05: Manufacturing
Self-Manufacturing
You’re in the process of planning for growth. You have a product selling well, and you want to expand. Your distribution channels are set up and running, so you’re ready to take it to the next level.
From setting up a manufacturing plant to finding the right equipment and raw materials, there are many steps before manufacturing your product.
While this is a big step for your company, it doesn’t need to be overwhelming.
To self-manufacture for your food and beverage company, here’s a brief rundown of everything you’ll need to do:
- Investing in equipment, facilities, and personnel that can handle the production, packaging, and distribution of your products. You may need to obtain licenses, permits, and certifications to comply with food safety and quality standards.
- Developing recipes, formulas, and processes that suit your brand identity, target market, and product portfolio. You may need to conduct research and development, testing, and consumer feedback to optimize your products.
- Establishing relationships with suppliers, distributors, and retailers that can provide you with the raw materials, ingredients, and services you need for your production. You may need to negotiate contracts, prices, and delivery terms to ensure a steady supply of inputs and outputs.
And this is just scratching the surface.
You also have to consider things like:
Choosing the Right Location
The first thing you should do when starting your own manufacturing company is choosing the right location. The location should be close to suppliers and customers to minimize transportation costs. It should also be easily accessible by road or rail to make shipping easier.
Evaluating Your Production Needs
Let’s say you run a small juice company that sells cold-pressed juices. You’re currently outsourcing production to a co-manufacturer but are interested in self-manufacturing. Before you take the plunge, you need to evaluate your production needs.
For example, you may need to produce 1,000 bottles of juice per week to meet demand. You’ll also need to factor in the time it takes to make each bottle and the cost of materials.
Developing a Business Plan
With your production needs in mind, you’ll need to develop a business plan that outlines your goals, production process, and financial projections. For example, your business plan might include details on the cost of equipment, the cost of ingredients, and the cost of labor. You might also include projections for revenue, profit margins, and growth over time.
Production Equipment
Once you have a business plan, you’ll need to secure the right equipment and space for your production needs.
You’ll need a variety of machines and tools to get started – everything from mixers to ovens. For example, you might need a cold-press juicer, a bottling machine, and a labeling machine.
According to Samy from Snacklinks, a brand featured on Shark Tank, it’s worth being more hands-on with machinery, making modifications, and hiring engineers for repairs, rather than paying a co-packer premium to avoid the headache. By owning the manufacturing, you can quickly make changes and corrections and introduce new flavors to the market.
However, if you’re just starting with one product line, you can buy used equipment that’s still functional enough for your purposes.
You’ll also need to secure a food-grade facility with enough space to accommodate your equipment and production process.
Hiring the Right Team
Self-manufacturing requires skilled and qualified staff to handle tasks like production planning, inventory management, quality control, maintenance, packaging, shipping, etc. Your team should have relevant experience, knowledge, attitude, and aptitude for your business.
For example, you might hire a production manager to oversee operations, a quality control specialist to ensure product consistency and safety, and a packaging specialist to manage bottling and labeling. You might also need to hire administrative staff to manage orders, invoices, and other paperwork.
Permits and Licenses
Finally, you’ll need to obtain the necessary permits and licenses to operate your self-manufacturing facility legally.
For example, you might need a food safety certification from your local health department. You’ll also need to obtain any necessary zoning permits and business licenses from your local government.
While self-manufacturing involves constructing and requires a significant upfront investment – but it gives you complete control over the manufacturing process.