Industrial Plan: Structure, Contents and Common Mistakes
An industrial plan is not a budget with three extra years bolted on. It is the argument for how the company creates value over the next three to five years, and it is judged on whether the actions behind the numbers are real.
The structure that works
- Where the company stands: market, position, margin structure, honestly stated
- The strategic choice: what the company will do more of and, more importantly, less of
- The operating actions by year, each with an owner, an investment and an expected effect
- The investment plan and how it is funded
- The financial projections, monthly for year one, annual thereafter
- Sensitivities and the actions triggered if the downside case arrives
The section that decides it
The action section. A reader can accept an ambitious revenue line if the actions under it are specific: a named plant investment with a delivery date, a pricing change already tested on one segment, an export market with a distributor already in negotiation. Ambition supported by named actions reads as a plan. The same ambition supported by adjectives reads as a wish.
Common reasons a plan is rejected
When an outsider should help write it
When the plan will be read by a bank in a difficult conversation, by a private equity buyer, or by a family shareholder base that no longer agrees with itself. In those cases the value of an external operator is not the modelling. It is the willingness to write down the two or three things the management team has been avoiding.
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