When a startup launches, it’s alone in a sea of cutthroat businesses. You have to reach out to other businesses to outsource work, and you need to hire freelancers to get work done that your employees aren’t qualified for. But as your business grows, so does your control. You’ll stop relying on other companies and gain independence in the world of business, and you’ll have a one-to-one connection with your customers with no middlemen in between that could sabotage your public relationships.
One of the clearest ways to expand your business is to take matters into your own hands. Whether it’s handling your own postage and packaging or building your own office from the ground up, the fact that you’ve become an independent and self-sufficient business is a sign of phenomenal growth. However, there’s alway room for further improvement.
If your business involves selling products, then you may have considered manufacturing your own instead of outsourcing the work to a third-party business. Let’s say you are a company that specializes in selling bathroom products. Instead of reaching out to chemical factories and hiring them to create your products, you could set up your own factory.
This has many advantages. First, depending on the location, you’ll be supporting the economy by generating more jobs. Secondly, you’ll avoid the costs involved when outsourcing your production work which could increase your profits by a large margin. Most businesses pay ridiculous amounts of money to get their production line started, and while it’s cheaper than starting your own factory, it will save you a lot of money in the long-term.
Consider the Risks
Your factory is susceptible to a lot more disasters and problems than your office. Your investment won’t be profitable for a few years, so if anything happens to your factory or production line then you’ll face disastrous consequences. If bad weather strikes your facility and renders it useless, then not only does it slow your production, it might also damage the facility beyond repair and you’ll end up spending thousands on replacing custom-made machinery.
Your factory is also going to be a new source of jobs in the area. You might attract bad employees or people that refuse to cooperate. Your business is in their hands, so if they are unhappy with working conditions, pay, or other issues, then you’ll need to address them which could cause a large dent in your business budget, forcing you to invest more money than you first anticipated. If you’re unable to recruit workers, then you’ll have no one to run your production lines and you’ll be out of business.
Assuming that your factory is in a location that isn’t affected by bad weather, has a lot of potential employees in the local area, and gets off to a good start, you could be sitting on a goldmine of opportunities that will net you huge profits.
A factory doesn’t need to be built from the ground up. You can consider buying old and abandoned factories to restore them to their former glory, or the other option would be to buy out an existing business that is struggling but owns a factory of their own.
With some careful considerations, you could assimilate the business into your own and share employees and resources. When buying another business, you’ll gain almost all of the assets that company owned. This might include the office, factory, machines, employees, and of course, their salaries that you have to pay. It can sometimes be more than you bargained for, but it might not take a lot of work to start making their business profitable again especially if they are lacking in something that you specialize in, such as marketing.
When purchasing an existing factory, make sure that there’s enough space to install your own equipment. If you’re not sure what kind of machines you’ll need, you can find equipment online here. Take note of the dimensions of each machine and pass them onto your contractor so they know how much space needs to be allocated for your new production line. If there are useless or old machines that won’t serve your needs, you can scrap them for parts or sell them to other businesses for a considerable chunk of money.
Your staff aren’t going to know how to use each machine without training. You need to hire professionals that have been trained in the use of the machines you’ve invested in, and that training needs to be passed on to new staff members. You can hire foremen and experienced factory workers for specific tasks to help ease the training process, but make sure you calculate the costs of hiring professionals into your budget.
One of the most important issues to drill into your new staff is health and safety. Factory inspections need to happen to ensure that both your machines and staff are operating efficiently and safely, and nothing is worse than an inspector noticing that your staff are dozing off or aren’t wearing the right equipment for the job.
If a worker has an accident, they will almost always win their claim unless you pay close attention to safety details. Consult health and safety experts and place the right signs around your factory to remind your staff on how to conduct their duties, and always equip them with the right clothing and accessories for the job you need them to do.