If you are running a manufacturing business of any kind, there are plenty of risks involved. However, the ‘big four’ should play an important part in setting up your business plan, and running your company on a day-to-day basis. Today, we’re going to take a look at those four important risks, and I’m going to give you some suggestions on how to keep on top of them.
1. The Economy
No matter what line of business you are in, the general state of the economy will always be a concern. If you are producing consumer goods, any imbalance in mainstream spending is going to have an effect. And, of course, in more peaceful times, the defence and security industries can see a lot of work go out of the window. The trick here is to keep your company flexible, and able to pivot at any given moment. Taking the consumer angle again, you can try to produce a broader range of goods. Luxury items will do well when times are good. However, cheaper alternatives can be beneficial to consumers when things aren’t looking rosy.
2. Government Legislation
Rules and regulations play an important role in the manufacturing industry. And, it only takes a minor adjustment to legislation for things to turn sour for production companies. Your best bet here is to pre-empt any move to make changes and act accordingly. Finding a good business lawyer with experience in your industry can help you cover all the current bases. And, it will also give you a professional opinion as and when things change.
3. Health and Safety
As a manufacturer, you have a responsibility to ensure your workers can work safely. There is no room for error here, as any lawsuit brought against you could result in your company going out of business. So, make sure your health and safety policies are all up to date – get an HR professional in to help if you don’t know how. Also, make sure that your machinery is in good working order – a puwer check can help you here. As long as you are doing your bit and training your staff, you will have protection if something ever goes wrong.
4. Cost of Raw Materials
The cost of your raw materials can have a severe impact on your profits. And, if you are reliant on a single supplier, it can be a dangerous game to play. Make sure you give yourself as many options as possible and always be on the lookout for different sources of materials. There is a fine line between settling for second-rate material and cutting costs, however. If you use inferior products to make your product, there is every chance that your appeal will start to dim in your customer’s eyes. Always try to buy as high quality products as possible, without paying through the nose.
OK, so there you have it – the top four problems faced by manufacturing companies. If you are planning to start a manufacturing business, make sure you have all your bases covered in these areas.