Providing food contract manufacturing services
If you have the equipment, resources and staff, you could provide contract manufacturing services to other businesses. This could be your core activity, or you could be contracted to use your resources when they would otherwise be unused (e.g. during downtime or slow periods).
For example, if you are a food manufacturer you may use staff and equipment 80% of the time, but you are still committed to paying full wages, plus the equipment is sitting idle for 20% of the working shift. If your business could provide a production or packaging service under contract you may be able to increase turnover without significantly increasing your overheads.
Make a clear agreement
When providing contract manufacturing services, you need to make a clear agreement with any business that you deal with, so everyone understands who is responsible for costs. A written agreement drawn up by your solicitor that spells out what will happen if a problem occurs makes it easier to assign costs and resolve disputes.
You should try to avoid building your business around one customer, as this will help you to avoid the significant impact it would have on your business if this customer went elsewhere.
Understand your customer
Understanding the real needs of your customer (the businesses you want to contract out their products or services to you) is key to securing and keeping work. Consider whether your customers want competitive pricing, quality, turnaround times and problem solving – and which is most important to them. If you can provide your customers with solutions that are tailored to their needs, you are in a strong position to gain their business.
- See the results of our food contract manufacturing survey to find out how it is used in Queensland's food processing industry.
- Learn more about identifying customer needs and researching your market.
- Improve your processes and performance with assistance from Queensland Manufacturing Institute.
- Last reviewed: 29 Jun 2016
- Last updated: 29 Jun 2016
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