4 December 2023

10 Big Problems Your Little Manufacturing Business Will Face

By Ronald Smith

Running a small manufacturing business can be tough. I know because I’ve been there. In this article, I’ll be sharing the top ten challenges you’re likely to encounter and how you can tackle them head-on. From cash flow issues to technological advancements, I’ll cover it all. So, let’s dive in together and find solutions that will keep your business thriving.


Finding Skilled Workers

One of the biggest hurdles you’ll face is finding skilled workers who can meet the demands of your manufacturing processes. But fear not! You can tap into local trade schools, offer apprenticeships, or even collaborate with other businesses to address this challenge.


Battling Cash Flow Problems

Cash flow is the lifeblood of any business, and small manufacturing businesses are no exception. To overcome cash flow issues, you can implement better inventory management systems, negotiate favorable payment terms with your suppliers, or explore alternative financing options.


Adapting to Technological Advancements

As technology continues to advance at a rapid pace, it’s essential to keep up. Embrace automation, invest in updated machinery, and stay informed about the latest industry trends to ensure your manufacturing business remains competitive.


Managing Supply Chain Risks

Supply chain disruptions can be a major setback for your business. To mitigate risks, establish strong relationships with trusted suppliers, diversify your supplier base, and develop contingency plans to minimize the impact of unexpected events.


Navigating Regulatory Compliance

Complying with regulations can feel like a complex dance. Maintain open communication with regulatory authorities, stay up to date with evolving requirements, and consider working with consultants or legal professionals to ensure your business meets all necessary standards.


Creating a Strong Online Presence

In today’s digital world, having a strong online presence is crucial. Build a user-friendly website, optimize your content for search engines, and utilize social media platforms to connect with your target audience and drive sales.


Dealing with Increasing Costs

Rising costs can put a strain on your bottom line. Look for ways to cut expenses, such as energy-saving initiatives or streamlining processes, and regularly review your pricing strategies to ensure you maintain profitability.


Ensuring Product Quality

Quality is king in the manufacturing industry. Implement rigorous quality control measures, invest in employee training, and continuously monitor and improve your products to meet or exceed customer expectations.


Building a Resilient Supply Chain

A resilient supply chain is essential for minimizing disruptions. Identify potential weak points in your supply chain, collaborate closely with suppliers to ensure visibility and transparency, and develop contingency plans to address any issues that may arise.


Staying Ahead of the Competition

Competition in the manufacturing sector can be fierce. Stay informed about your competitors, differentiate your products or services, and continuously innovate to stay one step ahead in the market.

I hope these insights have shed light on the challenges you may face as a small manufacturing business owner. Remember, perseverance and adaptability are key. With the right strategies and a positive mindset, you can overcome these hurdles and lead your business to success.

10 Big Problems Your Little Manufacturing Business Will Face

There’s been a lot of talk about how manufacturing in the US is declining. But let me tell you, the US still makes more than 18 percent of all the stuff in the world. So don’t fret, manufacturing is still going strong. But I gotta say, small manufacturers have it pretty tough. They have to deal with a bunch of challenges, like competition from big companies in the US and around the world. Let me break it down for you, here are some of the main problems small manufacturers face and some tips for tackling them.

The Struggles of Small Manufacturers

Competition from Cheaper Overseas Factories

I’ll tell you something that may surprise you: manufacturers in the United States have to deal with competition from all over the world. One country in particular, China, poses a major challenge because they can make products at a much lower cost than we can.

Andrew Clarke, who is the founder and president of a consulting firm called Ground Floor Partners, explains that in 2011, the cost of labor in China was only 10% of what it was in the US. Imagine that! Since then, labor costs in China have gone up, but they still remain significantly lower than in our country.

Changes in the Rules

Well, the reason why American manufacturers can’t compete with their overseas counterparts in terms of price is because of two big factors: labor costs and government regulations. It’s no secret that wages are much lower in other countries, which allows them to produce goods at a lower cost. On top of that, the U.S. has a lot of regulations and compliance issues that manufacturers have to deal with. This means they not only have to spend more money to comply with these rules, but they also have to constantly make adjustments to their operations, which can be a headache.

The Improving Quality of Manufacturing Overseas

Now, while the cost of products made outside the U.S. has been going up in recent years, the quality has also been improving. This means that American manufacturers not only have to worry about competing on price, but they also have to make sure they can keep up with the competition in terms of quality.

I’ll tell you what, things have changed a lot over the past couple of decades. Back then, when manufacturing started moving overseas, the quality of the products they made wasn’t so great. But let me tell you, that’s not the case anymore. US manufacturers face a whole lot more competition now, and one thing they’ve had to improve is their quality. You see, it’s all part of the game when it comes to being the best. And let me tell you, that’s not gonna change anytime soon.

Countries that are Known for Quality

Now, I’ll tell you something interesting. There are some other countries that are known for making really high-quality stuff. And sometimes, customers are willing to pay a little extra for these products because they know they’re getting something top-notch.

Take Germany, for example. Their manufacturers have higher labor costs compared to ours here in the US. But let me tell you, they are still able to compete because of their top-tier quality. Can you believe that?

Competition from Local Manufacturing

Let’s talk about the challenges that small manufacturers like myself face. Not only do we have to compete with companies overseas, but we now also have to deal with increased competition from within our own country. It’s a tough situation, but I’ll explain why.

Shortage of Skilled Workers

Increase in Automation

I’ve noticed that big manufacturing companies are relying more and more on automation to keep their operations running smoothly. This helps them work more efficiently and save money. But for small businesses like ours, it’s not always feasible or cost-effective to invest in the same kind of equipment. This puts us at a disadvantage when it comes to both price and quality, unless we can find affordable financing options or find other ways to stand out in the market.

Rapidly Advancing Technology

Technology in the manufacturing world is constantly improving and evolving. It’s hard for small businesses to keep up with the frequent updates as much as the big players do. Therefore, we need to choose our upgrades wisely to avoid stretching ourselves too thin and wasting resources.


As technology keeps advancing, we also need to step up our cybersecurity game. Hackers can break into computer systems and disrupt manufacturing processes, causing huge losses. So, even though it may seem like a big investment, it’s crucial for businesses of all sizes to prioritize cybersecurity.

A Savvier Customer Base

Today’s customers are more aware of where their products come from. This poses a challenge for manufacturers, as they need to carefully consider their marketing strategies. However, it can also be an advantage for small manufacturers who can highlight their local connections or offer personalized services.