Manufacturing At Home

By Author: Marcus Stalder
Total Articles: 491
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With the recession, there's something quite strange happening to established businesses. Ten tears ago when our labor was expensive and China and india were cheap, there was a move to outsource all the major work to China and India. Now the recession has hit our industries and China has grown more expensive, our industries are discovering it may now be cheaper to bring the work back. There's just one problem. Most of the people with the right skills have now grown older and moved away. It's a challenge to find enough people to work the machines again. Except some who were thrown out of work decided it might be good to run a small business from home. They quietly established small workshops in the basement, keeping the noise down, hiding away. So what are the implications? What should you do if you can afford the machines and have the right skills to make products in demand?

The first question is whether you live in a purely residential zone. Local government has many different regulations defining the use of property. Most require you to get a license, permits and certificates before you can manufacture at home. This ...
... is not the simple matter you might imagine. It's more than just filling in a few forms and paying a fee. It takes time to get all the approvals. Worse, the same regulations that apply to a big company also apply to the machines you have in your basement. So when it comes to connecting up to the power supply, there are real safety issues to be addressed. Then what are you going to do with any waste? Can you avoid polluting the neighborhood? It's a big hill to climb if you want to stay legal. So why not just start up and hope for the best?

The answer is depends on the level of risk you want to run. Without all the necessary paperwork in place to show you have complied with all the local ordinances and regulations, running the business from home will be illegal. If your operation is illegal, you cannot get a valid insurance. Although you may lie, get a policy and pay the premiums, the insurer will cancel the policy once it becomes obvious you do not have the permits and licenses. So if you have claims, they will be denied by the insurer and it will all fall on your head to pay whatever losses have arisen. Most people decide it's not worth the trouble to manufacture from home.

Instead, they rent a small space in a building that does have the right licenses, and run all the paperwork out of their homes. Now your business is more likely to be legal and the small business insurance policy enforceable. All this assumes, of course, that the business proposal itself is going to make money. You have identified a market? You do know you can sell what you make at a sufficient price to cover all the bills and leave you with a profit? All business ideas should be properly appraised before you start. Just going on a wing and a prayer is not enough. In all this, business insurances can make the difference between instant failure and long-term success should anything go wrong.