Do you want to start a watch manufacturing company? If YES, here is a complete guide to starting a watch manufacturing business with no money and no experience
Okay, so we have provided you an in-depth sample watch manufacturing business plan template. We also took it further by analyzing and drafting a sample watch manufacturing marketing plan backed up by actionable guerrilla marketing ideas for watch manufacturing businesses. In this article, we will be considering all the requirements for starting a watch manufacturing business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Watch Manufacturing Company?
A watch manufacturing business is one of the many businesses that can be started in any part of the world and the owner of the business can still penetrate the world market once the design is good and it meets a need in the fashion market.
Entrepreneurs who intend starting a watch manufacturing business can start on a small scale and service a customized market, or big – time investors can open a wristwatch manufacturing factory and dominate both the U.S. and international market.
The bottom line is that there is always a ready market for the manufacturers of different types and grades of wristwatches. All a designer needs to do is to carve a niche for his business and then build the brand name to be accepted beyond the physical location of their factory.
The wristwatch manufacturing business thrives on creativity, branding (media hype et al) and good business skills. Any aspiring entrepreneur can go into this type of business as long as they are creative, they can get people to promote their brand and they have good business skills. The starting size of this type of business doesn’t really matter as long as the business is built on the right foundation and with the right combination of skills.
In the wrist watch manufacturing business, your signature is your style and people will be willing to pay a fortune once they value your design. Another important factor that counts in this line of business is brand name.
You can start your watch manufacturing company from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes internationally recognized with celebrities becoming your top clients.
Starting a Watch Manufacturing Company – A Complete Guide
- Industry Overview
It won’t be out of place to state that over 60 percent of adults, both male and female in the United States of America, and a good number of children as well have at least a wristwatch. This goes to show that there is indeed a very large market for wristwatches; hence loads of investors cum aspiring entrepreneurs are pitching their tent in the watch and clock manufacturing industry and luxury wrist watch manufacturing is one of the booming business opportunities in this industry.
Businesses in the wrist watch and clock manufacturing industry are known to manufacture different types of wristwatches, clocks and accessories.
Research conducted by IBISWORLD shows that the Wristwatch and Clock Manufacturing industry is undergoing a transition period. After years of offshoring and outsourcing, some industry operators are considering bringing production back to the United States to avoid rising prices in China and high overhead costs associated with manufacturing abroad.
The report also shows that reshoring would also result in shorter turnaround time between production and sales, as well as greater control over manufacturing operations.
However, large players, and some players that serve niche markets, are replacing other struggling operators that are no longer able to survive profitably in this industry. Consequently, the true impact of reshoring remains uncertain, but IBISWorld expects the effects of reshoring to become more evident over the next five years.
If you take notice of the Watch and Clock Manufacturing industry, you will notice that the industry has contracted over the past five years. Import competition has been a major factor in the declining performance of this industry, with many players in the industry shifting from manufacturing mass produced wristwatches to sourcing them from low-cost Asian countries or third-party contractors.
A good number of wristwatch and clock manufacturers have departed the industry, unable to sustain operations in the price-pressured environment. The surviving players have altered operations to focus on the design and marketing processes rather than the production of goods.
For example, revenue for the Clock and Watch Manufacturing industry in China is set to increase by 5.0 percent in 2018 to $13.5 billion. Over the five years to 2018, the industry grew at an annualized rate of 5.5 percent. China’s large domestic market and growing foreign demand are the two main engines for the industry’s development.
The industry is highly export-oriented; as a result, most operators are based in coastal areas, namely Guangdong, Fujian, Zhejiang, Shandong and Tianjin. Exports as a proportion of industry revenue are estimated at 34.8 percent in 2018. China produces over 80.0 percent of the watches and clocks worldwide by volume, but only acquires a small share by value.
Some of the factors that encourage entrepreneurs to start their own watch manufacturing company could be that the business is a thriving business and the products can be sold not just in your country but all across the globe.
The watch and clock manufacturing 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 on a large scale with standard wristwatch manufacturing factories both in the United States of America and in countries in Asia where you can get cheaper labor and raw materials.
Starting a Watch Manufacturing Company – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who use wristwatch cut across all genders and age group; hence the demographic composition for wrist watch manufacturing business is all encompassing. So, if you are thinking of starting your own watch manufacturing business, then you should look beyond producing and marketing your products to just people in your city, but also people across the United States of America and other parts of the world.
List of Niche ideas Within the Watch Manufacturing Industry That You Can Specialize in
There is no niche area of specialization in the watch manufacturing business since wristwatch manufacturing business is a niche area in the watch and clock manufacturing industry. Those who are into the manufacturing of wristwatch produce wristwatches with different materials such as pure gold, silver, leather et al and for different genders and classes of people.
Branding and packaging is a major factor that can help you increase your sales and gain market prominence in the industry. In as much as there are no clear cut niche ideas in this line of business, it is important to point out that some watch and clock manufacturing industries are known to pitch their tent in the manufacturing of any of the following;
- High-end watches and clocks
- Mid-end watches and clocks
- Low-end watches and clocks
The Level of Competition in the Watch Manufacturing Industry
It might interest you to note that the competition that exists in the watch manufacturing business goes beyond competitions in your city or country; it is both national and international. This is because major wristwatch brands in China, Switzerland, Germany, France, Italy, United Kingdom and in any part of the world can be found in boutiques and jewelry stores all across the United States of America. So, it will be right to say the competition in the watch manufacturing business is 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 churn out quality products (wrist watches) and you know how to reach out to your target market.
There are several watch manufacturing companies scattered all around the United States and the globe. So, if you choose to start your own company in the United States, you will definitely meet stiff competition amongst watch manufacturing companies in the United States and other countries of the world. Besides, there are larger watch manufacturing companies that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Watch Manufacturing Industry
In every industry, there are always brands that perform better or are better regarded by customers and general public than others. Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading wrist watch manufacturing brands in the United States of America and in the globe;
- Audemars Piguet.
- Vacheron Constantin.
- Patek Philippe.
- IWC Schaffhausen.
- Ulysse Nardin
- Piaget SA
- Bell & Ross
- TAG Heuer
- Louis Moinet
- A.Lange & Sohne
- Baume & Mercier
- Girard Perregaux
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.
Watch manufacturing business is not a green business. As a matter of fact, you will come across several brand names in your local jewelry store when you go shopping. So, if you are mapping out your economic analysis, you should carry out thorough market survey of the cost of runing the business.
If you are considering starting a watch manufacturing company, then your concern should not be limited to the cost of setting up the business and churning out quality wristwatches, you should also be concerned 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.
Starting Your Watch Manufacturing Company from Scratch vs Buying a Franchise
Unfortunately, you can hardly find the franchise of a watch manufacturing company to purchase meaning that if you want to own a watch manufacturing business, then you must be ready to start from the scratch. The truth is that 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 successful watch manufacturing companies around the world 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.
Possible Threats and Challenges You Will Face When Starting a Watch Manufacturing Business
If you decide to start your own watch manufacturing business today, one of the major challenges you are likely going to face is the presence of well – established brands whose products can be found all across the United States and the global market. The only way to avoid this challenge is to create your own market.
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. Another threat that you may likely face also is the arrival of new wristwatch manufacturing companies especially from China who are known to manufacturer at cheaper prices.
Starting a Watch Manufacturing Company – Legal Matters
- Best legal entity to use for this type of business
When considering starting a watch manufacturing company, the legal entity you choose will go a long way to determine how big the business can grow; some watch manufacturing companies design their products for the regional market, some for national market, while others for international market.
Generally, you have the options of choosing a general partnership, or limited liability company which is commonly called an LLC for your wristwatch manufacturing company. There are different advantages to the various business entities. For example, 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 watch manufacturing business; 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 entities available in the business, 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 watch manufacturing business 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.
Catchy Business Name ideas Suitable for a Watch Manufacturing Company
Of course, 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. If you are considering starting your own watch manufacturing company, here are some catchy names that you can choose from;
- Saint Berkley® Wristwatches, Inc.
- Jake Bally® Wristwatches Manufacturing, Inc.
- Pearson Lewis™ Wristwatches Manufacturing, Inc.
- Ted Larson© Wristwatch Manufacturing Company
- Onyx GRADE® Wristwatch Brand, Inc.
- Sleek Signature® Wristwatch Manufacturing Co, Inc.
- Perry Stone® Luxury Wristwatch Production Company
- Jade Wilcox® Wristwatch Manufacturing Co, LLC
- Ray Marko® Luxury Wristwatch Manufacturing, Inc.
- Prime Edge® Wristwatch Line, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important 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 covers that you should consider purchasing if you want to start your own watch manufacturing business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If at all there are any businesses that require intellectual property protection, then wristwatch manufacturing should be one of them. The truth is that your label, design and style needs to be protected or else anybody can successfully fake or create similar products and make money off your brand name.
Since you are the initiator of your design, 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.
Is Professional Certification Needed to Run a Watch Manufacturing Company?
Although you do not need any special professional certification before you can successfully start your own watch manufacturing business, but you will do yourself a whole lot of favor if you study related course before starting this this type of business. It will afford you the opportunity to truly maximize the business; you will be able to have full grasp of the business from start to finish especially as it relates to producing trendy wristwatches.
List of Legal Documents You Need to Run a Wristwatch Manufacturing Company
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. 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 hand of the law catches 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 watch manufacturing company in the United States of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
- Apostille (for those who intend operating beyond the United States of America)
- Franchise or Trademark License (optional)
Financing Your Watch Manufacturing Business
Starting a watch manufacturing business is somewhat capital intensive. Securing a standard production facility is part of what will consume a large chunk of your startup capital, so if you choose to start the business on a large scale, you would need to source for fund to finance the business because it is expensive to start a standard large – scale watch manufacturing company.
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 watch manufacturing business;
- 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
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
Choosing a Suitable Location for your Watch Manufacturing Company
When it comes to choosing a location for your watch manufacturing business, 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 your location. If you are able to secure a central location for your watch manufacturing business, it will enable you cut the cost of transporting your raw materials and finished products to and from your production facility and warehouse.
Most importantly, before choosing a location for your watch manufacturing 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 can’t be ruled out.
This is why it is very important to gather as much facts and figures before choosing a location to set up your business. These are some of the key factors that you should consider before choosing a location for your watch manufacturing company;
- The demography of the location
- The demand for wristwatches in the location
- Accessibility of the location
- The local laws and regulations in the community / state
- Traffic, parking and security et al
Starting a Watch Manufacturing Company – Technical and Manpower Details
If you are considering setting up a watch manufacturing company, it means that you should be prepared to purchase equipment and machines. If you don’t have enough cash, you can start with fairly used equipment/machines but if you are financially buoyant, then you should go for brand new ones since they usually have a longer lifespan.
As regard 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 watch manufacturing 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, Watch Designers and Making Experts, Quality Control Officer, Machine Operators, Accountant, Distribution / Delivery Van Drivers and Client Services Executive. On the average, you will need a minimum of 10 to 15 key staff members to run a small – scale but standard watch manufacturing business.
The Production Process Involved in the Production of Wristwatches
When it comes to manufacturing detailed products like wristwatches, the first step to take is to come up with a design and then have the design approved by the board before going into full swing production.
The truth is that the production and assembly of watches must be performed carefully and methodically.
In the production process, the whole set of crystal and microchips is set onto a circuit board. The board incorporates a space to hold the battery that supplies electricity to the quartz crystal and supplies the power for the LED display. In general, the space for the battery is on the outside of the surface facing the back of the case. The battery can be replaced by removing the back of the watch, shaking out the old one, and dropping in the new battery.
After the above stated process, the mechanism used for setting the watch is then connected. This mechanism involves two pins that extend beyond the case of the watch. One pin lets the counter circuit know which reading to reset—seconds, minutes, or hours. The second pin is pushed a number of times to bring the display to the desired reading. The entire circuit board, along with a battery, is then closed into a case, and a wrist strap is attached.
Please note that before the final process, a lot of visual checks and quality control is carried out. As a matter of fact, if the quality control staff notices a tiny scratch or deviation in tolerances, measures are taken. At times, pieces have to go all the way back to the production process to be fixed.
Hands are sometimes automatically applied to the dial, but in many cases this is still done by hand. More visual checks take place to see whether the hands are perfectly aligned. The crown is of course also added and tested to see if all the hands move correctly and whether the winding system works.
It is important to state that a watch manufacturing company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated watch manufacturing business process is not cast on stone.
Starting a Watch Manufacturing Company – The Marketing Plan
- Marketing ideas and 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 watch manufacturing company, then you must 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 watch manufacturing industry.
Customers will purchase your wristwatch if they know that they are going to get the best in terms of quality and value.
As a matter of fact, your marketing strategy will center on quality, durability and pricing, and above all excellent customer service. Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services or products.
These are some of the marketing ideas and strategies that you can adopt for your watch manufacturing business;
- Introduce your products by sending introductory letters alongside your brochure to corporate organizations, businesses in the retail industry, jewelry 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, so that those on the social media or those who read blogs can know where to go when they need to purchase your wristwatch
- Create a basic website for your business so as to give your business an online presence
- Directly market your products.
- Join related manufacturer associations for industry trends and tips
- Advertise our business in community based newspapers, local TV and radio stations
- Encourage the use of word of mouth marketing (referrals)
Factors That Will Help You Get the Right Product Pricing
One key factor that will help you sell your wristwatches at the right price or 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 quantity of items that you purchase directly from wholesalers, the cheaper you tend to get them.
Another strategy that will help you retail your wristwatches at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
- Possible Competitive Strategies for Winning your Competitors
The quality and uniqueness of your wristwatches, your business process and of course your pricing model are part of what you need to stay competitive in the industry. If wholesale distributors are making profits from selling your products, they will be more than willing to go the extra mile to help you push your products to all nooks and crannies of the cities they distribute products.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution cum business network. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your wristwatches can favorably compete with the some of the best in the industry.
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
If you are in business and you are not deliberate 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 secret of larger corporations is that they are willing to spend fortunes to boost their brand.
If your intention of starting a watch manufacturing company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
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 awareness and create a corporate identity for your watch manufacturing company;
- Place adverts on both print (newspapers and fashion magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to retail your watch
- Distribute your fliers and handbills in target areas
- List your watch manufacturing company in local directories / yellow pages
- Advertise your watch manufacturing company in your official website and employ strategies that will help you pull traffic to the site.
Business is all about demand and supply; meaning that if you are into watch manufacturing, you will need raw materials and other accessories and you would also need a distribution network to help you push your products to end users.
To successfully run a watch manufacturing company, you must establish good business relationship with wholesalers of the required raw materials and accessories within the city where your watch manufacturing company is located. So also, you are expected to create business networks with distributors of watches. They can help you distribute your products throughout the United States of America and other parts of the world.