What to Know About Starting a Manufacturing Business

[This article was written by Samantha Higgins.]

Starting a manufacturing business can be challenging. There are several factors that you need to consider. The better you plan to address these considerations in advance, the more likely you will be to have success. The following are a couple of factors to think about when starting a manufacturing business.

Does Anyone Want Your Product?

This is probably the most important question you can ask. It would be pointless to manufacture a product for which there is no demand. This means that you will need to dedicate time and research to studying the market. You need to understand who your customers are and if they will truly buy your product. Once you have determined that there is a demand for the product you wish to manufacture, you will then be able to investigate further factors that can impact the success of your business.

How Much Is It Going to Cost?

Manufacturing is expensive. There are other startups that do not have a lot of overhead. However, with manufacturing, you have to purchase or rent a manufacturing space. You will probably need to purchase specialized equipment or machinery to manufacture your product. You will need to pay experts to run the manufacturing process and will need a bank of workers to assemble products.

Unless you are starting out with a ton of money under your belt, you will need to get financing. This means identifying the finance options that are available and that you qualify for. If you do not have an adequate amount of capital, you may need to rethink your venture. Manufacturing is not one of those businesses that you can start-up in your garage with a couple of hundred dollars. To be successful, you will need to have substantial capital.

Local, State, and Federal Laws

There are several laws that will impact where you can locate your business. You need to familiarize yourself with areas that are zoned for manufacturing in your state.

You will need to balance your location with your market. It may be challenging to find a location where you can legally carry out manufacturing operations and that you can afford.

States, municipalities, and the federal government have rules and regulations that dictate product manufacturing. You need to be aware of how these rules apply to the type of manufacturing that you want to do. Primary among this legislation includes regulations to protect the health of your employees, the health of people living around you, and environmental regulations.

If you are considering building a location for manufacturing, there is a whole other group of laws that you need to be concerned with. Depending on what you are manufacturing, prefabricated steel buildings might be exactly what you need to construct to house your manufacturing operation. In other instances, different building requirements may be needed. It’s good to review the laws in your area so you don’t start out on a venture only to realize that because of some law you did not know you cannot follow through.

Create a Team of Knowledgeable Professionals

You want to work with people who have knowledge and experience in manufacturing. The experience they bring will impact the success of your business.

While it is not always necessary for you to hire college-educated people, for certain positions you may want someone who has an MBA degree to work on your management team. The engineers who help with the design of your product and oversee manufacturing operations should also have the proper degrees and experience.

Start Small and Plan to Grow

Because producing physical products require significant financial investment and because the experience required is demanding, it’s best to start small and then make plans to grow. In manufacturing, a slight mistake can be fatal. However, if you run lean, you will minimize financial risk.

For example, instead of purchasing expensive equipment, why not lease it first? If possible, use manual labor as opposed to expensive equipment. Find ways that you can leverage tools that are not expensive but will allow you to create a quality product.

You can guarantee that the product you manufacture is going to change as your experience with the product grows. Plan for these changes.


Starting a manufacturing business is no small feat. Starting small can be a challenge, but it is doable. You don’t want to compete with big companies. Identify your niche market, minimize expenses, and create smart partnerships that will help your business grow.

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