If you have a product-based business, meaning, your income comes from the sale of goods, there are some specific things that can negatively affect your bottom line. Though we don’t have time to go into depth, we can touch on some of the most common mistakes. Of course, some of this has to do with the actual manufacturing of those products.
Mistake #1: Being too Niche or too Broad
When it comes to a product-based business, it’s important to find the balance between having variety and clear brand identity. Being too niche can make it difficult to attract your ideal customers. However, manufacturing and selling too many different products could make your brand unclear and create confusion. Try to stick to products that are related to your core mission and brand.
Mistake #2: Failing to Get Outside Help
Obviously, the more products you sell the busier you will be. That goes double for businesses that manufacture their own products. The need for outside help also increases at certain times of the year for some businesses. Regardless of the need, many business owners choose to stick it out and do the work within their company. However, this might not be such a good idea if it is hindering growth and customer satisfaction.
A good example is a business that wants to offer a certain product but doesn’t have the equipment or skills to make it. Things like the overmolding process of electronics, mass food production, clothing manufacturing, and even mass packaging are all things that can be outsourced for greater profit. It could also benefit a business to outsource admin-related services like accounting, staffing, and training.
Mistake #3: Prioritizing Cost over Quality
Keeping product cost low is important for many businesses that serve a lower-income market. However, sacrificing quality in order to have a lower price tag may not be a good choice if you lose those customers in the long run.
You’ll earn a good reputation by delivering quality products that have a price in an expected range. Focus on trimming costs that don’t affect quality such as finding ways to reduce waste, reducing energy costs and using software to automate processes to save on manpower.
Mistake #4: Failing to Motivate Employees
As a business leader, it’s crucial to treat employees with respect and know what motivates them. Of course, this could be different things for different people, but there are some common motivators for nearly everyone. For example, offering above average pay and benefits could help you sustain a quality staff. Additionally, a bonus program or production-based incentive will go far to motivate those who are willing to work harder.
When it comes to repetitive jobs, allow frequent breaks and allow music. Regularly get everyone together for meetings to enforce a team spirit and allow people of all levels to suggest ideas and improvements so that they feel involved.
Mistake #5: Overlooking Energy Efficiency
Energy efficiency is becoming more of a focus for modern businesses and manufacturing companies. Having a good environmental focus is good for your reputation and it can save you money. It could be worth investing in your own sustainable power sources such as solar panels and higher quality equipment. If these things aren’t in the budget, do, at least, maintain your present building and equipment as well as you can for cost-efficiency.