Brick manufacturing business is proven to be a very profitable business with less investment, high returns, and huge potential. Here are few key factors to consider before venturing into brick manufacturing business.
1.Identify Suitable Product and market
Before starting any business it is very important to do detailed study of the market. Identify the regions where lot of residential or commercial or industrial constructions happening. Check which is the brick which is mostly used in these projects. Analyse if you will be introducing a new product will the market accept and adopt it. Based on your analysis and study select which will be a right product to setup a brick plant.
2. Check availability of raw materials
Once you select the right product you need to check of the availability of raw materials in the region and distance from the source. Remember you can alter the mix designs of the products based on local availability of raw materials. Choose the best material which will have continuous supply and available to best cost at your site. You can check with your brick machine manufacturer with the samples of raw materials if they are suitable for the product you are looking to produce.
3. Choose the right location
Once you identify the market, product and get information of raw materials availability you need to choose the best location to setup the plant. Having an own land or leased land both are suitable based on the local conditions and site costs. If it is a leased land, it is crucial to have a long term lease and at low rent. Most of the cases it is fine to have the plant setup even if its not on the main road. But it crucial that land rentals should not be a big burden on the plant. Also, any readily available infrastructure like power, shed, rooms will be an additional benefit in reducing the initial infrastructure costs.
4. Perform costing analysis
Once you get the raw materials costing and other overheads costing, calculate the total production cost of bricks you are looking to manufacture. Check the market selling price of these products. Once you get these costs check the monthly estimated revenues and margins on the products. Based on the margins you can calculate the returns on investment and breakeven periods. A healthy ROI and quick payback periods will help in faster expansion of setting up more plants.
5. Acquire permissions and registrations
Based on the local laws acquire all the required registrations to setup the plants. Typically, the registrations required to setup a brick plant are Incorporation of firm, Pan Card, GST registration and labour license. In few cases and certain localities, it will be required to get environmental clearances to setup the plant.
6. Plan for required working capital
One of the common mistakes most of the entrepreneurs do while setting up a brick plant is not properly calculating the working capital requirement. By spending all the budget in machinery and infrastructure setup one might get exhausted and end up very little or no working capital. Without proper working capital it will be difficult to completely do the production of bricks. Typically for a brick plant a minimum of 1-month full capacity working capital will be good to have. Considering only 50% production efficiency for the first 2-3 months, having 1-month full capacity working capital will generally be good to run the plant for 2 months without any income through sales. Once the sales begin the cash flow will be used as working capital in the long run. Getting vendors who would provide credit on the raw materials will be helpful.
7. Purchase the best equipment from trusted manufacturer
One of the most important factors to setup and operate a highly successful brick is select the best brick machinery from a trusted manufacturer. The Cheapest machinery available in the market will not always be the best choice. While selecting the machine manufacturer consider the factors like
Nanolite Infratech Pvt.Ltd. Level II, M K Reddy’s Mansion Above Adidas Showroom Dr. A S Rao Nagar, ECIL Post Hyderabad – 500062
+91 94915 39933
+91 94916 39933
+91 94917 39933
+91 94918 39933