Do you want to start a foam production business? If YES, here is a complete guide to starting a foam production business with NO money and no experience.
Okay, so we have provided you an in-depth sample foam production business plan template. We also took it further by analyzing and drafting a sample foam production marketing plan backed up by actionable guerrilla marketing ideas for foam production companies. In this article, we will be considering all the requirements for starting a foam production business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- 1 Why Start a Foam Production Business?
- 2 Starting a Foam Production Business – Market Feasibility and Research
- 3 Starting a Foam Production Business – Legal Aspect
- 4 Is Professional Certification Needed to Run a Foam Production Business?
- 5 Starting a Foam Production Business – Technical and Manpower Requirements
- 6 Starting a Foam Production Business – The Marketing Plan
Why Start a Foam Production Business?
We all know that foam is a very crucial item in households and it serves a very unique role in human existence. They indeed come in various shapes and sizes, and have different uses and purposes. Foam can be used in making mattresses, big and small pillows, cushions, and some furniture.
Starting a business that produces foam is capital intensive, and it also needs industrial experienced persons to facilitate the entire production process and make it less complicated. The foam making business is also a business that can stand the test of time because there is always a need for it in human existence.
If you are so interested in starting a foam production business, then you have to start first by writing a suitable business plan. Writing a business plan is among the initial steps to take before starting up any business. Another crucial thing is for you to learn and master the processes that are involved in foam making.
An individual with great knowledge in this line of business can be gotten to give you good information that would be beneficiary to your business. In the meantime, here is a detailed information on how to start a foam production business;
Starting a Foam Production Business – A Complete Guide
- Industry Overview
Businesses in this industry produce foam and foam products (except polystyrene). Apart from being used for mattresses, these products are used to insulate objects or reduce shock in bedding, packaging, seat cushioning, carpet cushioning, car interiors, fluid filtration systems, anti-noise and vibration systems in aircraft, medical devices and several consumer applications such as sponges, mops, paint brushes and cosmetic applicators. Reports have it that this industry has grown over the five years to 2017.
Good economic conditions have sustained heightened demand from important downstream markets, such as construction and automobile production. Also we believe that the downstream demand from residential and non-residential construction activity is expected to boost sales of foam products used in insulation, furniture and carpets. Similarly, demand for cars will increase purchase of foam used in seat cushions and vehicle insulation.
Experts believe that over the five years to 2022, that industry revenue is expected to continue rising. Note that the locations of production businesses are generally influenced by how close they are to major markets, as well as material and supply industries. We believe that production businesses also tend to be highly correlated with population density.
Foam production industry businesses are primarily concentrated in the Southeast, Great Lakes and West regions of the United States due to their proximity to major manufacturing industries as well as population centers. These three regions combined account for 64.2% of industry establishments. Note that the Southeast region is expected to account for 28.3% of industry establishments.
Starting a Foam Production Business – Market Feasibility and Research
- Demographics and Psychographics
The people who patronize this business can be very vast. Foams are needed in as many industries as we can imagine. From fitting car seats to mattresses for our sleep, the nation needs foam production businesses to make foams that will be used either by the Healthcare industry or the transportation industry. In this line of business, we suggest that you make it a paramount duty to dictate and make sure you develop strategic pacts with corporate organizations, advertising and branding agencies, religious organizations et al.
List of Niche ideas in the Foam Production Business
We all know that foams come in different shapes and sizes and it also has different uses. It is used in furniture making, mattresses, and other things. The three main raw materials used in the manufacturing of the flexible polyurethane foam are POLYOL, TDI, and WATER. A lot of people would think this industry has no niches or specialization for focused individuals.
Have it in mind that foam is not foam; it has different uses and purposes, so does its processes. Niche ideas in this industry may also include the target market you choose and the industry you decide to service. Types of foam production you can choose from may include;
- Urethane foam production
- Polystyrene foam production
- Airbed production
- Waterbed production
- Camping mat
- Latex foam production
- Pillow production etc
Level of Competition in the Foam Production Business
We don’t need much words to explain the importance of this industry to man’s comfort. This growing need will keep boosting the revenue of this industry, and indeed with increasing revenues comes competition for market shares. This industry though not as harsh as most may think, comes with its own formidable competition.
List of Known Foam Production Companies
- American Excelsior Company
- American foam products
- Rempec foam cooperation
- Haubech cooperation
- Wisconsin Foam Products, Inc.
- Thrust Industries
- William’s foam
- Design Converting, Inc.
Mattresses in the past have been filled with any kind of cushioning material. Common fillers were straw, feathers, down, wool, horsehair, sawdust, leaves, and rags. But immediately cotton was introduced from India and the Americas, things changed.
As time passed by, it became the most common ingredient, especially with the advent of the Industrial Revolution. This era influenced foam production. The cotton gin, spinning mills, and textile mills made cotton and cloth less expensive and more readily available. Sewing machines, gas and electric lighting made production more efficient. Better roads and motor vehicles enabled manufacturers to serve a wider area, even locally.
The latest major development in the Foam Production industry is ecommerce. Online sales have been increasing at the expense of physical stores. This is resulting in a decline of shopping malls and national retail chains (ironically, as big box stores decline, local stores are making a comeback). This now includes foams.
People use to visit furniture stores, foam stores and department stores to see the foams for themselves, feel them, and test them. With too many confusing choices, high pressure sales and high prices, coupled with disappointment in the final product, they were open to options. But now producers are now listing their foams online.
Starting a Foam Production Business from Scratch or Buying a Franchise
A lot of inexperienced foam production business entrepreneurs see business ownership with the wrong idea that startup is their only platform to pursue a business acquisition. Apart from situations that need extensive innovation or highly unique value propositions, it is usually less risky to buy an existing foam production business.
A known Foam Production business is a known quantity; a startup is less certain because its expectations rest on estimated outcomes. In a best case scenario, you will be able to locate a turnkey operation with proven profitability and a well-oiled business model.
Have it in mind that the odds of achieving your top business goals are high when you franchise and make use of their successful brand and track record. When planning to start a foam production business, a smart move is to investigate whether there are good franchise opportunities available that might increase your chances of success in the industry.
Possible Challenges and Threats of Starting a Foam Production Business
There is a large market for foams and foam products. They are produced in different sizes, dimensions and thickness all to serve different purposes. But understand that the quality of the materials determines the durability, level of comfort and price. Poor grade mattresses degrade quickly while high quality foams last several years. Barriers of starting this business in the United States may include;
- Understanding the market
- Production knowledge
- Rigorous legal processes
- Suitable location
- Raw materials
Starting a Foam Production Business – Legal Aspect
- Best Legal Entity for a Foam Production Business
When thinking of the best legal entity to use for your foam production business, remember you have just two legal entities that seem to suit the business properly- sole proprietorship and the LLC. But have it in mind that the legal structure you choose out of the two should be based on the size and scale of the business.
If your business is all about the income and interest of your clients, then LLC is the best legal entity for your business be it small, medium or large. It is important to state that the advantage of creating an LLC typically outweighs any perceived disadvantages. The advantages include;
- Protected assets
- Heightened credibility
- Limited compliance requirements
- Flexible management structure
- Few restrictions
Catchy Business Name ideas for a Foam Production Business
- Super foam
- King size
- Nick foams
- First choice
- Main gate
- Sole comfort
- Assorted foams
- Mandarin foams
We all know that a production company needs insurance to protect its workers, protect itself and its owners. There are many pitfalls in this business, and one can never be too careful. Have it in mind that it is your duty as an independent entrepreneur to guide your business, supplies, customers and employees by making sure you have the best business insurance to fit your particular business needs. Insurance you will be needing may include;
- Foam production General Liability Insurance
- Foam production property insurance
- Foam production Equipment Breakdown Insurance
- Foam production commercial auto insurance
- Foam production umbrella insurance
- Foam production Workers’ Compensation
- Foam production crime insurance
Intellectual Property Protection
There are different brands of foams in the market, and for that reason, you have to come up with a brand name for your foams. You have to make it possible for people to differentiate your brand from other brands. So, in order to patent a name for your brand, visit the patenting office which is under the library board in your country.
Just like a lot of new entrants in the business world, you might think it is not important for your business, but note that filing for intellectual property protection for your foam production business goes beyond protecting your company’s logo and other documents, but also protecting your investments, ideas, style, and of course the name of your company.
If you want to file for intellectual property protection and also register your trademark in the United States, you have to start by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Is Professional Certification Needed to Run a Foam Production Business?
In this business, you will always need to show your customers how knowledgeable you are about what you do. Convince them and give them the guarantee to trust you even without you asking for it. Have it in mind that only professionalism coined from professional certifications can give you this coverage, and each certification in this industry has its own set of rules and regulations and it is granted by a professional career organization. They include;
- SPFA Professional Certification Program
- PCP Professional Certification
Legal Documents Needed for a Foam Production Business
The legal aspect of a business is an important step when starting a business/company. Note that it is very crucial and cannot be taken lightly. If you have big plans for your business and you want people to take you seriously, then you have to satisfy all protocols and have your documents complete. They may include;
- Articles of Organization
- LLC operating agreement
- Business license
- Business plan
Financing your Foam Production Business
Starting a foam production business needs good capital, and if you can get the necessary capital/resources on your own then much better. But if you can’t, you do not need to worry too much as there are always individuals, companies and investors who are willing and ready to invest in or go into partnership with you in a profitable business. It is advised that you investigate reliable sources of funds that can be accessed. Possible sources include:
- Personal savings
- Angel investor
- Bank overdraft
- Venture Capital
- Loans from family and friends
- Loans and grants
Choosing a Suitable Location for your Foam Production Business
Immediately you are done with getting your capital, the next step is to find a suitable and befitting location for your foam production company. A lot of choice locations for manufacturing are mostly sited in the outskirts of town, which is why you need to make sure you get a good warehouse that will accommodate all the equipment and other things needed for your foam production.
You may want to consider an industrial estate that is away from a residential area. Make sure that your realtor gets you a place that can accommodate all the equipment that you procure and do not forget that you would need space that can serve as a lounge for your factory workers. Other things to consider may include;
- Target market
- Basic amenities
Starting a Foam Production Business – Technical and Manpower Requirements
For your business to succeed, you need qualified workers. Indeed you do not want to start out on a failed note, which is why you have to go for experienced ones. Your business needs workers who are able to make clients come running back as a result of good quality. Note that there are several high-tech machines and equipment that must be purchased in order to churn out very good quality foams.
Since this business is capital intensive, you need to have it in mind that purchasing of new machines and equipment is among the factors that will eat deep into your budget. If you have limited funds, you can always go for fairly used foam making machines; you can get from those already in the business before you or from a dealer.
We believe there are many kinds of foam making machines to choose from, like a floral foam making machine plant goes for $9,000 shipping excluded, while a 700t per day foam machine plant costs about $7,000, and there are others that go for as much as $15,000- $30,000.
The Production Process Involved in a Foam Production Business
Foam is presently made of many materials, both natural and synthetic. When you look at a mattress, you may not know that the innerspring, helical, and box spring components are made from wire; the box spring wire is usually of a heavier gauge than that used in the innerspring. The insulator is made up of semi-rigid netting or wire mesh, and the cushioning layers can comprise a number of different materials including natural fibre, polyurethane foam, and polyester.
The flanges are made of fabric, and the hogs rings of metal. Top, bottom and side panels consist of a durable fabric cover quilted over the backing of foam or fibre, and the binding tape that holds the ticking together is made of heavy-duty, fibrous, synthetic material. The underlying box spring may consist of either a wooden frame with slats or of metal coils similar to those used in the mattress itself. The box spring may be upholstered, but, even if it is not, it always receives a fabric covering.
Building mattress layers
- A lot of the producers subcontract the production of the innerspring unit to an outside firm that specializes in making springs. Immediately the completed spring unit is received and inspected, the workers manually apply the insulator. Next, they apply the cushioning layers that will determine the feel and comfort of the final product.
- At that point, the mattress is being “built up” in one part of the plant, while the decorative cover that will serve as the exterior for the top, bottom and sides is being made in another part. Sometimes this cover is made on a giant quilting machine which controls a multitude of needles that stitch the cover to a layer of backing material. The stitching chosen serves both useful and ornamental purposes, as it must prevent the mattress cover from slipping or creeping over the layers of cushioning in addition to creating a visually pleasing exterior.
- Immediately the fabric is quilted, it is cut into panels that will fit the top and bottom of the mattress. Note that the side panels are often cut from this same composite or made separately on a border machine. If side handles or vents are to be added, they are attached to the side panels before these are applied to the mattress.
Adding the flanges
- Specially designed sewing machines are used to attach the flanges to the top and bottom panels, and the hog rings are stapled to the flanges. Everything is now ready for the closing operation, during which the hog rings will be secured to the innerspring unit.
Finishing the mattress
- Note that the closing operation is of one of the most highly skilled and critical procedures in the entire process. It is done with a movable sewing head that is mounted on a track. Tape edge operators manually feed the top, bottom, and side panels and a heavy duty binding tape into the sewing machine as it moves around the mattress. As this combination of materials is fed into the machine, the operators use their skill to feed the proper amount of each material into the machine to produce a professionally tailored product.
- A lot of the highest quality mattresses may also feature a pillow top, a panel filled with soft upholstery and attached to the top and bottom panels of the mattress for a more luxurious feel and appearance.
Starting a Foam Production Business – The Marketing Plan
- Marketing Strategies for a Foam Production Business
We cannot deny that innovation is important, but consistency is critical when you market a foam production business. In this industry, the application of fundamental marketing tactics is more valuable than promotional fads and gimmicks. With the use of today’s best marketing techniques, any foam production business can achieve greater marketing dominance through strategic marketing and robust value messaging in the industry.
- Knowledge of Product
This unique technique is a fundamental requirement for marketing a foam production business. Even if you outsource marketing or handle it in-house, your products’ distinctive characteristics would be the marketing strategy that differentiates your foam production business in the competitive industry. This technique is very important that experts that tend to advise SMBs to consult a marketing professional to identify and exploit their brands’ product-based value propositions.
- Using Geolocational Marketing
We all can attest to the fact that Androids, iPhones and Blackberries have made mobile technology a must-have resource for today’s consumers. We humans seem especially keen on using mobile devices for geolocational shopping. As a foam production business owner, geolocational features can be a powerful weapon in your marketing arsenal.
Geolocational marketing is an emerging trend. Indeed it is difficult for small businesses to get in on the action without the assistance of a marketing firm that is experienced in creating mobile-based marketing strategies. There are a lot of ways to influence consumers through mobile GPS. But, in its simplest form, geolocational marketing allows consumers to get the foam they want and it shows them where to get it.
- Avoiding Negative Publicity
Not just you, a lot of foam production business owners don’t know how to avoid or manage negative publicity. Note that the worst way to handle negative buzz is to put off developing a response until reporters come pounding on your door, demanding a comment from a company spokesperson. To be successful in this technique, experts believe you need to have an updated crisis response plan in place at all times.
Boosting your Foam Production Business Brand Awareness and Creating a Corporate identity
There are many ways to boost your brand and promote your business. Below, you have the best methods that require only small investment from your part:
- Modern Social media
Building a successful Foam production business means making a name for yourself. The social media is a fast way to build up any brand. You can start by identifying influencers and engage with them. In little time, those individuals will create some buzz around your service. We also advice that you use social channels such as Facebook, Twitter, Instagram, LinkedIn, and Google+ to keep them and your customers up to date with your accomplishments.
- Online ads
This technique known as online advertising is one of the top ways a starting business can expand its reach and find new customers. You have a lot of options available in this particular strategy such as pay-per-click, paid social media, display advertising, and in-app ads. Note that direct website advertising is also a good idea.
- Product Placement
This often involves ads placed within videos, shows, online stories, or other types of media. Be it links, written words, videos, or visuals, the way you use it depends on your objectives and budget. But this marketing technique is beneficial for the viewers as well.
A reseller is known to buy a batch of your products and sell them at a higher cost. But the benefit is that these partners often visit potential buyers in person and tell them about the product explicitly. But you will have to sell your models at a discount price to the reseller.