Many entrepreneurs look at manufacturing as a lucrative and versatile enterprise. With the potential of re-purposing equipment, manufacturers have access to a wide range of opportunities. However, the up-front costs of starting a manufacturing business can be difficult to overcome, and competition is abundant. Manufacturing startups require careful planning in order to thrive.
The Benefits of Forming Partnerships
It can be difficult to raise the funds to acquire all the equipment that you need to get started. It may be necessary to find another company to partner with in order to bring your first products to market. Although it might be tempting to look for a well-established manufacturer to partner with, a larger company may not take a startup seriously and won’t have the motivation to work with you on pricing.
Looking for a younger company to work with can help you to form a relationship with a business that is vested in the success of your enterprise. A solid partnership is formed when your partner benefits from your success. If you need access to advanced technology, like friction-weld stirring, partnering with another manufacturer like MegaStir can save you immensely in time, labor and research dollars and can be a valuable resource when it’s time for you to develop your own process.
Scale Your Enterprise as You Grow
Once you have secured funding for your startup, you might be tempted to spend the majority of your resources on hi-tech facilities and equipment. Attempting to acquire the equipment you need in anticipation for future growth can be a mistake. If you wait until you need the equipment to purchase it, the price might reduce significantly in the meantime, and more attractive alternatives might have emerged in the marketplace. It’s far more prudent to hire a manufacturer with the equipment you need until the demand justifies investing in that equipment yourself, especially if you are considering financing equipment that won’t be producing an immediate return on that investment. Growing slowly can be an important strategy for success.
Newer Isn’t Always Better
Cutting-edge equipment will have fewer skilled operators in the marketplace, and the cost of that labor will be inflated. Additionally, hi-tech equipment will cost considerably more. The price differential might represent a level of versatility and capacity that is beyond your initial need. This represents a waste of capital that would be better spent on developing a solid team.
Cutting-Edge Equipment Cannot Replace Experience and Expertise
A skilled operator working on familiar equipment can be far more productive than an inexperienced operator on cutting-edge equipment. It is difficult to overvalue or anticipate the value of a seasoned professional in a trade. The more capital you save by purchasing only the essential equipment, the more you will have to build your team. The right team can make or break your manufacturing startup.
Team Building Should be One of Your First Considerations
Firstly, recruiting experienced operators to your team will help you determine what equipment is vital to your operation, what equipment you can do without and what part of the process you might be better off outsourcing to a partner company. By involving these skilled members of your team into the process of idealization from the beginning, you can ensure your team buys into the process. A Forbes article explains why it’s so important that everyone is “moving toward the same goal” for the success of your enterprise. The experience of a good team can also save you valuable time in refining your process and in anticipating the possible challenges that lay ahead. Young entrepreneurs who are interested in manufacturing often fall into the trap of focusing too much on the equipment and not enough on the people who will be using it.
Putting It All Together
For entrepreneurs seeking to get into manufacturing, there is a steep learning curve and without much room for error. With careful planning and patience, many of the most common critical mistakes that have caused many enterprises to fail can successfully be avoided. If you focus on building a team that is conducive to your goals, on forming mutually-beneficial partnerships and on scaling your enterprise when demand requires it, your startup will have a chance to succeed and thrive in a highly lucrative and constantly-evolving industry.