Before starting a paper mill, you must have a clear picture in your mind of how this project is going to work. This picture is termed as the vision of your paper mill.
What is the ideal process to start a successful paper mill? Where do you begin?
Read these several steps to understand the complete process of paper mill set up.
1.Understand the Industry
Players in the paper mills industry basically manufacture paper from pulp, a fibrous material derived from wood. Mill operators may manufacture their own pulp or purchase it.
Industry products include paper rolls and reams, including printing and writing paper, newsprint, packaging material, and household papers. These products are sold in bulk to individual consumers, businesses, and downstream manufacturers who may further convert the industry’s products into specialty paper products.
2.Conduct Market Research and Feasibility Studies
Demographics and Psychographics
The demographic and psychographic composition of those who make use of paper mill products including printing and writing paper, newsprint, packaging material, and household papers cut across individual consumers, businesses, and downstream manufacturers who may further convert the industry’s products into specialty paper products hence the demographic composition for paper mill company is all-encompassing.
3.Decide Which Niche to Concentrate On
- There is no niche area of specialization in the paper mill industry but some paper mills may decide to specialize in the manufacturing of any or all of the following products：
- Construction paper
- Personal care products
- Newsprint
- Rolls of printing paper, writing paper, packaging paper and industrial paper from pulp
- Clay-coated paper
- Absorbent sanitary and tissue paper
- The Level of Competition in the Paper Mill Industry
- The competition that exists in the paper mill industry goes beyond competition in your city; it is both national and international. This is because major paper productions can be contracted to any part of the United States or abroad especially in China where it can be manufactured at a cheap rate. So, it will be right to say the competition in the paper mill industry is relatively tough.
- The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to manufacture quality paper products and you know how to reach out to your target market.
- So, if you choose to start your own paper mill company in the United States, you will definitely meet stiff competition among paper mill companies in the United States. Besides, there are larger paper mills that determine the trends in the industry and you should be ready to compete with them for customers.
4.Economic Analysis
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business.
Paper mill company is no longer a green business. As a matter of fact, you will come across several brand names when you source for paper in your area. So, if you are mapping out your economic analysis, you should carry out a thorough market survey of what it will cost to acquire paper mill machines, installation, raw materials, branding and costs needed to successfully run the business.
Over and above, if you are considering starting a paper mill company, then your concern should not be limited to the cost of setting up the business, but also to branding and how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are surely going to maximize profits in the business.
5.Decide Whether to Buy a Franchise or Start from Scratch
Some starters finish a paper mill, then they sell it or rent it out, so they can avoid the upfront tasks of building a paper mill and focus on production and sales.
The truth is that it will pay you to start your paper mill company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful paper mills around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6.Know the Possible Threats and Challenges You Will Face
If you decide to start your own paper mill company today, one of the major challenges you are likely going to face is the presence of well-established paper mills whose products can be found all across your area. The only way to avoid this challenge is to create your own market perhaps by producing customized paper products.
So also, just like any other business, you are going to face the challenge of getting the required raw materials when you want them and also at the right price that will guarantee you good profit. some other threats that you are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power.
7.Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a paper mill company, the legal entity you choose will go a long way to determine how big the business can grow; some paper mill companies design their business for the regional market, some for the national market, and international market.
Generally, you can either choose a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for your paper mill company. Ordinarily, sole proprietorship should have been the ideal business structure for a small–scale paper mill company especially if you are just starting out with a moderate startup capital.
But if your intention is to grow the business and manufacture paper products for clients based in your country and other countries of the world, then choosing a sole proprietor is not an option for you. Limited Liability Company, LLC or even a general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings, and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your paper mill company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectations and of course taxes.
If you take your time to study the various legal entities to use for your paper mill company, you will agree that a limited liability company; an LLC is most suitable. You can start this type of business as a limited liability company (LLC) and in the future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your paper mill company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8.Choose a Catchy Business Name from the ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend to operate from when naming their business.
9.Discuss With an Agent to Know the Best Insurance Policies for You
In most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own paper mill company:
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers Compensation
- Building/Property Insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10.Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own paper mill company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to leverage on these business opportunities within the industry and also to protect your unique design, company logo, and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the related organization.
11.Get the Necessary Professional Certification
When it comes to operating a paper mill company, you do not need to have any formal training or special certification. All you need is informal training that will expose you to the in and outs of managing a paper mill company and also effectively running the business.
On the other hand, if you come across any form of certification that can aid you in managing your paper mill company pretty well, then, by all means, try and pursue such certification.
12.Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business without the proper documentation. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business ：
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use (if you have a website)
- Online Privacy Policy Document (basically for online payment portal)
- Company Bylaws
- Memorandum of Understanding (MoU)
13.Raise the Needed Startup Capital
Starting a standard, secured and well – equipped paper mill company is capital intensive even if you choose to launch the business on a small scale and you only have a handful of full – time employees on your payroll.
Because of the particularity of the papermaking industry, it is rare to rent a factory building. Because the installation of the papermaking machine and the construction of the factory area are set according to the machine, land is generally purchased.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your paper mill company：
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Source for soft loans from your family members and your friends.
14.Choose a Suitable Location for your Business
When it comes to choosing a location for your paper mill company, the rule of thumb is that, you should be guided by the demand for such products and easy access to labor and raw materials in the location you so desire to start the business.
Of course, if you are able to secure a central location for your paper mill company, it will enable you cut the cost of transporting your raw materials and finished products to and from your production facility and warehouse.
It cannot be overemphasized that the location you choose to open your paper mill company is key to the success of the business, hence entrepreneurs are willing to use the land in a visible location; a location where the demography consists of people with the required purchasing power.
Regardless of water source, power supply, labor, transportation, and the ability to discharge wastewater.
15.Hire Employees for your Technical and Manpower Needs
If you are considering setting up a paper mill company, it means that you should be prepared to set a standard production factory like Fourdrinier machines, pulper machine, mesh-like screen and steam-driven paper making machine.
If you don’t have enough cash, you can start with fairly used production machines, but if you are financially buoyant, then you should go for brand new ones since they usually have a long – life span.
When it comes to hiring employees for a standard paper mill company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Sales and Marketing Manager, Manager, Quality Control Officer, Machine Operators, Accountant, Distribution/Delivery Truck Drivers and Client Services Executive.
Usually when the project starts and the machine is installed, the general provider will send their technicians to install it. At that time, the training of local employees will begin until the machine runs successfully and smoothly.
Of course, you can also find another installation team, but the problem will be that they need to spend time understanding the machine.
On average, you will need a minimum of 20 to 50 key staff members to run a small–scale but standard paper mill company.
16. Where is your Raw Material Coming From?
- The step is to find out the dealers and suppliers of the raw material for your paper mill. Study the types of raw materials that produce the best quality of the paper.
- Raw materials can vary on the type of paper you are going to produce. You may choose different raw materials for different types of paper manufacturing.
- The dealers and suppliers of the raw material must be reliable and known. The raw material supplier should be nearer to your paper mill.
17. Select Paper Machine Manufacturer
The most important stage is selecting a knowledgeable and experienced machine supplier. This is very important as the quality of your paper is going to depend on the machine that you use in the production. Approaching the best paper machine manufacturer and supplier will give you a plus point in improving the quality of your paper.
Watch interview of a famous paper mill owner explaining how he started his mill and reached great heights.
Selecting a well-established paper and pulp machine supplier is very important as the paper mill business is highly dependent on the quality of the end product.
Have a detailed meeting with your machine providers on what is your production capacity expectation and get the machines accordingly.
18.Write a Marketing Plan Packed With ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a paper mill company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well–known brands that determine the market direction for paper mill companies.
Customers will purchase and make use of your products if they know that they are going to get the best in terms of quality and value for their money. Your marketing strategy should center on quality and pricing, and above all excellent customer service. The truth is that, if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in the past. This will help boost your chances in the marketplace when marketing your paper products.
Here are some of the platforms you can utilize to market your paper mill company：
- Introduce your paper mill company by sending introductory letters alongside your brochure to the printing press, schools, paper crafts companies, paper-related manufacturing organizations, stores, and key stake holders throughout your country
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Creating a basic website for your business to give your business an online presence
- Directly market your products.
- Join local Pulp, Paper & Paperboard Mill Products associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on Yellow Pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
19.Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your paper products at rock-bottom prices is to purchase your raw materials and supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantities of items that you purchase directly from wholesalers, the cheaper you tend to get them.
You can also try as much as possible to work with independent contractors and marketers; it will help you save costs for paying sales and marketing executives. So also, if you are able to secure a business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course, maximize profits from your business.
20.Develop Iron-clad Competitive Strategies to Help You Win
The paper mill business is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to ensure that your paper products are well-designed to fit with the trends and quality must also be your guiding principle.
In other to stay competitive in this industry, you must ensure that your clients are always comfortable when making use of your paper products and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the quality of your products, customers can choose to shift allegiance and settle for other options available.
21.Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers coming back to purchase your products or services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers. Part of what you need to do to achieve this is to track progress, results, or outputs with the aim of improving on them quickly as the case demands.
22.Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand-boosting cum promotion to continue to appeal to your target market.
Here are the platforms you can leverage to boost your brand and create a corporate identity for your paper mill company：
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community–based events
- Leverage the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your paper mill company
- Install your billboards in strategic locations all around your city or state
Distribute your fliers and handbills in target areas - List your paper mill company in local directories/yellow pages
- Advertise your paper mill company on your official website and employ strategies that will help you pull traffic to the site
- Position your Banners at strategic positions in the location where your paper mill company is located
- Ensure that all your staff members wear your branded shirts and that all your vehicles are branded with your company logo
