There are two major types of businesses: products and services. You just need skilled people to offer a service and a complete manufacturing setup to start a product-based business. The latter is more difficult but it is also more scalable and offers bigger profits. 

If you are offering a tangible product, you might need to set up a factory to manufacture it. This is a big step that must be done after detailed research and brainstorming. Here I’ve discussed basic things you should know when starting a factory. 

 

Check Demand for the Product

There is no point in setting up a factory if the demand for your product is not very high. You will have to manufacture a high number of products if you want to make a profit. Setting up a whole factory and only selling a few units will only take your business to loss. 

This is why you should conduct complete market research to see who will buy your product and how much they will pay for it. If the demand is too low to make profits, consider some other alternatives. You can set up a factory after you start getting sales. 

 

Outsource or Manufacture

You don’t necessarily have to manufacture yourself if you want to run a product-based business. It’s much easier to simply purchase the product wholesale and sell it with a profit. The profit margin won’t be as high, but you also don’t have to invest as much and it requires less time and effort. 

You can pick the units from another manufacturer and sell them as a distributor and/or retailer. Many businesses create an online store and sell there through paid advertising. If you don’t want to take a big risk, outsource the manufacturing to someone who already has a complete setup.  

 

Consider Investing in Automation

There are most probably already many factories manufacturing the same products as you such as IBC totes. They are your competition who are basically fighting for the same customers. You have to offer better quality, prices, and service in order to take the lead. 

However, it won’t be possible unless you optimize manufacturing processes and reduce operations costs. You can do this by investing in factory automation. Take the help of companies like Schneider Electric PLC to help make your machines smarter. 

 

Don’t Start without Prior Experience

You should not get into manufacturing unless you have past experience. It’s very expensive to set up a factory. You have to buy many machines and hire the right workforce to operate them. The production cost could get out of control if you have never done this before. 

You should either have experience of working in a factory yourself or you should have trusted people who are experts at this. Make sure you align your goals with them so your success is their success. You might not be able to get the best results if you don’t know what you are doing, hire the main players on salary.