According to BDO’s Manufacturing Index, which measures expected growth rates, expectations have fallen from 113.2 in August to 111.68 in September. With the manufacturing industry’s biggest market being the EU, poor economic performance of Europe’s biggest economy, Germany, was definitely a factor in this decline. However, there is a way the manufacturing industry, especially the small and medium size firms, can bounce back to growth even in these difficult times.
Here are three simple ways this can be achieved:
1. Exploring New Markets
One of the ways in which the manufacturing industry can potentially grow is by diversifying its customer base by exploring new markets. Overdependence on the European market means that any time there is an economic slowdown in the EU, this tends to affect the businesses serving customers within those regions. A change in focus, perhaps to emerging markets in places such as Asia, South America and Africa, can help to cushion your business from the effects of economic slow-down in EU countries. We’re not suggesting you move away from traditional markets that you’ve operated in, but that the refocus helps you to diversify your customer base. That way, if demand in one market slows down, you still have demand from at least one other. If you’re thinking of exploring new markets, the UKTI offers a number of resources as well as extensive support.
2. Creative Marketing
Gaining a strong foothold in emerging markets and retaining our traditional markets in Europe and North America requires embracing creative marketing strategies to aggressively promote British industrial products. Here are ten ideas for marketing your manufacturing business:
– Email Marketing
– Newsletters To Clients
– Sponsoring Relevant Events
– Joint Ventures
– Local PR
– Speaking at Conferences and Events
– Free Samples
– ‘Lumpy’ Mail
– Video Product demonstrations
– Create Interesting Content Like Infographics
3. Use of Asset Financing
The high costs of buying and maintaining physical assets like plant and manufacturing machinery can often hold back the growth of businesses who require huge amounts of capital to invest in new machinery. Heavy investment in the acquisition and maintenance of these assets can lead to cash flow issues. Asset financing solves this problem. Using this method, the manufacturer is able to acquire all the needed assets from a leasing company without paying for their total cost upfront. The lease period is often 2 to 5 years. During this time, the manufacturer makes monthly payments for the lease. In this way, they are able to maintain a healthy cash flow while acquiring equipment that would have otherwise cost them a fortune. This frees up cash flow that can be used in other areas of the business.