Manufacturing
Introduction
So you've decided you want to start a manufacturing-based business. Maybe you've recently completed a relevant training course, or perhaps you've been working in someone else's manufacturing firm and feel the time is right to go it alone. Whatever the reason and whatever the product, this guide will take you through the issues you need to consider and give you practical pointers on getting started.
Sector trends
Although the fortunes of individual sectors have varied in recent years, in general terms the manufacturing sector has seen the following developments:
- increasing competition from overseas competitors, particularly in sectors such as clothing and footwear
- the strength of sterling during the mid 2000s making exports difficult while increasing the attraction of imported goods to buyers
- the continuing decline of traditional 'heavy' industries
- rapid growth and then decline of high tech electronic industries
- the emergence of manufacturer/customer alliances and partnerships
- increased regulation of many sectors, for example the introduction of packaging waste and food safety regulations and regulations introducing the collection and recycling of waste electronic and electrical equipment and waste batteries
- energy costs increasing as a result of the introduction of the Climate Change Levy
- an increase in demand for locally produced food and drink products
- pressure on food manufacturers to reduce the level of fat and salt in food products
- an increasing focus on environmental issues and measures that reduce an organisation's carbon footprint
- a greater awareness of ethical issues - for example, the launch and growth of the Fairtrade initiative
- rising costs and falling demand during the global economic downturn of the late 2000s
- a fall in the value of sterling at the end of the 2000s which helped to boost exports
The manufacturing sector as a whole has suffered from a long term decline, with the number of people employed in manufacturing falling every year.
You will have to decide:
- whether there will be enough customers for your particular products
- whether you will be able to produce them cheaply enough to price competitively and still make a profit
- whether the market you hope to supply has reasonable prospects for the future
- how you will keep customers loyal to your product ranges
- whether your local economy is healthy enough if you plan to supply a local rather than national market
1.1 Keeping up to date with developments
The manufacturing sector is represented by many different trade associations, some of which produce specialist journals of interest to those operating in that sector.
Organisations providing services to the manufacturing sector include EEF, the manufacturers organisation, the CBI, the Scottish Council for Development and Industry and the Chartered Institute of Purchasing and Supply, among many others. The government-funded Manufacturing Advisory Service (MAS) website is designed to help businesses find manufacturing-related support. Business Support Wales gives support and advice to manufacturing businesses in Wales.
If you plan to target export markets you can find help and guidance on the UK Trade & Investment (UKTI) website.
The Federation of Small Businesses represents the interests of all small enterprises in the UK and offers a variety of member benefits. It produces First Voice a journal that helps business people to keep up with issues that affect them.
You might also find it helpful to join your local Chamber of Commerce.
You will be able to obtain a lot of useful information if you go to a trade show or exhibition for your type of business. Visit www.exhibitions.co.uk to access details of shows that may interest to you.
