The critical rule of manufacturing, or indeed any business, is “make a profit” (actually, it’s “don’t make an unnecessary loss” but that’s less catchy and harder to explain).
Steve’s Fuzzbox tools are a very, very good starting point.
T1 - you can make a profit. I did, and in some areas still do. T2 is more profitable, but requires more investment in skills.
Firstly, if you are doing this using materials you’ve mined or produced then make sure that manufacturing from them is more profitable than just selling them. I’m not going to say “they are not free” but rather “what’s the best profit you can make for your activity?”
Watch turnover carefully. An item may be listed on the market for a stonking great profit, but if they rarely sell them that’s a lot of ISK tied up doing nothing for you. A lesser profit repeated many times in the same period will generate a more income. Profit is generated by activity (“velocity of money”).
So: what to make? Things everyone needs. Then everyone is buying it => turnover => profits
Ammunition. Check that it is a popular item: for example Multifrequency crystals (the high damage ones) will sell better than, say, Infra-red (mid-long range, lower damage - bit more niche). Everyone (all good Amarrians - so I wonder where a good market would be…?) will buy them because they are nice and cheap for mission running. A similar argument for hybrid, projectile and missile ammunition.
T1 modules. Very few people fit Damage Control I. Most people quickly train for the T2 modules, so while everyone fits s DC, it’s not normally a DC1. You are normally selling to T2 manufacturers (T2 is a T1 component + bunch of complex stuff and a T2 BPC). That limits the profitability - manufacturers are more price conscious. The same applies for most modules. Ships fit meta modules which you can’t make, so you are manufacturing for T2 manufacturers to buy. And they will give you a profit. Just not a huge one.
(The answer to the obvious question is: “I’ll buy T1 parts, because using my production capacity for T2 manufacturing gives me more profit.”)
Drones are ammunition (<== useful insight).
Ships: the right ones can be profitable (I like gankers! - they drive demand).
Don’t forget to allow for sales tax and broker commission in calculations. It adds up (5%), but can be reduced by skills and standing.
And manufacturing installation costs add up as well.
Research you BPOs. Particularly ME. You will be competing against people like me with ME=10 BPOs. You’re either going to need a good ME on the BP or a willingness to accept narrower margins than I operate at in the T1 business.
Yes: Manufacturing is PvP activity. Instead of beating someone ship against ship, you are taking them on business model v business model. Make sure you understand the strengths and weaknesses of your business and only take n the fights you are suited for.
One other tip: hauling.
You can spend a lot of time slogging back and forth between a market station and a manufacturing point. Think about how much fun that can be! Is that worth it for the loss of enjoyment? OK. If you like hauling, good for you - New Eden needs haulers.
Also think how often you’ll do it to keep feeding the manufacturing lines and lugging things to market. And the (minimal unless you are stupid) risk.
And you’ll quickly be putting a lot of value in the hold, and that makes you more tempting to a ganker.
And then there’ll be the one item you forgot to buy before heading home so another round trip is needed.
[I’ve been ganked once. On the upside, he’d bought the ammunition from me…]