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Reflections of an Ex-Manufacturer1994 TEN article by Diane Lewis, 734-458-2378, Livonia, MI. Diane and her husband manufactured products for the gift and novelties market for over 15 years under the company name, You & Me, Kid. Money To Burn and Capsule Critters were a couple of products she was the first to introduce. When the business environment started getting too tough, she chucked it, and started a small service business doing specialty work for local print shops. Now she's having second thoughts. Listen closely to what she's saying. Entrepreneurs are people who seek the path of most resistance. Defying all laws of reason, they will go where no one has gone before. They freely relinquish their position with the companies that pay their bills, that protect them with insurance, and blaze paths to parts unknown. Their only security is their faith in themselves and their dreams. You just gotta love 'em! But during the past decade, entrepreneurs seem to have taken a different path toward the business ventures they've started. Yes, there are a few who have jumped head first into manufacturing a product. But the overwhelming trend seems to have turned toward the service industry. In an ever-shaky business environment, service is by far the safer place to be than manufacturing. For example, you have little or no inventory to deal with. Your overhead is a fraction of what a manufacturing company carries. You have minimal payables because you're not dealing with a variety of suppliers. Your employee ratio is dramatically different that that of the production setting. Then, there's insurance. Workers' comp, liability, etc., are entirely different in the service business. And the compensation you receive for your service is pretty neat and clean -- not the complicated mess of the manufacturer's profit and loss statement. All in all, the service business is a very nice way to make a living. I've learned this from my own experience going from a business manufacturing products for the gift and novelties market to a business servicing the printing industry. As businesses go, my current business is pretty good. The print shops give us the stock. We do something to it, like emboss or foil a logo, number forms, or die cut. We give it back completed, and they pay us. Nice work if you can get it and, believe me, there's lots of work out there if you can provide good quality and service. So after doing this for the past couple of years, and feeling pretty smug about this great discovery I had made, i.e., how easy service business is, something hit me. I had succumbed to what I see as a national epidemic -- the retreat from manufacturing to service. It has become harder and harder for entrepreneurs to manufacture products in this country. Government regulations, employees rights, insurance, overhead, foreign competion, taxes -- the list goes on and on. A part of me says, "Who needs that grief when I can make a really nice living providing a service, without all those hassles". But another part of me now recognizes what I'm no longer contributing. Yes, there was grief in manufacturing -- but something else really important was happening. Money was circulating. It begins when you make that first product. You buy supplies from someone -- and their company gets a little stronger. You hire people to put it together -- and their lives improve, and they go out and buy things. You sell it to a store -- and they make a few more dollars than they would have. The sales rep that got it there gets a commission check -- and he, too, circulates some of that money. And your business gets paid, and makes more product -- and you get stronger. And that one little product has caused a chain reaction, and affected the lives of many people. For many years, I manufactured things that no one needed -- and everybody wanted more of. I was part of a system that helped circulate a lot of money. Now, in this nice little service business I'm running, the money is kind of dead-ended. It really doesn't have the same circulation that manufacturing had. It's just not the same -- and it's not good for this country. And I'm just a tiny part of what seems to be happening. We have to become producers again. We have to become the makers and the sellers to get the economics of this country back to where it should be. To all you entrepreneurs selling services -- how about starting to think about what you could make -- and do it. And to all you wanna-be manufacturers -- stop thinking about it and start producing. No one's going to take the step for you. No one's going to give you all the answers -- or all the money you need. But those are just challenges that you can face and overcome. We've already let too many industries slide away from us -- multi-billion dollar industries like electronics, clothing, appliances, toys, and just about anything else you can name. No big company is going to come in and create the jobs and rescue us. The jobs and dollars are going to have to come from us -- the entrepreneurs. I hope one of your New Year's resolutions was to face up to the challenge and resolve to make this the year you begin manufacturing your first product. If not, make that resolution now. Mine couldn't be to make my first -- but it was surely to get back into manufacturing.
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