Small companies moving production closer to home
In the past, it was almost a requirement that New Jersey business owners manufacture their products overseas in a country such as China or Taiwan. Production costs had always been cheaper there, allowing business owners to get more bang for their buck. That is, until recently. With labor and shipping costs soaring, a growing number of small companies are manufacturing their products here in the United States.
Besides increased shipping and labor costs, there are other reasons why small business owners are bringing their products back to the United States for production. Shipping speed is one of them. It can take weeks to get products that are made in Asia shipped to the United States. Meanwhile, American customers have become impatient and want things sooner rather than later.
Even though overseas manufacturing doubled between 1997 and 2010, many business owners are growing weary of demanding workers in India and China. These workers want higher wages and as a result, wages have increased by 20 percent per year, whereas labor costs in the United States are growing a modest 3 percent per year.
As with all businesses, big or small, it's all about the numbers. A business cannot succeed if the owner doesn't know how well his or her company is performing. This involves revenue (how much the company is earning) and expenses (costs). Knowing the various costs involved - such as marketing, manufacturing and payroll - as well as different accounting methods, can help a person stay on top of the company and make it grow even more.
Source: The Washington Post, "Made in the USA back in style for some small businesses as reshoring brings manufacturing home," May 22, 2013