Many successful businesses start out on a small scale. Your cottage industry may have begun as a hobby that turned into something more. You have discovered that there is a market for your products, and now you want to expand to a full-fledged business. There are several things to consider as you take your project to the next level.
Finding the Right Space
The name “cottage industry” refers to the fact that most of these small businesses begin in someone’s home. Up until now, your garage or basement was enough space to manufacture your products by hand on a small scale. To expand, you will need more space. Most towns have local industrial parks where you can find a small or medium-sized manufacturing facility. If you have similar size and equipment needs, you might consider partnering with other small-scale manufacturers to lower your costs.
Finding Help with the Big Picture
At the cottage industry level, many entrepreneurs handle every aspect of the business alone. They will use local suppliers or online resources to order the materials they need. They will make daily trips to the post office or shipping store to send products to consumers. This approach is impractical for a small business. A logistics consulting service can help you find solutions for your supply and shipping needs. They can also help you determine the best way for your business to receive and process orders. They will help you solve problems that you never knew existed when you were a cottage industry.
Manufacturing equipment is a serious financial investment. As you get started, you may want to look for used equipment that will reduce your initial expenses. Depending on your production process, you might be able to automate in stages. First, buy the machinery that will minimize production bottlenecks. As your business grows, you can purchase more equipment to speed up the process even more.
Many cottage industries use the labor of friends and family in the early stages. However, expanding your business will mean that you must go beyond your circle of friends. For manufacturing, local employment agencies and online services can help you find people with experience. You will also want to consult with an accountant to get information about taxes and payroll. Before you are large enough to have an accounting department, working with a payroll company can save you a great deal of time and prevent costly tax mistakes.
A common challenge of expanding a cottage industry is a dip in quality. Rushing to fulfill orders can lead to less-than-perfect products. You would have caught these mistakes when you were doing this work on your own. One of the reasons that there is a demand for your product is the high quality of your work. A sustainable expansion is one where you can maintain a consistent level of quality. Be sure that someone inspects your products before they go to market. When you discover quality issues, it is time for a temporary slowdown so that you can fix the problem.
Scaling up to a full-sized business will present several challenges. With careful planning and the help of experienced professionals, your cottage industry can successfully expand into something more.