Does your food processing company have a strategic plan? Failing to plan is planning to fail—especially when it comes to your business. Earlier this year, Stellar hosted the Food Engineering webinar, 3 Key Elements in a Successful Strategic Plan for Growth. That webinar is now available on-demand, so you can still catch up on our discussion about how strategic planning can benefit food manufacturing plants, and how you can get started with developing your own strategic plan.
The benefits of a strategic plan include:
- Clearly defined mission and vision
- Objective view
- Cost management
- Competitive advantages
- Improved communication
The first step in building your strategic plan is to develop your business plan, where you define and analyze aspects of your business against its business objectives. Your business plan outlines where your business is going and how you want it to grow.
Your business plan should address the following four key elements:
1. Company description
The first element of your business plan is defining the identity of your company: who it is and what you want it to be. This is your “company description.” Be sure to answer these questions:
- What is the nature of your business, and how will your product serve the market’s needs?
- Who are your target customers?
- What sets your company apart from other food processing companies in the marketplace offering similar products?
2. Product mix
Detail each product your company will manufacture and its contribution to meeting sales goals. In other words, understand which products are profitable—and which are not. Each individual SKU will fill a unique customer desire and have its own price and profit margin, in addition to competitive advantages, such as ingredients, packaging or price. Be sure to answer these questions:
- What similar products are available and what market share do they own?
- Are there product lines the company may add in the future?
- What products are profitable?
- What products are not profitable?
- What are your products’ profit margins?
- For each product, what is the cost of equipment utilization, labor, materials, etc.?
3. Industry analysis
Address both the specific market segment you’ll serve and your customers’ wants/ needs. This analysis should involve your company’s sales and marketing departments: the individuals who understand where the customer base is headed and how customer preferences are shifting from one product to another. Be sure to answer these questions:
- Is the market expanding or well saturated?
- Who are the current market leaders and what is their brand strategy?
- What profit margins are typical in the industry?
- Are there seasonal or geographic limitations or opportunities?
4. Marketing and sales
Determine your sales goals and develop your marketing strategy to meet those goals. Be sure to answer these questions:
- Is this a new market you’re hoping to penetrate or are there existing product lines in the market?
- Could your product target an entirely new demographic, and if so, how will you reach it?
- How will you meet your sales goals? Will it be through organic growth, a business acquisition or a vertical growth strategy?
- What channels of distribution will you use to meet these sales goals?
Want to learn even more about building a business plan? Download our handy business plan guide.