What is the Procedure for opening a New Manufacturing Company?

The manufacturing sector has played a pivotal role in the growth of the Indian economy. Considering the contribution of manufacturers, Prime Minister, Mr. Narendra Modi, launched a new program called “Make in India” on 25^th September 2014. The purpose is to foster innovation, facilitate investments, enhance skills, and guard intellectual property to build the best manufacturing infrastructure in the country. As per a report, India is prospective to be the 5th largest manufacturing country across the world by the end of this year. Further, the Government aims to accomplish 25% GDP share and create around 100 million job opportunities in the manufacturing sector by 2022.

If you also intend to start a new manufacturing company, this write-up shall provide you substantial knowledge of the same.

How is “Make in India Program” beneficial for Manufacturing Sector?

The propaganda of Make in India has turned out to be a blessing for the manufacturing industry. The Indian Government has adequately emphasized on the development of 25 priority sectors in the manufacturing business with this scheme which are mentioned below:

• Boost Economic Growth:  The campaign of “Make in India” is a gateway for an increased number of exports and manufacturing activities. A rise in exports will uplift the economy and transform India into a manufacturing hub. It opens doors for foreign investments with advanced technology, thus boost India’s GDP.
• Create more Job Opportunities: The program is a route for several job opportunities. It is expected to generate around ten million jobs. An increase in investment has a direct impact on the manufacturing job market and helps to refurbish the skills of human labour. 

• Escalate Foreign Direct Investments: After the enforcement of “Make in India,” there has been a considerable hike in Foreign Direct Investments. Due to the ease of commencing manufacturing business, more companies are looking to set up factories to manufacture their products.
• Make in India unit: The Department of Commerce facilitates manufacturers to easily carry out regulatory clearance within the shortest period and ensures that businesses can be done easily.

Factors to consider while setting up a Manufacturing Business

These are some essential things to keep in mind before starting a new manufacturing company:

• Set-up Partnership Firm– As a start-up, you should associate with big manufacturers. Create innovative strategies so that large manufacturing units collaborate with you.
• Thorough Market Research– If you are seeking to be a manufacturer or set your own manufacturing unit, you need to conduct extensive market research. Make use of trade journals and fairs to research and connect with existing manufacturers.
• Make a Robust Team- Human asset management is the most efficient way to empower a business. It is imperative to assess the abilities of your manufacturers before distributing the roles & responsibilities. 
• Get Legal Licenses or Registrations- There are some legal provisions and compliances that every business must adhere to. Similarly, a manufacturing business must register with the Government.
• Expand in big markets- It’s good tostart small, but to gain success, a manufacturer must penetrate the large markets.  Choose a niche that has more demand and less competition to sustain in the industry.
• Keep low cost in production- Make optimal use of resources to generate more revenue. Keep your production cost low, which is only possible when you stick to a budget.

Licenses required for Manufacturing Company  

Different types of businesses follow various rules and regulations. Likewise, there is much legal compliance associated with a manufacturing firm, so you must obtain the most common licenses or registration to open a new manufacturing company:

• Factory License from the local authority- Any manufacturing unit with less than 10 employees needs to get a Factory License from the district officer or local authority. Also, the companies with more than 10 workers should get a license from the State headquarters.
• SSI/MSME Registration- Small manufacturers can avail several benefits by registering under the MSMED Act, such as collateral-free credit, lower electricity bills, and subsidies. 
• NSIC Registration-Similar to MSMED Act, NSIC Registration also aid, promote, and foster the growth of small and large manufacturing units.
• Environment and Pollution related Clearance- Any entrepreneur who strives to set up a manufacturing company must take a No Objection Certificate from the State Pollution Control Board before carrying the manufacturing activities.

Business ideas to open a new Manufacturing Company  

To gain a competitive edge in the cutting throat competitive manufacturing market, you should have some unique business ideas. Some of the peculiar ideas to start a new manufacturing company are:

• Candle-Making
• Plastic Bottle
• Sport related goods
• Stationary Items
• Fertilizers 
• Leather Goods

Procedure to open a Manufacturing Unit

Take the following steps to incorporate a manufacturing business in India:

• Conduct Research-The success or failure of a company depends upon its research strategies. It is important to know about the level of the competition you may have to face after incorporating the business.
• Determine Location- Location is a crucial factor of a business, so determine where you will set your factory or manufacturing unit. Also, decide on the market in which you will sell your products.
• Make a strong team- After fixing the location and product line, you should employ experienced manufacturers. Distribute roles and responsibilities in different departments like operations, sales, marketing, inventory management, public relations, etc.
• Apply for Registrations- Any business without registration is considered as illegal. Therefore, take assistance from professionals and do MSME/ NSIC, Company registration to carry the manufacturing activities.

Conclusion

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