• Apply now

Money in bank in 24 hours

Apply now

How to build a successful manufacturing business

  • Highlights

  • Get a third-party evaluation of your product in the development stage

  • Arrange for adequate working capital before starting

  • Ensure that you are pricing your product correctly

  • Keep updating your machinery to keep pace with technology

Setting up a successful manufacturing business takes a lot more than a clear business plan. It requires substantial financial outlay to outfit your business and specialized facilities along with advanced equipment and raw materials. These steps will help you build a profitable manufacturing business:

1) Get a third-party evaluation of your product in the development stage:

Get your final product approved or evaluated by technical experts right in the development stage. This allows you to make changes or improvements right when you are investing in machinery and manpower. This keeps you from introducing an inferior product to the market and then having to go back to the development stage. You can conduct a product sampling exercise to ensure that you have market feedback before launching your product. Getting customer opinions will help you adjust the manufacturing

process if necessary, and also establish firm quality management techniques.

2) Arrange for adequate working capital for production:

Once you have finalized your product, arrange for sufficient working capital to ensure that your daily operations proceed without a hitch. Some costs to account for are – raw materials, employee salaries, and electricity. Since a manufacturing business is cash-intensive, start making arrangements for future needs for working capital. Identify an affordable source of external finance like a working capital loan so your company’s working capital account is flush.

3) Price your product after thorough market analysis:

Market research is an imperative part of pricing your product. Analyse your competitors in the industry and measure your products against theirs to come up with a reasonable price. The price should justify your manufacturing cost, market price, and quality. Identify who your target audience is as well as what they can pay for your product to finalize your pricing. You can then use various pricing strategies like penetration pricing, competitor pricing or cost-based pricing.

4) Keep an eye on evolving technology and new machinery for production:

Technology improves the speed at which production occurs, and as a result, improves your productivity per unit. The better your technology and machinery, the better your quality and the easier it is for you to match the expected demand. Mechanising your production process may even help you lower your price and stay competitive. Think about how you can finance the latest technology by raising money from revenues or by borrowing a machinery loan.

Additional read: Role of GST in India’s manufacturing growth story

5) Learn how the supply-demand chain works:

The supply chain consists of purchasing raw materials, manufacturing and then distributing your finished product. The demand chain includes marketing, sales, and servicing. It is important to know how the supply and demand chain works to achieve a coordinated and synchronized cycle. Getting these dynamics right ensures that you can manufacture products that are in sync with the demand chain. Timely sourcing of raw materials, for example, can ensure that you can produce and distribute your products at the right time to increase your sales revenue.

Grow Your Business With Bajaj Finserv Machinery Loan

Dos and Don’ts when applying for a Business Loan

Business loans from Bajaj Finserv are designed specially to help growing businesses meet their financial requirements. Easy to apply for and hassle-free to avail, these loans come with several unique benefits that make them the ideal mode of business finance for small and medium sized enterprises. However, when applying for a business loan, there are certain dos and don’ts that you should keep in mind, in order to ensure that your application is processed smoothly. Here, we tell you what they are.

Dos and Don’ts when applying for a Business Loan

6) Have a clear marketing plan to reach your consumer:

Develop your marketing methodology based on the nature of your business, your product and the size of the market. If you are manufacturing consumer products, decide if you want to market in the retail or wholesale sector. If your target market is wide, then you may want to hire marketers on contract. If it is narrow, you may want to create an in-house sales force. If you want to focus on manufacturing, selling to wholesalers or hiring contractors who will market for you, may be a better idea.

How would you rate this article

 Please let us know why?

What did you dislike?

What did you dislike?

What did you like?

What did you like?

What did you like?

Next Up


5 Tips to Manage Working Capital for Your Trading Business