5 Things to Consider if You’re Thinking of Starting a Manufacturing Business: Pixabay – CCO Licence
Launching your own business is a great way to control your destiny and do something you love. No matter what your interests, you can build a business that combines the things you’re passionate about.
For many people, the opportunity to manufacture a product is the ultimate business dream. When you have complete creative control over the design and functionality of a product, you can bring your dreams alive.
However, people tend to assume that starting a manufacturing business requires million-dollar backing and extensive experience. While there are certainly hurdles to overcome when you launch any new company; starting a manufacturing business could be easier than you think.
If you’re eager to make your mark on the world, escape the rat race and harness your creativity; take a look at these essential factors to consider when starting your own manufacturing business:
1. Market Research
Before you get work designing a product and starting a production line, you’ll want to ensure there’s sufficient demand for what you intend to manufacture. While it’s tempting to assume a product will be popular, researching your target market will help you to confirm that your audience will actively be interested in your outputs.
Additionally, the information gained via market research could help you to refine your product designs and enhance your final product. When you know exactly what your audience wants and needs prior to production, it’s possible to increase marketability. It drastically reduces your costs.
Informal research can mean asking friends and family for feedback. However, you’ll want to take a more objective look at your market too. Fortunately, there are a variety of ways to conduct accurate market research on a budget. Instead of setting up your own focus groups or prototype testers, you could use dedicated online platforms to access the research volunteers. With feedback from thousands of people in your target demographic, you can all the data you need quickly and efficiently.
2. Startup Costs
Launching a business requires an initial investment, regardless of what sector you choose to operate in. When it comes to the manufacturing industry, you’ll need to work out exactly what equipment you’ll need to turn raw materials into a finished product. From assembly lines and 3D printers to a heavy duty platform trolley and warehouse space, there are lots of factors to consider. When assessing your needs, remember to think about every stage of production and logistics.
Although people tend to assume that launching a manufacturing business is expensive, it doesn’t have to be. A significant proportion of the equipment you might need can be rented or leased, which will reduce your initial outlay and help you to minimize your expenditure.
Furthermore, many firms offer access to production line facilities. Essentially hiring out a warehouse, its staff and equipment to produce your own line of products; this can be a cost-effective way to bring your first few batches of products to the market.
If you do need to access funding to facilitate the launch of your business, there are lots of options available. A comprehensive business plan and detailed market research will make it easier to access commercial loans and financial support from angel or seed investors, while family and friends may be willing to buy into the business in return for a share of the equity.
3. Knowledge of the Industry
Perhaps you already have extensive knowledge of the manufacturing industry. Also, maybe you plan to use your professional experience to put your business plan into action. Alternatively, you may want to increase your understanding of exactly how the manufacturing sector operates.
As a business owner may have experience in your sector and an understanding of your target market. However, this doesn’t necessarily mean you have an intricate knowledge of production lines, manufacturing regulations and/or import and export restrictions.
If you’re concerned that limited knowledge of the sector will hold you back, there’s no need to worry. As well as formal courses offering qualifications in manufacturing, there are plenty of resources available online that will help you get up to speed with what you need to know.
Furthermore, you’ll find that other companies within the industry will be happy to discuss your needs and requirements with you to help establish exactly what outsourced services you might require. If you plan on hiring factory space, for example, talking to providers will help you to identify critical issues you may have overlooked.
4. Company Location
High-speed logistics and instant communication mean that there are very few restrictions when it comes to where your company is located. While the cost of transporting goods will need to be factored into your calculations; there’s no need for you to base your production line in your own locality. With the option to use independent quality control assessors, you could even set up a functional production line on the other side of the world, if you choose to.
Depending on the nature of your organisation, you may choose to work from home, open a bricks and mortar retail store or hire office space to facilitate your growing business. With the opportunity to outsource many essential business tasks, many small business owners choose to launch with a small staff and expand as time goes on.
Again, using freelancers and subcontractors to help build your business ensures you’re not restricted by geographical locations. Every business wants to bring onboard the best talent. Now, you’ll have the chance to work with designers, producers, marketers and salespeople from all around the world.
What’s more, this approach greatly reduces your operational costs and minimizes the amount of financing you’ll need to get your manufacturing business up and running.
5. Regulatory Requirements
When you decide to launch your own business, it’s essential to research the rules and regulations which might apply to your organization. From health and safety requirements to tax liabilities, there are a wide variety of areas to consider.
If you choose to have your production line manufactured abroad. You may need to determine whether products will meet the health and safety criteria imposed in your resale locations. Similarly, you’ll want to assess the impact that shipping and freight will have on your costs to help you decide what impact this will have on your outgoings, turnover and profits.
The rules and regulations which govern your chosen industry are one of the most important things to understand. So, do take the time to access all the information you need. When you are manufacturing goods, the products must be made using materials that have been tested for safety. Your prototypes should be trialled to ensure they meet safety standards, won’t pose a risk to future users or customers.
Of course, understanding these regulations can seem daunting at first, particularly in relation to the manufacturing sector. However, there is a whole industry dedicated to making it easier for small businesses to access services, equipment and support that is pre-tested and approved.
Launching Your Manufacturing Business
Once you’ve done your research, refined your design and sourced funding, you’ll be ready to begin launching your company. Following your initial research, you’ll be able to turn your attention to branding and marketing, exploring which routes to market you intend to utilize.
Although building your own business can be tricky, it’s also supremely rewarding. With the potential to create a new product and bring your own unique ideas to life; operating within the manufacturing industry could fulfil your professional ambitions and give you the challenge you’ve been craving.