Are you interested in starting a toothpick production company? Do you need a sample toothpick business plan template or feasibility study report? Then I advice you read on.
Toothpick production is one of the most commonly overlooked, but very profitable businesses that anyone can venture into. The demand for toothpicks is always on the high, as it is used daily in homes, restaurants, hotels, public gatherings, and every other place where food is usually shared.
In addition, the raw materials for making toothpicks are usually locally available in most countries, which means there is reduced cost of production and a complete assurance of regular supply of raw materials, steady production, enhanced production capacity, and profitability.
Since there is a huge market for toothpicks, starting a toothpick production company is no doubt a decision that you should consider if you are looking for a business that requires little startup capital and has quick profit turnover. This article explains the steps involved in starting a profitable toothpick production business.
Starting a Toothpick Production Company – Sample Business Plan Template
Step one: Write a business plan
The need for a business plan cannot be overemphasized. Even if the structure of the business and the market seem very simple, you cannot rule out the importance of a business plan. A business plan not only helps you plan well for the business, but it also helps you stay focused after starting the business so that you can achieve your goals within the shortest time possible.
Your business plan will highlight the projected costs of starting and running the business, the target market and its growth potential, the competition, and many other valuable pieces of information that will help you make well-informed business decisions in the short and long terms.
Step two: Source for funding
Your business guide will give you insight into how much you need to start the business and keep it going after its launch. If you cannot afford all the money required, you will need to approach investors, small business credit institutions, or friends and family.
Step three: Find a good location
There are no hard and fast rules regarding where a toothpick production company should be located. But the rule of thumb regarding any business is that it should be located as closely as possible to the target market and the source of raw materials.
So, a toothpick production company should be set up in a location where there are many hotels, restaurants, and other places where the commodity is used in large quantities.
Step four: Get the necessary equipment and hire staff
A toothpick production business requires equipment such as splitting, polishing, and sharpening machines. Others include dust collector and packing machine.
It goes without saying that you will need to acquire these equipment before you can start your toothpick production business. however, you must ensure that your equipment are of high quality, as substandard equipments will not only affect the quality of your products, but the cost of repairing them too often can also have a long term crippling effect on your business.
While you have the option of importing your toothpick making machines, you can have them made locally without any compromise on quality and efficiency.
In addition, you will need to hire a few more individuals to work with you. The number of people you will hire depends on the quantity of production. You will need people to handle each task involved in the production process.
Step five: Find suppliers for raw materials
The major raw materials required for toothpick production are bamboo or hardwood (for making the toothpicks), and plastic containers (for packing the finished products). Before starting your business, you will need to find regular suppliers for these materials. Only when you have regular supply of raw materials will you be able to ensure steady and enhanced production as well as profitability.
To be on the safe side, you must find two or three suppliers for each raw material you will need. This way, you will not be forced to pause production when a supplier runs out of materials.
Step six: Start production and marketing
Once you have everything put in place, you can start production. You will need to adopt some effective marketing strategies to attract customers. Such strategies include reducing your prices slightly while not reducing quality. This will help you “snatch” some customers off the competition.
Another way to market your products is to do some cold calling. Visit some of the restaurants and other places around you where toothpicks are used in huge quantities, and inform them about your business and product.
In conclusion, toothpick production is a very lucrative business that anyone can venture into. It has a very short payback period of between 1-2 years, and the return on investment is very huge (about 80%).