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How to Purchase Machinery for a Manufacturing Plant

Purchasing machines and equipment are the most common things in the manufacturing business. Even a home-based business requires different small machines and hand tools. However, taking the right decision of purchasing machines and equipment is not an easy task for new entrepreneurs. Because here you are investing your hard-earned capital into fixed assets.

In addition, retail businesses also demand machine operations. It includes a weighing scale, bill printing machine, etc. However, purchasing machines is the most crucial aspect of the manufacturing business. After you buy and install the machinery, it is really tough to change them frequently.

Even if you go for a change, it comes with a huge financial loss. Therefore, you must be careful at the time of purchase machines for your manufacturing business. The object of crafting this article is to provide important considerations to be made in purchasing machinery for entrepreneurs.

10 Steps to Purchase Machines for a Manufacturing Plant

#1. New or Used

When you are starting a business with less budget, you may consider purchasing a used machine. Definitely, a used machine costs much lower than the same quality new machine. Therefore, it reduces the startup capital investment in new businesses.

However, you must be doubly careful in purchasing a used machine. Check, whether the machine supplier provides a warranty or not. Check it carefully. In addition, check the company’s reputation in the machinery market.

#2. Production Output

This is one of the major criteria in purchasing machines for your small business. In addition, you will need to compare the production output with the required utilities and price. Definitely, the perfect machine comes with maximum production output with minimum utility requirements at a reasonable price. And in the time searching for the right machine, you will need to compare all these things with the production output.

Related: How To Choose The Best Filling Machine For Your Business

#3. Price Comparison

This is another important factor in selecting the right machine. When you get different prices for the same machine, find out the reason behind it. Check every feature of the machine. However, never compromise quality over price. While price is important in deciding what to purchase, the greater focus should be on quality and value.

#4. Manpower Engagement

Identify the manpower engagement. Because you will need to pay for every man-hour that involves in operating the machine. The long-term success of the business hugely depends on several cost factors. And you have to identify how much you are paying per unit of production.

Here we put an example of an Agarbatti-making machine. Generally, there are two different types of machines. These are semi-automatic and fully automatic. A semi-automatic machine demands dedicated manpower for the operation. On the other hand, a single individual can operate at least 5 numbers fully automatic machines at a time. And in that case, you get more production output with minimum manpower utilization.

#5. Space Requirement

You must know how much space the machine takes in installation and operation. Generally, after the installation, you will need to provide some extra space for the operational activity. So it is important to know the exact space requirement before putting in the final order. In addition, check whether you can provide the required space or not.

6. Power Requirement & Consumption

This is another important consideration in purchasing machines for your manufacturing business. If the machine requires a domestic phase to operate then it is good. Otherwise, you will need to arrange commercial electricity from the Electricity Board. And definitely, it is time-consuming. In addition, it demands investment.

Furthermore, check the consumption rate of the machine. Check it for 8 hours of operation. Because you will need to calculate the cost of energy involves in the production.

#7. Warranty Period

Check the warranty period before placing the final order. In addition, check it in detail. What are the parts that come with the warranty and what don’t? In addition, check the service fee structure after the warranty period. Because you will need to pay the machine company for every service issue in the future.

 #8. Installation & Training

Check whether there is any installation charge. Generally, maximum companies provide the installation service free of cost. However, some companies take charge of the installation.

In addition, ask them to provide on-site training to your employees. Even if the company asks for fees for it this is worth giving.

Read: Top Profitable Small Manufacturing Business Ideas

Customer Feedback

After you finalize the machine and machinery supplier for buying the machine, check the company’s customer feedback. Large companies always provide client feedback on-demand basis. And you can check what other clients say about that machine company.

What You Can Outsource?

Last but not least. Before planning to buy the machine, check what you can or should outsource. Simply, identify what makes sense to outsource for financial reasons and space limitations. Also, you have to calculate the financial aspects carefully.

Here we put an example of an Agarbatti business where bamboo sticks are the major raw materials. You can simply buy the bamboo sticks from another company or you can produce the sticks at your unit. And for a small unit, we always advise getting bamboo sticks from other manufacturers. On the other hand, for a large-scale Agarbatti unit, outsourcing the stick is not a financially prudent decision.

Related: Questions To Ask Before Starting Manufacturing Business

Starting a manufacturing business is a self-rewarding career for every entrepreneur. However, to achieve long-term success in the business, you must take every step carefully. And we hope, these 10 important considerations in purchasing machines with help you in buying the right machine for your small business.

About Next What Business Research Team

The Editorial Staffs at NextWhatBusiness is a team of Business Consultants with years of experience in small and medium-scale manufacturing and service-based businesses.