Could My SMB Manufacture Its Own Products?

Manufacturing is difficult to get right, and often requires a lot of cost, time and the right people to set up a plant. For this reason, manufacturing isn’t something that’s usually associated with small businesses, with most who need products making choosing to outsource to an established and experienced manufacturer instead. This is useful as it gives you peace of mind that things are being made well, and you can get on with running other areas of your business. However outsourcing does come at a cost, and in the long run it will work out more expensive to do this compared with keeping it in-house. If you do want to do all of your own manufacturing as a smaller company, it is possible but there are some considerations you will need to think carefully about first. Here are a few ideas to bear in mind.

The Practicalities of Getting Set Up

Setting up a manufacturing plant or factory is a massive task. You need to source all the correct machines and vehicles. You need to find a suitable location, you need to hire the right staff to run and maintain everything. Things can and will break down, machines for example can wear out and parts can go wrong. Sometimes it’s a simple fix, a case of finding a site that will supply shim washers for example so that parts fit correctly and are therefore less likely to wear. Other times it can mean expensive repairs or replacements. Make sure you can find, buy and set up everything for your manufacturing plant, and are able to maintain it too.

The High Upfront Costs

Even for a smaller business, manufacturing plants take up a lot of space. Most involve large items of machinery, forklifts, they need a warehouse to store materials and finished products.

This means you need to rent a large premises which will come at a higher price. Everything you need to manufacture products from machines to materials will be expensive, so that initial setting up price is likely to be extremely high. The good news however is that once these costs are out of the way, manufacturing your own products will work out cheaper than outsourcing and will save you money in the long run. So it is worth doing if you’re able to.

Health and Safety in Regards to a More Dangerous Workplace

When you’re running a manufacturing plant, there are lots of very specific risks that you don’t get in many other places of work. Heavy machines, vehicles, equipment like drills and saws, chemicals might be used and much more. Along with the risks you’d get in any workplace such as slips, trips and falls it can add up to a lot of potential problems. You need to follow health and safety laws to the letter, if not and someone is hurt you could end up with a very expensive lawsuit on your hands.

Would you ever consider manufacturing your own products as a smaller or medium sized business?