Website or app based online shopping portals, aggregator business models, search directories, social networks might be the attracting avenues for entrepreneurs as well as consumers but the importance of manufacturing sector in our daily life can’t be avoided.

The impact of manufacturing sector even on startup ecosystem is huge. From a small screw to the luxury car, each product owes its birth to a combination of manufacturing processes. In fact all the dot com, ios, windows or androids based business portals are useless in absence of basic manufacturing.

In absence of a suitable hardware, like mobiles or laptops – which are nothing but an assembly of complicated and craftily manufactured products, all the software would be useless. If car manufacturers like Suzuki, Toyota, and Mahindra etc stop producing the cabs, there would be no Ola or Uber aggregating the cab service providers. If there is no production line to manufacture iphones, tablets and laptops, shopping portals like amazon, flipkart would be of no use. If there is no two wheeler, what travel mode the delivery guy would use to serve your daily necessities? And how you will get your on demand food?

Manufacturing startups are rare. Now-a-days everyone is trying to catch huge monetary benefits riding just on dotcom business boom. Few give reasons like manufacturing is long term game, return on investment is low etc. But the major driver for any economy is not only the dotcom boom, Manufacturing startups are equally important.

Manufacturing Startup Business Model

FS comprehended the manufacturing startup business model – cash and work flow in simple info-graphics –

Manufacturing Startup Business Model- Cash Flow

Manufacturing Startup Business Model - Work Flow

The next step is to calculate the production cost of your product. So apart from the fixed cost (one time investments like land cost, machinery cost etc), additional running cost that is required for production per piece can be estimated in following heads.

Manufacturing Startup - Product Cost Calculation

Manufacturing Startup - Product Cost Calculation Info

Above mentioned heads should be precised based on the type of product being manufactured.

Though the manufacturing based startups involve a huge amount of capital investments – fixed as well as variable, continuous demand of such products ensures the return on investment. Stay tuned wiith FS to know more.