How to Start Business of Clocks?

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Clocks Business

Clocks BusinessEvery business runs according to time. There is no other term that can define or explain time except the word TIME itself. Clocks are widely used to determine time. We look at clocks to find out the exact time at several instances during a day.

These days’ clocks are being manufactured in almost all countries. In Pakistan, there are many small and big businessmen who are manufacturing clocks on a small as well as on a large scale.  IBEX has found wall clock manufacturing as a profitable business opportunity.

Starting the Business

The first step to start this business is to acquire a piece of land to set the manufacturing unit. To start a business at a normal level, at least 3 small sized machines are purchased which can manufacture a clock of approximately 12 inches. These 3 machines have the ability to produce 1200 clocks in 24 hours. Large machines can manufacture clocks up to 18 to 20 inches. To start this business, small machines are quite suitable.

In Pakistan, a normal manufacturer of wall clocks usually employs refurbished machines from Hong Kong. Once the machines are purchased and installed, the investor needs employees to start the production. Each machine requires at least 2 employees to operate it. The machine man/ machine operator must be a skilled worker who should also know how to repair the machines if they breakdown. These skilled machine men/ machine operators are easily available in Pakistan. Laborers who can carry out the fitting, cleaning and packaging of clocks are also required. Usually, 30 employees are hired to run a specific clock manufacturing unit with 3 working machines.

Expenses and Profit Margins

To start a clock manufacturing business, an initial investment of Rs. 3 million is needed. First, an area of 500 to 1000 square yards is selected for the establishment of the factory. The value of the land depends on the location selected. Each refurbished machine of small size can be purchased at a price of Rs. 5 lac from Hong Kong. The combined costs of 3 machines will be Rs. 15 lac. The other basic raw material (glass, plastic, frames, needles etc) should be purchased to have stock for few weeks or months.

As each machine operator is a skilled laborer, therefore his monthly pay will range from Rs. 35,000 to Rs. 50,000. The rest of the employees will be paid normal labor charges for packing, fitting and cleaning.

Keeping in view the value of the location, a few months advance salary of the employees and overheads of the business, the initial investment could easily increase to Rs. 5 million. Apart from the initial investment, the monthly expenses also include the location rent and electricity bills. These days due to load shedding, diesel generators are used which are also responsible for increasing the monthly overheads of this business.

The profit margins in the clock business depend on the customer to whom you are supplying the clock. If you are supplying clocks to retail outlets, the profit margins will be less as well as they will do business on credit. On the other hand if you supply clocks to companies, the profit margins will be as high as 80%. On average a normal clock’s manufacturing cost is Rs. 80 to Rs. 150 depending upon the quality and it can be easily sold to a company at a price of Rs. 150 to Rs. 300 each.

Marketing and Sales

The demand of wall clocks is always on the rise. Clocks are traded/sold through three channels. Firstly, they can be supplied to retail shops country wide, the second option is to supply to companies and corporate offices for office use and as giveaways for their clients or during promotional campaigns. Thirdly, a manufacturer exports his clocks to other countries. Pakistani manufactured clocks cannot be exported because of their low quality. In the international market, clocks are usually imported from China or branded clocks are purchased. Therefore, Pakistani clock manufacturers can only sell their product to retail shops and companies.

The most profitable method to sell these clocks is supplying to companies. Even during the harsh economic times, there are a number of companies who run their marketing and promotional campaigns and require a large quantity of clocks every month in different cities. If you hire a marketing or sales person who can get 2 or 3 clients (companies); then you can easily secure your investment by supplying clocks to your clients and can reach the break even point in 1 or 2 years. As far as retail shops are concerned, the profit margins are not very high. It is also very difficult to penetrate in the market as there are a large number of clock manufacturers in Pakistan. People do not prefer buying wall clocks from China because local clocks are much cheaper as compared to Chinese clocks.

There is an intense internal competition in the clock manufacturing business in Pakistan. The retail shops purchase clocks from manufacturers on credit therefore the profit is delayed for some time and involves risk. The best way to increase the sales is to make few big companies who actively participate in promotional campaigns your clients.

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