Manufacturing is a huge part of almost any small business’ process. After all, it’s how you bring your product concepts to life. But one small decision can leave many owners feeling lost – to outsource the manufacturing process or keep things in-house? Here’s a little information to help you make the best decision for your company.
When to Outsource
Outsourcing is a commonly used business practice where you, as a small business owner, distribute certain aspects of your work to an independent third party or agency. People generally do this to life a load from their shoulders in regards to responsibility. When you have a relatively small business, it’s impossible to always be able to do absolutely everything yourself. In order to make a good job of what you’re doing, you need to have experience in every single part of the business process, and this is impossible. However, outsourcing means that you don’t have to take on full-time staff in order to benefit from others’ knowledge and expertise. Now, if you have only recently started your small business up, nine times out of ten, outsourcing is going to be the best option for you. This is because (even though you may feel pretty confident in your business concepts) you can never be sure whether the products and services that you are providing are going to be a hit with the consumer market. You’ll often find that small business owners have to make changes to what they’re selling within the first year of operation to better meet their customers’ needs. Some will experience failure once their products have launched and have to completely change their angle and start selling entirely different products. So, you don’t want to invest too much time or money into your initial products. Outsourcing allows you to make use of others’ knowledge and other’s manufacturing machinery to create your first few runs of products without having to take on full-time staff of your own (which is a huge responsibility in itself, especially when you are still finding your feet). What’s more? Outsourcing is likely to guarantee you high-quality goods and products. Third party companies are unlikely to send you faulty or low-quality goods, as they’re going to want you to return to them time and time again.
When to Keep Things In-House
As your business expands and you find your place in the consumer market, you’re going to want to start bringing things in-house. As soon as you are certain of the direction your company is going to take and have a loyal base of customers, you can have the faith in your products to invest in manufacturing machinery. While it may seem a little costly up front, it means you literally own your own means of production and gain independence. The cost of the machinery will quickly cover itself with profit from products that you have sold, and you will have one less outgoing, as you won’t have to pay third parties to do the work for you anymore. Just make sure that the quality of your machinery is top-notch and purchase from reliable suppliers such as CNC machining centres.
Remember That You Can Engage With Both!
If you are a little hesitant with the crossover from outsourcing to in-house production, you should bear in mind that you can always use outsourcing and in-house manufacturing at once while you find your feet!
As you can see, the decision you make will depend largely on what stage your business is at! So, think things through and try both out to see which suits your needs best!