Why Are SMBs Put Off By Manufacturing Their Own Products?

Manufacturing is always going to be one of the most extensive, as well as the most expensive departments to run in business. If you want to be able to make your own products you'll require tools and equipment, endless materials, vehicles, special licenses- not to mention warehouse space to store everything. For this reason, many smaller businesses are completely put off by the idea of manufacturing, and choose to outsource the work elsewhere instead. Is it possible to manufacture yourself as a smaller business, or should you continue to utilise third party companies to do this for you? Here's what you need to know. 

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Consider the Logistics

Whether or not you're able to manufacture your own products depends on your budget, as well as the kind of items your company wants to make. For example, very complex items that require a lot of expensive technology might not be possible, but manufacturing things like clothes or other textiles, wood or even plastic injection moulding could be doable. Consider the equipment you'll need and the skill level of the employees you'll need to run things. Think about any special licenses or other restrictions that might make it difficult- in some cases manufacturing certain items will be easier than you think. 

The High Upfront Costs

Manufacturing plants take up a lot of space, even if you're a smaller operation. This means you'll need to rent a large premises, which will of course come at a higher price and that's just to start with. Everything you need to manufacture products will be expensive from machines to materials so that initial setting up price is likely to be extremely high. However, you can find good second hand deals on machines or even look into renting them at first. If you find good suppliers then you might be able to keep your costs down here too. You could use a plate heat exchanger to keep running costs down or look into other effective methods. Once the upfront costs are out of the way, you could save yourself money compared with outsourcing. 

Health and Safety 

When you’re running a manufacturing plant, there are numerous risks specific to this kind of workplace that can cause significant injury if things aren’t managed well. Heavy machines, vehicles, power tools, chemicals and much more have the ability to cause life threatening injuries or even kill people. On top of this you have the general risks you’d get in any workplace such as slips, trips and falls, meaning 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. 

Setting up a manufacturing plant is always going to be a massive task, but just because you're a smaller or medium businesses, don't rule it out completely. In some cases, it may be more possible than you realise.