Here is How to Start Pen Making Business – Profitable Business Plan

Pen business

A Pen is mightier than a sword’, represents the true power of pen. The phrase means that the power of pen that is education is mightier than even a sword that can kill countless number of people. In the present context one can say that manufacturing of pen is mightier than manufacturing of sword as the demand of pen is higher in the world today.

As education became the fundamental necessity of humans from the last one century, people have invested more in education. Pen is one such product that is being manufactured at huge scale and has global market of billion dollars. As one can see there are both local and global brands that manufacture pen and its product and supply it to the rest of the world.

It would be very hard to imagine a world without pen and therefore there is constant demand for pen and related products and it is also increasing day by day as more children are following the path of elementary education. While global brands operate at a huge volume, local brands operate at low volume manufacturing cheap pens in small numbers to cater the local demands.

Their products are not well finished and polished but can be used for the purpose of use and throw after one writing. Cheap pens that cost much lower than well-known pen brands are huge success as people who only care about writing use such pens.

Pen Manufacturing as a Business

You may have only viewed pen as a medium of writing but it can also be a good source of revenue if you start to manufacture them and sell them in market. With a very small investment and little space you can start your own pen manufacturing business and earn a decent return from it.

The below mentioned steps would guide you in starting your own business. But before that it is also important to look into the merits and demerits of pen manufacturing business. It is always wise to be well aware of all the aspects of a business before putting your hand in to it.

Merits of Pen Manufacturing Business

  • Pen manufacturing business does not requires large capital investment. You will only require few thousand dollars or even less to start your business. This indicates that it would not put financial pressures on you
  • You don’t require a separate space for starting your manufacturing business. Even a decent sized room in your house would suffice.
  • Since the requirement of pen remains active in the market it would be obvious that you will get a market for your product
  • The whole business operates at low cost and is also much simpler than any other business and it also doesn’t require much manpower

Demerits of Pen Manufacturing Business

  • Pen market is quite huge and is already very crowded. Everyone now seems to be investing in this business but the market is growing with a steady speed
  • Since the manufacturing is at huge volumes, the production of pens are high and consumption is moderate, this decreases the market value of product
  • There is very small profit margin in selling pens. It is obvious that a local brand cannot sell costlier pens and therefore it has to sell cheap pens that give very small profit margin, especially to the manufacturer.
  • With many pen manufacturers in the market, brand value of local market becomes irrelevant and it can easily be replaced by other competitive brand thus your profit would not always be the same.

With the pros and cons of pen business let’s understand how a pen manufacturing business works and what it takes to start it.

Knowing what would be the end result

 New interesting business ideas always attracts new entrepreneurs and often they act without knowing the end results. Before you venture out in pen manufacturing business it is important to know what would be the end result.

The end result chiefly means the return on investment that you make. Is it worth the effort you make for the business? If yes then you should proceed and if not then you must not. To know the end result you obviously need to research on the business and it’s every minute details. Here are some ways to analyze your market.

  • Research well about the pen industry in your country, your state and your city.
  • Know how much of worth your industry is
  • Know about the potential competition you have if you choose to enter the market
  • Know about the resources that will be required to start your business and whether you can afford it or not
  • Know about the estimated capital investment
  • Lastly, how much return will you get by investing in the business

The above method is also known as feasibility analysis which you can do it by yourself by researching the market, meeting people involved in the business or by hiring a firm that does feasibility analysis for its clients.

Create a Detailed Business Plan

 A business plan depicts what steps will you take to incorporate your business, the investment details, expense required, resources required, man power, return on investment, risks and failures, etc. A business plan is also helpful to attract investors and to secure loan for your business. It also guides you while starting your business and keeps you on track.

How to Start?

Let us quickly get to know how to start your business. To start your pen manufacturing business you will need the following things.

  • Raw materials to manufacture pen
  • Machines to manufacture pen
  • Space to setup your manufacturing unit
  • Capital Investment to purchase such products and lease space for business
  • Manpower and pen manufacturing specialists
  • Networking in order to create a market to sell your products
  • Managing the business and return on investment

Raw Materials to Manufacture Pen

 There are certain raw materials that are required in order to manufacture a pen. Here are some of them:

Barrel: A barrel is the main body of a pen and it is where the ink is generally filled. Present day pens mostly have refills in it therefore the barrel part remains empty in order to accommodate the refill.

Metal Tip: A metal tip is the main end of a pen from where the ink flows and which is put on the paper in order to write something. A metal tip should be of quality standard to ensure its smoothness. The metal tip is connected with refill or the barrel to facilitate the flow of ink.

Plastic Adapter: It connects the metal tip and the barrel together. This is made of plastic.

The Cap: A pen cap is the most common part of any pen. It covers the metal tip in order to ensure non-leakage of ink and to secure the metal tip.

Ink: Ink is the fluid which is used in the pen to make the scribes on the metal sheet visible. Ink is very important part of any pen and it is important that it has standards. Ink can be of any color like blue, black, green or red.

One can purchase these items in bulk or can manufacture few of them on their own. You can purchase pen ink in bulk that is in liters and can use it to fill the refills of pen. Barrel, plastic cap and adapter can be manufactured using standard plastic. For this you need plastic or recycled plastic. You can purchase the required machines which are necessary to manufacture these products.

Machines Required for the Process

 Apart from the raw materials you also require some machines that will be used for manufacturing. They are:

Punching Machine: This machine is used to punch the plastic adapter into the barrel from one end.

Stamping Machine: Stamping Machine is used to print the name of your company on the body of the plate in order to advertise. You can avoid this if you are not interested to brand your pen. You will not need this in case you are supplying pens in bulk for some other company who will use their stamp on the pen for various purposes.

Ink Filling Machine: The machine is used to fill ink in the refill or the barrel. Ink should be filled with precision while making the other end closed. There should also be no air in the barrel and between the inks as it will impact the flow of ink.

Centrifuging Machine: This machine is used to remove the air gaps between the metal nip and the barrel. It remove the air in between the inks in order to ensure smooth flow of ink and thus better writing experience.

Drilled Nozzle Plate: It is used to fix the metal nip into the barrel or the refill.

You may also need machines to manufacture the body of pen like the barrel, the metal tip, the cap, etc. if you want. You may directly purchase such items in bulk for better convenience.

Space to Setup your Manufacturing Unit

 It is obvious that in order to manufacture pens you will require a decent space where you will do the manufacturing work. The good thing here is that you don’t need much space to start your job. A decent sized room is enough to start your work.

If you are operating at small scale then one room is enough for you which can be manage in your own house. If you find it necessary then you can lease a space for the same. If you are already the owner then you will save much money which may be wasted while renting space.

Capital Investment to Start your Business

 Based on the feasibility analysis report and your business plan it is obvious that you would have got the estimate of the capital investment that is required to start your business. The cost of labor, specialists, skilled technicians, rented space, registering as tax entity, employees in office, raw material cost, machine cost and some extra expenditure.

To sum it up you will not be required to spend a whooping capital for your business but just few thousand dollars. You can reduce it by taking necessary steps like starting your business at a space owned by you. Doing the management and accounting work for yourself. Hiring men who are multitalented.

Manpower for your Business

 You may need help of one or two men to assist you for your small sized business. Hire those who are multitalented and can do different jobs. You can get them trained in the field of operating machines and manufacturing the pens. If your budget allows then you can hire an advisor for your business who can also manage the accounts.

Market for your Business

 You need to create or discover a market in order to sell your manufactured product. You have to meet those numerous shopkeepers and distributors who deal with stationary business. Create a network of them all to sell your products.

You can also choose to setup your own retail shop to sell pens in order to increase the profit margin. You may also contact some businesses or companies who purchase pens and then brand it with their company’s name to distribute it within their company or to clients. Pharmaceutical companies are best example of the same.

Managing your Business and Return on Investment

 Managing your business is an important aspect in order to get best results. From arranging every item to setting up your business and to hiring your employees. All requires lots of efforts. Managing your business with efficiency will increase the profit margin and will give you good returns.

First few month of your earnings would be spent on the investment you made and only after that you will start to get any returns. Profit margin which is low in this business can be increased by increasing the product value or by doing value addition. You can also sell other items or manufacture them like text books, tennis balls, etc.

Lastly, in order to ensure success in your business, planning is very essential followed by execution. Always remain on your toes as a small mistake may cause big damage to your business. In this competitive market your smartness will matter the most.

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