It’s rough world out there for manufacturers. If they’re not facing low sales and threats of cheaper competition from overseas, they are dealing with high energy costs. It seems every year we hear of an older, established manufacturing firm that has been shut down. You don’t want your business to be next. But if you’re not careful, it could be. We think there are a few issues that your business might be facing right now that could easily cripple your chances at making a profit. On this post, we’ll examine these issues and help you find ways to fix them.
This is a huge problem in the manufacturing industry at the moment. Manufacturers are making contracts with other businesses to produce a product, usually in bulk. The product is produced on time and passed on to either the supplier or the shop. At this point the manufacturing business should be paid for the work they’ve completed. But this doesn’t always happen. Instead, the buyer waits until they can sell the product, they’ve bought on. The buyer is playing it safe. Rather than putting their own finances in jeopardy, they leave the manufacturer hanging. But that presents a massive issue for the manufacturer. They often use new payments to buy more supplies. Without it, their manufacturing business grinds to a halt or goes into debt. So, what’s the answer?
Well, we suggest you look into an invoice factoring service. Through invoice factoring, you can get the amount you need straight away. Essentially, you sell your unpaid invoices to that company. They’ll then collect it for you and it’s that simple. If you constantly find suppliers aren’t paying on time, this is the solution.
High Energy Prices
If you own an office, you might worry about how much you’re paying in energy prices. But that’s nothing compared to the month cost a manufacturer will probably pay. Just think about all the machinery and equipment running nonstop in a factory. There are only two ways you can counter this issue. You can either look at getting your energy costs reduced, switching to a company with cheaper rates. Or, you can look at the source of the problem. In this case, that’s the tech and equipment you’re using. You can look online to see if there is new tech and machinery on the market that is more efficient. For example, Miller welders products are designed to save energy and still get the job you need to be completed in good time.
This problem is one of the most difficult to solve. These days there is really no such thing as a local market. We’re all on an international playing field and that means there is a more aggressive competition. In some countries, tax laws and labour laws are far more lenient. That means they can charge less for their product and still make a high amount of profit. The only solution is to beat them at their own game. You have to find a way to lower your costs too. One possibility is to use outsourcing solutions. By doing this, you shift some of the more expensive parts of your company to another business. But you still get a fantastic service at a great price.