The manufacturing industry is one-sixth of the world’s economy; therefore, if you are looking to take the plunge and set up your own manufacturing business, you are certainly in the correct field. Perhaps more so than other business types, manufacturing businesses can be difficult to set up and maintain in the long-term should the entrepreneur not have enough knowledge of the industry; whereas seasoned professionals should hit the ground running providing they have the correct planning in place and an innovative product.
If you have an idea for a manufacturing business but are unsure on how to get started, here are a few considerations:
1. Plan your finance
Before you can set up your manufacturing business, you need to work out how you are going to cover the costs of the premises, equipment and hiring staff. It is unlikely that your business can get started immediately without making all of these expenses at once, which is why many new entrepreneurs choose to take out a loan. Some individuals are worried that their credit history may impact their chances of being accepted. However, there are companies who offer loans no credit check. What is also great is that you will receive the cash quickly without having to wait around to get your financial plans in order.
2. Look at other business models
Although you may have a great idea of how you are going to run your new manufacturing business, you may not have the experience and expertise in the field to ensure your plans will play out smoothly.
You may have an idea on location, the type of equipment needed and your desired premises, but do you really have enough knowledge to jump straight in and make these huge investments? If not, it would be worth researching other manufacturing business models so you can investigate their mistakes and gain an understanding of their set-up process.
3. Is there a gap in the market for your product?
Although you may have immense faith in your product (especially if you have designed and created it) is there really a niche in the market for it to become a huge hit? Before making any financial commitments, you need to be sure that others will be just as intrigued by the product as you are in order for them to purchase it.
You can source this valuable information by conducting research, which will be an essential part of your business plan. You may choose to contact manufacturing experts, who will be happy to give you advice as to whether it would be worth making the large investment, or if any tweaks to the product are needed. You can also contact marketing firms who will take care of the research for you and give any feedback that may be helpful.
4. Choose a suitable location
One of the most important aspects for consideration is the location of your business; especially entrepreneurs relying on local custom and collaborations with other nearby businesses.
Transportation should also determine your location choice. Being far out from main roads and motorways may mean that transportation services will charge you extra; bumping up the prices of the materials being delivered and giving you a lower ROI. Likewise, being in a remote location may take longer for your materials to arrive from suppliers. Being centrally located also makes it easier to source local talent when it comes to the hiring process, as candidates are more likely to be willing to travel to and from the premises each working day.
5. Find the right factory
Once you have chosen your location, you need to find a suitable premises for your business; which all depends on the type of product you are going to be manufacturing. The size of the product and the machinery needed to create it will determine how much warehouse space is needed.
Dependant on the amount of staff you are looking to hire, is there enough car parking space to accommodate all staff members once your business is up and running?
Although you may have to sacrifice some benefits, the type of factory space you opt for will have a significant effect on the productivity of your business.
6. Hire a good team
Once you have come up with the right product, a good location and a suitable premises, the individuals you choose to hire to create your team will have an impact on your success rates. During the hiring process, be sure to consider those with the skillset suited to the manufacturing process of your product and have experience with the machinery they will be using.
Once aware of the type of skills you are looking for in candidates, ensure you research the average salary to know how many team members you can afford to pay. You will only acquire good workers who will work happily and efficiently if you pay a sufficient wage.
If you don’t wish to take on a management role yourself, hire an individual who has worked within the manufacturing industry previously and can confidently lead a team to success.
7. Do your research and have multiple partnerships
Before you decide who you are going to do business with, be sure to do extensive research first. Don’t settle for the first business you find – give yourself enough options to make a well-informed decision as to who would work best with your company.
This doesn’t necessarily mean you have to choose just one business to partner up with. You should have a number of reliable options you can call on when a job needs completing. Doing so means you can spread out the risk and find the most competitive prices for a better return on investment.
8. Don’t forget the legal details
As with any business, you need to be sure you have your legal documentation sorted before you can officially get up and running. Visit local government websites and make contact with those who are in the know about the type of licensing and certification needed to make your business legal. Once you have filled-out the necessary documents, you shouldn’t have any problems with purchasing equipment, hiring new employees and trading.