Business

Essential Checklist For Launching Your Own Manufacturing Business

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Business

Essential Checklist For Launching Your Own Manufacturing Business

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If you’re reading this, it’s probably because you have had an idea. You’ve thought of a material, ingredient or product that doesn’t currently exist, but will explode into the market like the invention of sliced bread. You believe in this idea with all your heart and soul, and you’re desperate to share it with the world and make it a reality. However, there’s one problem; you don’t currently have the facilities or infrastructure in place to make this idea come to life. Without these practicalities, the dream inside your head will remain just that; a dream.

This is the major difference between a great idea and a successful business. Many people have innovative thoughts and plans; plans they share with coworkers, friends and relatives - but far fewer have the resolve or resources to follow these plans to a conclusion.

Launching any business is hard enough, but a manufacturing business - building a product from the ground up - is even harder. There are often large start-up costs compared with other business models, making it a risk few people are willing to take. Yet the rewards can be just as huge, especially the joy and satisfaction from seeing something travel from a light-bulb moment in your head, to a product being delivered to companies and shelves.

If you are ready to take this leap into a new adventure, here are some of the main issues and areas you’ll need to consider both before and during the setup of your business. By thinking about these considerations, you will be putting yourself in a prime position to help make your new business a roaring success.

The Idea

The first item on your agenda should always be the idea itself. Even the greatest idea can have flaws, and it’s important to hammer these out as soon as possible, before you tie yourself into knots and commitments later on. Market research is vital to find out if your product truly does not exist elsewhere.

Sometimes this can be hard to tell with a simple google search, as companies will be operating behind the scenes to supply major companies, and often the individual components, ingredients or production methods won’t be handily listed.

You have to be absolutely sure that you are offering something new, or you risk being muscled out of the market by existing manufacturers. Even if your idea is new, be strict and ask yourself if there is a clear niche in the market for it, or if it is a luxury item which is great in theory, but too expensive, complex or specific to appeal to potential buyers.

Manufacturing Needs

Once you have thoroughly researched and made your idea watertight, there are more difficult questions to ask yourself. Your main query should be; do you need to create a manufacturing process from scratch, or is this a product a pre-existing factory may have the ability to make for you? If a large pre-existing factory has the appropriate facilities and equipment, they will often create products for multiple companies all under the one roof.

It may not have the idealistic glow of doing it all yourself, but this method will be less risky in terms of start-up costs, and worth checking as an option. It’s also worth weighing the ongoing financial commitments of renting factory space or paying a manufacturer to create your product, against running costs of using your own building.

Scale and Location

If you have determined that your product requires a new, specialised facility, your next considerations will be the scale and location of this structure. Of course, your particular manufacturing business may be very low scale and personalised - you may be baking bread in your home kitchen for supply to the local bakery! Other examples of smaller scale businesses that can be classed as manufacturing are craft and artistic pursuits such as textiles and pottery.

In these cases, you may be both the manufacturer and the retailer for your product - it may be worth considering whether your business can be conducted entirely at home and online or if you need an external workshop or retail location - but at least this will be a fairly simple manoeuvre.

If, on the other hand, your manufacturing needs are larger, you’ll need to think about where to base yourself and how large an area you will require. Some regeneration areas can result in tax breaks for new businesses, or your manufacturing methods may require some degree of noise where other local businesses or residents need to be taken into account.

Infrastructure and Equipment

After determining a location, your next step will be identifying what equipment you will need to make your product. Machines and systems can be incredibly specialised (though this will come with a price tag) and you should be able to find or commission anything you need, ranging from industrial pumps to drills, lathes or anything in between. Your equipment will form a vital backbone for your business, so you want to make sure you are investing in high-quality goods that will help your product stand out and look its best. 

Funding

Of course, all these considerations are dependent on one thing; finance. Starting a manufacturing business is one of the most high-cost and high-risk ventures, and so a good deal of capital is vital. However, if you don’t have mountains of personal finance behind you, don’t despair. There are other ways to source the capital required; they just need a little more work.

Crowdsourcing is an option, particularly if your product has large and popular appeal. You can also investigate sponsorship from larger corporations who may have a vested interest in your idea, and there are also government loans available to start-up businesses. You’re likely to need a combination of these options, so make sure to do your research and know exactly what you are asking for.

Partners and Promises

Before you start your business, it’s very helpful to gather a professional network around you so that you feel supported and part of the industry. This is necessary on both sides of your buying and selling model. You will almost certainly need materials to create your product, whether it be flour or sheet metal, and it’s worth building a partnership with a supplier company where you can negotiate bulk rates and deliveries.

On the other side, if you can obtain pre-orders or genuine expressions of interest from the companies you want to be supplying in turn, this will help greatly in lowering risk and enabling you to start your manufacturing with confidence.

Support Network

As well as a professional network, a personal support network is equally important for maintaining your health and peace of mind. Especially in the first few years of your business, you may be working very long hours and dealing with many hurdles.

It’s important to make sure your family and close personal relationships are aware of this, and ready to help you make your way through it. More officially, you should never underestimate the benefits of a Business Advisor, who can give impartial and objective advice on any difficult problems or new steps - a particularly useful role for a new business.

Developing a long-term relationship with a Business Advisor will help your business in the short-term and the long-term, and it is a wise investment.

Staff

Of course, alongside partners, investors and advisors, you may also need staff. This is particularly relevant if your business plans are more large scale, and not confined to a home business in which you will be doing the manufacturing yourself. You may need to employ specialist tradesmen, or a team of factory workers to operate machinery and help create your product.

With the employment of staff comes a host of other considerations including fair pay, employee benefits, planning for annual leave and sickness, the types of contracts you want to offer - and that’s just naming a few. To begin with, you need to decide how many staff you need to operate, and what skills you may need them to have, considering costs, effectiveness and staff morale as part of this equation.

Growth

Finally, it’s worth considering the potential of your business for growth. Is your product one which could, if successful, spawn other options, accessories or spin-offs? Does your factory have the capability to accommodate this growth, or do you need to plan for the potential of further locations and more specific equipment? Of course, all these questions are ones for the future, but they may be interesting to start loosely considering now, so you are prepared for all eventualities.

First Steps

So, your first step following this is to thoroughly research your idea and check its viability. Following that, it would be a very good idea to create a detailed budget and plan for the first five years of your business.

The cold hard numbers of startup costs will help you start to make decisions about location and equipment needs, and give you a fundraising budget to aim for. With this in place, you will be on the first rung of the ladder, and ready to start the hard, rewarding work towards making your fantastic idea into a reality.

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Essential Checklist For Launching Your Own Manufacturing Business

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