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How to Start a Conveyor Belt Manufacturing Business

Do you want to start a conveyor belt manufacturing business? If YES, here’s a complete guide to starting a conveyor belt manufacturing business with NO money and no experience. Conveyor belts are majorly used in ensuring that assembly lines are connected to the final inspection and packaging lines. Conveyor belts are also used to transport solid materials horizontally or on an inclined slope due to the fact that the belt moves over pulleys in positions that are fixed.

Conveyor belts are the most popular mechanical handling equipment that are used by industries. It is expected that there will be an increase in demand in the next few years especially as there will be increased activities in the manufacturing, mining and power industries. Conveyor belts are regarded as reliable in helping to automatically move objects within a building. It has become quite popular because that it saves labor and allows for a large volume of products to move at a very fast process.

There are different kinds of conveyor belts that are used to convey varied kinds of objects and some (like the rubber) are used to convey items that have irregular bottom surfaces while the belt conveyors, which are used for both regular and irregular objects are the most commonly used and least expensive kind of conveyor belts.

Conveyor belts have been in use since the late 18th century in yards and mines to transport bulk materials over short distances. It was revolutionized by Henry Ford in 1913 for his assembly line, which enabled him to not only produce cars faster than competitors but to do it in a cheaper way.

The process that Henry Ford used has since been replicated by other mass production facilities not only in the United States but all over the world. The difference between the conveyor belts of now and then is that its speed and precision has been improved.

Just like any other business, it is important to conduct thorough research regarding the business that you are looking to start so that you can make informed choices regarding critical aspects of the business.

There are different kinds of conveyor belts in the market, and if you aren’t aware of this, it might lead you to buy the wrong materials or equipment for your business. Also, you are supposed to know who your target market is and what it is they expect from you.

Once you have conducted a thorough research regarding the business, it is important that you create a comprehensive business plan. A business plan is an important document for any serious entrepreneur because it serves as a map for your business. Also, having a comprehensive business plan allows you to approach investors and convince them to invest in your business.

19 Steps to Starting a Conveyor Belt Manufacturing Business in the United States of America

1. Understand the Industry

The conveyor belt manufacturing industry which is combined with the forklift industry, according to the IBISWorld research report, generates revenue of over $30 billion annually but has been experiencing a negative growth of -1.6 percent between the periods of 2012 and 2017.

There are more than 1,600 forklift and conveyor belt manufacturing businesses in the United States of America employing more than 89,500 people. The industry is largely fragmented with few companies having a major market share. According to research, it is expected that improving activities in the manufacturing sector as well as the freight sector will facilitate a modest rise in demand.

The industry is in its mature life cycle because its markets are clearly defined even though there are few substitutes in place. A lot of industries in the downstream sector have driven the demand for the diverse product lines of the industry.

Over the past years, 2007 to 2012, the industry has experienced revenue growth that can be described as moderate as activities in construction not only boosted revenue for this period but sustained it for a period of time even till revenue started to decline not just due to the construction market but low commodity prices.

Capital intensity level in this business is quite low because of wage depreciation. It is important to note that the capital investment in this industry is similar to those spent in most manufacturing industries as the capital is majorly spent on putting up new facilities, improving already existing facilities, developing infrastructures as well as products.

However, more companies are not only investing in improvements on their companies and information technology infrastructure but to improve on their products and keep the cost of production low as the business expands.

The major global portion of the conveyor belt industry market share is dominated by regional players. There is a high degree of competition in the industry especially on their pricing strategy as well as the differentiation of the products as certain customized conveyor belts are manufactured at low cost.

The area with the highest global demand for conveyor belts is the Asian Pacific and the two fastest emerging economies – India and China are leading in the industry with the trend expected to continue into the foreseeable future due to increased industrial investments.

It is expected that the global market for conveyor belt manufacturing business is expected to reach nearly $7 billion by the year 2022 due to the strong demand for heavy industrial equipment, conveyor equipment as well as construction equipment especially as the manufacturing sector on a global level is slowly recovering from the economic downturn.

The industry is also expected to benefit greatly from other industries such as food processing, automotive and aerospace. Manufacturers of the standard V-belts however have to slowly adapt to increasing interests in premium belt drives such as the synchronous belt drives especially demanded by manufacturing plants in order to enhance their energy efficiency.

One of the major trends that is slowly gaining a foothold in the market is the increase in demand for conveyor belts that are eco-friendly. These eco-friendly belts are not only economical and extremely curve negotiable, they also more durable in moving heavy materials.

These conveyor belts are closed from either side and eliminate dust pollution as well as the soiling of the conveyor system due to spillage. Also, the belts help to reduce operational costs as they are capable of making small radius bends that not only gets rid of transfer stations but also have self-cleansing properties.

The industry is segmented into three product types – light-weight conveyor belt, medium-weight conveyor belt and heavy-weight conveyor belt. The medium-weight conveyor belt according to market research not only dominated the market in 2015 but also accounted for nearly 58 percent of the total market share.

The increase of manufacturing activities as well as the availability of labor, raw materials and equipment has increased the use of medium-weight conveyor belts. It is further expected that the overall industry will continue to improve as standard of living will cause an increase in demand for manufactured goods.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who use conveyor belts are businesses in industries such as agriculture, mining, manufacturing, food, transportation and logistics/warehousing.

Therefore, if you are looking to define the demography of your conveyor belt manufacturing business, you should try to make it as all-encompassing as possible especially for industries in the downstream sector.

3. Decide What Niche to Concentrate On

The conveyor belt industry is segmented into different product categories. If you are looking to go into this business, you can choose a niche and concentrate on it depending on how much start-up capital you have at hand. It is however important that you study the niche you intend going into in order to determine how profitable it is so that you do not end up manufacturing a product that doesn’t have many customers.

In this industry, small and medium scale companies usually concentrate on manufacturing one or several products, while large scale companies manufacture a broader variety.

Below are some of the niche ideas that are available for you within this particular business to specialize in;

  • Lightweight conveyor belt
  • Medium-weight conveyor belt
  • Heavy-weight conveyor belt
  • Industrial Pulleys
The Level of Competition in the Industry

Competition in this industry is quite high with there being a number of conveyor belt manufacturers focusing on producing only one or several conveyor belts that others also produce.

What customers (usually businesses in other industries) are on the lookout for when purchasing conveyor belts is high quality and that the material’s thickness is consistent. While one or few of your products are bound to have defects, it shouldn’t be a continuous trend.

There are very popular conveyor belt manufacturing companies not only within the United States but also all over the globe and so if you are looking to start your conveyor business in the United States of America, you should be prepared for intense competition from those within and even those outside the country.

4. Know the Major Competitors in the Industry

In every industry, there are brands that stand out due to several reasons and this industry is no different. The brands in this industry that are popular not only command a market share but are known for the kinds of products they produce, their awareness, marketing strategy and their innovativeness.

Below are some of the well-known conveyor belt manufacturing businesses in the United States and also globally as well;

  • Bridgestone
  • Bando Chemical Industries
  • ContiTech AG
  • QingDao Rubber Six
  • Zhejiang Double Arrow
  • Mitsuboshi Belting
Economic Analysis

The demand for conveyor belts is dependent on the industries that exist in a region. Therefore, the major growth drivers for the conveyor belt manufacturing industry are macroeconomic factors such as the growth of the GDP as well as growth in infrastructural activities such as airports and malls. On the other hand, one major factor that can cause a huge restraint on the industry is when the economy is experiencing a downturn.

Even though the Asia Pacific dominates in the demand for conveyor belt manufacturing on a global level, North America is regarded as the second largest market even though the market is highly saturated and it is anticipated to come out of a sluggish period within a decade (2015 to 2025). Other regions such as South America and Africa are expected to grow at a better pace due to the fact that their economies are still developing.

It is expected that the conveyor belt market on a global level will continue to grow steadily at a CAGR of almost 4 percent by the year 2022 because of the growing demand from mining, manufacturing as well as power industries who have to rely on them to keep their production costs as low as possible.

Manufacturers that use industrial conveyor systems do so in order to not only reduce their inventory levels but also reduce overall costs as well. Conveyor belts are very useful in improving the order-to-delivery cycle especially as there is the need to be swift in production.

5. Decide Whether to Buy a Franchise or Start from Scratch

One serious decision that most entrepreneurs have to make is whether to start their business from scratch or to buy a franchise. This is a decision that has to be carefully made because not only does each option have its pros and cons, it is also not a guarantee a business achieving its stated goals and objectives.

However, this kind of business isn’t one where there are franchise opportunities for entrepreneurs and the options available are either to start totally from scratch or to buy an already existing conveyor belt manufacturing business.

Starting from the scratch might be advantageous to an entrepreneur depending on where the business is located. If your conveyor belt manufacturing business is located in an area that is slowing booming with activities from the downstream sector, then starting from the scratch might not be a totally bad idea.

Some entrepreneurs do however prefer buying off an existing business as this would enable them spend less on overhead costs as they would not need to bother about buying certain equipment that would be needed to start the business. It is however important that you carry out a research on this in order to determine which would most likely favor your business.

6. Know the Possible Threats and Challenges You Will Face

When starting any business, you need to be aware of the threats and challenges that you are likely to face and know how to easily combat them, which is why it is often advised that entrepreneurs have a comprehensive business plan in place that will guide them in taking decisions.

However, no matter how exhaustive your research regarding your new business might have been, there will still be some challenges that will crop up that are totally unexpected and not easily resolved.

Some of the threats and challenges that you are therefore likely to face when looking to start your conveyor belt manufacturing business are; having to compete with already existing and successful conveyor belt manufacturing companies, economic downturn, being an unknown brand, industry and government regulations as well as changing trends.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

According to research, a large number of companies that do not incorporate are not likely to make it past 3 – 5 years in business and while the success of a business shouldn’t be dependent on its legal structure, the right business structure can have a lot of impact on your business especially when it comes to how much taxes you will have to pay, your ability to raise capital, the personal liability that you will face as well as the amount of paperwork that will be required. Also, taking the time to choose the right legal entity for your business shows that you are taking your business very seriously.

As an entrepreneur looking to start a business, you cannot just assume one form of legal entity is better than the other because the circumstances differ for every business. The decision is not one that should be made without getting counsel from attorneys as well as business experts. It will be a waste of time and resources if you find out that you chose the wrong entity for your business.

Since there are no best entities except that which is right for your business, the three major entities that exist for businesses in the United States are; sole proprietorship, partnerships and corporation. The partnership form of legal entity has variations which are general partnership, limited partnership and limited liability company (LLC).

The LLC is considered a very popular option for entrepreneurs in the United States apart from the sole proprietorship. This is due to the fact that an LLC helps in limiting the personal liability of the owner(s), which means that the business is regarded as an entity in its own right and can sue and be sued. Also, LLCs are regarded as very flexible when it comes to their management structure as well as tax structure.

One disadvantage with the LLC is that you cannot make your company public by raising stock in order to generate capital and it is for this reason that entrepreneurs usually prefer to choose a corporation as their legal entity. However, a corporation is more complex and expensive to form even though it is considered as an independent legal entity. Also, corporations can continue indefinitely even after a shareholder dies or sells his shares.

8. Choose a Catchy Business Name from the ideas Below

When looking to start a business, getting a name that will enable your business to be easily identified is important because not only will this make your business legal, it will also make you stand out from others in the same industry. Getting a business name is not easy because not only must the business name be memorable, it must be easily pronounced while also indicative of the industry that you are in.

Below are some of the catchy business names that are suitable for a conveyor belt manufacturing business;

  • Bish Conveyor Belts, Inc
  • Kwang Ben Belts
  • ConPull, Inc
  • Swiss Belts Inc
  • Golden Conveyor Belts

9. Discuss With an Agent to Know the Best Insurance Policies for You

There are a number of things that could happen to your business and it is your duty to ensure that regardless of the kind of calamity that befalls your business, you are not going to be put out of business.

Insuring your business and the equipment you use transfers the risk to someone else and so when calamity befalls you, the risk carrier assumes the burden, making the calamity not affect your business operations. It is vital that you know what insurance policies will be good for your business and how much you should therefore set aside.

Below are some of the insurance policies that you should therefore consider purchasing when looking to start your conveyor belt manufacturing business;

  • Property Insurance
  • Casualty Insurance
  • Workers’ Compensation Insurance
  • General Liability Insurance
  • Commercial Property Insurance
  • Product Liability Insurance
  • Professional Liability Insurance
  • Business Auto Insurance
  • Key Employee Insurance Life
  • Umbrella Policies

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

In this kind of business, there is no need to acquire intellectual property protection except you are looking to protect your business name, logo, or any other material that you deem worthy of protection, in which case you will have to seek the advice of an attorney who understands the industry thoroughly.

11. Get the Necessary Professional Certification

In order to be able to manufacture a conveyor belt, it is not necessary that a professional certification be first gotten. What is needed in order to be able to start this business and run it successfully is startup capital and technical expertise from the various hands that will be hired.

This does not however mean that you cannot leverage against your competitors by getting professional certifications in certain areas such as management, finance, manufacturing and marketing in order to run your business better.

12. Get the Necessary Legal Documents You Need to Operate

Regardless of the business that you are looking to start in the United States, it is important that you get the necessary documents that will allow you run your business without any hassles from regulated authorities. It is best that you engage the services of an attorney to help you with the legal documents that you might need for your business.

Below are the list of legal documents that you will need in order to run your conveyor belt manufacturing business successfully;

  • Certificate of Incorporation
  • Operating Agreement for LLCs
  • Business Plan
  • Business License
  • Employment Agreement
  • Contract Documents
  • Insurance Policy
  • Trade License
  • Employer Identification Number (EIN)
  • Tax Identification Number (TIN)

13. Raise the Needed Startup Capital

The conveyor belt manufacturing business is one that requires a great amount of capital to start up and run till it starts to generate revenue. Sourcing for start-up capital is not something that is easy for any entrepreneur which is why it is usually advised that a comprehensive business plan is in place in order to help convince investors of the viability of the idea.

You should note that investors expect you to also invest in your business regardless of how comprehensive your business plan is and so you should have your own start-up capital which you have to put to use for your business.

Below are some of the financing options that are available for you to start your conveyor belt manufacturing business;

  • Generate part of your start-up capital through sale of property and stock
  • Get a business partner to invest in your business
  • Apply for loan from bank
  • Apply for equipment leasing option

14. Choose a Suitable Location for your Business

One of the serious decisions that you will have to take when looking to start a business is where you are going to locate the business. Starting a manufacturing business means that you cannot just locate your business anywhere due to zoning regulations which is why it is necessary to conduct a thorough research before starting your business so that you do not violate any laws when it comes to leasing a space.

Even though you can purchase or lease the land, factory or warehouse that you want, it is important that the area is easily accessible for not only your employees but for others that will be looking to visit your factory.

The space should also be big enough for you to put in all the equipment and machinery you will need to run the business as efficiently as possible. The machines themselves need space in order not to constantly break down.

It is important that your factory is very conducive for your employees, and ensure that all the necessary utilities are installed.

You can engage the services of a real estate agent or broker when looking to rent or buy the space or facility you will need for your conveyor belt manufacturing business.

15. Hire Employees for your Technical and Manpower Needs

The conveyor belt manufacturing business requires the use of specialized equipment, a huge capital to start up as well as technical skill in order to run the business efficiently. The business is capital intensive as funds are needed to purchase the needed raw materials as well as equipment. Therefore in order to ensure that the production capacity, market demand and quality standard of the belts are maintained, it is important that you consider a few things.

Conveyor belts sometimes may have one or more layers of materials strapped around the pulleys in order to rotate the belt in a continuous circular motion. The material that needs to be transported is usually placed on the belt and then carried to the other point of the belt. One conveyor belt requires two pulleys in order to function efficiently. Modern conveyors have now been designed to sort packaged goods by sensing the positions which objects are placed and aligning them in order that they can be processed and then shipped.

The raw materials that are often used in manufacturing conveyor belts are usually of different materials such as rayon, natural raw rubber, synthetic rubber, nylon, processed oil and cotton. Other raw materials include pine tar, stearic acid, sulphur, antioxidants, carbon black, zinc oxide, pigments, rosin, whiting, fabrics as well as packaging materials.

Aside from the raw materials, you will also need certain machineries and equipment to produce your belts and they are; calendar machine, hydraulic press, hydraulic mixture machine, size cutting machine, rubber mixing mill, rubber dispersion kneader, farming table, testing equipment, boiler of at least 250kg, generating set, ageing chamber and packaging equipment.

It is important that you build a solid business structure if you intend to attain your stated goals and objectives. This business is highly technical so it is important that you only hire those that have the needed capability so that you can achieve your goals and objectives. Those that you therefore need to hire for your conveyor belt manufacturing business include; office manager, supervisor, accountant, inventory manager, front desk officer, marketing and sales executive, driver and security guard.

From the above breakdown, you will require at least 8 key individuals to be able to achieve your intended goals and objectives.

The Service Delivery Process of the Business

A conveyor belt is usually manufactured through a calendar machine which allows for a huge number of products to not only be produced but to allow for more effectiveness as well. The calendar method also allows for less solvent loss and a faster production.

In order to achieve the required layer specification and thickness, the product is allowed to go through a rubberization process before passing through the hydraulic press.

The belt produced has to be uniform and in order for it to perform efficiently, the thickness of the material has to be consistent. In order for friction to be improved, the belt has to be treated with heat. The belt and the pulleys (roller heads) are usually coated in order to improve the wear and tear resistance and also friction.

16. Write a Marketing Plan Packed With ideas & Strategies

Even though the conveyor belt is used by certain kinds of industries, it does not therefore mean that your marketing strategies will be so different from those being used by other kinds of business. One thing to note is that industrialization and technology are the chief driving force in this industry.

It is important to develop marketing strategies that will not only enable you to generate the revenue that you will need to grow and sustain your business but one that will also allow you to penetrate the market and also get a fair share of the industry despite how competitive it is.

It is important to conduct a thorough market research in order to not only determine who your target market is but also what strategies will grab their attention enough to make them take note of your brand. You could get a professional marketing consultant to help you out with the statistics that will help you create the right marketing strategies for your business.

Having a marketing plan for your business is essential and enables you to recruit the right hands because you should get those that not only understand the industry but also identify with your intended goals and objectives and will therefore do all they can to ensure that the goals are attained.

Below are some of the marketing ideas and strategies that you will require for your conveyor belt manufacturing business;

  • Ensure that you send a brochure containing pictures of your products, your other services, your rates, contact information and an introductory letter to your intended clients
  • Empower your marketing executives to physically visit your potential clients
  • Place adverts regarding your conveyor belt manufacturing business in newspapers and related magazines
  • Hire a website developer to create a professional website for your company
  • Ensure that your conveyor belt manufacturing business is listed in yellow pages as well as online directories

17. Develop Iron-clad Competitive Strategies to Help You Win

No matter how unique your business is, you are likely going to face competition after a while and so it is necessary that you create strategies that will allow you not only run your business effectively but also allow you stand out from others that are in the same industry.

Some of the competitive strategies that you will require in order to be able to win over your competitors in this particular industry include; being in the know about industry trends, being innovative and also being consistent in quality.

18. Brainstorm Possible Ways to Retain Clients & Customers

In every business, customers are regarded as key and so it is vital that you treat your customers right as this will enable you attract more to your company. However, inasmuch as it is important to create the strategies that will attract the right customers to your business, it is also very important that you create strategies that will allow you increase the retention of your customers.

According to research, companies that successfully increased the retention of their customers were likely to save more money than those that didn’t take the relationship with their customers seriously, thereby resulting in a loss of customers.

There are several ways by which you can increase customer retention for your business and one of such ways is in ensuring that the quality of your products are as consistent as possible. While one or two defects can be excused by your customers, constant defects in your products show how unserious you are and therefore will lead to your customers leaving you for your competitor.

Another way by which you can increase customer retention for your business is by trying to remain innovative and keep a quality relationship with your customers. Once your customers know that you are not only bringing out new products but that you are also keeping them in the loop, they are likely to stick to your brand.

19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

As an entrepreneur starting a business, your chance of becoming well known within the industry and without will require that you develop the right strategies that will not only boost your business but also help you create a corporate identity that will be positively communicated to your intended target market. The advantage that comes with boosting the awareness of one’s brand is that not only do you get people to be aware of your business; you also get to generate revenue as well.

The importance of boosting one’s brand is why businesses that have attained a degree of success no matter how long they have been in existence take the continuous promotion of their brand very seriously which is why a certain amount of money is kept aside so that the business can engage in promotional activities.

You should know what kind of promotional activities that will benefit your business more by conducting a survey of the promotional strategies that are being used by others in the same industry and then modifying these strategies to suit your business.

It should be noted that not all strategies will require you to spend lots of money in order to create awareness, as being at the right kind of events or networking with the right people can also enable you achieve your intention of boosting awareness for your brand and also creating a corporate identity.

Below are some of the strategies that you can use to boost awareness for your brand and create a corporate identity for your business;

  • Register with professional bodies and organizations in order to promote your brand
  • Get a professional website and employ an SEO consultant to help optimize visibility for your website in search engines
  • Install billboards in strategic locations around the areas that your intended target market is
  • Advertise your conveyor belt manufacturing business on popular forums
  • Use your social media platforms such as Facebook, Linkedin, and Twitter to promote your business