Packaging plays a significant role in marketing and ensuring the sale of a product. It is what we see in advertisements and what catches our eye when shopping. The packaging industry is estimated to be worth $10 million, and there are clear indications it will keep growing in the coming years. This means it can be a lucrative business venture. There are a few things you need to know before you get started.
Planning is Crucial
A plan is vital when starting any business, so ensure you have a solid one beforehand. Start by identifying your target market. The packaging industry is very wide, so focus on a specific target market. Some target markets to consider include household companies, industrial clients, food and beverages, fashion and cosmetics, and pharmaceuticals.
Doing this also provides you with an opportunity to identify market gaps. For example, fashion brands in your area might need custom in-house printing services alongside packaging, and you can leverage this opportunity.
Next, determine your products and services. Your research thus far should guide you on the services your market needs. Some businesses might need design services, while others might need you to create the inserts, mailers, and boxes they need for the packaging.
Even if you will not provide some services at the start due to budget constraints, it is best to keep them in mind. You can check if your customers require them in the future, and you can sell them as add-ons if they do.
You Need a Business Name
Your packaging business requires an identity, and this comes from the name you choose. Take your time to find one that underlines your services, objectives, and mission. Try to keep it short, concise and memorable. These qualities are crucial when starting because a sizable part of your business will come from word-of-mouth referrals at the start.
Also, keep the following things in mind:
- The name should be easy to say and spell.
- You can ask friends and family for suggestions.
- Location-based services might hinder future expansion.
- Try to incorporate keywords that will help with SEO when you build your website.
- You can use online name generators for ideas if you get stuck.
Deal with the Legalities Early On
Some critical things to deal with as soon as possible are:
- Registering the business – Doing this makes the business official, and it is crucial for other steps like raising capital, paying taxes, opening a business bank account, and planning for the future.
- Choose a business structure – Your business’s legal structure will dictate your liability and how you pay taxes, and it will also determine registration requirements.
- Register for taxes – You should get an Employer Identification Number or EIN for tax purposes. However, you do not need one if your business is a sole proprietorship, and you can instead use your social security number in that case.
- Apply for licenses and permits – You will also need several licenses and permits from the federal, state and local governments. To avoid oversight, you can work with businesses that register them.
Setting a Budget Will Save You in Numerous Ways
Similar to any other business, you will need to pay for a few things like supply charges, packaging material and others. Understand what you need and then budget for it. Doing so will help you avoid buying inventory that costs you extra to store when your clients require much less than you bought.
Also, save for unexpected events. Sometimes, opportunities like partnerships and special events can come out of nowhere and require that you provide bulk packaging services. If you cannot do this due to not having a budget, you will lose those opportunities and your business might suffer for it.
Lastly, track your expenses. Doing so will help you tweak your budget as necessary, so you always have enough cash for the business and any unexpected needs. It will also help you find areas where you can save money to invest in others, such as market research and marketing.
Focus On Core Packaging Components
There are several core components you need to think about while starting the business. The most important of these is perhaps the material. You can choose from different packaging materials, including paper, glass, metal, and wood.
These will dictate costs and other factors, such as how you will do the packaging, what packaging services you can provide, and the adhesive you will use. For example, selecting paper and wood will require that you find reliable water-based adhesives, and you should only consider adding wooden pallets to the services provided if you pick wood. Metal and glass work best for foods and beverages, and ensure your business is eco-friendly since they are recyclable.
You will also need to find a supplier for the materials you pick. They should be reliable and provide high-quality ones at an affordable cost. Negotiate with them to see if they can give you special discounts if you buy in bulk, something you might have to do as the business grows.
Automation Will Save You Time and Money
When starting your business, you might be able to handle all the packaging by hand. However, that might not be sustainable as border volumes increase. So, start thinking of automation early on.
You can use automation to streamline managing and sealing boxes and cartons and ensure streamlined processes and workflows to avoid bottlenecks. Also, consider machines that will make it easier to print and place labels.
You Will Need to Market Your Business
At the start, it is wise to visit platforms like LinkedIn to find people who need your packaging services. You can then expand slowly outwards, creating lead-generating strategies that will help you land more clients and deals in the future.
A packaging business can be highly profitable if set up right. There are some common things you need to do, such as registering it and ensuring it is tax-compliant, and some that apply specifically to these types of businesses, such as choosing the right materials and automation platforms. Don’t forget to differentiate and market yourself in your chosen niche to beat your competition and more established businesses.
