How to Start a Manufacturing Business?
Manufacturing holds a lot of significance to the sustenance of society. The manufacturing industry is the key driver of the economies of almost every developed nation. The role of manufacturing is even more significant for the economies of developing countries like India.
The Indian manufacturing industry has been picking pace over the past few years with the government striving to position India as a global manufacturing destination. India is planning to increase the share of the manufacturing industry in GDP to 20% by 2025, betting big on schemes such as PLI, ‘Make in India’, etc.
Also Read: Most Profitable Manufacturing Business Ideas in India
Today, India has emerged as an attractive destination for investments in manufacturing with investments from both foreign as well as local companies. Interestingly, India has seen a lot of young entrepreneurs foraying into the manufacturing sector from Tier 2 and Tier 3 cities of the country, which is a very good sign of decentralization of industrial development. As more and more entrepreneurs planning to explore opportunities in the Indian manufacturing industry, let us look at various steps to start a manufacturing business.
1. Market Research
Market research is essential for any kind of industry and is a pre-requisite to starting a business. It helps to logically conclude about various things related to the business such as the size of the plant, location, investments, etc. Market research provides a holistic and nuanced view of the market dynamics and your competitors.
2. Product Conceptualization & Identification
Product conceptualization involves gathering all your ideas related to your business, such as the industry vertical, product line, etc. After assessing the ideas, you will then identify one product that you would like to manufacture based on various parameters such as market demand, supply, future demand forecast, availability of raw materials, manufacturing costs, etc.
3. Detailed Project Report & Techno-Economic Feasibility Report
The detailed project report (DPR) covers almost every detail related to the project. It provides complete information about various aspects of business such as costs of raw materials, labour costs, machinery, fixed capital for land and building, working capital, means of the finances, ROI, etc.
The techno-economic feasibility report (TEFR) tells you whether or not the project is technically and economically worthwhile. It includes things like technology to be used, financials required, risks involved, probability of profits, etc.
Also Read: Best Manufacturing Business Ideas in 2024
4. Finances
Once the DPR and TEFR are ready, you can easily get the funding required to start your business. There are many government schemes, subsidies and grants in the country, particularly for MSMEs that provide financial assistance. The Government of India announced schemes under the ‘Atmanirbhar Bharat’ following the covid-19 outbreak that disrupted businesses in the country.
5. Registration & Approvals
In order to do business in India, you need to register your company with various authorities. Different types of companies that can be incorporated in India include private limited company, partnership company, one-person company, sole partnership, limited liability partnership, public limited company, etc. If it is a small company that comes under the definition of MSME, then you can register with the Ministry of Micro, Small and Medium Enterprises and avail benefits from the government schemes related to the MSME sector.
6. Business Development & Marketing
In this competitive business environment, it important to start marketing activities much before the actual launch of the product into the market. It gives ample time to effectively cater to the changing market dynamics and customer expectations. So, it is advisable to start the marketing activities as soon as the DPR and funding are done.
7. Machinery Ordering & Procurement
Manufacturing industries require a wide range of machinery and the type of machinery depends on the type of process involved. Based on the scale and investment, you can go for manually operated or semi-automated or completely automated machinery. Considering the importance of machinery in manufacturing, you should consult an expert before ordering the machinery.
8. Plant Layout Design, Building & Commissioning
Following the machinery ordering, you can start the plant layout and design based on the size and shape of the machinery. Once the plant is ready, you can install all the machinery required to start the production. The location of the plant plays an important in determining the price of the final product; so extra care must be taken while selecting the location by considering various factors such as connectivity, availability of water electricity, etc.
9. Workforce Recruitment & Training
Manufacturing is a labour-intensive industry and requires a skilled and well-trained workforce. The productivity of the business depends on the skills of the human resources present in the company. So, new enterprises must train their workforce on various manufacturing practices through experts so as to make the most of them.
10. Product Prototyping & First Production Run
After commissioning the plant and recruiting employees, you can start the prototyping and testing of the products. In prototyping, you will create the preliminary model of the product and test it to make sure that the product is up to the expectations or not. It helps to save a lot of time and money in designing the product. Then you should perform the first production run to check if everything in the shop floor is running as per the plan.
11. Certification & Licenses
The manufacturing industry is bound by lot of regulations by the government and related authorities. You need to take a lot of certifications and licenses before launching the product into the market. The type of certifications and licenses depends on the industry that you operate in. For instance, if you are into food processing then you have to take certifications such as FSSAI, AGMAR, HACCP, Halal, Kosher, etc. Of various certifications, some are mandatory while others are voluntary.
12. Mass Production
Once the prototyping and first production run are done, then you can go for the mass production of your products for commercial purpose. But before proceeding to the mass production of the products, you have to gather all the raw materials required for the manufacturing of the products on the large scale.
13. Distribution & Logistics
As marketing has already been done the market will be aware of your products. So, you can start the distribution of products through various distribution channels. You have to take care of the supply chain and logistics so that your products are delivered on time to the end-user.
While these are the various steps to be followed to start the manufacturing business, starting the business by setting up the manufacturing plant is easier said than done. It requires professional advice from experts in the industry to start the manufacturing business. If you are planning to start a manufacturing business, then kindly register with SolutionBuggy. We provide you access to verified manufacturing consultants who can assist you in setting up the manufacturing plant and grow your business. We help new entrepreneurs easily enter into the manufacturing industry by undertaking the complete execution of the project. SolutionBuggy provides a wide range of services for the manufacturing industry right from market research, product conception and plant setup to funding, workforce training, certifications, marketing and sales.
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