How to open a contact lens manufacturer?
There's no doubt that starting a contact lens manufacturing business requires a lot of work, but with expert planning, you'll be well on your way to creating a profitable business venture.
This guide will give you a low down on all of the major steps involved, from choosing a legal structure to creating a financial forecast and registering your business.
We will also walk you through the process of checking whether or not your idea can be viable given market conditions.
Let's embark on this exciting journey together!
What is the business model of a contact lens manufacturing business?
Before thinking about starting a contact lens manufacturing business, you'll need to have a solid understanding of its business model (how it generates profits) and how the business operates on a daily basis.
Doing so will help you decide whether or not this is the right business idea for you, given your skillset, personal savings, and lifestyle choices.
Looking at the business model in detail will also enable you to form an initial view of the potential for growth and profitability, and to check that it matches your level of ambition.
The easiest ways to acquire insights into how a contact lens manufacturing business works are to:
- Speak with contact lens manufacturing business owners
- Undertake work experience with a successful contact lens manufacturing business
- Participate in a training course
Speak with contact lens manufacturing business owners
Talking to seasoned entrepreneurs who have also set up a contact lens manufacturing business will enable you to gain practical advice based on their experience and hindsight.
Learning from others' mistakes not only saves you time and money, but also enhances the likelihood of your venture becoming a financial success.
Undertake work experience with a successful contact lens manufacturing business
Gaining hands-on experience in a contact lens manufacturing business provides insights into the day-to-day operations, and challenges specific to the activity.
This firsthand knowledge is crucial for effective planning and management if you decide to start your own contact lens manufacturing business.
You'll also realise if the working hours suit your lifestyle. For many entrepreneurs, this can be a "make or break" situation, especially if they have children to look after.
First-hand experience will not only ensure that this is the right business opportunity for you, but will also enable you to meet valuable contacts and gain a better understanding of customer expectations and key success factors which will likely prove advantageous when launching your own contact lens manufacturing business.
Participate in a training course
Undertaking training within your chosen industry is another way to get a feel for how a contact lens manufacturing business works before deciding to pursue a new venture.
Whichever approach you go for to gain insights before starting your contact lens manufacturing business, make sure you familiarise yourself with:
- The expertise needed to run the business successfully (do you have the skills required?)
- How a week of running a contact lens manufacturing business might look like (does this fit with your personal situation?)
- The potential turnover of your contact lens manufacturing business and long-term growth prospects (does this match your ambition?)
- The likely course of action if you decide to sell the company or retire (it's never too early to consider your exit)
At the end of this stage, you should be able to decide whether opening a contact lens manufacturing business is the right business idea for you given your current personal situation (skills, desires, money, family, etc.).
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Assembling your contact lens manufacturing business's founding team
The next step to opening your contact lens manufacturing business is to think about the ideal founding team, or to decide to go in alone.
Starting and growing a successful business doesn't have to be a solo journey and setting up a contact lens manufacturing business with several co-founders is generally easier. The business benefits from a management team with a wider skillset, decisions are made together, and the financial risk is shared among the partners, making the journey more collaborative and less daunting.
But, running a business with several partners brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your own business.
We won't go into too much detail here, as this is a complex topic that deserves its own guide, but we do recommend that you ask yourself the following questions:
- What is the ideal number of co-founders for this venture?
- Are you on the same wavelength as your potential partners in terms of vision and ambition?
- How will you deal with potential failure?
Let's look at each of these questions in more detail.
What is the ideal number of co-founders for this venture?
To answer this question you will need to consider the following:
- What skills do you need to run the business? Are you lacking any?
- How much startup capital do you need? How much do you have?
- How are key decisions going to be made? - It is usually advisable to have an odd number of partners (or a majority shareholder) to help break the tie.
Put simply, your co-founders contribute skills, capital, or both. Increasing the number of partners becomes advantageous when there is a deficiency in either of these resources.
Are you on the same wavelength as your potential partners in terms of vision and ambition?
Your business partners should share the same short and long-term vision, be it business expansion or social responsibility, to avoid future frustrations and simplify decision-making. Different views are natural, but alignment is ideal.
In any case, you should think of having an exit mechanism in place in case one of the partners wants to move on.
How will you deal with potential failure?
We wish you nothing but success when starting up and growing your contact lens manufacturing business, but it's always wise to have a backup in case things don't go as planned.
How you deal with a potential failure can vary significantly based on the relationship you have with your business partner (close friend, spouse, ex-colleague, etc.) and the personal circumstances of each of you.
For instance, starting a business with your spouse might seem appealing, but if it doesn't succeed, you risk losing 100% of the household income at once, which could be stressful.
Similarly, going into a partnership with a friend can put pressure on the friendship in the event of failure or when you need to make difficult decisions.
There is no wrong answer, but it is essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Conducting market research for a contact lens manufacturing business
The next step in launching a contact lens manufacturing business is to carry out market research. Let's take a look at what this involves.
The objectives of market research
The objective here is very simple: to assess the level of demand for your business and whether there is an opportunity for it to thrive in your chosen location.
The first step will be to check that the market is not saturated with competing offers and that there is room for a new player: your contact lens manufacturing business.
Your market analysis will also help you identify a concept and market positioning that has every chance of being successful in your target market, thereby helping increase your business's chances of success.
Carrying out market research for your contact lens manufacturing business will also enable you to better understand the expectations of your future customers and the most effective ways to communicate with them in your marketing plan.
Analyse key trends in the industry
Your market research should start with an industry analysis in order to gain a good understanding of the main players and current trends in your sector.
Once you've delved into the current state of the market, it will be time to assess what proportion of your target market can be seized by your contact lens manufacturing business. To do this, you will need to consider both the demand and supply side of the market.
Assess the demand
After checking out the industry, let's shift our focus to figuring out what your potential customers want and how they like to buy.
A classic mistake made by first-time entrepreneurs is to assess demand on the global or national market instead of concentrating on their target market. Only the market share that can be captured by your company in the short term matters.
Your demand analysis should seek to find answers to the following questions:
- Who are your target customers?
- How many are there?
- What are their expectations?
- What are their buying habits?
- How much budget do they have?
- What are the different customer segments and their characteristics?
- What are the main distribution channels and means of communication for reaching each segment?
The aim of the demand analysis is to identify the customer segments that could be targeted by your contact lens manufacturing business and what products and services you need to offer to meet their expectations.
Analyse the supply side
You will also have to familiarize yourself with the competing contact lens manufacturers on the market targeted by your future business.
Amongst other things, you’ll need to ask yourself:
- Who are the main competitors?
- How many competitors are already present?
- Where are they located?
- How many people do they employ?
- What is their turnover?
- How do they set their prices?
- Are they small independent businesses or national players?
- Do they seem to be in difficulty or are they flourishing?
- What is their market positioning?
- What types of products and services do they offer?
- What do customers seem to like about them?
The aim of the competitive analysis is to identify who your competitors will be and to gather information that will help you find a differentiating commercial positioning (more on that later in this guide).
Regulations
Conducting market research is also an opportunity to look at the regulations and conditions required to do business.
You should ask yourself the following questions:
- Do you need to have a specific degree to open a contact lens manufacturing business?
- Do you need specific licences or permits?
- What are the main regulations applicable to your future business?
Given that your project is at an early stage, your focus should be to ensure that there are no roadblocks from a regulatory standpoint before you deep dive into the planning process.
Once your project is more advanced, you will have the opportunity to talk about regulation more in-depth with your lawyer.
Concluding your market research
By the time your market research is completed, you should have either:
- Pinpointed an untapped business opportunity,
- Or arrived at the realisation that the market is saturated, prompting the search for alternative business ideas or models.
If the conclusion is that there is an opportunity in the market to cater to one or more customer segments currently underserved by competitors, that's great!
Conversely, if you come to the conclusion that the market is already saturated, don’t panic! The good news is that you won’t spend several years working hard on a project that has little chance of success. There is no shortage of business ideas either - at The Business Plan Shop, we have identified more than 1,300 potential business ideas!
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How should I position my contact lens manufacturing business on the market?
The next step to start your contact lens manufacturing business is to define precisely the market positioning your company will adopt in order to capitalise on the opportunity identified during your market research.
Market positioning refers to the place your product and service offering occupies in customers' minds and how they differ from the competition. Being perceived as a low-cost solution, for example.
To find a concept and a market positioning that will resonate with your customers, you need to address the following issues:
- How can you differentiate yourself from your competitors?
- Is it better to start or buy a contact lens manufacturing business already in operation?
- How will you validate your concept and market positioning before investing in the business?
Let's look at these aspects in more detail.
How can you differentiate yourself from your competitors?
Opening a contact lens manufacturing business means starting with a major disadvantage compared with competitors already active on the market.
While you will have to create everything from scratch, your competitors already have everything in place.
Your competitors' teams know the business well, whereas yours has only just been recruited, their customers are loyal and they benefit from word of mouth that you don't yet have.
So you're going to need a solid plan to succeed in taking market share from your competitors and making your mark.
There are a number of aspects to consider in order to try to avoid direct confrontation if possible:
- Can you target a different customer base than your competitors?
- Can you offer products or services that are different from or complementary to what your competitors already sell?
- How will your competitors react to your contact lens manufacturing business entering their market?
- Can you build a sustainable competitive advantage that will enable you to compete with your current and future competitors?
Is it better to start or buy a contact lens manufacturing business already in operation?
The alternative to setting up a new independent business is to buy out and take over a contact lens manufacturing business already in operation.
A takeover is a good way of reducing the risk of your project compared with a pure start-up.
Taking over a business has two enormous advantages over setting up a new one: you start out on an equal footing with your competitors since you take over the team and the customer base, and you don't increase the supply on the market enabling you to maintain the existing balance on the market where the business operates.
However, the capital requirements for a takeover are higher because the business will have to be bought from its previous owners.
How will you validate your concept and market positioning before investing in the business?
However you decide to set up your business, you will need to ensure that there is a good fit between what you sell and what customers are looking to buy.
To do this, you'll need to meet your target customers to present your products or services and check that they meet their expectations.
Explore the ideal location to start your contact lens manufacturing business
The next stage in our guide on how to start a contact lens manufacturing business: choosing where to set up shop.
Setting up your business in the right location will have a direct impact on your chances of success, so it's a good idea to think things through before you launch.
To help you decide where to set up your business, we recommend considering the following factors:
- Proximity to target customers - For a contact lens manufacturing business, it is important to be located close to the target market to reduce shipping costs and ensure timely delivery of products.
- Availability of skilled labor - This is crucial for a contact lens manufacturing business as it requires specialized skills and knowledge to produce high-quality lenses.
- Parking space, road and public transport accessibility - This is important for both employees and customers, as it allows for easy access to the manufacturing facility and increases convenience for potential customers.
- Premises layout - The layout of the manufacturing facility should be spacious and efficient to accommodate equipment and allow for smooth production processes.
These criteria will need to be refined according to the specific features of your project.
After weighing the factors mentioned earlier, it's crucial to focus on your startup's budget. Look for a location that suits your business needs while being affordable, especially in the short term.
One of the issues that will also come up is the long-term future of your location, particularly if you opt to rent your premises rather than buy. In this case, you will need to consider the conditions for renewing the lease (duration, rent increases, etc.).
Lease agreements vary widely from country to country, so make sure you check the terms applicable to your situation and have your lawyer review your lease before you sign.
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Choosing your contact lens manufacturing business's legal form
The next step to open a contact lens manufacturing business is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your contact lens manufacturing business's legal form important?
Choosing the legal form for your contact lens manufacturing business is an important decision because this will affect your tax obligations, your personal exposure to risk, how decisions are made within the business, the sources of financing available to you, and the amount of paperwork and legal formalities, amongst other things.
The way you set up your business legally will impact your taxes and social contributions, both at a personal level (how much your income is taxed) and at the business level (how much the business's profits are taxed).
Your personal exposure to risk as a business owner also varies based on the legal form of your business. Certain legal forms have a legal personality (also called corporate personality), which means that the business obtains a legal entity which is separate from the owners and the people running it. To put it simply, if something goes wrong with a customer or competitor, for example, with a corporate personality the business gets sued, whereas without it is the entrepreneur personally.
Similarly, some legal forms benefit from limited liability. With a limited liability the maximum you can lose if the business fails is what you invested. Your personal assets are not at risk. However, not all structures protect you in such a way, some structures may expose your personal assets (for example, your creditors might try to go after your house if the business incurs debts and then goes under without being able to repay what it owed).
How decisions are made within the business is also influenced by the legal form of your contact lens manufacturing business, and so is the amount of paperwork and legal formalities: do you need to hold general assemblies, to produce annual accounts, to get the accounts audited, etc.
The legal form also influences what sources of financing are available to you. Raising capital from investors requires having a company set up, and they will expect limited liability and corporate personality.
What are the most common legal structures?
It's important to note that the actual names of legal structures for businesses vary from country to country.
But they usually fall within two main types of structures:
- Individual businesses
- Companies
Individual businesses
Individual businesses, such as sole traders or sole proprietorships, are legal structures with basic administrative requirements.
They primarily serve self-employed individuals and freelancers rather than businesses with employees.
The main downside of being a sole trader is that there's usually no legal separation between the business and the person running it. Everything the person owns personally is tied up with the business, which can be risky.
This means that if there are problems or the business goes bankrupt, the entrepreneur's personal assets could be taken by creditors. So, there's a risk of personal liability in case of disputes or financial issues.
It is also not possible to raise equity from investors with these structures as there is no share capital.
Despite the downsides, being a sole proprietorship has some advantages. There is usually very little paperwork to get started, simpler tax calculations and accounting formalities.
Companies
Companies are all rounders which can be set up by one or more individuals, working on their own or with many employees.
They are recognized as a distinct entity with their own legal personality, and the liability is usually limited to the amount invested by the owners (co-founders and investors). This means that you cannot lose more than you have invested in the business.
This separation ensures that in legal disputes or bankruptcy, the company bears primary responsibility, protecting the personal assets of the founder(s) and potential investor(s).
How should I choose my contact lens manufacturing business's legal structure?
Deciding on the legal structure is usually quite straightforward once you know how many co-founders you'll have, whether you'll have employees, and the expected revenues for the business.
A good business idea will be viable whatever the legal form you choose. How businesses are taxed changes every year, therefore one cannot rely on specific tax benefits tied to a particular structure when deciding to go into business.
One easy way to proceed is to take note of the legal structures used by your top five competitors, and assume you're going with the most commonly chosen option. Once your idea is mature and you're prepared to formally register the business, you can validate this assumption with a lawyer and an accountant.
Can I switch my contact lens manufacturing business's legal structure if I get it wrong?
You can switch your legal setup later on, even if it involves selling the old one to a new entity in some cases. However, this comes with extra costs, so it's better to make the right choice from the beginning if you can.
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Calculating the budget to open a contact lens manufacturing business
The next step to opening a contact lens manufacturing business involves thinking about the equipment and staff needed to launch and run your business on a day-to-day basis.
Each project has its own characteristics, which means that it is not possible to estimate the budget for opening a contact lens manufacturing business without building a complete financial forecast.
So be careful when you see estimates circulating on the Internet. As with all figures, ask yourself these questions:
- Is my project similar (location, concept, size, etc.)?
- How recent is the information?
- Is it from a trustworthy source?
Startup costs and investments to open a contact lens manufacturing business
For a contact lens manufacturing business, the initial working capital requirements and investments may include the following elements:
- Machinery and Equipment: This includes all the necessary machinery and equipment needed for the production of contact lenses, such as lathes, polishers, and molders. These are fixed assets that will be used for a long period of time and are essential for the manufacturing process.
- Factory Building: A suitable factory building is needed to house all the equipment and machinery for the production of contact lenses. This can include the cost of purchasing or leasing the building, as well as any renovations or modifications needed to make it suitable for the business.
- Raw Materials and Supplies: As a contact lens manufacturing business, you will need to purchase raw materials and supplies such as silicon, plastic, and solution. These are essential for the production process and will be a recurring capital expenditure.
- Quality Control Equipment: In order to ensure that your contact lenses meet industry standards and are safe for use, you will need to invest in quality control equipment. This can include devices for testing lens strength, precision, and durability.
- Packaging Machinery and Materials: Contact lenses need to be packaged properly in order to maintain their quality and prevent damage during transportation. This may include the cost of purchasing or leasing packaging machinery and materials such as boxes, labels, and seals.
Of course, you will need to adapt this list to your company's specific needs.
Staffing plan to operate a contact lens manufacturing business
To establish an accurate financial forecast for your contact lens manufacturing business, you will also need to assess your staffing requirements.
The extent to which you need to recruit will of course depend on your ambitions for the company's growth, but you might consider recruiting for the following positions:
Once again, this list is only indicative and will need to be adjusted according to the specifics of your contact lens manufacturing business.
Other operating expenses required to run a contact lens manufacturing business
You also need to consider operating expenses to run the business:
- Staff Costs: This includes the salaries and wages of your manufacturing and administrative staff, as well as any employee benefits and payroll taxes.
- Accountancy Fees: You will need to hire an accountant to manage your financial records, prepare tax filings, and provide financial advice.
- Insurance Costs: As a contact lens manufacturer, you will need to invest in insurance to cover potential risks such as product liability, property damage, and workers' compensation.
- Software Licenses: You will need to purchase software licenses for programs such as CAD/CAM software, inventory management software, and accounting software to support your business operations.
- Banking Fees: You will incur fees for maintaining a business bank account, processing transactions, and using other banking services such as wire transfers and credit card processing.
- Raw Materials: This includes the cost of purchasing materials such as contact lens molds, polymers, and packaging materials to manufacture your contact lenses.
- Utilities: You will need to cover the cost of electricity, water, and other utilities to power your manufacturing equipment and keep your facilities running.
- Rent or Mortgage: If you do not own your manufacturing facility, you will need to pay rent. If you own your facility, you will have mortgage payments.
- Maintenance and Repairs: You will need to budget for regular maintenance and repairs of your manufacturing equipment to keep it functioning properly.
- Marketing and Advertising: To reach potential customers, you will need to invest in marketing and advertising efforts, such as creating a website, attending trade shows, and running ad campaigns.
- Shipping and Freight: You will need to cover the costs of shipping and freight for both receiving raw materials and sending out finished products to customers.
- Professional Services: You may need to hire outside consultants or lawyers for specialized services, such as product testing, regulatory compliance, or legal advice.
- Travel and Entertainment: If you attend trade shows or conferences, you will need to budget for travel and entertainment expenses, such as airfare, hotel stays, and meals.
- Taxes and Licenses: As a business, you will need to pay taxes and obtain necessary licenses and permits to operate legally.
- Office Supplies: You will need to purchase office supplies such as paper, pens, and printer ink to keep your administrative operations running smoothly.
This list will need to be adapted to the specifics of your contact lens manufacturing business but should be a good starting point for your budget.
Create a sales & marketing plan for your contact lens manufacturing business
The next step to launching your contact lens manufacturing business is to think about the actions you need to take to promote your products and services and build customer loyalty.
Here, you'll be looking at the following issues:
- What is the best method to attract as many new customers as possible?
- How to build customer loyalty and spread word of mouth?
- What human and financial resources will be required to implement the planned actions?
- What level of sales can I expect to generate in return?
The precise sales and marketing levers to activate will depend on the size of your contact lens manufacturing business. But you could potentially leverage some of the initiatives below.
Besides your sales and marketing plan, your sales forecast will be affected by seasonal patterns related to the nature of your business, such as fluctuations during the holiday season, and your competitive landscape.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
Building your contact lens manufacturing business's financial forecast
The next step to opening a contact lens manufacturing business is to create your financial forecast.
What is a contact lens manufacturing business financial forecast?
A contact lens manufacturing business financial forecast is a forward-looking tool that projects the financial performance of your business over a specific period (usually 3 years for start-ups).
A forecast looks at your business finances in detail - from income to operating costs and investments - to evaluate its expected profitability and future cash flows.
Building a financial forecast enables you to determine the precise amount of initial financing required to start your contact lens manufacturing business.
There are many promising business ideas but very few are actually viable and making a financial forecast is the only way to ensure that your project holds up economically and financially.
Your financial forecast will also be part of your overall business plan (which we will detail in a later step), which is the document you will need to secure financing.
Financial forecasts are used to drive your contact lens manufacturing business and make key decisions, both in the pre and post-launch phases:
- Should we go ahead with the business or scrap the idea?
- Should we hire staff or use an external service provider?
- Which development project offers the best growth prospects?
- Etc.
Creating a financial forecast for starting a contact lens manufacturing business is an iterative process as you will need to refine your numbers as your business idea matures.
As your contact lens manufacturing business grows, your forecasts will become more accurate. You will also need to test different scenarios to ensure that your business model holds true even if economic conditions deteriorate (lower sales than expected, difficulties in recruiting, sudden cost increases or equipment failure problems, for example).
Once you’ve launched your business, it will also be important to regularly compare your accounting data to your financial projections in order to keep your forecast up-to-date and maintain visibility on future cash flows.
What does a financial forecast look like?
Once ready, your contact lens manufacturing business forecast will be presented using the financial tables below.
The forecasted profit & loss statement
The profit & loss forecast gives you a clear picture of your business’ expected growth over the first three to five years, and whether it’s likely to be profitable or not.
The projected balance sheet
Your contact lens manufacturing business's forecasted balance sheet enables you to assess your financial structure and working capital requirements.
The projected cash flow statement
A projected cash flow statement to start a contact lens manufacturing business is used to show how much cash the business is expected to generate or consume over the first three years.
Which solution should you use to make a financial forecast for your contact lens manufacturing business?
The easiest and safest way to create your contact lens manufacturing business forecasts is to use an online financial forecasting software, like the one we offer at The Business Plan Shop.
There are several advantages to using professional software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Finding a name and registering your contact lens manufacturing business
The next step in starting a contact lens manufacturing business is to decide on a name for your entity.
For starters, you cannot take a name similar to a name already registered by a competitor or protected by a trademark without inevitably risking getting sued. So you’ll need to find a name available, and reserve it before others can.
In addition, you will probably want to use the same name for:
- Your company’s legal name - Example LTD or Example Inc
- Your trading name - Example
- A trademark - Example ®
- Your company’s domain name - Example.com
The issue is that you’ll need to register your name in three different places almost simultaneously, but with each place having its own timeframes:
- Registering a domain name is instantaneous
- Registering a trademark takes at least 3 months (if your application is accepted)
- Registering a company depends on the country, but it's generally fairly quick
You will therefore be faced with the choice of either registering everything at once in the hope that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.
Our advice is to discuss the strategy with your legal counsel (see further down in this guide) and to give priority to your domain names and your registered trademark. You'll always have the option of using a trading name that's different from your company's legal name, and that's not a big deal.
To check that the name you want is not already in use, you should consult:
- Your country's business register
- The register of trademarks where you wish to obtain protection
- Your preferred search engine
- A domain name reservation company (such as GoDaddy)
If the name you want is available, you can go ahead and register it.
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What corporate identity do I want for my contact lens manufacturing business?
The following step to start a contact lens manufacturing business is to define your company's visual identity.
Visual identity is part of the DNA of your contact lens manufacturing business: it makes you recognizable and recognized by your customers, and helps you stand out from the competition. It also helps convey your values, notably through the choice of colors that identify the company.
Creating your business's visual identity yourself is entirely possible: there are several online tools that let you generate color palettes, choose typography and even generate logos.
However, we advise you to delegate this task to a designer or a communications agency for a professional result.
Your corporate identity will include the following elements:
- Your business logo
- Your brand guidelines
- Your business cards
- Design and theme of your website
Logo
Your contact lens manufacturing business's logo serves as a quick identifier for your company. It will be featured on all your communication platforms (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
Beyond its appearance, your logo should be easy to use on any type of support and background (white, black, gray, colored, etc.). Ideally, it should be easy to use in a variety of colors.
Brand guidelines
One of the challenges when starting a contact lens manufacturing business is to ensure a consistent brand image wherever your company is visible.
This is the role of your company's brand guidelines, which defines the typography and colors used by your brand and thus acts as the protector of your brand image.
Typography refers to the fonts used (family and size). For example, Trebuchet in size 22 for your titles and Times New Roman in size 13 for your texts.
The colors chosen to represent your brand should typically be limited to five (or fewer):
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Classic but a must-have, your business cards will be at your side to help you easily communicate your contact details to your founders, customers, suppliers, recruitment candidates, etc.
In essence, they should feature your logo and adhere to the brand guidelines mentioned earlier.
Website theme
Likewise, the theme of your contact lens manufacturing business website will integrate your logo and follow the brand guidelines we talked about earlier.
This will also define the look and feel of all your site's graphic elements:
- Buttons
- Menus
- Forms
- Banners
- Etc.
Navigate the legal and regulatory requirements for launching your contact lens manufacturing business
The next thing to do in getting a contact lens manufacturing business off the ground is to handle all the legal and regulatory requirements. We recommend that you be accompanied by a law firm for all of the steps outlined below.
Intellectual property
One of your priorities will be to ensure that your company's intellectual property is adequately protected.
As explained before, you can choose to register a trademark. Your lawyer can help you with a detailed search to make sure your chosen trademark is unique and doesn't clash with existing ones.
They'll assist in preparing the required documents and steer you in picking the right categories and locations for trademark registration.
Moreover, your lawyer can offer guidance on additional measures to protect other intellectual property assets your company may have.
Getting your contact lens manufacturing business paperwork in order
For day-to-day operations, your contact lens manufacturing business will need to rely on a set of contractual documents.
Your exact needs in this respect will depend on the country in which you are launching your contact lens manufacturing business, the number of partners and the envisaged size of the company.
However, you will probably need at least the following documents:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
Operating your business legally may require licences and business permits. The exact requirements applicable to your situation will depend on the country in which you set up your contact lens manufacturing business.
The lawyers who advise you will also be able to guide you with regard to all the rules applicable to your business.
Similarly, your accountant will be able to help you take the necessary steps to comply with the tax authorities.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Create a business plan for your contact lens manufacturing business
The next step to open a contact lens manufacturing business: put together your business plan.
What is a business plan?
To keep it simple, a business plan comprises two crucial components:
- Firstly, a numerical part, the financial forecast (which we mentioned earlier), which highlights the initial financing requirements and profitability potential of the contact lens manufacturing business,
- And a written, well-argued section that presents your project in detail, aims to convince the reader of its chances of success, and provides the context needed to assess whether the forecast is realistic or not.
The business plan will enable you to verify the coherence of your project, and ensure that the company can be profitable before incurring further costs. It will also help you convince business and financial partners.
As you can see, your business plan must be convincing and error-free.
How to write a business plan for a contact lens manufacturing business?
Nowadays, the modern and most efficient way to write a contact lens manufacturer business plan is to use startup business plan software like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for acontact lens manufacturing business has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Raise the financing needed to launch your contact lens manufacturing business
With your business plan in hand, you can tackle one of the final steps to open a contact lens manufacturing business business: the search for financing.
Raising the capital needed to launch your business will probably require a combination of equity and debt, which are the two types of financing available to companies.
Equity funding
Equity is the sum of money invested in a contact lens manufacturing business by both founders and investors.
Equity is a key factor in business start-ups. Should the project fail, the sums invested in equity are likely to be lost; these sums therefore enable the founders to send a strong signal to their commercial and financial partners as to their conviction in the project's chances of success.
In terms of return on investment, equity investors can either receive dividends from the company (provided it is profitable) or realize capital gains by selling their shares (provided a buyer is interested in the company).
Equity providers are therefore in a very risky position. They can lose everything in the event of bankruptcy, and will only see a return on their investment if the company is profitable or resold. On the other hand, they can generate a very high return if the project is a success.
Given their position, equity investors look for start-up projects with sufficient growth and profitability potential to offset their risk.
From a technical standpoint, equity includes:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: which represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Contributions made by the owners.
- Private investors: business angels, friends and family.
- Crowdfunding: raising funds by involving a group of people through campaigns where they contribute money or make donations, often getting something in return for their support.
- Start-up aid, e.g. government loans to help founders build up their start-up capital.
Debt financing
Debt is the other way of financing companies. Unlike equity, debt offers lenders a limited, contractually guaranteed return on their investment.
Your contact lens manufacturing business undertakes to pay lenders' interest and repay the capital borrowed according to a pre-agreed schedule. Lenders are therefore making money whether or not your company makes a profit.
As a result, the only risk lenders take is that of your contact lens manufacturing business going bankrupt, so they're extremely conservative and will want to see prudent, hands-on management of the company's finances.
From the point of view of the company and all its stakeholders (workforce, customers, suppliers, etc.), the company's contractual obligation to repay lenders increases the risk for all. As a result, there is a certain caution towards companies which are too heavily indebted.
Businesses can borrow debt in two main ways:
- Against assets: this is the most common way of borrowing. The bank funds a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the business cannot repay the loan, the bank takes the asset and sells it to reduce losses.
- Against cash flows: the bank looks at how much profit and cash flow the business expects to make in the future. Based on these projections, it assigns a credit risk to the business and decides how much the business can borrow and under what terms (amount, interest rate, and duration of the loan).
It's difficult to borrow against future cash flows when you're starting a contact lens manufacturing business, because the business doesn't yet have historical data to reassure about the credibility of cash flow forecast.
Borrowing to finance a portion of equipment purchases is therefore often the only option available to founders. The assets that can be financed with this option must also be easy to resell, in the unfortunate event that the bank is forced to seize them, which could limit your options even further.
As far as possible sources of borrowing are concerned, the main ones here are banks and credit institutions. Bear in mind, however, that each institution is different, in terms of the risk it is prepared to accept, what it is willing to finance, and how the risk of your project will be perceived.
In some countries, it is also possible to borrow from private investors (directly or via crowdfunding platforms) or other companies, but not everywhere.
Key points about financing your contact lens manufacturing business
Multiple solutions are available to help you raise the initial financing you need to open your contact lens manufacturing business. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the financing.
Launching your contact lens manufacturing business and monitoring progress against your forecast
Once you’ve secured financing, you will finally be ready to launch your contact lens manufacturing business. Congratulations!
Celebrate the launch of your business and acknowledge the hard work that brought you here, but remember, this is where the real work begins.
As you know, 50% of business start-ups do not pass the five-year mark. Your priority will be to do everything to secure your business's future.
To do this, it is key to keep an eye on your business plan to ensure that you are on track to achieve your goals.
No one can predict the future with certainty, so it’s likely that your contact lens manufacturing business's financial performance will differ from what you predicted in your forecast.
This is why it is recommended to make several forecasts:
- A base case (most likely)
- An optimistic scenario
- And a pessimistic scenario to test the robustness of your financial model
If you follow this approach, your numbers will hopefully be better than your optimistic case and you can consider accelerating your expansion plans. That’s what we wish you anyway!
If, unfortunately, your figures are below your base case (or worse than your pessimistic case), you will need to quickly put in place corrective actions, or consider stopping the activity.
The key, in terms of decision-making, is to regularly compare your real accounting data to your contact lens manufacturing business's forecast to:
- Measure the discrepancies and promptly identify where the variances with your base case come from
- Adjust your financial forecast as the year progresses to maintain visibility on future cash flow and cash position
There is nothing worse than waiting for your accountant to prepare your year-end accounts, which can take several months after the end of your financial year (up to nine months in the UK for example), to realise that the performance over the past year was well below the your base case and that your contact lens manufacturing business will not have enough cash to keep running over the next twelve months.
This is why using a financial forecasting solution that integrates with accounting software and offers actuals vs. forecast tracking out of the box, like the financial dashboards we offer at The Business Plan Shop, greatly facilitates the task and significantly reduces the risk associated with starting a business.
Need inspiration for your business plan?
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Key takeaways
- There are 15 key steps to opening a contact lens manufacturing business.
- Your financial forecast will enable you to accurately assess your initial financing requirements and the potential profitability of your project.
- Your business plan will give your financial partners the context they need to be able to judge the consistency and relevance of your forecast before deciding whether or not to finance the creation of your contact lens manufacturing business.
- Post-launch, it's essential to have an up-to-date forecast to maintain visibility of your business's future cash flows.
- Using a financial planning and analysis platform that integrates forecasts, business plans and actual performance monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.
We hope this guide has helped you understand how to open a contact lens manufacturing business. Please don't hesitate to contact us if you have any questions or want to share your experience as an entrepreneur.
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Founder & CEO at The Business Plan Shop Ltd
