Many people in India do not want to work in a 9 to 5 job and want to start their own business where they are not answerable to anybody and can work independently earning a decent income. Brick manufacturing is one such business which has proven to be a very profitable business with less investment, high returns, and huge potential. You just have to buy brick making machine, a piece of land where you can install the machine and some people who work on the machine and you are good to go. Although it is easier said than done hence in this article, we will be discussing some tips to start your brick manufacturing business.
Factors to consider before starting brick manufacturing business
1. Identify the market properly
It is crucial to conduct a thorough market analysis prior to launching any kind of business. Determine the areas with a high concentration of residential, commercial, or industrial construction. Verify which kind of brick is most frequently utilised in these projects. Examine whether the market will approve of and embrace a new product that you plan to introduce. Choose the product that will be best for setting up a brick plant based on your analysis and research.
2. Check the availability of raw materials
After choosing the appropriate product, you must ascertain the distance from the source and the region’s raw material availability. Recall that you can change the product mix designs according to what raw materials are available locally. Select the best material that will be readily available at the best price and be in continuous supply at your location. If you have samples of raw materials, you can ask your brick machine maker if they are appropriate for the product you want to make.
3. Select the right location
You must select the ideal site for the plant after determining the market, the product, and the availability of raw resources. Depending on the site expenses and local restrictions, either owned or leased land is appropriate. If the land is rented, a long-term, affordable lease is essential. Most of the time it is good to have the plant setup even if its not on the major road. However, it is imperative that the facility not be overly burdened by land rentals. Any readily available infrastructure, such as electricity, a shed, or rooms, will also help to lower the initial infrastructure expenditures.
4. Analyse the costing properly
Determine the overall production cost of the bricks you want to create after you have the costs for the raw materials and additional overheads. Verify the products’ market selling price. Check the products’ expected monthly revenues and margins as soon as you have these expenses. Based on the margins you may determine the returns on investment and breakeven periods. Establishing new plants will expand more quickly with a strong return on investment and short payback times.
5. Ensure the best use of the working capital
One of the most frequent errors made by entrepreneurs when starting a brick company is to underestimate the amount of working capital needed. It is possible to run out of money and have very little or no working capital if all of the funds are spent on infrastructure and machinery setup. Brick manufacture will be difficult to complete without adequate working capital. Generally, a brick plant should have working capital sufficient to cover at least one month’s worth of operations. Given that the plant will only operate at 50% efficiency for the first two to three months, a working capital of one month’s worth will usually be sufficient to run the plant for two months without any sales revenue.