Home-based businesses are perfect for turning your skills into a successful career. With little investment and a small space requirement, cottage industries offer great opportunities for young entrepreneurs.
However, turning it into a successful full-fledged business is a difficult task that requires a lot more than careful planning. For starters, to meet the growing demand for your products would require an increase in production rate. Likewise, proper marketing tools and strategies also play an important role.
What Is A Cottage Industry?
By definition, a cottage industry is a micro-factory which is usually operated in homes and cater to a much smaller demand for any product. Usually, garage businesses that manufacture consumables for daily needs fall under this category. Several sub-contracted facilities such as garment manufacturing, soap manufacturing, and candle making factories are typical examples of a cottage industry. But, the trade is not limited to sub-contracts only. In fact, recent years have witnessed a tremendous increase in sole proprietorships that patent and manufacture there own products.
If you have an idea and wish to begin with it but lack the investments needed, setting up a home-based manufacturing unit is the most feasible option for you. Here, in this article, you shall find all the necessary tips to get your home-based business rolling.
Identify The Product Demand In Your Market
Before anything, you would need to learn if the market has a demand for your skills. More precisely, as a small business operator, you would need to focus your efforts in your local market. Catering to the markets far away from your manufacturing facility would require you to spend a lot more money on promotions and sales. And not to forget, the transportation costs are among the prime expenses that may not be able to cover. As a simple solution, you can ask your friends and neighbors if they would be willing to purchase your products. For example, if you are into manufacturing handmade bamboo baskets your primary customer base would be the homes around your location. Targeting your local market can ensure easy returns for your investment. And more importantly, they can get your business the necessary revenue for scaling the initial phase of setting up your business.
Seek Benefits From Government Programs
Government agencies usually offer several benefits for cottage industries. These benefits usually include tax rebates and easy financing options. Before setting up your small factory in your garage, make sure you inquire about the necessary documentation and fulfill the legal obligations for your business. Doing so will enable you to seek benefits from government programs and schemes. Additionally, you can seek advice from legal personnel who specializes in company laws. They can help you steer clear of the possible legal pitfalls, which you, otherwise, may fall prey to. Moreover, these people have a vivid knowledge of the schemes and benefits that government agencies have to offer on every scale for your business.
Plan Inventory For Smooth Operations
After having fulfilled all the necessary documentation and legal obligations, the next thing is to plan for the inventory. Your inventory should include the necessary raw materials, tools, and other pieces of equipment required for the manufacturing process. Besides, you must also learn how and where to source all these inventory items. For example, you may need a power backup to keep your machinery running during a blackout period to avoid production losses. You can easily find more info online for purchasing a backup generator for your cottage factory. Perhaps, preparing a list of inventory items beforehand can ensure that you don’t have to struggle with the production tasks after you set up your plant. After all, the production must go on because your customers or clients wouldn’t entertain any excuse for delays in delivery.
Gradually Increase Your Customer Base
Once you have the initial start for your business, you may plan to scale it. Ideally, scaling up the business would mean to increase production capacity. However, increasing production before acquiring new customers may prove to be more harmful to your business. Of course, if you producing more would mean you will need to invest more in the raw materials and utility bills. And if there are no customers to buy your products, all your investment would turn deadly. In other words, you cannot expect any returns on your investment if you plan to scale without increasing your customer base. Therefore, a wise decision when planning to scale up your business would be to acquire new customers. However, this statement is underrated if you skip on the ways of acquiring new customers.
Employ Region Specific Marketing Strategies
For acquiring new customers, you would need to penetrate new markets. In simple terms, if you were catering to your immediate neighborhood in your block, then you would now need to reach the next block. And then the next block, and so on. As already mentioned, scaling a business requires new relationships, and to nurture these new customers you would need to revamp your marketing strategy. In the initial phase of your business, targeting the local market for promotions and sales is promising. However, when you begin to scale, you would need to expand your horizon and plan to reach faraway markets as well. Seasoned marketers would suggest you tap into digital media for promoting your brand and gaining exposure. In fact, the particular strategy has been recognized as an economical marketing plan with highly promising returns on investment.
Conducting market research, sourcing raw materials, converting leads, and engaging in promotions and advertisements are fundamentally common to any business. However, what matters most for a small or a micro-scale industry is the ability to follow up with the changing market demands. In fact, cottage industries need to be highly volatile with their operations and need to plan short term business goals. In turn, relying mostly on the changing dynamics of the trade and making adjustments to the business model accordingly can promise more returns than anything else.
To sum it up, you must prepare yourself to be able to adjust your business according to your customers’ needs. Rest assured you can expect your business to keep generating you a promising revenue.