1. Market Research
Before we start business planning, doing extensive market research is important. It helps us understand our competitor, find target customer and the reasons to buy.
Doing the market research yourself is the most cost saving way. You either gather information by phone call or collect data from a secondary resource. During this process, you will understand your customer better.
Doing your own market researches
Ask yourself the basic question as follow so you can think deeper about customer real demand:
1.1 Who is your customer
Typically, mass finishing customers make surface finishing of small and medium-size parts. When you focus on a certain industry, your customers likely join the same association. They may know each other well. Throughout the time, you gain a reputation in your field. Even you don’t do advertise, you can get good business referrals by word of mouth.
1.2 What do they buy
Some of the customer already equipped with machines, so we can focus on consumables. If they are buying expensive German product, we can recommend cost-effective solutions. On the other hand, if they buy the low-quality product we may think about to improve their surface quality.
1.3 What makes them buy from you
Mass finishing is a service-based business. A good knowledge of your product and service helps to build the trust. New customer needs more time to show your expertise. For example your good understanding of their target, possible solutions etc. Then they can give you more chance to do some test and discuss something details. You may also show the similar project that you did before with video and photo.
Here is the list of items that you need to consider:
- Competitors already work in the market: Is there any competitor in the market? Are their products made local or import?
- Market Volume: Are their many users for your products? Is the demand increasing or stable?
- Price Level: Too high or too low price is not a good strategy. A good price acceptable to the customer and sustain your good service level.
- Quality level: Your product quality versus product exist in market
- Service and shipment: what value adds service that your competitors provide? How they deliver their goods and service?
- Your advantage: Your personal character is the key advantage. For example, understanding several languages is a merit. Because many people in Europe and Latin America don’t speak English. Besides, your facial expression, your easy-going nature, your trustful talking make things better.
Reference: The Best Ways to Do Market Research for Your Business Plan
2. Business Planning
2.1 Define your product and service
Do your supply only consumables to existing users or complete solutions including equipment installations? Do you only sell the product to the customer or take care of maintenance service? The more you offer, the better position you will be in the market.
Make comprehensive business plan before starting
2.2 Marketing plan
Make your own SWOT analysis of your business is one step ahead of others. But understanding yourself is not enough, you need to collect data of your competitor as well. Ask yourself important questions as:
- How can you get a new customer?
- What do you do to keep existing customer?
- How is the cost of acquiring a new customer?
- Online marketing or advertise in local media?
Pricing strategy is also important. You can either do it cost base pricing or value base pricing. Usually, cost base pricing works on wholesales level. When you deliver a bulk product like media, adding certain percentage is a good practice. Customers like to ask for a discount when they have a big order.
Value-based pricing works when you deliver a solution rather than products only. When your service more likely as an adviser and tell how to do it, you make more value to your customer.
2.3 Operational plan
A well refined operational plan is a road map to your destination. Ask yourself bellow questions:
- Where to select your business location?
- Manage your suppliers and your customers’ relations?
- Can you deliver your product and service to your customer in time?
- How to organize your personnel to do the job?
- How do you deal with a customer complaint?
2.4 Financial plan
When you start your business, you need a financial resource yourself or partly get a loan from the bank. It is perhaps the most important element of your business plan. Developing your financial plan helps you set a financial goal and access support.
Business Plan Template for a Startup Business
3. Authorizing Your Business
One of the most important licenses you will need to get is a wholesale license. This will allow you to act as a middleman and buy products wholesale from us. Also, you will need to contact us to work out the deal and distribute the products. Many times you can fill out an online application form or contact us by email.
For example, in Inovatec, you need to select the territory that you looking to work in. Then we check if the market is sufficiently served in that region, so not be competing with other authorized distributors.
4. Choose a location
Choosing the right location is not just to find the place that looks closest to the one you’ve envisioned.
A good location is easy for a customer to find you. You can easy to control the rental spending and follow local regulations.
4.1 Convenient transport
Your location needs easy access to land shipment so you can easily move your container in and distribute your products to your customer.
4.2 Close to your customer
Being close to customers is extremely important. Tumbling media and chemicals are the bulk material which takes quite some space. Customers don’t willing to keep heavy stock. But they prefer to keep consistent small order once a month. Therefore, a location close to customer site saves shipping cost and time.
4.3 Affordable cost
Although you can start from home. To be truly successful, you still need to buy or rent a warehouse in areas that are not too expensive, and close to your desired customer base.
4.4 Focus on one or several industries
Usually, companies of same industries locate close to each other. For example, Tuttlingen, German is famous for surgical instruments production. If you have one satisfied customer in the area, you can sell your product easier with a good reference.
Focus on certain application area will show your professional and reduce competition level. Over time, you will have a good reputation in the industry and free referrals.
Surgical instruments companies in Tuttlingen, German
5. Keep control of stock
How much inventory you end up holding depends on your industry. On one hand, if you don’t have enough inventories when a customer calls, that person will go somewhere else. But if you buy too much inventory, you run the risk not selling it fast and lots of capital tied up.
We don’t demand our partner to order too many products at the very beginning. But we suggest you keep at least 3-4 months’ stock. This is because we need about one-month production, one-month sea shipment and extra weeks for custom. Besides, a 20’ full container shipment saves shipping cost and customs clearance cost.
How to become an authorized distributor
6. Logistics and shipment
After you receive your first order, you need to make shipment of your product to your customer. If they need to wait for than a week, then they probably go for somewhere else. For media and chemicals, you need to be able to ship within one day. Otherwise, production stops and your customer suffers a huge loss.
Most of our partner has equipped with a service car. In this car, you can put at least 500kg media and 200kg chemicals. This is the usual consumption of a medium-sized manufacturing company. At the same time, you can bring with yourself toolbox with machine spare parts. You can check if anything goes wrong you can make repair and replacement at one time.
The typical service truck that we recommend
For designer solutions, customers need to organize production in advance. At that time, you need to rent a forklift which carries the machines.