When considering factory expansion, it’s important to focus on the ability to increase productivity at a low cost. Factory expansion can be an expensive endeavor with the cost of construction, higher utilities, and new equipment. Before you decide to expand, it’s important to evaluate the following factors:
● Does expanding my manufacturing facilities line up with my objectives set in my business plan?
● Am I eligible for a business loan or asset based loan to fund my expansion?
● Will my current customer base remain loyal during expansion?
● Does factory expansion bring new opportunities for growth and future profits?
Once you have decided that expanding is the best choice for your business it’s time to begin building. But instead of exploding your finances and affecting your bottom line here are three tips to expand your manufacturing facility on a budget:
1. Interview multiple builders
Going with the first builder who gives you a fair estimate may not be the best choice for your company or your budget. By interviewing a few construction firms you can get multiple opinions about the costs involved, an accurate time-frame, and the builder’s experience with factory expansion.
Contact Celtic Bank to discover how our SBA CAPLine and asset-based loans can give you the capital you need for your factory expansion.
2. Buy used equipment
Your expanded factory will no doubt need additional manufacturing equipment to increase productivity. Many businesses are turning toward gently used equipment to save on the high ticket price of brand new equipment. Although used equipment may not be acceptable for all industries, the comparable cost savings can be surprising.
3. Save on utilities
Installing new or updated heating and cooling systems into your newly expanded factory is a great way to increase your energy efficiency. In fact, you may be able to reduce your energy consumption by 40% by simply replacing out-of-date HVAC systems. For even more savings, consider building your new factory with additional sustainable features (such as renewable energy systems) which are eligible for government tax credits.
Expanding your manufacturing facility is an important part of your company’s continued growth and success. By evaluating your expansion needs, finding the right builder, buying used equipment, and cutting back on utility bills you can make your factory expansion fit into your budget.
