Most manufacturing is small business
By Rhonda Abrams
Gannett News Service
Listen to business news, and one thing you'll hear repeatedly is that the United States' economy is consumer-driven. In other words, the country's economic health depends on people buying and selling stuff.
If you are interested in starting a manufacturing business, you'll find many resources to tap into. A good source of assistance, especially once you are up and running, is the Manufacturing Extension Partnership (MEP) of the National Institute of Standards and Technology, an agency of the U.S. Department of Commerce. MEP has more than 400 nonprofit centers, located in all 50 States and Puerto Rico. They provide manufacturing and business specialists, with real-life experience, to assist American manufacturing companies, large or small. Contact them at www.mep.nist.gov or (800) 637-4634.
But somebody has to make all that stuff. That's where manufacturing comes in.
Getting started in manufacturing
If that word gives you a mental picture of a huge production plant, think again: Most manufacturing is done in small shops.
According to the latest figures available, compiled from 1999 by the Small Business Administration, here's the breakdown by size of private manufacturing firms:
• Total firms: 311,902.
• 0 to 99 employees: 291,004.
• 0 to 19 employees: 226,673.
• 0 to 9 employees: 177,246.
In other words, more than 93 percent of all manufacturing companies had fewer than 100 employees, and nearly 57 percent had fewer than 10.
What's more, many large manufacturers, including auto and computer makers, depend on smaller ones for parts, supplies, assembly, etc. So small manufacturing is very much alive and well.
Of course, the term "manufacturer" covers a broad range of products, from small fashion accessories or body lotions to automobiles or kitchen sinks. Manufacturing refers merely to the process of taking raw materials and adding value to them to make something of greater value. In other words, you take steel and make refrigerators, or take tomatoes and make salsa.
Manufacturing is typically divided into two main categories:
• Durable goods, such as automobiles, appliances, furniture.
• Nondurable goods, such as apparel, food, paper goods.
Being a manufacturer can be creative. Even very small manufacturers are involved in research and development.
Manufacturing also can provide more leverage from investment than many other types of business. Once it has recovered the initial investment for R&D, equipment and capital costs, manufacturing can be quite profitable.
One major drawback is the startup capital required for machinery, other equipment, workers, raw materials, and the resources to design, test, and market products.
On the other hand, some operations can be started on a shoestring, as cottage industries — making products at home, then selling goods at craft fairs or to a few small retailers. That's a good way to build sales, work out design kinks and do market research before starting to mass-produce goods.
