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Production Plan in Business Plan: A Comprehensive Guide to Success

Last Updated:  

August 22, 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. This is particularly important for any startup platform aiming to streamline its production processes and achieve sustainable growth.

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. For those interested in property development, understanding the dynamics of the real estate market can provide valuable insights into aligning production capabilities with demand, ensuring successful projects and investments.

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 over-utilisation.

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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Delivery Service Business Plan Template

Written by Dave Lavinsky

Delivery Service Business Plan

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

If you’re unfamiliar with creating a delivery service 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 delivery service business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Delivery Service Business Plan?

A business plan provides a snapshot of your delivery service business 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 Delivery Service

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

Sources of Funding for Delivery Businesses

With regards to funding, the main sources of funding for a delivery service business 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 delivery service companies.

How to Write a Business Plan for a Delivery Service Business

If you want to start a delivery service business or expand your current one, you need a business plan. The sample below details the necessary information for how to write each essential component of your delivery service 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 delivery service business you are running and the status. For example, are you a startup, do you have a delivery service business that you would like to grow, or are you operating a chain of delivery service businesses?

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

• Give a brief overview of the delivery service industry.
• Discuss the type of delivery service business 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 delivery service business you are operating.

For example, you might specialize in one of the following types of delivery service businesses:

• Courier Delivery Services : This type of business provides air, ground, or combined courier delivery services.
• Express Messenger Services : This type of business provides express messenger and delivery services.
• Package Delivery Services : This type of business delivers parcels, documents. and packages.
• Packing and Sorting Services : This type of business prepares items to be delivered.
• Transporting and Trucking Services : This type of delivery business transports items via truck.

In addition to explaining the type of delivery service business 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 delivery drivers you employ, the number of items delivered, 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 delivery service industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the delivery service 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:

• How big is the delivery service 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 delivery service business? 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 delivery service business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of delivery service business you operate. Clearly, individuals would respond to different marketing promotions than corporations, 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.

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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 delivery businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other third-party delivery services, ship-to-store services, and other types of delivery services. 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 customers do they serve?
• What type of delivery service business 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 options for local and long distance delivery?
• 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 delivery service, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of delivery service company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide express delivery, air transit courier services, or long distance delivery services?

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

Place : Place refers to the site of your delivery service company. Document where your company is situated and mention how the site will impact your success. For example, is your delivery service business located in a busy retail district, 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 delivery service 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:

• Advertise in local papers, radio stations and/or magazines
• 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 delivery service business, including answering calls, scheduling pick up and delivery of items, managing drivers, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to reach your X number of deliveries made, or when you hope to reach $X in revenue. It could also be when you expect to expand your delivery service business to a new city.  

Management Team

To demonstrate your delivery service business’ 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 delivery businesses. 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 delivery service business.  

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 sheet, and cash flow statements.  

Income Statement

In developing your income statement, you need to devise assumptions. For example, will you schedule 5-10 deliveries per driver per day and have 6 drivers? 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 delivery service business, 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 delivery service business:

• Cost of equipment and office 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 office location lease or a list of geographic locations you serve.  

Writing a business plan for your delivery company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert delivery service business plan; download it to PDF to show banks and investors. You will understand the delivery service industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful delivery service business.  

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business planning advisors can create your business plan for you.  

Other Helpful Business Plan Articles & Templates

Delivery Service Business Plan: Guide and FREE Template

Did you know that the delivery service industry is expected to reach $658.3 billion by 2031 ? If you’ve been thinking about starting a small business like food delivery or grocery delivery, there has never been a better time. Customer demand is at an all-time high and startup costs are under $10,000 on average. 

The first step to creating a successful delivery service business is — no surprises here — writing a business plan. In this guide, we’ll outline everything you need to know to turn your business idea into reality, and provide a free template for you to get started.

💡If you’re already done your homework and just want to get started, go ahead and start filling out our free delivery service business plan template .

Six reasons to create a business plan for your delivery service 

Did you know that 71% of fast-growing companies have a detailed business plan? And entrepreneurs who have a written plan are 260% more likely to actually start their business and see success. 

That’s because your business plan is your blueprint for getting started, and then guiding you to success in your new business. It will help you:

• Decide if your business idea is viable.
• Conduct a market analysis to understand your competition, customers, and growth ability.
• Set your goals, and create strategies for achieving them.
• Make important decisions about products, marketing, staffing and funding. 
• Raise funding from banks or other investors. 
• Track your progress, growth and profitability.

The main components of a delivery service plan

A business plan is a summary of all your business’s potential operations, so it includes multiple components. Here they are:

1. Executive summary

This section is an introduction to your business, so you want to make it appealing. Answer the following questions: 

• What’s going on in the delivery service industry? 
• What type of delivery service business are you opening? 
• What sets your business apart from well-known delivery options, like FedEx and USPS? 
• Who are the key members of your team? If you are just starting out, your only team member might be you. In this case, list your experience and commitment to success. 
• What are your financial projections showing? What are your operating margins and tentative profitability? 

You don’t want to bore the reader in this section. Make it engaging, and outline key points and advantages of starting your business. Don’t include any negative information.  For example, you shouldn’t say that the delivery service market is oversaturated. If it was, opening a new business wouldn’t be very successful, would it? 

Another common mistake to avoid is understating the qualifications of your team. Don’t say you lack the capital to hire team members, or that you don’t have the necessary experience to run the business. Instead, stay positive with words like “the (company) plans on hiring additional help once we enter a growth phase.”

2. Company overview

The company overview is a deeper dive into the fundamentals of your delivery service. Here, you will pinpoint the type of business you will operate. For example, will you be a pure delivery company, like a courier or express messenger? Or will you be delivering your own products, like food, beverages or flowers? Or maybe you’ll deliver on behalf of other producers, like many grocery delivery services that work with different farmers. Will you offer same-day delivery?

A courier service business plan will be different in some ways from a plan for a grocery delivery service company, but you’ll need to answer all the same questions.

It’s not uncommon for delivery service businesses to engage in more than one service. List all services that you plan on operating. 

In the company overview, you will also outline your “why” for starting the business, important milestones you have already achieved, and information on the legal structure of your business. You may also want to include a mission statement here. 

3. Industry analysis

Now, it’s time to get down to the facts. Include industry growth facts, such as that the compound annual growth rate in the United States is 5.7% or that there are currently over 250,000 courier and local delivery companies . 

Properly completing this section will require some industry and market research. Great research starting points include IBISWorld , the Small Business Administration (SBA), and your state’s website, if you are offering local courier services.  This is not only beneficial to show the opportunities in the market, but you will also develop insights into how to set yourself apart from competitors. 

Be sure you include information on market conditions, main competitors, key suppliers, current trends, and where the industry is headed. 

4. Customer and market analysis

Who is your primary customer? Are you looking to work with individuals or businesses? What types of businesses or individuals are your ideal potential customers? Identifying your target market, and how will you win new customers, is critical to developing accurate marketing strategies. 

Try to be as detailed as possible. Pinpoint the age, gender, geographic location, income levels, and needs of your target market. 

5. Competitive analysis

The competitive analysis section will highlight your competition and how you plan on setting your business apart. You should uncover data to back up your claims. For example, recent studies show that 73% of customers have had bad delivery experiences , and 16% have advised friends or family to avoid the retailer. 

Statistics like these can help to show that prioritizing customer service is how your business will shine. You might choose to include a chart or graph on common traits that your business and competitors have. Identify weaknesses, strengths, pricing differences, and the target market of competitors as well. 

Could you offer local delivery to companies in your area to boost their revenue? How about delivering outside of normal hours, such as overnight? Do you have the capabilities to specialize in fragile package delivery? These are all ways that you can differentiate yourself from competitors. 

6. Marketing strategy

Using all of the information and data you have accumulated, you will piece together a marketing strategy. Going through the four Ps can give you a comprehensive marketing plan:

• Product: Discuss the type of services you are providing again, including the specifics, like late night delivery or fragile package options. 
• Price:   Reinforce your pricing structure and make a comparison with competitors. 
• Place: Identify where you will be delivering. This could be local, regional, or national. 
• Promotions: Put together a general strategy for how you will attract customers. Will you advertise in local papers, or go for a pure e-commerce model? How about social media or email marketing? Talk about how your delivery service website will use SEO, how you’ll build relationships with local businesses, or how you’ll search for jobs on courier listing sites. 

Your marketing strategy is very important for displaying how you will attract customers using your competitive edge. 

6. Operating strategy

This section of your delivery service business plan will outline both the day-to-day operations and the long-term goals of your business. In the executive summary, you touched on a few of your main goals. In this section, you will elaborate on those items. 

Common day-to-day operations might include listing the tasks of your team, like answering calls, scheduling, and dispatching routes to delivery drivers. How will you plan your deliveries? Will you hire your own drivers, or use contractors? What about a vehicle fleet? What software will you use to track deliveries, customer requests, and costs? 

Long-term goals might be increasing revenue by a certain percentage each year, or adding a specific number of trucks every few months. Maybe you want to grow revenue by 3% each year. What can you do to get your business there? Will you increase prices to match inflation, win new customers or hire additional staff? 

Both your short-term and long-term goals need to be reasonable. Don’t say you’ll grow revenue by 50% in your first year, or have 20 delivery team members right from the start. Reasonable goals are easier to work toward and can keep you and your team motivated. 

7. Management team

Your team is essential to the success of your delivery business. If you have a partner with years of industry experience or a manager with a stellar record, incorporate that expertise and experience into this section. 

You should have a clear management structure and chain of command. Keep in mind that job roles can overlap, especially if you only have a few team members. Identify who will handle hiring, day-to-day operations, high-level decisions, and customer service. 

Also, be sure that you include any mentors that are guiding you along the way. This could be an advisor in the industry, a family member, or a friend. 

8. Financial projections

A key component of your delivery business plan is projected financial statements. If you are just starting out, you might not have years of historical financial information. This is why you need to project your expected revenue, operating expenses, assets, and profit based on industry research and your specific business characteristics. 

Your financial plan should include at least five years of financial projections. This helps you determine your business’s chance of being successful and profitable. Prospective lenders and investors will also want to see this information. Here are the main financial statements you will develop: 

• Income statement : This outlines your revenue, expenses, and bottom-line number, known as net income. A positive net income indicates a profitable business, while a negative number suggests you are losing money. 
• Balance sheet : The balance sheet tracks your overall financial health by outlining assets (what you own), liabilities (what you owe), and equity (what you’ve earned, contributed, and taken out of the company). 
• Cash flow statement : This tracks the movement of money in your business. The three main categories found in this document are cash earned or spent from operations, financing activities, and investments. 

It can be hard to plan out all of these expenses, which is why many delivery service businesses use an accountant to help. 

Don’t just hire the first accountant you come across. Interview a few to confirm that you feel comfortable with them and can develop a good working relationship. Also check that they have experience helping startups, especially in the delivery service industry. This is because the business model that delivery service businesses follow isn’t the same as other industries. 

Accountants will usually list the clientele they work with directly on their websites. Otherwise, don’t be afraid to reach out and set up a consultation. 

9. Appendix

The appendix will contain additional schedules, financials, graphs, maps, and supporting information for your delivery service business plan. 

Top things to know before writing your delivery service business plan

Before you create your delivery service business plan, you will need to think about the big picture. This includes evaluating the following components: 

1. What delivery service model will you choose?

In your delivery business plan, you will need to decide exactly what kind of courier or delivery service you want to offer.

First, consider how you will run your daily delivery operations . Will you do it all in-house , including hiring and managing your own drivers? This is how Walden Local in New England does it, using their own branded vehicle fleet and drivers to deliver local meat and fish directly from farms to customers. This gives you total control over delivery operations, but you will need your own delivery vehicles. This can increase the costs, especially when you factor in vehicle maintenance.

Alternatively, you could outsource your actual deliveries via a gig economy app like DoorDash or Uber Eats. Many restaurants and ghost kitchens choose this operating model, preferring to focus their effort on the actual product they’re delivering. 

Second, what delivery time frames will you offer? The three main options here are:

• On-demand delivery: This literally means you will deliver (or pick up and deliver, in the case of a courier service) as soon as the customer places their order. Depending on the exact product, this could be the same day (groceries) or the same hour (restaurants). This is highly convenient for customers, but expensive to operate.
• Batched delivery: If you expect very high volumes, or if you choose to offer next-day delivery or later, you have the option of creating delivery batches so you can create more efficient delivery routes and schedules. This makes it easier to deliver profitably, but isn’t suitable for a business like a restaurant.
• Scheduled delivery : This is a favorite delivery model for subscription services like meal prep companies, and it can make delivery operations much easier. It means pre-planning deliveries to specific areas on specific days — for example, I subscribe to a flower delivery service that means I get fresh blooms on my doorstep every second Wednesday. You will need to be very clear upfront with your customers about how their deliveries will work, but if you manage expectations clearly this can be an excellent option.

Finally, how much will you charge for deliveries ? It may be tempting to offer free delivery to win customers, but the costs can really eat into your profitability. Do the work to figure out what you can afford to offer for free, and how to make your delivery charges palatable.

You can read more insider tips for starting your own delivery business here . 

2. How will you set up and staff your business? 

During the  business planning process, you should form a legal business structure. This entails registering your business name with your state and applying for an Employer Identification Number. You will need to pick out a business structure, such as a single-member LLC, a partnership, or a corporation. Talking with an accountant can help you find the most favorable structure. 

Keep in mind that staffing can take some time, especially with talent shortages. Before you can accept your first delivery order, you need to go through the hiring and training process with staff members. Knowing how to hire and retain delivery drivers , in particular, can help you save a lot of time and money. 

Do your research on a competitive wage, determine how you will process payroll, pinpoint the benefits you will offer, and create job listings. The right team members working alongside you can help your business thrive. 

3. What delivery management software will you use?

If you want an efficient, profitable delivery service business , sooner or later you’ll need proper delivery management software . Plenty of delivery businesses have started out using nothing but Excel spreadsheets, but that can quickly become a brake on your growth. Considering your delivery software while you’re making your business plan can give you an edge. Look for software that will make it easy to:

• Upload orders
• Use route optimization to plan efficient delivery routes
• Dispatch to a mobile driver app
• Track delivery progress in real time
• Send customer notifications
• Manage driver timesheets and payroll

The right delivery management software can help you achieve profitability, offer a great customer experience, and ensure on-time deliveries.

How to use the template

Now that you know what to include in your delivery service business plan, it’s time to get started. You can open a copy of the template right now and start writing. Here are some tips we’ve learned along the way: 

• Don’t jump around: Work on your delivery business plan section by section, starting at the top. Jumping around results in missed information and confusion. 
• Re-read Sections – It’s helpful to read through each section a few times before you create your own. 
• Be Thorough – The more thorough you are, the more beneficial your plan will be. After all, the goal of a delivery business plan is to provide you with guidance for starting your business. 
• Be Honest – Oftentimes, delivery service business owners adjust their plans to make their business look more attractive. You want to be honest throughout the plan to give you an accurate roadmap of what you need to do to become successful. 

If you are still struggling to piece together your business plan after reading this guide, don’t hesitate to reach out to an expert for help. 

Final Thoughts and Access to Your Free Template

A delivery service business plan is a resource that can bolster the success of your new delivery business. Take the time to conduct research and put thought into your plan. You don’t want to start your business and scramble to figure out who your target market is or how to display your competitive advantage. Here is our free template . 

If you’re in the market for delivery management software, Routific has you covered. We infuse accuracy and efficiency into our platform, giving you the tools to increase profit, meet customer demands, and ensure your team maximizes productivity. Reach out to schedule your free consultation.

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How to write a business plan for your production company.

Starting a production company is a great way to create and distribute content to a wide range of audiences.

It also allows for creative control over the production process, allowing for the production of unique and innovative content.

Don't start without having built a business plan though.

A business plan is essential for any new project, as it provides a roadmap to success and helps to identify potential risks. It also helps to ensure that resources are allocated appropriately and that the project is completed on time and within budget.

In short, a good business plan will help ensure the profitability of your production company .

What are the necessary elements for a business plan for a production company? How should it be organized? Which metrics should be part of the financial analysis? What's the fastest way to outline a comprehensive business plan?

Rest assured, the article you're reading will provide answers to all these questions.

One last thing: you can avoid starting your business plan from scratch.

Feel free to download our business plan for a production company and adapt it to your project.

Developing a business plan for a production company

Do you need to develop a business plan for your production company.

Yes, you need to develop a business plan for your production company.

Formulating a comprehensive business plan will allow to:

• learn about the production company market
• stay abreast of the industry's newest developments
• find key factors for success in a production company
• understand clients' project goals and creative vision to produce high-quality and captivating visual content
• come up with a unique value proposition for your production company
• study the competitive landscape
• find relevant competitive advantages for your media production firm
• find a business model that will lead to a positive bottom line
• define a bulletproof strategy to make the business grow
• evaluate risks associated with operating a production company, including production delays, equipment breakdowns, and legal compliance

Our team has created a business plan for a production company that is designed to make it easier for you to achieve all the elements listed.

How to organize a business plan for a production company?

Your business plan incorporates multiple metrics and valuable data. It should be arranged in a way that makes it simple to read and comprehend.

When we designed our business plan for a production company , we ensured it was properly organized.

The document consists of 5 sections (Opportunity, Project, Market Research, Strategy and Finances).

1. Market Opportunity

The first section is named "Market Opportunity".

In this section, you will find a comprehensive analysis of the production industry, including market trends, production methods, distribution channels, and emerging technologies, providing insights for entrepreneurs and professionals in establishing and managing successful production companies.

The data here is always kept current; we update it biannually.

2. Project Presentation

The second part is called "Project" and this is where you talk about your production company. In this section, you can outline the types of productions you specialize in (e.g., film, television, commercials), your portfolio of projects, production capabilities, creative team, and the unique value proposition that ensures high-quality productions tailored to client needs.

Also include a short description about yourself at the end of this section.

Discuss your experience in production, your range of production services, and how you plan to provide creative and professional production solutions to clients. Highlight your portfolio of successful projects, your talented team of professionals, and your dedication to delivering high-quality productions that captivate audiences and bring visions to life through your production company.

We put together language in our business plan. Adjust it to suit your idea as needed.

3. Market Research

The third part is the "Market Research" section.

This section describes the target audience for your production company.

It includes a comprehensive analysis of competitors in the production industry and emphasizes your company's unique production services and competitive advantages.

A tailored SWOT analysis is provided as well.

4. Strategy

In the "Strategy" section, you will find a detailed growth plan for your production company, outlining all the necessary steps and initiatives to ensure its high profitability.

Furthermore, there is a marketing strategy for a production company, a way to manage risks, and a completed Business Model Canvas included in this section.

5. Finances

Ultimately, the "Finances" section serves as a platform to present the financial aspects of your project.

How to elaborate an Executive Summary for a production company?

The Executive Summary gives a summarized glimpse into the business plan of your production company.

Don't go beyond 2 pages; concentrate on the crucial information.

This document is meant to make the reader curious to know more about your business plan.

In the Executive Summary of your production company, address the following queries: what services does your production company offer? who is your target market? who are your competitors in the industry? how do you differentiate from them? what is your budget?

How to do the market analysis for a production company?

Conducting a market study for your production company enables you to grasp external factors like customer demands for specific media content, competition within the entertainment industry, and emerging trends in production techniques.

By conducting an extensive market analysis, a production company can understand client production needs, offer professional production services, optimize pricing strategies, and execute targeted marketing campaigns, ultimately leading to a larger client base, increased project contracts, and a prominent position in the production industry.

Here's what we've incorporated into the "Market Research" section of our business plan for a production company :

• fresh and updated data and statistics about production companies, including production industry revenue, film and TV production trends, and distribution methods
• a compilation of potential customer segments for a production company
• the competitor analysis
• the competitive advantages for a production company

The key points of the business plan for a production company

What's the business model of a production company, business model of a production company.

A production company's business model revolves around creating and producing various forms of media content such as films, television shows, commercials, or digital content. Revenue is generated through content production contracts, licensing deals, or advertising partnerships.

The business model focuses on identifying market demands, developing compelling content concepts, securing funding or investments, assembling talented production teams, managing production logistics, and distributing or monetizing content through various platforms.

Success depends on industry connections, delivering high-quality content, effective marketing and distribution strategies, fostering creative collaborations, and staying adaptable to evolving media consumption trends and technologies.

Business model ≠ Business plan

It's important to understand the distinction between "business plan" and "business model."

A business model defines how a company creates, delivers, and monetizes its offerings.

In a business plan, you make use of the Business Model Canvas as an easy-to-understand tool to depict how your business operates.

Rest assured, we provide a Business Model Canvas in our business plan for a production company .

How do you identify the market segments of a production company?

Market segmentation for your production company involves dividing your potential clients into different groups based on their media production needs, industries, and preferences.

These categories may include factors such as film production, commercial production, music video production, or clients seeking specific production services (e.g., scriptwriting, cinematography, editing).

By segmenting your market, you can offer specialized production services and solutions that cater to each segment's specific requirements. For example, you might provide film production services for independent filmmakers or production companies, offer commercial production services for businesses and advertising agencies looking to create compelling commercials or promotional videos, specialize in music video production and provide creative and visually stunning music videos for musicians and record labels, or focus on specific production services such as scriptwriting, cinematography, or editing.

Market segmentation allows you to effectively target your marketing efforts, communicate your expertise in media production, and deliver high-quality and captivating production experiences that meet the unique needs and preferences of each client segment.

In the business plan for a production company , you will find a detailed market segmentation that gives you insights into your potential customers.

How to conduct a competitor analysis for a production company?

Without surprise, you won't be the only production company in your market. There will be other companies offering film, video, or media production services to clients.

It is vital to study your competitors' strengths and weaknesses in detail when constructing your business plan.

Identify their weaknesses (such as inadequate production equipment, inconsistent project delivery, or poor client communication).

Why should you pay attention to these points? Because these weaknesses can impact the efficiency and effectiveness of production companies. By addressing these aspects, you can offer professional and reliable production services, provide state-of-the-art equipment and technology, and deliver excellent project management and client communication, positioning your production company as a trusted and preferred partner for creating high-quality and impactful audiovisual content.

It's what we call competitive advantages—invest in them to make your business unique.

Here are some examples of competitive advantages for an audiovisual production agency: creative and innovative content creation, professional equipment and editing, timely delivery.

How to draft a SWOT analysis for an audiovisual production agency?

A SWOT analysis can help identify the strengths, weaknesses, opportunities, and threats of starting a production company, allowing for informed decisions to be made.

As you can guess, there is indeed a completed and editable SWOT matrix in our business plan for a production company

The strengths for a production company

The "S" in SWOT denotes Strengths, which are the project's areas or aspects that provide a competitive advantage.

For a production company, strengths could include having experienced personnel, access to cutting-edge technology, strong financial resources, and a robust portfolio of past projects.

The weaknesses for a production company

When we mention the "W," we're referring to Weaknesses, which are the weak areas or aspects of the project that need to be improved.

For a production company, potential weaknesses include inadequate capital, lack of resources, insufficient marketing, and inadequate planning.

The opportunities for a production company

The "O" in SWOT symbolizes Opportunities, highlighting the potential advantages or positive factors that can benefit the project.

In the case of a production company, potential opportunities include creating web content, filming commercials, producing television shows, and creating music videos.

The threats for a production company

The "T" in SWOT symbolizes Threats, indicating the potential risks or unfavorable conditions that the project needs to mitigate.

How to outline a marketing strategy for an audiovisual production agency?

A marketing strategy is a vital component of a business plan as it specifies how a business will draw in customers and generate income.

Developing an effective marketing plan will help your production company gain visibility and appeal to clients seeking high-quality video and media production services.

Clients won't choose your audiovisual production agency without proper promotion; highlighting your creative capabilities and successful projects is necessary.

Have you considered marketing techniques to attract clients to your production company? Consider showcasing your portfolio of past projects, attending industry events or film festivals, and utilizing social media platforms to engage with potential clients and collaborators.

No need to worry if you're clueless about marketing and communication – it's not a big deal.

How to build a solid financial plan for an audiovisual production agency?

A successful business plan requires comprehensive financial data in order to accurately forecast future performance.

As part of your business plan, it will be necessary to forecast the revenue for your production company.

The presence of a relevant and credible revenue forecast is crucial to give your business plan a strong appeal to banks or investors.

Our financial plan for a production company is straightforward and equipped with automated checks, enabling you to validate and adjust your assumptions easily. This way, we make sure you're building solid financial projections.

Without a doubt, you'll need to come up with a basic budget for starting your production company. Don't forget any expense (we have listed them all in our financial plan !).

The break-even analysis is a crucial tool in your financial plan, providing insight into whether your production company will be profitable or not.

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Crafting a Winning Business Plan for Your Delivery Service

• By Rakesh Patel
• Last Updated: June 8, 2023

• A delivery service business plan should consist of key elements like market analysis, pricing strategies, and marketing plans.
• Also, you need to develop a strong brand identity and reputation for reliable and efficient delivery services to compete in the market.
• Newly developed business plans should focus on customer satisfaction and building strong relationships with them.

The delivery services business industry is BOOMING ! New delivery service businesses are popping every day around the world. Whether you’re starting a business dealing in same-day delivery, or if your customers are in another area of the delivery industry, you need a plan!

A business plan for delivery service companies is essential for success. This article will look to get you situated, started, and get you on your way to creating a delivery business or courier business that will attract customers & create repeat customers and hopefully provide you with everything to get started.

This guide will be helpful for you whether you need details on how to start a grocery delivery service business, courier service business, grocery delivery service, or any business with a component of delivery service.

Table of Contents

Why have a Delivery Business Plan?

What are the parts of a business plan for delivery service, how to write a business plan for delivery service.

• Get Started With Your Online Delivery Service Business Plan

There are many reasons to have a delivery service business plan . First and foremost, it’s a tool to help you make important decisions, helping you navigate difficult decisions. Good planning allows you to reduce expenses, create a better experience for customers, and ultimately have a higher chance of success.

A delivery service business plan can also access startup capital, funding, partners, and even recruit employees. This is true whether you are starting a goods delivery or grocery delivery business or any other type of small business.

If you have the question “ How to start a delivery service business ?” going in your mind, then keep reading. You will find the answers.

Upper Route Planner

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Small business owners have argued how to prepare business plans for ages. The delivery service is no different because there are a variety of ways a delivery service plan can be written.

Whether you are trying to write a grocery delivery business plan , courier delivery service business plan, or a flower delivery service plan, this guide will help you through it.

The following points will guide you about what to work on when you are preparing a proposal for delivery service business:

Overview of Your Delivery Services Business Plan

Typically, this is called the “Executive summary” it will summarize the key points of your enterprise.

Market analysis

This is the foundation for the whole delivery service business plan. Information on the delivery industry in your area will lead you to a higher likelihood of success.

It helps you figure out your delivery business model, finding and adding delivery strategy, and give several small delivery business ideas .

Company Profile

Most sample business plan templates will have this section as well. It’s all about your courier service business . What type of customers are they going to have? What is your business name? Are you a good business owner? Give the overview!

This part will require you to create a unique logo, the kind of business delivery services you will offer.

Marketing and Sales

This section is all about promoting, selling, and building a robust marketing plan! Who are your customers in your area? How will you promote your business and reach that target market? How will your sales engine keep generating you the money you need to ensure you have ongoing customers and a successful small business or courier business.

Operational Plan for Delivery Service

Who is part of your team? Who are the business owners? How are you going to reach those target customers? What demands are you meeting? Are you going to their homes? Or doing deliveries only to businesses? 

All businesses need to worry about the money. The most important part (arguably) of the service delivery plan is the financials. Whether you’re a goods delivery business or a courier business, you want to ensure that you get the financials done right. 

Executive Summary

This section is really a summary of the rest of the other sections. So just put the most salient parts here! This page should be a maximum of one page long!

Section 1 – Market Analysis / Industry Analysis

As mentioned, this section is all about an overview of the delivery businesses in your city. And understand how the industry works. Here are the factors you’ll want to have in this section:

• Industry Analysis: This is a bigger picture view. For instance, if you are a courier business dealing with parcels, you want to know the world’s big picture view and in the USA. This helps to get a perspective. If you are a goods delivery business, shipping goods from clothing to subscription boxes, you’ll also want a bigger picture view. Take a look at the business model followed in industry internationally.
• Local competitive analysis: For a proper competitive analysis, you’ll also want to look at local businesses and service providers in competition. You’ll first want to know which competitors are in your area competing for the same market. If your prospective customers are looking for deliveries for specific goods (like brewery kegs or dairy products), is there a competitor? If you are planning a courier service, are other delivery  companies dealing in this area? If so, what are they charging? How are they executing? This data is gold! It helps you gain competitive advantage over others.
• SWOT Analysis: A market and competitive analysis will push you to create a SWOT analysis of your business. It is the best way to get started with a plan.
• The Opportunity: After a great analysis, this allows us to identify the opportunity for that type of company in your region. Get as specific as you can (dollars and cents).

Section 2 – Company Profile

This second part flows well from section 1 as it says how you will “deliver the goods,” so to speak (whether or not you’re literally going to deliver goods)! This is also your personal account of your business. The sections to include are the following:

• Company Name: What is your company name? 
• Business Overview:  More or less a one-liner explaining the whole delivery company organization model. Mention your Mission and Vision Statement. Give a brief delivery service business description.
• Type of business: In this section, you’ll specify what type of company you are (food delivery service, flower delivery servicer, or a goods delivery service). Are you a single car driver to serve small businesses, or are you planning a large scale courier business?
• Products or Services Offered: What services are offered? Are you a goods delivery business? Or are you delivering documents? Or are you doing deliveries for products?
• Unique Value Proposition: How are you doing to differentiate yourself from others? (hint: it’s easy quality, speed, price, experience, same day deliveries or ideally all of them!)

Section 3 – Marketing Strategy and Business Development

The engine that keeps the business running is money. To get the money, you need clients. To get clients, you need to attract them with marketing. Here are the sections you’ll need for section3.

• Target Customer and niche: This is taken from the market analysis, ideally. At this point, you’ll have done sufficient research, and you’ll have a great idea of customer discovery, who you are targeting and why!
• Marketing Assets: To do marketing, you’ll need a whole variety of what they call “marketing assets” this includes branding, logo, business cards, websites, brochures, etc.
• Marketing Strategy: How are you going to get the word out? What channels are you going to use? Online or digital marketing? Or are you going to go “old school” like radio ads? Recruiting a cut-throat marketing strategy will help you step up.
• Customer Service: How are you going to deliver excellent customer service? What kind of delivery options are you offering? What are the payment options you offer? 
• Sales and Business Development: And of course, how are you going to carry out your sales? Do you have a sales process? Are you going to get clients to fill out an online form? This is where you write this all out.

Section 4 – Team and Operations

This section is about business structure, operations, and really how your company works overall!

• Business Structure: This includes specific legal elements like the legal structure and the type of business license you will get.
• Employees: Will you need employees? Are they full-time? Or Part-time? Will you start with contract drivers? Who are the co-owners?
• Equipment: In here talk, about that you need to carry out your duties. This includes equipment, the vehicle you will use, the computers, and so on.
• Operations: Where will you operate? Out of an office? How will the whole company communicate internally etc.?

Section 5 – Financials

This section is all about money! Honestly, every business is about money. As an entrepreneur, you know  it’s also about the funding, cash flow. Here are several things to think about:

• Startup costs: What are the costs involved to get started?
• Revenues/Sales projection: How much do you plan on making in year 1? Year 2? Generally, projections are for 2 or 3 years for an initial plan and 5 years for a more established company.
• Expenses: What are the expenses you will encounter? These are generally divided into two types. The first is called Cost of Goods Sold, or Cost of services sold. The second type is called operational expenses, which are also known as “overhead” this would include vehicle costs, fuel costs (delivery costs) office costs, and so on.

Make a check list of all the points mentioned above and any other aspects you feel are important for your niche. A good checklist will make it easier for you to get started with your business plan for delivery service. You will not miss out on anything.

The key is not to get stuck with the delivery service business ideas in your head: get it out! Please put the delivery services business plan on paper. And make sure you get ideas from talking to as many people in your target market. Many courier services get stuck and spend too much time ruminating on the business ideas; the best thing to do is quickly get the first version, validate it, and update it as you need it.

The number one thing to do to start a business, any business, is to start by researching and business planning. The problem is that you don’t want to do too much of that. The key to business success is the balance between taking action and making informed decisions. Keep experimenting, and you’ll find it. ?

All delivery businesses charge a different rate for their services. For instance, what a courier delivery business earns from a single delivery will differ from what business delivering food earns. But a delivery business is highly profitable as the demand for products and services to be delivered at the doorstep of the customers is increasing. This improves the scope for profitability for all kinds of delivery businesses.

Start with Your Online Delivery Service Business Plan

This is part of an ongoing series to help more businesses to get started and get going with a delivery aspect. We have several other blogs as a part of this series that covers:

• Courier delivery business;
• Food delivery service;
• Alcohol delivery service;
• Grocery delivery business.

We hope this has been useful, and as always, we are there to serve you, our users and get you successfully delivering and making a profit. We hope that this article finds you in good health. Stay safe and safe travels.

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.

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Goods Delivery Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Transportation Industry » Courier Company

Are you about starting a delivery service company? If YES, here is a complete sample goods delivery service business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a goods delivery service business. We also took it further by analyzing and drafting a sample goods delivery service marketing plan template backed up by actionable guerrilla marketing ideas for delivery service businesses. So let’s proceed to the business planning section.

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The goods delivery business has existed for a long while but was mostly under the federal government till private individuals decided to revolutionize delivery. The goods delivery business actually came gained more prominence during the internet boom which saw more businesses going online in order to try and reach more of their target market.

Small and medium scale businesses also joined the internet fray and therefore the need for delivery businesses that would ensure that customers of small, medium and even large scale businesses got what they ordered for, regardless of where they lived.

Even though this business might not be capital intensive especially if you intend to exclude several kinds of deliveries or even start on a lower scale, there are still certain factors you would need to consider before starting this business.

For instance, hiring a business consultant who has the required industry knowledge to help point out obstacles you might likely face and how you can overcome them is very important. Below is a sample goods delivery business plan;

A Sample Goods Delivery Service Business Plan Template

1. industry overview.

As at 1999, homes with an internet connection were less than 50 percent, and the use of smart phones weren’t even in the picture, which made the delivery business a near impossible one to run as delivery fees most times surpassed ordering fees for customers.

However, the rise of new technology that allowed for connectivity has seen a boost in the delivery business industry. Technology helped reduce costs for end user customer by employing algorithms to ensure that not only were cists reduced but that customers could also get their goods delivered same day as when they ordered it.

During the third quarter of 2013, a lot of same day delivery businesses started up and spread like wildfire. Today, a lot of goods delivery businesses also offer same day deliveries to customers raking in more money from this niche.

The goods delivery business is an industry that has been projected to grow more than 9 percent annually and is targeted to reach $343 billion by 2022, this is as traditional postal delivery companies are facing challenges in meeting target revenue.

According to statistics, delivery companies worldwide are scrambling to meet up with consumer demands and are also striving to remain proactive so as to meet future demands that are expected to expand the present capacity of delivery businesses as more delivery companies will be forced to focus on Business to Consumer (B2C).

Business to Consumer (B2C) is expected to grow revenue for goods delivery business annually at 6 percent. The growth is due to the fact that most retailers (about 80 percent) have seen a positive impact on customer satisfaction especially when there are multiple delivery options available. This fact has seen 77 percent of retailers increase their investment in delivery services.

Consumers now have the upper hand as regards what delivery options they prefer, this is why most goods delivery businesses are now focusing more on their recipient customers than those they make deliveries for. Consumers now have the option of tracking their goods and determining when it will get to them.

In the united states of America, there has been an emergence of regional carriers who have provided customers with cheaper and faster delivery options than the national carriers. The advantage with regional carriers is that they are likely to get delivery contracts from major customers.

The industry that has really helped the delivery industry is the e-commerce industry. The e-commerce market has generated huge volumes and is expected to generate about $2.4 trillion by 2018.

There are new delivery options that have been launched by several entrants such as using different means – taxi, bicycle, motorcycle, foot messengers and even the use of an app that allows ordinary people do the delivery – to bring innovation to the delivery marketplace.

2. Executive Summary

Quick-time goods delivery Inc is a business that has been established in Louisville – Kentucky and is reputed to be amongst the top three leading delivery brands in the United States of America by the year 2030. We intend to cater to both corporate and domestic clients, and will strive to meet all the demands of our customers.

Our goods delivery business has been established not only to generate revenue and make profit but also to compete favorably with other goods delivery businesses in Louisville – Kentucky and in the United States of America. In order to compete with our competitors, we have several competitive advantage strategies at hand to ensure that we remain proactive and achieve our intended goals and objectives.

We are willing to go the extra mile in ensuring that we invest in the best and experienced hands to help bring our business to the status that is in line with our goals and objectives. We have laid down business structures that will enable us source for and get the best professionals.

Our delivery drivers and dispatchers have been trained on how to attend to customers and what to do if a client is proving difficult. We have several strategies laid down so that we are not thrown back when there is an obstacle but are prepared for it.

Our customer care executives have been trained to be highly perceptive to the wants and needs of our customers, and also remain updated as regards the delivery industry so as to make informed comments to our customers on behalf of the company.

The delivery business industry is a huge one and not one where demand is likely to die anytime soon, and so this is a business that would continue to boom for a long time, and we are well positioned to tap into this huge market.

We intend to make sure our employees work in a conducive environment and that they earn the best pay as can be gotten in similar start-ups here in Louisville – Kentucky. Also, we intend to ensure that our employees get the best welfare packages that can be obtained in the industry this is so they could remain motivated.

Quick-time Goods Delivery Inc is owned and operated by Mike pence and his immediate family members. Mike Pence is a college graduate but has several years of experience in the delivery industry, as he has worked in all kinds of position in several delivery businesses and is best suited to bring the business to the required standard.

3. Our Products and Services

Quick-time Goods Delivery Inc intends to deliver all kinds of goods to our various customers with the exception of certain goods that are not legally permissible under the laws of Kentucky and that of the United States of America.

The goods delivery business is not a capital intensive business and can be started on any budget that the entrepreneur wishes for. However, to ensure that the business grows and sustains itself, we intend to offer other services in addition to our core service – goods delivery.

These other services will boost the bottom line of the business and cause us to achieve our intended sales projections on time. Some of the services we intend to offer at Quick-time Goods Delivery Inc. are:

• Delivery of different types of goods to our various customers
• Consultancy services

4. Our Mission and Vision Statement

• Our vision at Quick-time is to be the best and only preferred goods delivery business in the Kentucky and in the amongst the top three goods delivery business in the United States of America by 2030.
• In order to achieve being the best and preferred goods delivery business, we intend to perfect our business structure and also put several modalities in place to ensure that we achieve our goals and objectives.

Our Business Structure

At Quick-time Goods Delivery Inc, we know how important starting off on the right foot is as we believe, laying the right foundation at the beginning would enable us easily achieve our set goals and target. This is why we ensured that we got the right hands that will enable us achieve our set goals.

Our employees are professionals who understand the business thoroughly and know what it takes to take us to the height we intend to achieve.

All our employees are all assigned to the right available positions and are allowed the freedom to be able to draft strategies and implements plans that would see the company achieve its vision. Our employees are well paid and have one of the best salary structures in the goods delivery business industry.

Because this is a business that deals constantly with customers, our employees are highly trained in customer care and are able to provide excellent customer care to all our customers.

Knowing our important it is for our employees to remain satisfied and productive at work, we have ensured that they work in a conducive environment and that they have good welfare packages. Below is the business structure that we intend to build at Quick-time Goods Delivery Inc;

Chief Executive Officer

Marketing Executives

Logistics Manager

Human Resources and Admin Manager

Customer Service Executives

Delivery Drivers

Storage Manager

Security Guard

5. Job Roles and Responsibilities

• Drafts the overall corporate strategy for the company
• Makes strategic decision on behalf of the company
• Drafts a workable budget for the company
• Responsible for drafting and implementing marketing strategies that would allow the industry penetrate the large market
• In charge of placing adverts in relevant places to promote the business and help attract customers
• Carries out constant reviews on policies and modifies or remove ineffective marketing strategies
• In charge of planning the best routes for which goods can be delivered to customers on time
• Drafts and implements policies that would see the delivery department improve
• In charge or recruiting and conducting orientation for new employees
• In charge of employees welfare, and constantly carries out performance appraisals on customers
• Ensures that all the administrative functions in the business are running smoothly and undergo constant review
• Responsible for attending to clients and taking orders on behalf of the company
• Responsible for answering inquiries and ensuring that all complaints are promptly resolved
• Must remain be knowledgeable and remain updated about the delivery business industry
• Responsible for preparing all the financial records and statements of the companies
• In charge of preparing tax on behalf of the company and submitting tax documents to the relevant authorities
• Ensures that balances between the bank and company are reconciled at the end of the month.
• Oversees the loading and offloading of goods and parcels and ensures they tally with what is documented
• Ensures that all goods reach its accurate destination safely and on time
• Responsible for carrying out light maintenance on the delivery van
• Responsible and accountable for all goods under care
• Ensures that store is kept clean and secured at all times
• Carries a routine check for all packages and documents all goods under care
• Responsible for ensuring that the area in and around work is kept secure at all times
• Ensures that cargoes brought into the business premises are properly screened
• Scrutinizes incoming and outgoing items and people
• Responsible for keeping the premises clean especially after work hours
• Cleans up the rest room for employees and visitors
• Stock up on cleaning supplies, and report out of stock supplies to the manager

6. SWOT Analysis

In order to know if our business would thrive, we hired a reputable business consultant here in Louisville to look through our business concept and help conduct a SWOT ( Strength, Weakness, Opportunities, and Threats ) analysis that would determine if we were in position to compete favorably against our competitors and if our business would survive the threats that are likely to crop up during the time of starting or running the goods delivery business.

The SWOT analysis was not only conducted for our location here in Louisville but also as regards the whole of the United States of America. Asides the location, the industry as a whole and several other factors were put into consideration. The of the SWOT analysis that was conducted on behalf of Quick-time Goods Delivery Inc is as follows;

Our strengths lies on the fact that we would be offering our customers a unique goods delivery service unlike that they have ever seen, as we intend to become the preferred brand in Louisville – Kentucky. We have a well designed business structure that will ensure that our vision is achieved as we have recruited the best employees in the field to help achieve this vision.

Our employees are not only competent but also have the required experience necessary to ensure that we achieve our goals and objectives.

Also, the fact that we are located in Louisville – Kentucky is another added strength as our position is convenient for many of the customers in our target market. Also, our Chief Executive Officer, Mike Pence has a vast and also the necessary expertise to see that the corporate vision and objectives of the company is achieved.

Our weakness is in the fact that we are not the only goods delivery business as there are several others in Louisville – Kentucky offering the same services that we are offering and to the same target market. However, we are positive that our strategies will afford us the ability to compete favorably with other established goods delivery businesses in Louisville – Kentucky.

• Opportunities

The opportunities this business affords us are boundless as the numbers of people that shop online or buy products via phones are increasing by the day. This therefore means that the demand for goods delivery service will continually increase.

Facing threats is not a new thing to any business, and so we know that during the course of running or starting the business, we are likely to face several threats such as having a new competitor in the same location where we intend to start our business or a downturn of the economy which will see less people demanding for our services. However, we have several laid down strategies that will ensure that we overcome any threats.

7. MARKET ANALYSIS

• Market Trends

The goods delivery business is a huge business that has seen a positive growth in the service industry, this is because more people now prefer to shop online or buy products through their phones.

Also, the goods delivery business has allowed more businesses to penetrate their target market as goods can now be delivered to these customers regardless of where they stay via the businesses such as the delivery business. Customers are willing to pay for this extra charge because it is more convenient to have the goods delivered to whatever place of their convenience.

Another trend for goods delivery business is the trend of timed delivery. Customers no longer have to wait a long time to receive their goods as they can receive it within 24 hours. Delivery businesses that offer express delivery have also cropped up therefore raising the bars in the delivery industry.

However, regardless of what mode the customer chooses, all they want is that their goods are delivered at the right time and place and in the right conditions. The reason for the spike in delivery businesses in the service industry is the internet.

The internet is now being used towards ensuring that innovative entrepreneurs reach out to customers – private and commercial has eased most of the stress of conventional publicity for these entrepreneurs. Websites and social media platforms are being used to lure customers and also create awareness about the business.

8. Our Target Market

The target market for the goods delivery business is very huge as there are a number of people that require the services of a delivery company.

This therefore means that the target market is huge and cannot be limited to a certain location or set of people. Also, our location in Louisville – Kentucky is very strategic and affords us the opportunity of being able to cater to a large number of customers.

Asides from being in a strategic location, our website has been Search Engine Optimized (SEO) to be able to pop out during searches for goods delivery businesses.

In conducting a thorough market research, we were able to find out what our target market would be expecting from us in terms of offering the best delivery services. The target market that Quick-time Goods Delivery Inc. would be offering goods delivery services for and to are;

• Manufacturing Companies
• Restaurants
• Printing press
• Publishing houses
• Clubs and bars
• Salons and beauty shops
• Private individuals
• Corporate Executives
• Celebrities
• Everyone in our target market who would require our services

Our Competitive Advantage

Our aim in starting Quick-time Goods Delivery Inc is to ensure that we are the preferred goods delivery in Louisville – Kentucky, and also amongst the top three brands in the United States of America. To achieve this vision, we have laid out strategies that will ensure that we have competitive advantage over those we intend to compete with in the delivery business industry.

First off, we intend to get two delivery vans that will ensure that customers get tier goods on time. Our delivery drivers will have a Point of Sale (POS) Machine for customers who do not have cash and didn’t pay in advance but intends to pay once the goods have been delivered. This service is the first of its kind here in Louisville – Kentucky.

Another competitive advantage we intend to have over our competitors is in ensuring that we hire only competent employees who not only have the experience but are also attuned to the vision of the company in becoming the best brand here in Louisville – Kentucky and amongst the top 3 in the United States of America.

We intend to train our employees in customer care service so that they effectively communicate our brand whenever they represent us to customers. We will ensure that we not only meet the expectations of our customers but also exceed it as well as we will continually review our customer service strategies to ensure that we remain on top of our game.

Finally, our employees will have the best welfare packages that can be gotten amongst similar start-ups here in Louisville – Kentucky. We intend to ensure that their skills are constantly honed through various training that will improve their careers and also their productivity for our company.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Due to the fact that the goods delivery business is a service based business, and might not seem like it has several sources of income, we have laid down strategies that would see us not only earning from delivery of goods but from other sources as well.

However at Quick-time Goods Delivery Inc business, we intend to ensure that all our sources of income are under the legal and permissible laws of the United States of America. Quick-time Goods Delivery Inc. intends to generate income from these several sources;

10. Sales Forecast

The goods delivery business is not likely to fade into oblivion anytime in the future and instead will see a likely surge in demand as more businesses spring up and more people shop online through their PCs, tablets or smart phones.

Our target is to ensure that we generate our target income within the first year of operation as our strategic location in Louisville – Kentucky is pivotal to this projection. Also, regardless of the fact that we might offer reduced fares during the first three months of running the business, we are confident of meeting our target especially as we have laid down plans that will see to this.

We have in collaboration with a reputable business consultant here in Louisville – Kentucky critically examined the goods delivery business and having analyzed our chances of survival and growth in this competitive industry has been able to come up with the following sales forecast.

The sales projection that was conducted on behalf of Quick-time Goods Delivery Inc were based on several assumptions that are peculiar to similar businesses in same location; Louisville – Kentucky. Below is the sales projection that was conducted on our behalf;

• First Fiscal Year-: $300,000
• Second Fiscal Year-: $600,000
• Third Fiscal Year-: $1,200,000

N.B: The above sales projection was done based on certain factors that are obtainable in the industry and on several assumptions such as the rate of people willing to shop online, the state of the economy, government policies, and the arrival of a similar competitor to same location.

This therefore means that the sales projection might be lower or higher if any of the above assumptions change either positively or negatively.

• Marketing Strategy and Sales Strategy

Before starting off our goods delivery business, we intend to ensure that our marketing and sales strategies have been thoroughly reviewed. During the course of running the business, we also intend to ensure that we carry out a continuous review of our strategies, this is because we know how important marketing is to any organization – either profit or non-profit.

Carrying out a sales forecast helped us determine who our likely target market were and therefore helped in determining the best marketing strategies to use in penetrating the market and also attracting customers to our goods delivery business in Louisville – Kentucky as well as the whole of the United States of America.

Our marketing executives have been empowered to continuously carry out research on the target market as well as tweak or remove marketing strategies that are not regarded as effective during the course of running the business.

The strategies that would be developed by our marketing executives will be one that will help us catch the attention and eventually win a larger percentage of the market not only in Louisville – Kentucky, but in the whole of the United States of America as well.

In order to ensure that customers outside Louisville – Kentucky know about Quick-time Goods Delivery Inc business, we intend to deploy several strategies on the internet to enable us achieve this.

Our website will not only be interactive and user friendly, it will also be well designed to appear on top searches for customers looking for the best delivery business. Asides, our website, we intend to use social media platforms such as Facebook and Twitter to engage and attract more customers to our business.

Finally, we at Quick-time Goods delivery Inc business intends to use the following marketing strategy in getting more customers for our goods delivery business;

• Advertise our goods delivery business in popular online forums, blogs and websites
• Place adverts in local newspapers, and on radio and television stations
• Encourage our loyal customers to refer us to others
• Engage in direct marketing
• List our business in offline directories as well as online directories
• Use the internet – website – to market our services, as well as social media platforms such as Facebook, Twitter, Google Hangout and LinkedIn.

11. Publicity and Advertising Strategy

Every business either new or old knows how wise it is to court publicity. Publicity is a two edged sword as you get to create awareness for your business while also generating revenue.

Even though we have laid down strategies that intends to make us stand out from the other goods delivery businesses we would be competing with, we know how important publicity is if we intend to achieve our goals and objectives and succeed as a business.

Louisville – Kentucky is a perfect location for our goods delivery business and the perfect launching pad for our publicity strategies, before we eventually venture out to other cities and spread throughout the United States of America.

Quick-time Goods Delivery Inc. intends to create a unique logo and also have a unique color that stands us out of the crowd. Some of the publicity and advertising strategies we at Quick-time Goods Delivery Inc intend to deploy are;

• Ensure that we create customized tee-shirts for all our workers especially our drivers
• Emblazon our delivery trucks with our unique logo and color
• Place adverts in local newspapers, magazines and on radio and television stations
• Distribute our handbills and pin our fliers in target locations
• Put up flexi banners in strategic locations so that our target customers can see and patronize our services
• Use our social media platforms – Facebook and Twitter – to promote our brand
• Send out cold e-mails to prospective customers
• Send out newsletters to customers – both potential and existing

12. Our Pricing Strategy

The success of a business can be determined by the kind of prices it sets. While a business will need to set the prices that are deemed fair by its customers, it shouldn’t set a price that will cause a price war with its competitors or one that will enable the business run at a loss.

Determining the fair price for a service oriented business can be tricky but any serious entrepreneur knows that regardless of the business being run, any set price or rate should cover overhead and operating expenses and ensures that the business makes profit as it should.

Since we are relatively new in the market, we also know that it is necessary that we set a price that will allow our customers patronize our services and for this purpose, we would offer our services at a reduced rate for the first 6 months of operation. We however would not lower the prices too much so as not to have our business crumble.

• Payment Options

Due to the fact that this is a service oriented business, we are aware that our customers would prefer several means of being able to pay for our services and it is due to this fact that we have come up with different payment options intended to suit whatever style our customers would want. Below are the payment options that we intend to make available to all our various customers;

• Cash payment
• Payment via check
• Payment via Point of Sale (POS) Machine
• Payment via credit card
• Payment via online bank transfer

The options chosen above were done with the help of a trusted and reputable bank, and will be available to all our customers without hitches.

13. Startup Expenditure (Budget)

The goods delivery business can only be capital intensive depending on the area the entrepreneur wants to focus on. However, in starting a standard goods delivery business, there are certain expenses that the entrepreneur is supposed to spend the bulk of the capital on.

The expenses include all overhead expenses and several operating expenses such as bill payments and employee salaries. Therefore the key areas where we intend to spend the bulk of our start-up capital on are;

• Business incorporation fees – $750
• Business licenses and special permits as well as certain accounting software – $1,550
• Cost of hiring a business consultant – $1,000
• Marketing expenses (promotion expenses for grand opening and regular marketing) – $5,000
• Insurance (general liability and workers’ compensation) – $2,000
• Operational expenses for the first 6 months which includes employees salaries and bill payments – $75,000
• Cost of storage facilities and hardware (racks, shelves, bin, surveillance cameras) – $4,000
• Administrative expenses (stationeries, furniture, computer, phone, printer) – $5,200
• Cost of purchasing two goods delivery van – $90,000
• Cost of launching a website – $500
• Cost of grand opening party – $3,000
• Miscellaneous – $2,000

From the above estimation, we would need a total of $200,000 in order to successfully start-up our goods delivery business in Louisville – Kentucky. The amount covers the payment of our employees’ salaries as well as other bills for a period of 6 months.

Generating Funding / Startup Capital for Quick-time Goods Delivery Business

Quick-time Goods Delivery Inc is a business owned and run by college graduate, Mike Pence and his family. This is a business that the family has decided to start and run and so we would not be generating funds from external investors such as venture capitalists, as we would not want outside interference for now.

Therefore the areas where we intend to source for start-up capitals are;

• Using our savings and sale of stocks to generate capital
• Seeking for soft loans from extended family members
• Applying for loan from the bank

N.B: We were able to generate about $50,000 from our joint savings and sale of personal stocks. We got a soft loan of $50,000 from both of our parents, and the bank which we applied for a $100,000 loan has credited our account with the sum, which means that we are ready for business.

14. Sustainability and Expansion Strategy

Every business is established to make profit and it is from this profit that a business is sustained and then expanded. However to make profit and remain sustained, there are several factors that must be put into consideration, such as the business structure , the number of loyal customers and the investment strategy.

The major reason of starting Quick-time Goods Delivery Inc is so as to build a business that can offer a unique delivery service whilst making profit and sustaining itself from the revenue generated. We do not plan on seeking for external private investors as we have laid down plans to ensure that we generate revenue and eventually make profit within a year of operation.

Having the right employees and business structure is very important to us and so our employees are not only experienced but competent as well. Our employees know what is needed to take our business to the very top.

Asides from making sure that our employees are paid right, we also intend to ensure that they are constantly trained so as to keep them updated skill-wise. Also, employees who perform their duties diligently and constantly promote the brand of the business will be motivated via incentives and fringe benefits.

Ensuring that our customers are treated right is very important to us because we know that without our customers our business would crumble. We intend to give our customers an excellent customer service and offer incentives on certain days or to loyal customers to ensure that they stick with our brand.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting feasibility studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• writing of business plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
• Purchase of trucks: Completed

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• Start a Company > Business Plan > Writing a Business Plan

How to Write the Operations and Production Chapter of a Business Plan

Writing a Business Plan

Written by Samuel Muriithi for Gaebler Ventures

This chapter of the business plan details how the production of a given product or service will be done and the operations that must be accomplished for this to happen. It is a narrative describing what and who is required for production, how and how much of this will be achieved, and what measures will be implemented after production.

In writing the operations and production chapter of a business plan several fundamental issues have to be highlighted.

It is quite in order to sequence these fundamentals in terms of what the production involves, the resources available to accomplish this, the actual process, and finally the activities that will ensue after production is done.

Begin by describing the production process in detail. Here you should provide information on the various stages of production and how materials will be moved from one stage to the next. Describe the different technologies that will be employed in this process and what the various inherent advantages and disadvantages are. Indicate all the production ingredients that will be outsourced, from whom they will be outsourced and at what cost. Finally you should indicate what the other production costs are.

Next, the operations and production chapter of a business plan should provide details about the equipment to be used . After listing all the equipment you should describe its condition and ownership status i.e. is it wholly owned or partially owed. Describe the unavailable equipment you'll need to purchase, the source and the anticipated cost.

Move on to the aspects of labor where you should start by describing the quantity and nature of employees at your disposal i.e. are they permanent or casual workers and do they earn salaries or wages etc. Describe the desired qualifications for each aspect of production. Give details on how these employees will be organized as they work and who will supervise them. It is also appropriate to indicate how long each shift will be and the number of these per week.

A description of the capacity should also feature in the operations and production chapter of a business plan. Here you are meant to describe the quantity of production that your current/planned facilities can churn out in a given timeframe and the amount of labor that is required to meet this output. Make suggestions as to how capacity can be increased and on how excess capacity can be utilized.

Issues of quality control should also be addressed in this chapter. You should indicate who will be in charge of quality control and what the defined standards of quality are. Details about every quality control check performed from the start to the end of the production process should be provided. You should also describe how the employees will be motivated to ensure that quality is upheld and how feedback on the quality of the product will be collected from the end-users or consumers.

In the operations and production chapter of a business plan details about inventory control measures to be employed should be provided. The person responsible should be identified as should the maximum and minimum levels of inventory. Further, the minimum and maximum times for inventory receipt from suppliers, goods/service production, and delivery to consumers should be indicated. A description of the information system to be used for inventory management is required. Equally important are descriptions of the procedures that will be implemented to address inventory issues like storage requirements, damage and theft.

Samuel Muriithi is a business owner in Nairobi, Kenya. He has extensive international business experience in the United States and India.

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What is Production Planning? Process & Strategies

In the realm of manufacturing and operations management, production planning plays a crucial role in ensuring efficiency, cost-effectiveness, and timely delivery of products. Whether you're producing cars, electronics, or consumer goods, effective production planning can make or break your business's success.

Table of Contents

Understanding production planning, strategies for effective production planning, the production planning process in action, benefits of effective production planning.

Production planning is the process of organizing and coordinating resources, both human and capital, in order to meet the demands of production while maintaining efficiency. It involves forecasting demand, designing a production process, scheduling workloads, and ensuring raw materials and resources are available when needed.

Key Elements of Production Planning

To grasp the intricacies of production planning, it's essential to delve into its core components:

Demand Forecasting: Before embarking on production, businesses must forecast demand accurately. This involves analyzing historical data, market trends, and customer behavior to predict future demand patterns.

Designing the Production Process: Once demand is estimated, the production process must be designed. This includes determining the sequence of operations, selecting appropriate machinery and equipment, and setting up workstations.

Production Scheduling: Scheduling ensures that production activities are coordinated in a timely manner. It involves assigning tasks, allocating resources, and establishing timelines to meet production goals.

Inventory Management: Efficient inventory management is crucial to production planning. It entails maintaining optimal levels of raw materials, work-in-progress (WIP), and finished goods to prevent stockouts or overstock situations.

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Effective production planning involves implementing strategies that streamline processes, reduce waste, and enhance overall productivity. Here are some detailed strategies.

1. Lean Manufacturing Principles

Lean manufacturing is a systematic approach aimed at minimizing waste while maximizing productivity. It focuses on creating more value for customers with fewer resources through continuous improvement and waste reduction techniques.

Key Techniques:

Just-In-Time (JIT) Inventory: JIT aims to minimize inventory holding costs by delivering materials and components just when they are needed for production.

Kaizen (Continuous Improvement): Encourages incremental improvements in processes, products, and services to enhance efficiency and quality continuously.

Benefits: Lean principles reduce lead times, improve product quality, lower production costs, and increase overall responsiveness to customer demands.

2. Capacity Planning

Capacity planning involves determining the production capacity needed to meet current and future demands efficiently. It ensures that resources such as machinery, labor, and workspace are utilized optimally without underutilization or overutilization.

Key Aspects:

Demand Forecasting: Accurately forecast demand to align production capacity accordingly.

Resource Allocation: Allocate resources based on forecasted demand and production schedules.

Scenario Planning: Prepare for different demand scenarios to adjust capacity accordingly.

Benefits: Effective capacity planning prevents production bottlenecks, reduces lead times, improves delivery reliability, and enhances resource utilization.

3. Production Control

Production control encompasses monitoring and regulating production processes to ensure they adhere to planned schedules and quality standards. It involves real-time adjustments to optimize workflow and minimize deviations from production plans.

Key Components:

Real-Time Monitoring: Monitor production processes to identify and resolve issues promptly.

Quality Assurance: Implement quality control measures to maintain consistent product quality.

Schedule Adherence: Ensure that production activities are executed as per the schedule to meet deadlines.

Benefits: Production control enhances efficiency, reduces production downtime, improves on-time delivery performance, and boosts overall operational transparency.

4. Supply Chain Management Integration

Integrating supply chain management (SCM) with production planning ensures seamless coordination from raw material suppliers to end customers. It focuses on optimizing the flow of materials, information, and finances across the supply chain network.

Key Practices:

Supplier Collaboration: Collaborate closely with suppliers to ensure timely delivery of quality materials.

Inventory Optimization: Maintain optimal inventory levels to prevent stockouts or overstock situations.

Logistics Efficiency: Streamline transportation and distribution channels to minimize lead times.

Benefits: SCM integration enhances supply chain responsiveness, reduces costs associated with inventory and transportation, improves product availability, and strengthens supplier relationships.

5. Technology Adoption

Technological advancements play a pivotal role in modern production planning by enabling automation, data-driven decision-making, and real-time visibility into production processes.

Key Technologies:

Enterprise Resource Planning (ERP) Systems: Integrate various aspects of production planning, inventory management, and resource allocation into a unified platform.

Advanced Analytics: Utilize predictive analytics and machine learning algorithms to improve demand forecasting accuracy.

IoT and Automation: Implement IoT devices for real-time monitoring of machinery performance and automated production processes.

Benefits: Technology adoption improves operational efficiency, reduces production costs, enhances decision-making capabilities, and facilitates scalability.

Effective production planning involves a series of systematic steps to ensure that manufacturing operations run smoothly, efficiently, and meet the demands of customers. 

Step 1: Demand Forecasting

Demand forecasting is the initial phase of production planning and involves predicting future demand for products based on historical data, market trends, and customer insights. This step is crucial as it sets the foundation for all subsequent planning activities.

Data Analysis: Production planners analyze historical sales data, customer orders, and market trends to identify patterns and fluctuations in demand.

Market Research: Conducting market research helps gather insights into customer preferences, competitor activities, and economic factors that could impact demand.

Collaboration: Close collaboration between sales teams, marketing, and production planners ensures that demand forecasts are realistic and aligned with business objectives.

Step 2: Resource Allocation

Once demand forecasts are established, the next step is to allocate resources efficiently to meet production requirements while minimizing costs and maximizing productivity.

Material Requirements Planning (MRP): Production planners use MRP systems to calculate the quantity of raw materials needed based on production schedules and inventory levels.

Labor Scheduling: Human resources are allocated based on production volumes, skill requirements, and shift patterns to ensure adequate workforce availability.

Equipment and Facility Planning: Planning includes scheduling equipment usage, maintenance schedules, and ensuring that production facilities are optimized for efficiency.

Step 3: Production Scheduling

Production scheduling involves creating a detailed timeline and sequence of operations for each production order to ensure that products are manufactured on time and according to specifications.

Work Order Creation: Each production order is translated into a work order specifying tasks, quantities, and timelines for completion.

Capacity Planning: Production planners assess the capacity of machines, workstations, and personnel to determine realistic production schedules and avoid overloading resources.

Sequence of Operations: The order in which tasks are performed is determined to minimize setup times, optimize workflow, and maximize throughput.

Step 4: Monitoring and Adjustments

Throughout the production process, continuous monitoring and control are essential to ensure that operations are running according to plan and to address any deviations promptly.

Real-Time Monitoring: Production managers use real-time data from sensors, production reports, and ERP systems to monitor progress, identify bottlenecks, and track key performance indicators (KPIs).

Quality Control: Quality assurance processes are integrated into production workflows to ensure that products meet quality standards and specifications.

Problem Solving: Production planners and managers collaborate to resolve issues such as equipment breakdowns, material shortages, or unexpected changes in demand.

Cost Efficiency

One of the primary advantages of effective production planning is its ability to enhance cost efficiency across the manufacturing process. By accurately forecasting demand and scheduling production accordingly, businesses can optimize resource utilization. This optimization includes minimizing wastage of raw materials, reducing overtime costs by efficient scheduling of labor, and optimizing machine usage to lower energy consumption. Additionally, streamlined processes and reduced lead times contribute to overall cost savings, making operations more financially sustainable.

Improved Productivity

Efficient production planning leads to improved productivity throughout the manufacturing cycle. By carefully allocating resources and scheduling tasks, companies can eliminate bottlenecks and downtime. This ensures that production lines operate smoothly and at maximum capacity, reducing idle time between processes. Moreover, clear timelines and well-defined workflows enhance employee productivity by providing clarity on tasks and expectations. As a result, businesses can produce more output with the same or fewer resources, boosting overall efficiency.

Enhanced Quality Control

Quality control is integral to effective production planning. By adhering to predetermined schedules and processes, businesses can implement rigorous quality checks at each stage of production. This proactive approach helps identify and rectify defects or inconsistencies early on, minimizing the likelihood of product recalls or customer dissatisfaction. Consistent product quality not only enhances customer satisfaction but also strengthens the brand reputation in the market.

Customer Satisfaction

Meeting customer demands in terms of product availability and delivery timelines is crucial for maintaining customer satisfaction. Effective production planning ensures that products are manufactured and delivered on time, meeting market demand without delays. This reliability builds trust with customers and encourages repeat business. Additionally, businesses can respond swiftly to changes in customer preferences or market trends by adjusting production schedules and priorities accordingly, thereby staying competitive in the marketplace.

Optimized Inventory Management

Proper production planning helps in maintaining optimal inventory levels throughout the supply chain. By accurately forecasting demand and scheduling production cycles, businesses can prevent overstocking or stockouts of raw materials, work-in-progress (WIP), and finished goods. This not only reduces holding costs associated with excess inventory but also ensures that products are available when needed, minimizing lead times and improving overall supply chain efficiency.

Strategic Resource Allocation

Effective production planning involves strategic allocation of resources such as manpower, equipment, and facilities. By aligning production schedules with resource availability, businesses can maximize the utilization of existing assets. This includes optimizing machine uptime, reducing setup times between production runs, and balancing workload across shifts or departments. Such strategic resource management not only improves operational efficiency but also supports long-term capacity planning and business growth.

Flexibility and Adaptability

In today's dynamic market environment, businesses must be agile and responsive to changes in customer demand or market conditions. Effective production planning facilitates agility by enabling quick adjustments to production schedules and priorities. This flexibility allows businesses to accommodate rush orders, handle seasonal fluctuations in demand, or respond to unexpected disruptions in the supply chain. By being adaptable, companies can maintain competitiveness and seize opportunities in the marketplace.

In conclusion, production planning is the backbone of manufacturing operations, integrating forecasting, scheduling, and resource management to optimize efficiency and meet customer demands effectively. By adopting advanced strategies like lean manufacturing and leveraging technology for real-time monitoring, businesses can stay competitive in today's dynamic market landscape.

-  What role does technology play in modern production planning?

Technology facilitates real-time monitoring, data analysis for accurate forecasting, and automation of routine tasks, enhancing overall efficiency.

-  How can small businesses benefit from production planning?

Small businesses can optimize resource utilization, reduce costs, and improve customer satisfaction by implementing tailored production planning strategies.

-  What are the common challenges in production planning?

Challenges include demand volatility, supply chain disruptions, balancing production capacity, and maintaining flexibility in operations.

-  How does production planning contribute to sustainability?

Efficient planning minimizes waste generation, conserves resources, and supports sustainable manufacturing practices.

-  What are the key performance indicators (KPIs) for measuring production planning success?

KPIs include on-time delivery rates, capacity utilization, inventory turnover, and adherence to production schedules.

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The Products and Services Section in a Business Plan

How to Write the Business Plan Products and Services Section

• The Products and Services Section
• What to Include
• Tips on Writing the Section

The products and services section of your business plan is more than just a list of what your business is going to provide. This section of your business plan should include details about how you'll price products and services, how you'll fulfill orders, and other details that investors need to hear before you can get funding .

Additionally, it should outline the unique selling points of your offerings and explain how they stand out from competitors. Providing information on awards received, potential suppliers, and manufacturing processes can also strengthen this section and build investor confidence. Learn more with the guide below.

Key Takeaways

• Business plans include details about the products and services you'll offer, including exactly how you plan to market, sell, and deliver on customer orders.
• The best business plans are clear and concise.
• The products and services section of your plan should show why your product or service is needed.
• The products and services section should also convey the expertise and experience you have to succeed.

Why You Need a Products and Services Section in a Business Plan

The business plan products and services section is the centerpiece of your plan. While other sections of your business plan are important, the products and services section is the essence of your business and the point around which every other part of the business plan is built .

What to Include in a Products and Services Section

The products and services section of your business plan outlines your product or service, why it's needed by your market, and how it will compete with other businesses selling the same or similar products and services.

Your products and services section should include a description of the products or services you are offering or plan to offer (including future products or services). You should explain how your products and services will be priced and a comparison of the products or services your competitors offer in relation to yours.

You should also include the sales literature you plan to use. Detail your marketing materials, and clarify the role your website will play in your sales efforts.

The products and services section will include a paragraph or so on how orders from your customers will be processed or fulfilled, as well as any needs you have to create or deliver your products, such as partnerships, up-to-date computer equipment, or manufacturing processes. If your process depends on intellectual property or legal issues, such as trademarks , then those need to be addressed.

Tips on Writing the Products and Services Section

This section of your business plan should excite those you're hoping will fund your business or work with you. To that end, here are a few tips to create a products and services section that appeals to the reader.

Indicate Why Your Product or Service Is Needed

Especially if you're venturing into a new concept or invention, or a place where there is no current market, you need to explain the need for your product or service.

Highlight the Features of Your Product or Service

A crucial part of business success is the ability to set yourself apart from other businesses that sell the same or similar products and services. What features, such as price point or level of service, do you offer that are unique to you?

Focus on Benefits

Unique features are important, but even more vital is how those features provide value to consumers. Translate your features (i.e., faster or cheaper) into benefits (i.e., get it now or save money). The goal is to highlight how your product or service will fix a problem or improve a client or customer's life.

Be Clear and Concise

Don't let your business plan get bogged down in too much description and information. Use bullets or numbered lists to quickly and easily highlight important information.

Show Off Expertise, Experience, and Accolades

You not only want to describe your products and services but also share why you're the best person to provide them. Include anything in your education or experience that makes you an expert in this business. If you have testimonials, awards, or endorsements, share those. Finally, if you've applied for a patent, copyright, or trademark, include that as well.

Be the Expert, But Use Layman's Terms

You should know your product, service, and industry well, but don't expect your potential funders and partners to have the same level of knowledge. Assume the reader doesn't know as much as you when you explain what you're offering.

Avoid acronyms and jargon when outlining your products and services.

Indicate What's Special About Your Products or Services

Will you be offering a special guarantee or refund policy? Do you have a quicker or more unique way of delivering your product or service? 

Speak to Your Customer

While you don't want to write an advertorial, you do want to be customer-oriented when you write your products and services section.

Examples of a Products and Services Section

The Small Business Administration offers business plan examples that you can draw from to help guide your writing. Here's an example of a products section for someone creating "Wooden Grain Toys."

Wooden Grain Toys will sell wooden toys made from solid hardwoods (maple, beech, birch, cherry, and oak) and steel rivets. The toys are handcrafted and designed for small children to easily use. Our line currently includes the following nine models:

• All-Purpose Pick-Up Truck w/movable doors and tailgate
• Dump Truck w/functioning dumping mechanism and box
• Biplane (two-seater) w/movable propeller
• Steam engine with coal tender - additional cars available separately: caboose, flat car w/logs, box car, tank car, coal car
• Flat-Bed Truck w/logs

Wooden Grain Toys will offer its products for the following prices:

• All-Purpose Pick-Up Truck w/movable doors and tailgate - $25
• Dump Truck w/functioning dumping mechanism and box - $30
• Biplane (two-seater) w/movable propeller - $20
• Additional train cars (single car) - $5
• Additional train cars (three cars) - $12
• City Bus - $12
• Tow Truck - $18
• Flat-Bed Truck w/logs - $35
• Sports Car - $20
• Sedan - $20

What is the products and services section in a business plan?

A products and services section of a business plan clarifies exactly what your business will produce , how much it'll sell for, and other details along those lines.

What are examples of products and services?

A product or service can be anything a business creates to turn a profit. Some businesses have both products and services. For example, a restaurant's services include cooking for and serving customers. The restaurant's products are the dishes and drinks it creates.

Small Business Administration. " Write your business plan ."

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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.

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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 step 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.

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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Food Delivery Business Plan Template

Written by Dave Lavinsky

Food Delivery Business Plan

You’ve come to the right place to create your Food Delivery 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 Food Delivery companies.

Below is a template to help you create each section of your Food Delivery business plan.

Executive Summary

Business overview.

Dig In is a newly established food delivery business located in San Diego, California. The company will have an online platform that will also be able to be downloaded to users’ phones as an app. Users will be able to create a login profile and have instant access to all the local restaurants, bakeries, grocery stores, and fast food establishments.

The company will outsource its delivery to local drivers that will be employed as Independent Contractors so they will be able to set their own schedule and hours. The drivers will receive orders through their app, select which user they want to deliver to, pick up the food order from the chosen establishment, and deliver to the user in a timely manner.

Dig In will reward users that frequently use their app. Users will be able to earn rewards and discounts for every order they place through the website or app. This will enable users to keep ordering their food delivery through Dig In.

Dig In will be owned and operated by John Hutchinson, a local entrepreneur who has been in the tech industry for over 15 years. He has developed other apps and platforms for tech companies and has started mapping out this business’ platform for over two years. At this point, he has perfected the technology and is ready to reveal the new local food delivery service in San Diego, California.

Product Offering

Dig In will provide food delivery services for the residents of San Diego. Residents who want the convenience of food delivered to their doorstep can download our app, find the establishment of their choice, and order whatever they’re craving for. Most of our sales will come from orders to local restaurants but we will also offer delivery from grocery stores and drug stores. Customers will be charged a small delivery fee or have the option to join our membership for reduced fees and special deals.

Customer Focus

Dig In will target all residents living in and around San Diego. It will appeal to students, families, retirees, white collar, blue collar, and government employees. Because our fees are moderately priced compared to other delivery apps, all income levels will be able to enjoy our delivery services.

Management Team

With his entrepreneurial and tech knowledge, John will be able to quickly fix any issues with the platform. He has also formed relationships with the most sought after restaurants, bakeries, grocery stores in the area to sign them up to be part of the food delivery platform. He has also hired a team of independent food delivery drivers to earn extra money by completing the food delivery orders.

Success Factors

The following success factors will set Dig In apart from the competition:

• Comprehensive List of Restaurants and Food Stores: Dig In will include a more comprehensive list of restaurants, grocery stores, and drug stores for customers to choose from.
• Membership Rewards: Dig In will allow users who create a profile to earn rewards for every order they place through its online platform. The rewards can be redeemed for delivery fee and order discounts.
• Faster Delivery Times: Dig In promises to have faster delivery times than its competitors.
• Pricing: Dig In’s price point for delivery fees is on par with its customers, if not cheaper.

Financial Highlights

Dig In is seeking a total funding of $500,000 of debt capital to launch. The funding will be dedicated for the design and development of the app, marketing expenses, working capital, and three months worth of payroll expenses. The breakout of the funding is below:

• Platform Development: $150,000
• Marketing and Brand Development: $100,000
• Three Months of Overhead Expenses (Payroll, Rent, Utilities): $150,000
• Working Capital: $100,000

The following graph outlines the pro forma financial projections for Dig In:

Company Overview

Who is dig in.

  The company will outsource its delivery to local drivers that will be employed as Independent Contractors so they will be able to set their own schedule and hours. The drivers will receive orders through their app, select which user they want to deliver to, pick up the food order from the chosen establishment, and deliver to the user in a timely manner.

Dig In’s History

John Hutchinson has spent the last 2.5 years creating the food delivery online platform. As a tech entrepreneur, he knows how to map, develop, and implement an online platform. He has been instrumental in creating other apps and platforms for ecommerce companies and has created attractive and efficient apps for numerous Fortune 500 companies.

During the COVID-19 pandemic, John was on lockdown and working from his home. He used other food delivery services, but they were all slow, got his order wrong, or didn’t have a good selection of restaurants and establishments. It was then that he started developing his food delivery business and would implement and perfect all of the things that the competition suffered at.

Since incorporation, the company has achieved the following milestones:

• Mapped out the online platform for the food delivery business
• Developed the company’s name, logo, and website
• Approached multiple local restaurants, grocery stores, and bakeries to be a part of Dig In’s platform
• Determined necessary insurance and legal requirements
• Began recruiting key employees
• Written and developed the Delivery Driver processes and procedures.

Dig In’s Services

Industry analysis.

The Food Delivery industry has grown substantially in the past five years. The convenience of ordering food from home has appealed to large demographics and now nearly everyone orders through a food delivery app at some point. Food delivery apps became a necessity during the COVID pandemic and now they are a mainstay in modern society.

According to Grand View Research, the Food Delivery industry is set to grow at a CAGR of 18.7% from now until 2030. What helps this growth is the increasing popularity of smartphones and the expansion of these services overseas. Food delivery apps are becoming an essential tool in modern society, which makes this a great time to create a new food delivery service.

Customer Analysis

Demographic profile of target market.

Dig In will target millennials, young professionals, and college age students as this demographic is more comfortable with online delivery services and regularly use other similar apps such as Uber and Tasty.

However, we expect Dig In will appeal to other demographics as well as it will be a convenient and moderately priced option to get food delivered quickly. For example, we expect working parents will enjoy our app as well as elderly residents who have trouble leaving their home to go grocery shopping or go to a restaurant.

The precise demographics of the San Diego area are as follows:

Customer Segmentation

Dig In will primarily target the following customer profiles:

• Young professionals
• College students
• Working parents

Competitive Analysis

Direct and indirect competitors.

Dig In will be competing with other popular food delivery apps. A profile of each competitor is below.

Food at Your Door

Food at Your Door is an online and mobile platform for restaurant pick-up and delivery orders. The company is known for connecting over 30 million customers and processes on average about 500,000 daily orders in most cities around the United States. Customers are able to search for restaurants, order directly through the website or app, and then await their delivery from independent contractor drivers.

The company generates revenue from delivery fees paid by consumers as well as commissions paid by participating restaurants. Food at Your Door’s other offerings include a program for corporate food ordering, website design and hosting for participating restaurants, and point-of-sale integration services. The company is continuously updating its platform with innovative technological advancements to stay on top of the competition.

Fast Foodie

Fast Foodie is a technology company that connects people with the most popular food establishments in their neighborhoods. They enable local businesses to meet consumers’ needs of ease and convenience while enabling their independent contractors to generate an additional source of income. The company is passionate about transforming local businesses and dedicated to enabling new ways of working, earning, and living. They empower their local economies by ensuring that people have equal access to opportunities to reach their full potential.

Fast Foodie has expanded their database to include not only restaurants, but convenience stores, pet stores, grocery stores, and drug stores.

Ding Dong is an operator of an on-demand goods delivery platform that is intended to facilitate smooth delivery of essential goods. The company’s platform offers full-service and in-store shopper services through a network of independent shoppers with same-day delivery and pickup service of fresh groceries and everyday essentials. This enables users to select items from their favorite grocery stores and get them delivered almost instantly.

Ding Dong was the first online platform to expand their services and products by including anything that can be purchased at a local grocery store, convenience store, or drug store. The drivers/shoppers are required to ensure delivery during the selected timeframe that the user selects.

Competitive Advantage

Dig In offers several advantages over its competition. Those advantages are:

Marketing Plan

Brand & value proposition.

Dig In will offer the unique value proposition to its clientele:

• Comprehensive list of restaurants and grocery stores
• Membership rewards and specials
• Faster delivery times
• Moderately priced fee structure

Promotions Strategy

The promotions strategy for Dig In are as follows:

Social Media

Dig In will utilize the most popular social media platforms for ads since the majority of the clientele will be active on social media. The company will also have business accounts on each major platform to post regularly of food options that are available for delivery.

Collateral Material

Dig In will develop numerous collateral materials to have on hand to give out to potential customers at the local farmers markets, events, or restaurant or store events.

Website/SEO

Dig In will invest heavily in developing a professional website and app that displays all of the restaurant and store options the company will be able to deliver for. The company will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.

Billboards/Signage

Dig In will invest in attractive signage and billboards to increase the brand awareness of the local food delivery business.

Dig In’s fee structure will be moderate so clients feel they receive great value when placing their food delivery orders.

Operations Plan

Operation Functions: The following will be the operations plan for Dig In.

• John Hutchinson will operate as the CEO of Dig In. In addition to running the general operations, he will oversee the app development and provide app support.
• John will hire 2-3 additional web engineers to run the website and app.
• John will hire 20-30 delivery drivers to work on an independent contractor basis.
• John will also hire an administrative team for accounting/bookkeeping, sales and marketing, and customer service support.

Milestones:

Dig In will have the following milestones complete in the next six months.

• 8/202X – Finalize app development
• 9/202X – Hire and train initial staff
• 10/202X – Kickoff of promotional campaign
• 11/202X – Launch Dig In
• 12/202X – Reach break-even

Financial Plan

Key revenue & costs.

Dig In’s revenues will come primarily from the fees it receives from the food delivery orders.

The delivery driver commissions, website platform fees, supplies, marketing, and labor expenses will be the key cost drivers of Dig In.

Funding Requirements and Use of Funds

Key assumptions.

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

• Initial Number of Orders Per Day: 100
• Average Order per Customer: $25.00

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Food Delivery Business Plan FAQs

What is a food delivery business plan.

A food delivery business plan is a plan to start and/or grow your food delivery 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 Food Delivery business plan using our Food Delivery Business Plan Template here .

What are the Main Types of Food Delivery Businesses?

There are a number of different kinds of food delivery businesses , some examples include: Restaurant Delivery, Meal Kit Delivery, Grocery Delivery, and Veggie Box Delivery.

How Do You Get Funding for Your Food Delivery Business Plan?

Food Delivery businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Food Delivery Business?

Starting a food delivery business 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 Food Delivery Business Plan - The first step in starting a business is to create a detailed food delivery 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 food delivery business. 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 food delivery business is in compliance with local laws.

3. Register Your Food Delivery Business - Once you have chosen a legal structure, the next step is to register your food delivery business 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 food delivery business, 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 Food Delivery Equipment & Supplies - In order to start your food delivery business, 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 food delivery business. 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. 

Learn more about how to start a successful food delivery business:

• How to Start a Food Delivery Business

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Help organizations manage and optimize their plan to produce processes

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Applies to: Dynamics 365 Finance, Dynamics 365 Guides, Dynamics 365 Human Resources, Dynamics 365 Project Operations, Dynamics 365 Supply Chain Management, Dynamics 365 Business Central, Power Apps, Power BI, Power Automate

This article introduces the plan to produce end-to-end business process. It outlines how Microsoft Business Applications can help organizations manage and optimize their plan to produce processes. This end-to-end business process has the number 70 in the business process catalog. Learn more at About the business process catalog for Dynamics 365 apps .

Plan to produce overview

The term plan to produce is used to describe a collection of business processes that an organization implements to support the planning and execution of the production process. Planning refers to the definition of production strategies, reviewing the long term production plan, and building a production schedule. The production business process incorporates the activities before, during, and after the execution of the procedures that result from taking raw materials and creating sub-assemblies or finished goods.

The plan to produce process covers several different approaches to manufacturing. For example, discrete manufacturing, process or batch manufacturing, lean manufacturing, and job-shop manufacturing. These are all considered different modes of manufacturing, but the core concepts in the business process are largely the same.

The plan to produce process is highly interconnected to the other end to end business processes, such as forecast to plan , source to pay, inventory to deliver, record to report, order to cash, and acquire to dispose . The upstream or downstream relationship of plan to produce to the other processes is highly dependent on the operational strategies of each organization. For example, plan to produce could be an upstream process of order to cash in a make-to-stock scenario, but would be a downstream process instead in a make to order scenario. Organizations also often use multiple different operational strategies when they offer different types of products. This choice is fully supported by Dynamics 365.

It is important to note that the inventory management processes related to plan to produce are not included in this process definition. They are located in the inventory to deliver process. Learn more at Inventory to deliver - introduction to the end-to-end business process .

It is important to note that the supply and demand planning process is part of the forecast to plan business process, and the planning in the plan to produce process begins with scheduling production. Learn more at Forecast to plan introduction .

The high-level strategy for plan to produce processes should be planned at the early phases of a larger business solution. The design and decisions made about this process have an impact on downstream processes including integrations, data that must be migrated, and so on. The production process is often considered business-critical scope for implementing a technology solution, but may sometimes be slated for later phases when a finance-first implementation strategy is chosen.

Every organization has variations to the  plan to produce process. Here, we define the basic outline for any organization looking to implement a Microsoft technology solution to support the  plan to produce process.

The plan to produce business process is key to any company that produces the product that they sell. A strong plan to produce process ensures that production runs efficiently within the capacity of materials and production resources to deliver products on time and at a minimized cost. Getting the plan to produce process right allows all other areas of the business to run smoothly and ultimately results in high customer satisfaction and brand loyalty.

Dynamics 365 includes many tools to support the execution and control of the plan to produce process. The core Dynamics 365 Supply Chain Management tool tracks production data like bills of materials and routings, supports production scheduling and capacity planning, and aligns the production process with other areas of the business. Power Apps can be used to make custom, quick, low-code solutions to support some of the more unique needs in your production process. Power BI and Azure Data Lake together can provide real-time visibility into shopfloor data and metrics to ensure that operations are receiving valuable feedback to control the quality and process of production.

Stakeholders

The key stakeholders required to define the plan to produce business processes include:

Inventory stakeholders – examples: Warehouse manager, Transportation planner

Customer service stakeholders – examples: VP of Customer Service, Customer service director, Customer satisfaction manager, Call center manager

Planning stakeholders – examples: COO, VP of Operations, Operations manager, Planning manager

Procurement stakeholders – examples: Director of procurement, Buyer, Purchasing agent, Purchasing manager

Sales stakeholders – examples: VP of Sales, Sales director, General manager

Production stakeholders – examples: Production manager, Production scheduler

Engineering stakeholders - examples: Product owner, Engineering manager

Costing stakeholders - examples: Cost accountant, controller

Plan to produce benefits

When your organization plans to implement Microsoft Business Applications to assist with the plan to produce process, there are several benefits the solution can help provide. These key benefits should be used to determine if the solution is a good fit for your business and to drive the specific business requirements for implementing the solution. As a side effect, these benefits can be used to create a baseline for your goals and objectives for the project so that you can measure the success of implementing solutions to meet those business requirements.

Increase delivery date accuracy

Using Dynamics 365 Supply Chain Management to track and control the plan to produce process allows the business to accurately estimate customer delivery dates. The sales order entry process can reference current production operations and material and resource capacity to systemically calculate a realistic date when a customer order can be shipped, which ultimately increases customer satisfaction and improves the order on time and in full (OTIF) percentage.

Improve insight into current production operations

Providing accurate status updates is as important as providing realistic estimates to customers. With the full operations traceability provided in Dynamics 365 Supply Chain Management, production supervisors and customer service representatives can quickly view the current status of shop floor operations to advise customers and internal stakeholders of order progress. Visibility into the procurement and planning operations can also provide production managers the tools they need to adjust the schedule based on supply chain disruptions or other variations.

Quickly and efficiently scale operations

The organized and controlled approach to production data management in Dynamics 365 Supply Chain Management allows organizations to efficiently roll out new products and locations by using the engineering change control tools and product templates to streamline processes. The system also supports capturing standard sets of production instructions and sharing with operators either via a printed job sheet or through the shop floor interface.

Enhance control of production costs and decrease cost variances

Dynamics 365 Supply Chain Management supports tracking production cost estimates and actuals for materials, labor, and overhead costs. Knowing the true cost of conversion in your production process helps ensure that you're properly setting product prices, and insights into cost variance can help identify opportunities for improving the production process.

Optimize production schedule

By modeling your production process in Dynamics 365 Supply Chain Management, you can use tools like sequencing rules, substitution planning, and resource load allocation to create a production schedule that is optimized to reduce changeovers, meet operational requirements, and still supports on time order delivery.

Improve quality control

Dynamics 365 enables manufacturers to track quality metrics throughout the production process, from raw materials to finished goods, ensuring consistent quality and reducing the risk of defects. It provides support for standardization of testing process and automating pass/fail assessments. It also ties in to the inventory management of quarantined materials and handling non-conformances and corrective actions.

If you want to implement Dynamics 365 solutions to assist with your  plan to produce business processes, you can use the following resources and steps to learn more.

Define the goals and objectives of implementing a plan to produce technology solution. Learn more at  Implementation strategy .

Define the business process scope of your project. Learn more at  Process-focused solution .

Request a demo or get a free trial of Dynamics 365 solutions for the plan to produce business process. Learn more at  Request a demo .

Learn more about the Power Platform products at Business Application Platform

Get an overview of the plan to produce process. Learn more at  Plan to produce overview .

If you want to implement Dynamics 365 solutions to help with your  track production costs business processes, use the following resources and steps to learn more.

Define product costing overview

Define production strategies

Plan production operations

Run production operations overview

Outsource production operations

Control production quality

Track production costs

Return to the overview of business process areas at  Plan to produce business process areas .

Related information

You can use the following resources to learn more about the plan to produce process in Dynamics 365.

TechTalk series on the plan to produce process: Production control in Dynamics 365 Supply Chain Management

TechTalk on Manufacturing Accounting: Part 4: Manufacturing Accounting in Dynamics 365 Supply Chain Management

TechTalk on Production Variance Analysis: Part 7: Production Variance Analysis in Dynamics 365 Supply Chain Management

Product documentation: Production process overview - Supply Chain Management

Product training: Get started with production control in Dynamics 365 Supply Chain Management

Related product certification: Exam MB-335: Microsoft Dynamics 365 Supply Chain Management Functional Consultant Expert (beta)

Dynamics 365 Community Forum: Dynamics 365 Supply Chain Management Forum - Production Control

Find definitions of terminology used in content for plan to produce in the Glossary: Dynamics 365 business processes article

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