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Many think that setting up a steel business means establishing a capital intensive steel plant that sprawls over acres of land. However, the truth is that Indian steel producers, it is mainly dominated by MSMEs. There are different kinds of small steel businesses one start.
Steel business ideas
Many steel business ideas can be profitable in small investments. For example, you can be a manufacturer or trader or an exporter. In manufacturing too, you can manufacture different kinds of products needed for different industries. Examples are given below:
- Automotive industry: steel components
- Construction industry: TMT bars, steel angles, steel railings, steel pipes
- Infrastructure industry: steel girders
- Multiple industries: steel wires
- Household items: kitchen utensils, steel furniture, etc.
Apart from the business ideas mentioned above, a steel fabrication unit can also be a profitable business idea of a steel business. The most important factor of any business is profitability. When you plan to kick-start a steel business, the following steps can help you make it profitable.
Steps for starting a steel business
If you are planning to start a steel business, what steps will you be required to follow? Here is a step-by-step guide for you to start a steel business.
Do the market research:
The first step is to do market research and understand the needs of the market. Also, analyse what exactly you would want to produce. Check feasibility of the business idea that you may have in your mind. Depending on the products, you will need to source the raw material. For example, galvanised steel coils are required for making some auto components. Also, competition analysis is important.
Choose the right location
For a steel business, location is extremely important. Either you can locate you business closer to your suppliers or your buyers. Odisha, Chhattisgarh, Jharkhand, Karnataka, have the highest steel producing capacities with multiple steel plants in the states. On the other hand, you can also choose to be closer to your potential customers. For example, if you start a business for making automotive parts from steel, you can choose to be closer to your customers in auto clusters such as Pune, Chennai, Delhi, etc.
Make a robust business plan
Like any other business, even a steel business needs a business plan. Include your market analysis, projected required investment, sales plan for the first couple of years, investment plan, marketing strategy and so on. This can also act as a roadmap for you and your employees while it can also help you get funds.
Arranging for funds
You can arrange funds in many ways such as a business loan, finding an investor, investing your own money and so on. Obtaining a business loan can be difficult for a new entrepreneur. However, there are loans, and schemes designed for new entrepreneurs and startups. These schemes encourage budding entrepreneurs to kick-tart their journeys.
Depending on the business you plan to do, requirement of capital changes. A steel fabrication unit can be started with an investment of ₹10 lakh to ₹15.
Company registration and licenses
You can register your company either as a partnership firm, private limited or limited liability partnership (llp) company. If you are setting up a new factory, you will need to obtain various registrations and licenses. Some of these include a factory license, company registration, MSME/Udyam registration, GST registration, trade licenses, pollution certificate and so on. If you plan to be an exporter, you need to obtain licenses accordingly.
Note: The requirement for licenses varies from state and location. Therefore, it is best to get in touch with local authorities to understand the requirement.
Procuring machinery
As a manufacturer, select the right machinery for your business. There may be many options available in the market from manual machines to high-end sophisticated machines. However, it depends on the products you plan to manufacture and your business plan. For example, aerospace parts need precision and accuracy that sophisticated can deliver. However, the production of household products such as steel kitchen utensils, steel furniture, etc., does not require such sophistication.
Once the machinery is delivered, you can start procuring raw materials. You can procure high quality steel at best price from Tata nexarc. Post your requirements and get quotes from verified vendors. Try now.
Choosing right technology and solutions
In this digital age, you will need to have the right IT infrastructure for your business. Also, it is important to have digitalisation can help you in many ways though the initial cost of it may be high. The degree of automation and digitalisation varies from business to business and depends on the business owner’s vision. Therefore, it is best to choose what suits your steel business the most and choose accordingly.
Hire the team with the right skills
As they say, a business can’t be run alone. You need a team to run day-to-day operations. For a steel business, you need a team with varied skills. You will require a team from the backgrounds such as metallurgy, engineering, IT, accounts, HR, marketing and branding, and so on.
Concluding note
Steel is one of the growing sectors. India’s emphasis on infrastructure development hints at the growth of demand for steel in the coming future. As a result, a well-thought-out steel business can earn profits for a businessman.
Also Read:
Best business ideas under ₹10 lakh
12 Creative MSME business ideas
write a business plan for your SME
How to start a truck transport business in India?
How to Start an Import/Export Business?
How to start a Steel Business?
