Launching a manufacturing company isn’t for newbies. If you don’t have personal experience in the field, consider partnering with someone who does. Grappling with the regulatory issues alone can be daunting, even for longtime manufacturers. On the plus side, you don’t have to be a major manufacturing powerhouse to thrive. According to the National Association of Manufacturers, today, more than 99 percent of U.S. manufacturers are small and medium-sized companies.
Among the benefits and challenges you can expect in your company’s early stages:
- Big manufacturers are increasingly turning to smaller companies to supply components.
- Customers often seek out small manufacturers when they need a quick turnaround and personal attention to their needs.
- One of the growing concerns facing small and mid-sized U.S. manufacturers: it’s getting harder to compete with overseas manufacturers.
Show me the start-up capitalIf you need seed funding to get your business off the ground, should you take out a bank loan? Look for an angel investor? Borrow from relatives?
Have a planInvestors expect to see a solid business plan. Even if you’ve already got your funding in place, you need a business plan to keep you on track.
Lease a workable spaceWhen evaluating potential facilities, consider every aspect of your business—from the amount of electrical power and storage space you’ll need, to whether drive-in truck access is important.
Mind your rules and regulationsAccording to the National Association of Manufacturers, manufacturers pay 81 percent more in regulatory costs than do other types of businesses. Before you set up shop, find out what you need to do to comply with national, state and local regulations.
The U.S. Occupational Health & Saftey Administration spells out safety guidelines for workers. If you have international customers or business partners, consult the National Association of Manufacturers International Standards and Regulatory Policy.
Equip your facilityNew technologies are streamlining some processes and making others obsolete. If you aren’t sure what your plant needs, consult with a manufacturing engineer.
Hire a sales repIf you can’t afford to hire a sales staff to contact and service your customers, consider contracting with independent sales reps.
Market your products and servicesPromote your company on the Web and elsewhere by spotlighting the benefits you deliver to customers.
Hire skilled workersCasting a wide net will improve your chances of landing the talent you need.
Keep up with issues and trendsNanotechnology and international trade may not affect how you do business today, but stay tuned. You can’t remain competitive unless you keep pace with the many forces that impact manufacturing.
- Protect your intellectual property. Ask contractors to sign a non-disclosure agreement. Also, don’t allow camera phones in the areas of your plant where proprietary processes or other sensitive information could be photographed.
- One way to reduce inventory costs is to conduct a make-or-buy study of costly parts. You might find that manufacturing some parts in-house would be more cost-effective than purchasing them.
- When looking for a facility, consider the location. Is it close enough to major highways for deliveries to get in and out with minimal headaches? Can workers conveniently access public transportation?