What will I be doing?

Do you like putting things together, and trying to figure out a more efficient and faster way to do it? If so, consider a manufacturing business in your home. A manufacturer doesn’t have to have an immense building and hundreds of workers. You can be a manufacturer in a spare room or the garage. A manufacturer is someone who makes a product from a variety of materials. You can be a dress manufacturer turning cloth into clothing. You can be a toy manufacturer assembling children’s toys from parts you buy from another manufacturer. Best of all, you can do it at home.

What will I need to start?

Manufacturing is such a broad category that it’s difficult to tell you exactly what you’ll need to start your business at home. The best place to start is with a product. For example, you can manufacture executive pen sets. You’ll need to find a source for the pens, the bases, felt for the base bottom, some trim pieces and maybe a plaque that can be engraved depending on who is buying the sets. Sources for materials in this example include pen manufacturers, trophy supply wholesalers, felt wholesalers, etc.

You may need some manufacturing equipment, depending on what you’re making. There are two approaches to getting started in manufacturing. Either get specialized equipment that minimizes your competition or simple equipment that minimizes your initial investment.

Who will my customers be?

Depending on what you’re manufacturing, your customers may be retailers, wholesalers, other manufacturers, or even consumers. Many small home-based manufacturers start by selling to consumers and retailers until their product and system are refined, then they sell to wholesalers or other manufacturers when they can deliver larger quantities.

Reaching your defined customers means calling on them with your product in hand. This is true if you’re selling to consumers, retailers, wholesalers or manufacturers. Be prepared to sell what you make. Who better to represent your business than you?

How much should I charge?

This is a tough question to answer. Small manufacturers, once established, typically use a rate of $40 to $80 an hour to calculate pricing. However, most soon set prices by percentage of value of manufactured product. For example, a manufacturer of pen sets may calculate that 30 percent of the wholesale price he charges will go for his labor, 50 percent for materials and 20 percent for overhead expenses.

How much will I make?

An established small manufacturer can earn an income of $15,000 to $75,000 a year, depending on many factors including demand for the product, manufacturing efficiency, marketing skills and the ability to find the least expensive sources for materials and supplies you will need. Start small, learn from every mistake and don’t expand until you have it down right. Equipment maintenance can be a big expense in manufacturing, so be sure and take that into consideration when estimating your overhead expenses.

How can I get started?

The best place to start a small manufacturing business is not with a product but with a customer. Depending on your skills, you may find a local wholesaler who can sell a specific type of product for you. Or you may find a retail chain that needs hanging planters, for example. Calculate whether you can manufacture them profitably. If so, get a written order, buy materials and equipment and get to work. You’ll soon learn what you do best, how to make it profitable, and where to sell it in the future.

How can I use computers to increase profits?

Manufacturing means inventory. The most efficient way of tracking and managing inventory is with computer software. Inventory databases and spreadsheets can help you know exactly what you have, how much it cost, how much you can profitably sell it for, and how fast it is selling. And by setting up a website you can sell your inventory via the Internet.