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IndustryArena Forum > MetalWorking > General Metalwork Discussion > Would businesses be willing to do this?
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  1. #13
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    I can honestly say that I am nine years into doing exactly what you are trying to start. I have learned a lot and wish I could go back and re-start knowing what I know now.

    I have spent a LOT of $ and many years acquiring equipment to make my own stuff. I should have done things differently.

    Find a good business manager and make sure he understands what you want and where you want to go. Then listen. The job is too big to tackle yourself if you want to do it properly. Do what you do best and find folks that can fill the gaps. Find a manager and a marketing person and find a way to engage them in your vision.

    What the product is absolutely irrelevant - business boils down to management and more importantly - marketing. The product and market is important to the marketer, of course.

    After nine years, I am just now where I wanted to be eight years ago.

    It doesn't matter if you are making plastic vomit or women's underwear - the business needs sound management, clear marketing direction, good financial management and guidance. Finding all of these in one individual is extremely difficult.

    In my case, it took me a long time to realize that I am good at design and good in the shop. I suck at managing my own company - it's just not my strong point. Perhaps you are more skilled. I now design and stay in the shop - someone else runs my company and calls the business and marketing shots. This is what I wanted I just didn't know it when I began. Sounds odd, but it's working for me.

    You need more than money - you need experienced help. Realize it as soon as you can. Also realize that as unique as you think your idea is - its success will be realized using standard business practices that apply to any product. Nothing is really all that special about your situation or your product - whatever it is. Try to remove your emotional attachment to your idea - this is a very, very hard thing to do for nearly any entrepreneur. I know it is/was for me.

    Scott
    Consistency is a good thing....unless you're consistently an idiot.

  2. #14
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    Simple solution, buy a cnc mill and make the parts yourself..

  3. #15
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    That sounds like the ideal solution but there's a lot more to it than that. Ask me how I know!

    Scott
    Consistency is a good thing....unless you're consistently an idiot.

  4. #16
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    Quote Originally Posted by Noodles87 View Post
    You guys are right....

    ....I still do not like the thought of some venture capitalist having major control of the business.....

    ....Now I'm faced asking myself many new questions. Is finding a partner capable in the ways needed, possible?
    Of course we are right.

    You are probably some distance away from getting the attention of Venture Capitalists. They normally become involved a few years down the road when you have built a fledgling company, and proved the viability of the product, and can demonstrate that there is an enormous potential for expansion, and can show that you have a management that can realise that potential once you have the capital needed.

    Don't be too negative about the idea of Venture Capital if/when you get to that stage. Yes, they do take a majority stake, but the agreements are often to the effect that they will not exercise control for a period of time, something like five years. You have almost free rein during these five years; which is why you need a management team that meets the expectations of the Venture Capitalists, they need to have the confidence to invest in you , and leave you alone. You agree that at the end of the five years you will buy them out for something like five times what they invested, or you will take the company public, or some other mechanism that allows them to get their profit. If you cannot do this, or will not do this, then they exercise their majority control, kick you out, and either liquidate the company, or put someone in who is going to do what they think is needed.

    So, you see, you do have the opportunity, if you have the ability, to prove yourself, and make a lot of money.

    But you are nowhere near their yet.

    Scott advises get a manager involved to do the stuff you cannot do.

    I do not necessarily agree, and we have been on different sides of this fence before. I boot-strapped my business up from nothing totally by myself, and the support of a wife and family who did not mind eating macaroni and cheese five days a week (the other two were crackers and water ) I taught/forced myself to do everything; managing, marketing, product development, sales, attending trade shows, being nice to people when I wanted to strangle them. It is possible if you are motivated, and I am very glad that I was motivated because now my wife and I are the sole owners of a very profitable, several million dollar company, and can enjoy life taking cruise around the world or relaxing in our backyard. And I get to play on the CNC machines in my home shop.

    Looking for partners, managers, sales people, whatever...is a thankless task. When you are doing it because you need to, you are in the position of a supplicant, you have no power. Years ago I needed a distributor, and I found one. Guess who became my first competitor when he told all the customers I had gone belly up, but that was okay he could get the product made by another company.

    If you can do it yourself, do it yourself. Keep total control and don't trust anybody any further than you can throw them. Never make commitments based on you going into debt, always set things up so that if you have to walk away from it tomorrow you are not saddled with a debt burden that has to be paid back. It is much better to take ten years getting where you would like to be, than five years going belly up.

    That ends my preaching for today.
    An open mind is a virtue...so long as all the common sense has not leaked out.

  5. #17
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    By all means geof, preach away!

    Personally. I would LOVE to handle this all on my own. I'm very confident that I'd be able to make it all work. Marketing, sales, customer service, design, R&D, you name it. That is one of the greatest things about the industry. The industry itself if you do things right....can make things far easier than they may normally be.

    My hurdle at this point is the financial aspect. I can front the money to get the working prototypes to prove the theory and concepts(for some things). My problem is going from prototype to production and how to get there.

  6. #18
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    There is a huge difference between running a service business and bringing a new product to market.

    It is a huge task.

    Scott
    Consistency is a good thing....unless you're consistently an idiot.

  7. #19
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    Bite the bullet and scrounge up the money to build the first parts. When you have a working product in your hand you have a lot more bargining power to work out production costs It's a lot easyer to sell a finished product then of an idea.
    Be carefull what you wish for, you might get it.

  8. #20
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    :idea:
    OK, this has not been mentioned yet, ask the government. >

    http://www.nationalgrants.com/ns/ngc/

    There is a HUGE amount of paperwork involved (ask me how I know!) but if you have your shi---stuff together and have a good plan you may be able to get a grant. These guys help every step of the way but you have to do the paperwork. They review the paperwork as many times as necessary to get it correct before it is submitted to the government. I have a buddy that is starting a trucking business through these guys, might be worth a shot.

    Grants are a real thing if you have the patients to jump through all the hoops.

  9. #21
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    Quote Originally Posted by Geof View Post

    I do not necessarily agree, and we have been on different sides of this fence before. I boot-strapped my business up from nothing totally by myself, and the support of a wife and family who did not mind eating macaroni and cheese five days a week (the other two were crackers and water ) I taught/forced myself to do everything; managing, marketing, product development, sales, attending trade shows, being nice to people when I wanted to strangle them. It is possible if you are motivated, and I am very glad that I was motivated because now my wife and I are the sole owners of a very profitable, several million dollar company, and can enjoy life taking cruise around the world or relaxing in our backyard. And I get to play on the CNC machines in my home shop.

    Off topic, but what is your business? Would you by any chance have a web site? I'm currently on the second or third step on the same ladder that you have already climbed, I'm just curious what product you sell.

  10. #22
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    I'd just like to thank everyone who's given their opinions and suggestions so far. I apreacite all of it.

    Geof. if you're willing, I'd really like to hear more from you. Here or PM if you'd rather it be there. Also, anyone else who's willing to share their experiences of what they've gone through and things they've learned along the way.

    Thanks again, everyone, its been great!

  11. #23
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    Quote Originally Posted by Noodles87 View Post
    ......Geof. if you're willing, I'd really like to hear more from you......
    I am always willing to prattle on, indeed I have been told on more than one occasion that I am too willing.

    But what to prattle about? I reviewed the posts in this thread, and I do not think there is one that does not provide useful in formation. So I am just going to prattle on different topics that may or may not have been touched on. Some of this is based on my experience or perspective, some from talking to other business owners, some from reading magazines and books. Probably none of it is truly original.

    Patents?

    If your product is really difficult to develop, dead easy to make, and has a market that can absorb kazillions...get a patent. Even if you do not have the money to protect it you will probably find someone who will, for a piece of the action, and even if you finish up with a minority share you have to remember that a minor share of something big is better than owning all of nothing.

    If your product is fairly simple to develop , but requires a big investment in machinery to make, and/or needs a lot of pre- and post-sale customer service...forget about patents. Put your money and effort into getting it on the market, build up your customer service capability and develop a reputation for being the best. You will get knock-offs of course, but they will never displace you.

    Pricing?

    Many moons ago I did a degree in science, and had to take some 'Arts' courses, so I took an Economics course designed for non-economists. Apart from all the jargon like monopoly, and monopsony, and elasticity of demand, etc., one thing a remember is it gave me a definition for the correct price, for anything. The correct price is slightly less than the next alternative. Notice that this definition does not take any notice of what it costs you to make and sell the 'anything'. Also, if there is no alternative, there is nothing to be less than, so you charge what the market will bear. My first business was making scientific equipment, and for one item I made I found out what was the typical maximum amount that a university researcher could spend without getting competitive bids...and set my price just below that. It was a great money-spinner for several years.

    Market Entry

    This is kinda related to pricing. You have a new product, the greatest thing since sliced bread (almost), how do you introduce it to the market? You can come in low and go for volume right away, or you can come in high; what are the disadvantages or benefits?

    The disadvantage to coming in low and going for volume is that you need a large amount of capital up front to finance the high volume production and advertising. The benefit is that if you are successful you, and your investors because you are almost certain to need them, can multiply your investment several-fold in a short time, and bale out before the market gets saturated.

    The advantage to coming in high is that you limit your sales so you have time to ramp up production. You recover the high inititial cost of low volume production. You actually find out what is the maximum price a portion of the market will accept, and you cream off this portion. As your volumes rise, and unit manufacturing costs decline, you can reduce prices and tap into larger, but price sensitive sections of the market. If somebody tries to compete with you it is possible you will have the flexibility to offer significant discounts for a limited time, and blow them out of the water.


    And that more or less exhausts my prattlefullness for the moment; actually truth be told, I am going to crack a bottle of wine, and my typing ability will soon degenerate.
    An open mind is a virtue...so long as all the common sense has not leaked out.

  12. #24
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    Thanks Geof! I always enjoy reading posts from you and a few others. They're very insightful. I don't think you'll from me, that you've gone and said too much! haha. So feel free to say as much as you'd like.

    Anyone else willing to share experiences, suggestions, and what not, as well?

    Thanks guys!

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