If your business sells products, there will probably come a time when you start wondering whether you’re best off manufacturing these yourself. Outsourcing manufacturing is expensive and will be taking a big cut out of your products every month, and as long as you’re relying on a third party company you’re always at their mercy. If they have issues in their factory this will filter down to you, if they put their prices up there’s not much you can do if you want to continue using them. Setting up your own plant, in many cases, is a smart move. But of course it’s a massive task, here are a few things to bear in mind when you’re considering manufacturing your own products.
Upfront costs
It’s the upfront cost that pose the biggest problem in most cases. It’s very expensive getting up and running – however the good news is that once all of these costs are covered, it will be much cheaper to manfacture your products. This means that a manufacturing plant will essentially pay for itself in time and from then your profit margin will improve. But you do need to be able to cover these upfront costs. You’ll need a premises, and machinery. You’ll need a warehousing area to store raw materials as well as the finished product. You’ll need tools and vehicles, and you’ll need to consider recruitment costs to hire the right people. If you’ve been turning a profit for a while and have capital behind you then you could use this to fund the plant, otherwise you could utilise commercial loans. It might seem extreme getting into debt, however it’s worth it as you’ll be making more profit in the long run.
Maintenance
Once the upfront costs have been covered and your plant is up and manufacturing products, you just need to ensure that everything stays running smoothly. A good maintenance team will fix things as they break down, you could also look into additional products such as the best industrial air dryer to ensure that breakdowns are minimised. This will ensure that moisture from compressed air systems is removed, preventing damage to certain machines. Have a think about what is most likely to go wrong with the machines and systems you use and put things in place to prevent this where possible.
Health and safety
One of the biggest concerns when it comes to running a manufacturing plant is staying on top of health and safety. With high heats, powerful tools, chemicals, people working at heights and much more, theres a lot more to think about than your average workplace. You will need to make sure health and safety practices are followed to the letter. You will need to ensure that staff have the correct training, and that any previous qualifications are verified so that you’re certain they’re able to do their job correctly.
Setting up a plant is a huge task but is something that allows your medium-sized business to push forward and expand.
* This post has been written for Morning Business Chat by an outside source.
