Idea Accelerator has received much interest on small manufacturing business ideas. We covered some small manufacturing businesses some time back and thought with the interest we’d cover small manufacturing business ideas again. Even if you don’t intend starting a small manufacturing business from scratch with your own ideas and passion or want to buy a second-hand small manufacturing business, don’t leave now because much of what applies to small manufacturing businesses applies to any business whether in manufacturing, wholesale, retail or service businesses.
I have been involved with many small manufacturing businesses but thought it would be best to speak to someone who has much experience in evaluating small businesses and selling them. Everard Etsebeth has been involved in business broking for the past 15 years. He was a managing director of a company and was the general manager of the local operations of a large international appliance manufacturer. I spoke to Everard this week and the first question I asked him is where do you look for ideas for small manufacturing businesses.
Some of the best sources for looking for ideas for small manufacturing business are at trade shows, directories, the Yellow Pages, and the Internet. It would also be useful to speak to a business broker but take care here because most business brokers have never owned their own business and certainly have not owned and operated small manufacturing businesses.
But the one thing that Everard says is vital is that the prospective small manufacturing business owner must have a passion for the type of business they want to do. Without this, he says, you’re looking for trouble. A qualified and experienced business broker with a feel for the area of small business manufacturing would lead you through a series of questions that would not only include questions about the business but deeper issues such as your family relationships (whether they are sound), time needed to spend time with children and how committed you are to a small manufacturing business.
Why is it that business people are attracted to small-scale manufacturing businesses? Everard says that small manufacturing businesses are relatively easy to run – once you have some coaching from the previous business owner – often don’t require dealing with middlemen and you tend to have a smaller number of customers in your customer base. Those small manufacturing businesses that are in high demand include food manufacturing, plastic packaging, fruit juices and steel fabrication.
What you need to watch out for? The viability of the business will depend on the product, whether it works well and you need to do your homework on market demand. It’s important to look at the financials but that’s difficult in South Africa because many businesses are registered as cc’s and don’t require their figures to be audited. Next, if you are not excited about the business, leave it alone. If your heart isn’t in it, it just takes one or two mistakes and, you will suddenly be in deep water. Product quality, cost of materials and customer care are important. Everard believes that you needn’t stress too much about the type manufacturing business as it’s not rocket science because the seller will usually give you a month of skills and knowledge, which is normal procedure.
Ultimately, you need to decide what type of business is right for you. Do you really want to be a manufacturer? The rewards are there for those who choose wisely. One business that Everard sold is still being run after 15 years by the business person who bought it. He’s never looked back. But before you get involved do your homework. If you’d like a chat at no cost and without any obligation with Everard Etsebeth, let me know and I’ll put you in touch with him.