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. Basically, you need to identify the specific demand, the competitors, and the potential clients.
Is Diamond Cutting And Polishing Business Profitable?
The demand for diamond jewelry 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 for the industry.
Basically, 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 at a CAGR of 4% between 2016 and 2022. Therefore, starting a diamond cutting and polishing business is a highly lucrative opportunity for entrepreneurs.
Diamond Cutting & Polishing Business Compliance
A medium-scale diamond processing unit demands specific registration and licenses from several Govt. 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 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 for securing 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).
Finance For Diamond Cutting & Polishing Unit
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 the fund 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.
Diamond Cutting & Polishing Plant Setup & Machinery
In establishing the unit, you have to secure a workspace first. Actually, 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. And you must talk to the machine supplier regarding the space required for the specific machine.
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.
Staffing & Marketing
Human resource plays an important role in this industry. And 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.
Basically, 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 for getting the long-term success of your diamond cutting and polishing business.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.