Manufacturing is important for a country’s economy. By turning raw materials into goods which can have a higher sale value, you increase the amount of money which comes into a country. Manufacturing also uses a variety of current technology and infrastructure, and this part of the economy is interesting for investors. So, let’s look at the eight steps to starting a manufacturing business.
Step 1: Do research
As with any new venture, you need to do thorough research. You need to choose a niche which will set you apart from your competitors. When considering which product you want to manufacture, it is also useful to consider what consumers will find important about the product. There are five questions which consumers consider:
- How unique or innovative is the product?
- What is the quality of the product?
- How safe is it to use?
- What is the value of the product over its lifetime?
- How can they claim if there is a problem with the product?
Step 2: Create a business plan
The next step is to write up a business plan. This helps you to review your research and evaluate what needs to be done to create a profitable and stable business. It is important to remember that a business plan is a living document which can change and adapt as you grow. Another benefit of a business plan is when you go to seek for funding, you will be able to show your idea clearly to potential investors or banks.
Step 3: Find investors or funds
Starting a manufacturing business can be expensive and you may need to get investors to help fund your dream. Consider how much funding you need and then look at the options available to you. When looking for investors, it is important to understand how much of your business they would want in exchange for their investment and what perks you may get if they joined you. Some investors offer mentoring with the funding.
Step 4: Get licensed
The manufacturing industry has different licenses depending on what you are producing. It is important to check what the licensing and permit requirements are for the industry you want to manufacture in. The basic requirements will be to be registered with the Companies and Intellectual Property Commission (CIPC) and the South African Revenue Service (SARS). You may also have to send your product to the South African Bureau of Standards(SABS) to be tested.
Step 5: Choose a prime location
One of the biggest expenses for a manufacturing business is shipping costs. It is important to choose a location which will be able to minimise the shipping costs you will incur. You will also need to ensure the area where you want to manufacture your products is zoned correctly.
Step 6: Hire competent staff
Making mistakes during production can have a massive negative impact on your business if it causes severe issues when the product is used. By ensuring you hire competent staff who can use your machines well, you help to prevent the negative impact on the business from sending out faulty goods. You should also ensure that the people you hire take care of the equipment they use so that you don’t waste money replacing equipment because of negligent use.
Step 7: Put procedures in place
A well-oiled manufacturing plant has procedures in place to help guide employees on what their responsibilities are and how the process they are involved in works. By having good procedures in place, you can ensure the production of faulty products is minimised. It is important to have your staff involved in creating procedures so that no step is missed and efficient procedures are created.
Step 8: Promote your business
You have set your business up beautifully but you still not making money. Have you told anyone about your business? You need to promote your business. This can be done through word of mouth but also consider social media platforms which will help to get your brand out in the industry that you manufacture for.
These are eight steps to get your manufacturing dreams off the ground.
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