• Building your food processing facility gives you the most control over its design and operations, but it is expensive due to materials, labor, transportation, and delays.
• Renting a food processing facility is cost-effective since it eliminates construction costs and maintenance fees, but you have less autonomy over its design and operations.
• Consider your plans when deciding whether to rent or build. If you are staying in the industry for the long haul, it’s better to invest in building a facility.
• Lastly, there are ways to reduce costs, such as hiring a contracting service, looking for tax breaks, and finding investors.
There are two main options when setting up a food processing facility: build or rent. Both have advantages and disadvantages, but they are a requirement if you want to start a food manufacturing business. Here’s what you need to know about the advantages and disadvantages of each.
The Pros and Cons of Building a Food Processing Facility
There are various advantages and disadvantages to building your facility. Here are some of them:
Autonomy
Building your food processing facility gives you the most control over how the facility is designed and operates. This can be especially beneficial when meeting all applicable health codes and regulations. Plus, you won’t have to worry about paying rent or dealing with landlords that might raise rental rates or change the lease agreement unexpectedly.
Cost
However, building a food processing facility from the ground up is also incredibly expensive. You will need to pay for first, the materials. Materials have been costly throughout the years, primarily because of the labor and transportation associated with them.
You will also need to factor in delays which can significantly increase the cost of your project. This can affect your construction cost more than you think.
Lastly, you’ll have to worry about labor costs, which have significantly increased over the years as well.
Reducing Costs
But there are ways you can reduce the cost of building your facility. Here are some of them:
Hire a Contracting Service
Having a professional to help you with the entire building process is good. Hiring industrial contracting services can help ensure that all materials and labor costs are allocated in the most cost-efficient way possible. In addition, they can handle the project from the ground up and even help you avoid costly mistakes.
Look for Tax Breaks
Most local and state governments offer tax incentives for businesses to build new commercial buildings. Researching these options can significantly reduce your overall costs.
Find Investors
There might be investors interested in backing your venture. Having investors can help you cover the hefty initial costs of building a food processing facility.
The Pros and Cons of Renting a Food Processing Facility
It might be wiser to rent your facility, especially if you’re starting. Here’s what you need to know about it:
Cost-Effective
When renting a food processing facility, one of the most significant advantages is that you don’t have to worry about construction costs or long-term maintenance costs that come with owning your building.
Additional Services
Depending on where you rent your space from, you may also get access to additional services such as waste management or packaging assistance. This can significantly reduce overall operational costs while ensuring compliance with all applicable laws and regulations.
Less Autonomy
However, renting also means you don’t have as much control over how your space is designed or operated; this could lead to unexpected expenses if renovations are needed to meet regulatory requirements. Additionally, rental fees tend to increase periodically, so there is always the risk of an incredible rent hike down the road.
The Bottomline
Renting and building a food processing facility both have their advantages and disadvantages. But it boils down to your plans.
Short-Term Gains
Renting is the better option if you plan to set up a short-term or trial project. It’s cost-effective and allows you to quickly build your business without worrying about construction costs.
Long-Term Gains
But if you’re planning to run a long-term operation, investing in building your facility might be wiser. This gives you greater autonomy and control over how the space is designed and operated while potentially saving money in the long run.
So essentially, if you’re planning to be in the industry for the long haul, consider building your facility instead of renting. If you’re planning to quit before the five-year mark with whatever revenue you’ve made, consider renting a facility instead.
However, no matter what option you choose, research and discover all the details before making any decisions. That way, you can make an informed decision that best suits your needs and budget.
