Starting a manufacturing company in India makes a lot of sense presently. In fact, setting up a manufacturing business post-coronavirus pandemic can fetch you big returns.
For the last few decades, the manufacturing industry in India had a free fall. The primary reason was the availability of cheap Chinese products. But, the post-COVID Chinese economy is under severe stress. Most companies putting extreme pressure on China and looking to shift their manufacturing location in other countries. India is a great option for not only foreign but also domestic companies.
If you are the one who wants to reap the benefits of making money out of manufacturing products but don’t have the experience to do so, this article can be a great help.
7 Steps to Start a Manufacturing Company in India
Find below, the different steps to be followed to start a manufacturing company in India.
1. Find the Right Product
The very first step is to find a product that has a good demand in the local market. One other factor that must be explored before finalizing the product. And that is your own experience and expertise. If you have an experience regarding a certain product, and you have the feeling to run it successfully, go ahead.
Research the local market as much as possible and gather as much information as possible regarding the trends, demand, and competition of the selected product. If the feedbacks are in positive, take the next step of creating the business plan.
2. Create a Business Project Plan
A business project plan is the single most important document while starting a manufacturing business. It is recommended to hire a professional in creating the project document.
This business plan is a critical document if you are looking for funds from investors. Every investor will ask for this document before investing in your business.
3. Arrange Finance
Capital is an important aspect of a manufacturing business. You need both fixed capital and working capital to run it successfully. Check your bank balance and other funding resources before jumping into manufacturing products. Check with the business plan and clearly figure out how much investment you need.
Approach financial institutions, investors with the business plan and pitch your funding requirements. Unless you are sure of meeting your financial requirement, it is better to postpone the project for the time being.
4. Get the Necessary Permissions and Licenses
The number of licenses and permits need to start and run a manufacturing business largely depends on the nature and type of the product you are going to manufacture. In general, a manufacturing business requires more licenses than other kinds of businesses.
Read: How to Register a Company in India
Every state demands different kinds of licenses to give permission to run a manufacturing business. Other than general licenses, check health, safety, and environmental regulations, if required.
5. Find a Factory Location, Build Plant, Buy and Install Machinery
Factory location plays a key role in the ultimate profitability of a manufacturing business. Find a location which is not far away from the market place. Also, take into consideration the cost of transportation of manufactured products. Many a time it is found the transportation overhead eats a considerable portion of the profit.
After finalizing the business location, it is time to build your plant. Talk to the machine manufacturer and a consultant and as per their advice set up the plant infrastructure.
6. Hire Manpower
You will be in need of both skilled and unskilled employees to run your factory smoothly. Chalk out a manpower requirement plan and recruit them. You can take help from a professional recruitment agency in hiring the right people.
7. Trial Production
The final stage in the process of starting manufacturing the product commercially, it is a must to go for a trial run. At least run this trial production for a week before launching the product for commercial purposes. Set up standing order procedures for a smooth manufacturing cycle including quality control, defective checks, Alan processes, and many more.
The scope of a small manufacturing business in India is on the rise at present. If you have the conviction, dedication, and a proper business plan, manufacturing business coms with high returns like none other businesses.
Rupak Chakrabarty
Rupak is the founder of MUVSI. He is a small business consultant by profession. His mission is to make people know how to make money and understand personal finance for a better living.