How to Start Diamond Cutting And Polishing Business
Any individual can start a medium or large-scale diamond processing and polishing unit with moderate capital investment. Here in this article, we intend to explore how to start a small-scale diamond-cutting and polishing business.
The overall success of this business majorly depends on the quality of work and investment capacity. Therefore, you have to put the investment in purchasing the right machines and hiring experienced manpower.
If you are a beginner, it is advisable to study the industry first. You must know the trade and current industry activities. Then only you can prepare a SWOT analysis. You need to identify the specific demand, the competitors, and the potential clients.
Table of Contents
10 Steps to Start Diamond Cutting and Polishing Business
1. Get Trained
Before starting the business, it is critical to understand the diamond industry. If you are a beginner, you also need to understand the types of diamonds in demand, such as colourless, fancy, or industrial-grade diamonds. It is advisable to attend workshops or work as an apprentice for a diamond cutting and polishing company.
2. Legal Considerations
A diamond processing unit demands specific registration and licenses from several Govt. authorities. Obtain necessary licenses and permits from the Gem and Jewellery Export Promotion Council (GJEPC) and other local authorities.
It is advisable to check your state law. However, here we have compiled some of the basic requirements.
- First, you have to register the business. It is better to form an LLP, Pvt. Ltd or Ltd company.
- Then apply for a Trade License from the local authority.
- Apply for a company PAN Card.
- Obtain Professional Tax Registration
- Open a current bank account for the business transaction.
- Apply for a Trademark to secure the brand name of your company.
- You must apply for the IEC code from DGFT (Directorate General of Foreign Trade). Because you have to import the rough diamond from the other countries.
- Get GST Registration Number
- Finally, check the upcoming tax liabilities of your business.
After starting the business apply for the membership of Gems and Jewellery Export Promotion Council (GJEPC).
3. Arrange Funds
The business demands substantial capital investment. And there are several options for securing the paid-up capital of your company. Generally, in this type of conventional business, it is a little hard to secure funds from angel investors or venture capitalists. However, you can have a try if you have a recommended one.
Otherwise, you can secure the funding from your business partners as equity participation. Additionally, you can also approach banks for financing your project. Additionally, you must look for Government subsidy schemes if there are any.
Read: Best Loan Apps in India for Instant Cash
4. Select a Location
Choose a location with proximity to other businesses in the diamond industry. Mumbai, Surat, and Ahmedabad are key locations.
5. Facility Setup
Set up a well-ventilated and secure facility with cutting and polishing rooms equipped with the latest technology. In establishing the unit, you have to secure a workspace first. The area requirement entirely depends on the business size. However, you can start a medium-scale unit with 1000 Sq Ft built-up space.
Additionally, you have to ensure a commercial electricity connection for running the machinery. It is advisable to have a detailed floor plan for the unit. You must talk to the machine supplier regarding the space required for the specific machine.
6. Buy Equipment
Invest in cutting and polishing machines, scaifes, laser saws, and other necessary tools. Ensure they meet industry standards. There is a wide array of diamond cutting and polishing machines you can find in the market. However, you must procure the right machine according to your specific demand. First of all, determine the size of the rough diamonds that you want to cut.
Additionally, specify the required quantity output. And accordingly, choose the machine. There are several aspects you might consider in the finished diamonds. These are single-side processing, parallel walls, tight kerf widths, unmatched surface finishes, higher yields, and minimal weight loss.
Related: Things To Consider in Purchasing Machine & Equipment
7. Procure Rough Diamond
Establish relationships with diamond suppliers. Source rough diamonds from reputable dealers. Develop skills in sorting and planning to maximize the yield from each rough diamond.
8. Cutting and Shaping Diamonds
Use a bruting machine to shape the diamond. This step determines the basic shape (round, oval, etc.). Next, facet the diamond using precision equipment to enhance its brilliance and fire. Finally, use polishing wheels and compounds to achieve a smooth and reflective surface.
You must implement stringent quality control measures at each stage to meet international standards. It is advised to get diamonds certified by reputed gemological laboratories.
9. Staffing
Human resources plays an important role in this industry. In a startup company, you must hire skilled and experienced manpower for your company. Additionally, you must conduct a training program regularly to keep your team relevant to the current trends.
10. Marketing
Establish an online presence through a professional website and social media. Attend industry events and build connections within the diamond community. Supply diamonds to jewellery manufacturers and retailers. Explore direct-to-consumer sales through your own showroom or online platform.
This is a B2-B business. Therefore, you must concentrate on networking. Additionally, chamber of commerce membership and relevant trade shows are the right options for creating brand awareness. Finally, you must go for the export to get the long-term success of your diamond cutting and polishing business.
Is Diamond Cutting And Polishing Business Profitable?
The demand for diamond jewellery is increasing in both metro cities and small-town populations. And consumer preferences will continue to evolve. However, innovation by global luxury brands and new online propositions will generate strong competition in the industry.
Economic empowerment ensures self-purchases, especially among women. And it will raise the demand for lower entry-point diamonds. According to the experts, the polished diamond value is expected to expand in the coming years. Therefore, starting a diamond-cutting and polishing business is a highly lucrative opportunity for entrepreneurs.
Frequently Asked Questions
How do I source rough diamonds for my business?
Establish relationships with reputable diamond suppliers or dealers. Attend industry events and build connections to access a steady supply of quality rough diamonds.
What is the significance of certification in the diamond industry?
Certification from renowned gemological laboratories, adds credibility to your diamonds. It assures customers of the quality and authenticity of the diamonds you offer.
What are the key factors influencing the success of a diamond-cutting and polishing business?
Success in this industry depends on factors like the quality of your diamonds, precision in cutting and polishing, adherence to industry standards, effective marketing, and building a strong network within the diamond community.
Is it necessary to have a physical showroom, or can I operate solely online?
While having a physical showroom can enhance your credibility, operating solely online is also a viable option. An online presence through a professional website and social media can help you reach a wider audience.
How long does it take to set up and establish a diamond-cutting and polishing business?
The timeline can vary based on factors like location, obtaining licenses, and setting up the required infrastructure. On average, it may take several months to a year to have everything in place.
What is the Kimberley Process Certification Scheme, and why is it important for the diamond industry?
The Kimberley Process is a global initiative aimed at preventing the trade of conflict diamonds. It ensures that diamonds are sourced in a way that does not contribute to conflict or human rights abuses. Adhering to this process is crucial for maintaining ethical standards in the diamond industry.
Can I start a diamond-cutting and polishing business with a limited budget?
While significant investment is required for equipment and infrastructure, you can explore partnerships or financing options. It’s important to balance cost considerations with the need for quality machinery and skilled personnel.
How can I stay updated on industry trends and innovations?
Regularly attend industry events, join relevant associations, and stay connected with industry publications. Continuous learning and networking are crucial in an ever-evolving industry like diamond cutting and polishing.
