Developing a Factory Unit Manufacturing BusinessIn some ways, acquiring a factory unit is the easy part of starting a new manufacturing business or developing an existing enterprise. Detailed business planning is essential and could make the difference between business success and failure.
When creating a manufacturing business plan, a large number of factors must be taken into account and many questions need to be asked, including:
Will you be manufacturing finished goods for consumers, or components or sub-assemblies for other manufacturers?
Will you produce from a standard product catalogue and / or make bespoke items?
Will products be made to order only?
Will you insist on minimum or maximum order quantities from customers?
Is the market for your products likely to be seasonal in nature and if so would you use external subcontractors to ease the load at peak periods?
Where will you purchase raw materials and what levels of raw material stock will you need to hold to ensure continuity of production?
Where will your factory unit be located and does it have adequate links to transport infrastructure?
Will your employees work a five-day week, single shift or two shifts, or 24 hours per day, seven days per week?
How much training will your employees require (at start-up and ongoing)?
How will you deal with product quality assurance?
How will you motivate your workforce?
Is the market for your products regional, national or international?
Will your factory employ its own sales force or use third party agents or resellers?
Will you sell online via your own website?
Will your factory unit incorporate its own sales outlet?
How will you determine the price of your products and how frequently will prices be reviewed?
If you are exporting products or importing raw materials, how will you make allowance for currency exchange rate fluctuations?
A prospective mortgage lender is going to want answers to these questions (and others) before making a mortgage offer to you.
SummaryWhen applying for a factory unit mortgage, a manufacturing business plan should address many issues including:
types of product;
production methods;
staffing;
sales.
Access Commercial Mortgages can help with all types of factory unit mortgages;
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