About
Setting up a local manufacturing facility is a crucial step in scaling a business. Establishing a local manufacturing facility is probably the riskiest step in a company’s development. Up to this point a business can thrive on a “pay-as-you-go” basis, with design and development funded by growing cash flow from operations, though at lower margins. However, building a manufacturing facility? That is a whole different ball game and a major change. It demands significant upfront capital, with returns trickling in years later. This investment normally requires equity or debt, and providers of these funds place significant obligations on the business and its owners to ensure they can execute the plans and strategies to recoup their investment. Owner entrepreneurs with manufacturing facilities move from independence, to working with and sometimes for the financiers. Only consider building a Local Manufacturing Facility when you are confident the business can afford the capital investment. Given the risks, your design and project management must be rigorous to ensure accurate cost estimation, flawless execution, and future efficient operations. Several risk mitigation steps should be undertaken before finalizing the decision. Addressing these in the process of designing and setting up a local manufacturing facility requires significant planning, focus, time, and resources. These tips, guidelines, and points to consider have been drafted to help you navigate the many issues you will face before designing and then seeking funding for your local production site. You will be doing this as you develop your product, produce your first batch, prove it in the market, grow your customer base, and build your “street-cred”.