It is a very good time to be in an industrial business. With an administration that has promised to encourage manufacturing jobs, industrial business owners will find it easier going forward. Having a profitable business starts right at the base. Unlike a service business which does not require much capital in terms of equipment and tools, an industrial business will require more careful planning as there is much more to lose. You could keep a few points in mind when starting off.
A strong business plan
Drawing up a business plan takes you back to the basics. You will be forced to re-examine your passion for the business. What are you selling and why are you offering the product? What does the business mean to you? After sorting out these questions, you will then be forced to look at the practicalities. What is your target market? Where will you get the capital? What is your marketing pitch? A good business plan will make a reference point to guide you from distractions.
Know the competition
You have much to learn from the existing competitors. How profitable have they been and why have they been profitable? If not, why are they incurring losses? A good analysis of the competition forces you to reexamine your product and the market at large. There are very good tools for ‘spying’ on your competition starting with Google.
Plan for the cash flow
In the manufacturing business, you cannot survive without cash. You have to pay for your raw materials, take care of the utilities, and organize the logistics to deliver the product to the market. And that is not counting labor and marketing costs. If your business plan is solid, there are many who will be willing to fund you but this would be short-term funding. You have to start making money as soon as possible. This means having a well-developed marketing strategy to quickly get the product to the market even if it means giving the product away at steep discounts.
Get the right team
In an industrial business, some business operations can be made or broken by key people. If you are making soft-drinks, for example, the chief chemist can mess up the product if he is not doing what is right. On the other hand, an innovative food chemist can make your product unique and popular by trying out different flavors. Having the right team of people sharing your vision will help you pull together quickly for mutual success.
With the right business plan, starting a profitable industrial business is not that hard. The rest will depend on how passionate and innovative you can get.