of our business planning.
We would welcome the input of others into this discussion.
David Deakin, Managing Director