It is said that small manufacturing businesses are the cornerstone of the American economy. Manufacturing is a trillion-dollar industry and encompasses many areas from car parts to toys to plastics to machinery.
Perhaps one of the surprising things about the manufacturing business is that the majority of American companies actually have less than 20 employees with 89% of companies struggling to fill vacancies.
This is maybe why some companies remain small. However, there are other elements involved in growing a business. If you have or want to start a small manufacturing business then there are some lessons worth noting.
Here are some ways you can take your manufacturing company from zero up to hero and beyond.
At the beginning of your companies life
Some basics need to be done when trying to start any company. It doesn’t matter if you are trying to open a retail store or a manufacturing business, you need to look at the following areas:
- Market research
- Find a niche
- Make a business plan
- Find funding
- Begin manufacturing
- Market your product
Conducting market research is vital to see if there is a need for your idea and business. Many people have thought of what seemed like wonderful ideas only to find that there wasn’t any call for them. Having a niche can be very useful to a start-up business. A hole in the market is exactly what you are looking for and manufacturing bottle capping machines, for example, could be something that no one else in your area is doing.
What happens next?
Once you have named your company and designed your logo you will need to make a business plan. This is essential to receiving funding from banks and investors. You will need to show that you have a strong idea and a thought-out route to how you will manufacture and distribute your product.
You will have to present your business plan to investors and they will want to know that you understand how to market your product, and how you will make your company profitable. You will need to show clear, realistic plans for your business and a complete understanding of your market.
You will also have to show the investors you understand why optimizing manufacturing logistics is vital and that you understand all the processes involved in your business. A weak business plan or the impression that you are not fully acquainted with your business and its processes could be a disaster when it comes to funding.
Once you have your funding it is time to manufacture and market
Assuming you convinced the investors to fund your new manufacturing business, it will be time to get to work. You already have all your employees in place at your new site and manufacturing has begun.
What you will need now are customers. To get your company known you will need to market. How you market your brand is going to depend partly on what you are manufacturing.
If you are making specialist machinery then you will perhaps advertise in trade magazines. If you make parts for machines such as gaskets, then you may look to sell these online and ship internationally. How you market your business will in some ways come down to your requirements but you do need to make yourself visible.
How to take yourself on to the next level
Assuming that all has gone well so far and your business is up and running, or you are already at the level of a small business ticking over, you want to know how to take your company up a few notches. After all, no one wants to be the zero.
You can improve the size and growth of your business by following a few key areas:
- Be visible
- Invest in employees
- Don’t ignore new technology
- Listen to customers
- Consider mergers or acquisitions
Below are these areas in more detail and following these might help your business move up a level.
Make your company visible
There are many ways to watch your small business grow with digital marketing and social media is one of them. Your company website and social media pages can help you to increase the presence of your brand and product.
Manufacturing businesses can use modern ways of marketing the same as any other business and communicating and marketing through the internet is a highly effective method. If the product you are manufacturing is suitable, you can deal with international customers this way and expand your market dramatically. Why stick to local areas and word-of-mouth referrals?
Invest in your people
As mentioned above, the vast majority of manufacturing companies have small workforces and have great trouble gaining new employees. This is partly due to a lack of understanding about what manufacturing involves but there are other factors too.
A happy employee is a great asset to your company and will be far more productive and effective than an unhappy one. Invest in training, encourage them to move forward, pay good salaries and benefits, and make sure the work conditions are good. Many people ignore the working environment and how it affects employees.
Use new technology
Times change and so do manufacturing processes. Keeping up with technology means that you will have smoother processes and can be more efficient.
Listen to your customers
Customer service is one of the key areas that can make a company grow or stagnate. In fact, bad customer service could even break your business.
Research has shown that 7 out of 10 consumers would willingly spend more money with a brand that treated them with good service. It has been shown that answering customer queries and complaints through social media can have extremely positive effects on a business’s reputation.
If your customers are complaining about the quality dropping or another problem with your product then ignoring it will lead to lost orders and a damaged reputation. These days with the internet at the fingertips of everyone, word travels fast.
Look at merging or making acquisitions
This is something that would take great thought and capital but it may be that the way to move up to the ‘hero’ level would be to either acquire your closest competitor and their business or to join together and increase your strength.
If you look at Disney’s acquisitions of Pixar, Marvel, and LucasFilm, then you can see the value in taking on your competitor’s business and making it your own. Of course, this takes funding and has to be done at the right time.
To get a business off the ground takes work in itself. You need to have a strong business plan and marketing strategy before you will be able to get funding in most instances. Even if you have a great product you need to understand if there is a market for it and how you will advertise yourself.
The next steps should help you to be on your way properly. Increase your visibility, look after your employees, and make sure you listen to your customers. These are simple basics that can expand your manufacturing business.
Once you have established your business, then you can look to move on. As long as you have the finances and the market is right you can perhaps look at mergers or acquisitions then.