Do you want to start a paper mill company from scratch? Or you need a sample paper mill business plan template? If YES, then i advice you read on. A paper mill is a company that produces paper and other paper related materials like toilet tissue.
Despite all the noise about computer and how everything is now in electronic form and computerized, there is still a very high demand for paper and its related products; which makes starting a paper mill a very profitable business.
Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you. You also need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open a paper mill in your city.
You can start your paper mill business from a small town in the United States and if you are good at what you do when it comes to churning out quality paper and paper based products, it won’t be too long before your brand becomes a nationally recognized brand.
20 Steps on How to Start a Paper Mill Company
Table of Content
- Conduct Market Research and Feasibility Studies
- Decide Which Niche to Concentrate On
- Know Your Major Competitors in the Industry
- Decide Whether to Buy a Franchise or Start from Scratch
- Discuss With an Agent to Know the Best Insurance Policies for You
- Get the Necessary Professional Certification
- Get the Necessary Legal Documents You Need to Operate
- Raise the Needed Startup Capital
- Choose a Suitable Location for your Business
- Hire Employees for your Technical and Manpower Needs
- Write a Marketing Plan Packed With ideas & Strategies
- Work Out a Reasonable Pricing for your Services & Products
- Develop Iron-clad Competitive Strategies to Help You Win
- Brainstorm Possible Ways to Retain Clients & Customers
- Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Understand the Industry
Players in the paper mills industry basically manufacture paper from pulp, a fibrous material derived from wood. Mill operators may manufacture their own pulp or purchase it.
Industry products include paper rolls and reams, including printing and writing paper, newsprint, packaging material and household papers. These products are sold in bulk to individual consumers, businesses and downstream manufacturers who may further convert the industry’s products into specialty paper products.
If you are a close watcher of happenings in this industry, you will notice that the paper mills industry, which produces a range of communication papers and personal care products, has contended with roadblocks to success over the five years to 2020 due to competition from foreign paper manufacturers and persistently declining demand for paper products.
Industry operators have toiled with concerns surrounding the increasing popularity of online communication, which has significantly reduced demand for traditional paper products.
Industry decline will be offset slightly by growth in the personal care product segment, which includes incontinence products such as adult diapers; as baby boomers in the United States have entered their senior years, demand for these products has grown.
Statistics has it that in the United States of America alone, the Paper Mills industry generates a whooping sum of $40 billion annually from more than 238 registered and licensed cardboard packaging and paper bag manufacturing companies.
The industry is responsible for the employment of over 54,446 people. Experts project the industry to grow at a -4.6 percent annual rate. The establishment in this industry that has a dominant market share in the United States of America are Domtar Corporation and Verso Corporation.
Over and above, the paper mills industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale or you can choose to start on a large scale with standard paper mills with robust distribution networks both in the United States of America and in countries in Asia where you can get cheaper labor and raw materials.
Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who make use of paper mill products including printing and writing paper, newsprint, packaging material and household papers cut across individual consumers, businesses and downstream manufacturers who may further convert the industry’s products into specialty paper products hence the demographic composition for paper mill company is all encompassing.
As a matter of fact, the United States is one of the biggest paper consumers in the world. Between 1990 and 2002, paper consumption in the United States increased from 84.9 million tons to 97.3 million tons. In 2006, there were approximately 450 paper mills in the United States, accounting for $68 billion.
So, if you are thinking of starting your own paper mill company, then you should look beyond manufacturing and marketing your products to just people in your city, but also people across the United States of America.
Decide Which Niche to Concentrate On
There is no niche area of specialization in the paper mill industry but some paper mills may decide to specialize in the manufacturing of any or all of the following products;
- Coated groundwood
- Super calendared paper
- Coated and uncoated freesheet
- Construction paper
- Personal care products
- Rolls of printing paper, writing paper, packaging paper and industrial paper from pulp
- Clay-coated paper
- Absorbent sanitary and tissue paper
The Level of Competition in the Paper Mill Industry
The competition that exists in the paper mill industry goes beyond competition in your city; it is both national and international. This is because major paper productions can be contracted to any part of the United States or abroad especially in China where it can be manufactured at a cheap rate. So, it will be right to say the competition in the paper mill industry is relatively tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to manufacture quality paper products and you know how to reach out to your target market.
So, if you choose to start your own paper mill company in the United States, you will definitely meet stiff competition amongst paper mill companies in the United States. Besides, there are larger paper mills that determine the trends in the industry and you should be ready to compete with them for customers.
Know Your Major Competitors in the Industry
Here are some of the most popular paper mills in the United States of America;
- International Paper
- Graphic Packaging
- Packaging Corporation of America
- Boise Cascade.
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Paper mill company is no longer a green business. As a matter of fact, you will come across several brand names when you source for paper in your state. So, if you are mapping out your economic analysis, you should carry out thorough market survey of what it will cost to acquire paper mill machines, installation, raw materials, branding and cost needed to successfully run the business.
Over and above, if you are considering starting a paper mill company, then your concern should not be limited to the cost of setting up the business, but also on branding and on how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are sure going to maximize profits in the business.
Decide Whether to Buy a Franchise or Start from Scratch
Unfortunately, you can hardly find the franchise of a paper mill to purchase meaning that if you want to own a paper mill company, then you must be ready to start from the scratch.
The truth is that it will pay you to start your paper mill company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful paper mills around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.y
Know the Possible Threats and Challenges You Will Face
If you decide to start your own paper mill company today, one of the major challenges you are likely going to face is the presence of well-established paper mills whose products can be found all across the United States. The only way to avoid this challenge is to create your own market perhaps by producing customized paper products.
So also, just like any other business, you are going to face the challenge of getting the required raw materials when you want them and also at the right price that will guarantee you good profit. some other threats that you are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power.
Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a paper mill company, the legal entity you choose will go a long way to determine how big the business can grow; some paper mill companies design their business for regional market, some for national market and international market.
Generally, you can either choose a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for your paper mill company. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale paper mill company especially if you are just starting out with a moderate startup capital.
But if your intention is to grow the business and manufacture paper products for clients all across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your paper mill company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to study the various legal entity to use for your paper mill company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your paper mill company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
Choose a Catchy Business Name from the ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own paper mill company, here are some catchy names that you can choose from;
- Malcom Robinson® Paper Mill, Inc.
- Aston Tucson® Paper Mill, Inc.
- Gerson Kent® Paper Mill, Inc.
- Pop Poivre™ Paper Mill company
- Paper Pro® Paper Mill, Inc.
- Regal Brown® Paper Mill, Inc.
- David Hudson & Sons® Paper Mill Company
- Reagent Group® Paper Mill Company, LLC
- Simpson Martins® Paper Mill Co, Inc.
- Daniel Wilson® Paper Mill Co, Inc.
Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own paper mill company in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Building/Property insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your paper mill company;
- Allstate Insurance Group
- Liberty Mutual
- Progressive Insurance Group (PGR)
- Health Care Service Corporation (HCSC)
- New York Life Insurance Company
- Lincoln National Life Insurance Company
- MassMutual (Massachusetts Mutual Life Insurance Company)
- Northwestern Mutual Life Insurance Company
- Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own paper mill company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to leverage on this business opportunities within the industry and also to protect your unique design, company logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Get the Necessary Professional Certification
When it comes to operating a paper mill company, you do not need to have any formal training or special certification. All you need is informal training that will expose you to the in and out of managing a paper mill company and also effectively running the business.
On the other hand, if you come across any form of certification that can aid you to manage your paper mill company pretty well, then by all mean try and pursue such certification.
Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
Raise the Needed Startup Capital
Starting a standard, secured and well – equipped paper mill company is capital intensive even if you choose to launch the business on a small scale and you only have a handful of full – time employees on your payroll.
Leasing of a standard facility that can accommodate your production machine, warehouse and staff members and of course equipping the facility are part of what will consume a large chunk of your startup capital, in essence, if you choose to start the business on a small scale, you will still have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your paper mill company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Source for soft loans from your family members and your friends.
Choose a Suitable Location for your Business
When it comes to choosing a location for your paper mill company, the rule of thumb is that, you should be guided by the demand for such product and easy access to labor and raw materials in the location you so desire to start the business.
Of course, if you are able to secure a central location for your paper mill company, it will enable you cut the cost of transporting your raw materials and finished products to and from your production facility and warehouse.
It cannot be overemphasized that the location you chose to open your paper mill company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consist of people with the required purchasing power.
If you make the mistake of renting or leasing a facility for your paper mill company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your paper mill company.
Most importantly, before choosing a location for your paper mill company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
Which is why it is very important to gather as much facts and figures before choosing a location to set up your own paper mill company. Having said that, these are some of the cities in the United States of America where you can locate your paper mill company;
- Terre Haute, Indiana
- Tucson, Arizona
- Silver Spring, Maryland
- Rowland Heights, California
- Portland, Oregon
- Reno, Nevada
- Boston, Massachusetts
- Plano, Texas
Hire Employees for your Technical and Manpower Needs
If you are considering setting up a paper mill company, it means that you should be prepared to set a standard production factory like Fourdrinier machines, pulper machine, mesh-like screen and steam-driven papermaking machine.
If you don’t have enough cash, you can start with fairly used production machines, but if you are financially buoyant, then you should go for brand new ones since they usually have a long – life span.
As regards leasing or outright purchase of a production facility or warehouse facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard paper mill company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Sales and Marketing Manager, Manager, Quality Control Officer, Machine Operators, Accountant, Distribution/Delivery Truck Drivers and Client Services Executive.
On the average, you will need a minimum of 20 to 50 key staff members to run a small – scale but standard paper mill company.
The Production Process of a Paper Mill Company
Paper mills basically manufacture paper from pulp, a fibrous material derived from wood. The production process starts out from the harvesting of trees. The tree bark is removed and the remaining wood is chipped, mashed into a pulp and processed by machines to make it smooth and durable.
Please note that paper mills may manufacture their own pulp or purchase it. Industry products include paper rolls and reams, including printing and writing paper, newsprint, packaging material and household papers. These products are sold in bulk to individual consumers, businesses and downstream manufacturers who may further convert the industry products into specialty paper products
It is important to state that a paper mill company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated paper mill company process is not cast on stone.
Write a Marketing Plan Packed With ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a paper mill company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for paper mill companies.
Customers will purchase and make use of your products if they know that they are going to get the best in terms of quality and value for their money. Your marketing strategy should center on quality and pricing, and above all excellent customer service. The truth is that, if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your paper products.
Here are some of the platforms you can utilize to market your paper mill company;
- Introduce your paper mill company by sending introductory letters alongside your brochure to printing press, schools, paper crafts companies, paper related manufacturing organizations, stores and key stake holders throughout the United States
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Creating a basic website for your business so as to give your business an online presence
- Directly market your products.
- Join local Pulp, Paper & Paperboard Mill Products associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your paper products at rock bottom prices is to purchase your raw materials and supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantities of items that you purchase directly from wholesalers, the cheaper you tend to get them.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
Develop Iron-clad Competitive Strategies to Help You Win
The paper mill business is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to ensure that your paper products are well designed to fit with the trends and quality must also be your guiding principle.
In other to stay competitive in this industry, you must ensure that your clients are always comfortable when making use of your paper products and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the quality of your products, customers can choose to shift allegiance and settle for other options available.
Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers coming back to purchase your products or services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your paper mill company;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your paper mill company
- Install your billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your paper mill company in local directories/yellow pages
- Advertise your paper mill company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your paper mill company is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.