Starting a manufacturing business is a capital-intensive process. It’s important to write a detailed plan in advance. This plan will allow you to attract investors and convince lenders to work with you. More importantly, a good plan will allow you to better understand your chances of success.
Start With the Idea
Usually a plan starts with a unique invention or major improvement in an existing product or process. These ideas can come from anywhere, but you need to get them on paper and organized. Work out the details for your core idea before continuing with planning around the rest of the business. You may need to seek the services of an intellectual property lawyer before talking with too many people about your idea.
Understand the Capital Investments Required
At an early stage, you need to start developing an idea of how much money is needed to get your idea off the ground. For example, if your product is a bulk liquid, a drum filling machine will be needed to ensure accurate filling of your product. You could fill drums by hand while in the prototype stage, but the cost of labor and the possible waste of product and mess involved in doing this in volume may be prohibitive. These are the kinds of details you need to understand before seeking investments.
Don’t Forget Marketing
Sometimes entrepreneurs assume that their idea will be a winner from a marketing standpoint and focus only how to make it work. Your initial business planning should definitely include as much proof as you can develop that your idea is not only good, but will sell. Once you have some protection for your idea, like a patent, you can show the concept to focus groups, conduct polling, reach out to prospects, and use other techniques to determine demand.
By planning ahead, you’ll reduce your risks. Planning is itself an expensive undertaking, but it pales in comparison to the cost of standing up an entire company and failing.