Starting a manufacturing business is not an easy task at all. You can’t take the decision lightly. A manufacturing operation involves a lot of commitments. In addition, the business demands a heavy up-front financial investment for specialized facilities, complex equipment, and raw materials. In this article, we intend to explore what are the 10 crucial questions to ask yourself before starting a manufacturing business.
Definitely, manufacturing processes come in all shapes and sizes. However, manufacturing starts with raw materials or pieces or parts that may have little value in and of themselves.
Through processes of fabrication and assembly, these pieces and parts are converted into useful products that have potential commercial value.
Before starting a manufacturing enterprise, you need to give careful consideration to a variety of concerns. And you must think through a whole series of related decision points.
Ask yourself several questions to assess your readiness in starting a manufacturing business.
10 Questions To Ask In Starting Manufacturing Business
#1. Do I have what it takes to be a manufacturer?
Manufacturing business demands a lot of commitments and dedications. Also, it demands some essential entrepreneurship attitudes. Do you have the requisite administrative and managerial skills to coordinate the many people and processes that constitute a manufacturing enterprise?
#2. What product will I manufacture?
Product decision plays a huge role in manufacturing business. However, there are three major considerations. First of all, check whether you have confidence in the product or not. What about the market potential. And finally, the availability of raw materials.
#3. How will I protect my rights to the product?
Yes, this is a big issue. And you can protect your product and brand through intellectual property rights. In India, you can protect your product and brand name through patent, trademark, and copyright.
#4. What is the most effective method to manufacture my product?
The manufacturing process is one of the most critical aspects. You must adopt a financially profitable manufacturing technology. In India, you can get the technologies from different Govt. institutions in exchange for proper fees.
#5. What would be the product costing, pricing, and profit margin?
These three factors are very crucial. And you must have a project report or business plan before starting a manufacturing business. First of all, calculate the cost of production. Then fix the pricing. And finally, you can conclude how much will be your profit.
#6. What is the market for my product; who will buy it; how will I market my product?
It is advisable to conduct market research about your product. Analyze and identify your target demographics. And according to that, craft a marketing plan. Regardless you are starting a small, medium or large scale business, you must have a marketing plan.
#7. How can I finance my enterprise?
Broadly, every manufacturing business demands two different types of investment. One is a fixed capital investment and another is working capital investment. Land, building, and machinery costs come under fixed cost investment.
On the other hand, raw materials, staff salary, rent, transportation, and other daily basis operational expenses come under working capital expenses. Different types of loans are available for different purposes from the public and private banks of our country.
#8. What are my tax obligations and can I get incentives or tax breaks for starting my business?
This is another important aspect. In India, the manufacturing industry is highly regulated by the Govt. authorities. Additionally, you will find different types of products attract different registration and licensing parameters. And most of them demand quarterly or annual return submission. So check what type of tax obligation the product attracts.
#9. How will I protect myself and the business from liability risks?
A form of an organization plays an important role in this issue. Furthermore, the form of an organization determines the power, control, risk and responsibility of the entrepreneur as well as the division of profits and losses. In addition, each type of organization has its own merits and demerits.
#10. What other sources of information are available for manufacturing business owners?
You can contact others in the manufacturing industry or technical experts. And they can provide advice and consultation on your product. However, you must take the right initiative on intellectual property rights before sharing it with others.
Furthermore, you can follow relevant books and tutorials. In addition, you can also avail of marketing support from different companies. Of course, you can take on the responsibility yourself for the sales of your product. But if selling is not a strong suit for you, you can hire experts.
After you start the business successfully, invest your time and energy in growth. Simply, how to grow your business. Because only growth leads to the positive development of the organization.
In addition, a positive relationship with your workers is an essential factor in the success of your enterprise. Finally, knowing what motivates you is the key to starting a manufacturing business successfully.
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Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.