| The Breakroom > The Water Cooler |
| How do you go about starting a small manufacturing business? |
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| S. Heslop:
--- Quote from: DavidA on June 30, 2014, 04:27:04 PM ---Maybe best to make one through to completion and estimate your time from that. Then see if it sells. Have you made them before ? Dave. --- End quote --- Never made one from scratch but i've repaired a few of them (not exactly to a fine luther standard though). I had a surprising amount of fun making 50 hooks and nuts for a banjo pot that was missing them, and with that amount it was worth giving it some thought as to how to produce them the quickest. I ended up putting a hole in the end of a steel bar with a polished round-over, and used a ground up chisel to push (with a hammer) the 4mm brass rod into the hole to bend the hook. Then used a fixture in the lathe toolpost to hold the things for cutting the excess brass off. It was quick and worked pretty well. Ever since i've been thinking about finding another 'batch' process to play with, and making whole banjos could be alot of fun. The internet also has alot of opportunities to market them. --- Quote from: RodW on June 30, 2014, 04:21:55 PM ---Don't price on time and materials, price on perceived value and the competition. Make sure you have enough fat for distributor pricing and the ability to outsource some manufacturing. Start high! Sell your products uniqueness, not just your time! This is what I did and it has paid for everything in my workshop. as for VAT/GST, I went to our tax man and asked them to backdate it after a quarter. Your expenses are high starting out so you have a lot of tax credits. Take some advice from an accountant. Go with your passion! --- End quote --- One thing i'm concerned about is that when it comes to banjos there's the cheap Chinese ones, and then there's the ones produced by the artisan craftsmanne type of instrument maker. With those I get the feeling they're selling more of an idea than an actual instrument, and it's not something I could (or would want to) try and compete with. But yeah until I produce a first few banjos there's really no telling if there's a market for what i've got in mind. |
| hanermo:
Some good advice, from both ends, re:pricing. You can be cheap and cheerful, or very good and high end. You cannot be both. If you go for the cheap end, you are competing against established processes with automated tools. You are unlikely to be succesful in competing with them - unless you have a direct sales channel. This may be captive market, uniqueness, relationships (clubs, known-avanues, location, affinity to a product or hobby or area of expertise etc). Selling cheap seldom succeeds. Ie unless you have sufficient margins, any success you may initially have will cripple you, as you cannot afford to expand, and cannot pay for the (usually very much more expensive) tools and processes you now need to produce in larger numbers. Planning in terms of money is the most important issue. The ONLY issue. (Unless you get lucky. A huge nr of businesses work not because they did it well, but because they got lucky with product pricing/market and demand. Paypal and makerbot are two examples. So is ebay.) YOU need to know YOUR numbers. In my experience, 99% of people never do this. Numbers means; What does it cost ME to do A, in terms of pieces, hours, materials, opportunity costs. Just because you are subsidising it from your garage, does not mean its free. E.g. Plan it like this: IF you cannot do item(s) b yourself, where can you get them ? At what cost ? How long does it take ? At what price do I now need to sell them ? If you dont plan to pay yourself a salary (with taxes) you dont have a business, you have a hobby. A succesful business makes profits. Profits are what is left over after taxes, and paying off the machines, and paying off the workers. Do you want to be a 10$/hr piecework worker ? Both yes and no is fine. Being honest with yourself is likely a good idea. Once you have a written plan, ie spreadsheet, with numbers, the financial success is much more likely. There is nothing wrong with a hobby that generates some extra cash. Many mechanics and tinkerers (musicians, marine stuff, motorbike stuff, RC stuff, model-engineering, ewc.) do so. |
| Lew_Merrick_PE:
Ah, come on, does nobody remember that to start a small manufacturing business, you start with a big manufacturing business -- and wait! ;-) |
| BaronJ:
--- Quote from: S. Heslop on June 30, 2014, 08:50:32 PM --- --- Quote from: DavidA on June 30, 2014, 04:27:04 PM ---Maybe best to make one through to completion and estimate your time from that. Then see if it sells. Have you made them before ? Dave. --- End quote --- Never made one from scratch but i've repaired a few of them (not exactly to a fine luther standard though). I had a surprising amount of fun making 50 hooks and nuts for a banjo pot that was missing them, and with that amount it was worth giving it some thought as to how to produce them the quickest. I ended up putting a hole in the end of a steel bar with a polished round-over, and used a ground up chisel to push (with a hammer) the 4mm brass rod into the hole to bend the hook. Then used a fixture in the lathe toolpost to hold the things for cutting the excess brass off. It was quick and worked pretty well. Ever since i've been thinking about finding another 'batch' process to play with, and making whole banjos could be alot of fun. The internet also has alot of opportunities to market them. --- Quote from: RodW on June 30, 2014, 04:21:55 PM ---Don't price on time and materials, price on perceived value and the competition. Make sure you have enough fat for distributor pricing and the ability to outsource some manufacturing. Start high! Sell your products uniqueness, not just your time! This is what I did and it has paid for everything in my workshop. as for VAT/GST, I went to our tax man and asked them to backdate it after a quarter. Your expenses are high starting out so you have a lot of tax credits. Take some advice from an accountant. Go with your passion! --- End quote --- One thing i'm concerned about is that when it comes to banjos there's the cheap Chinese ones, and then there's the ones produced by the artisan craftsmanne type of instrument maker. With those I get the feeling they're selling more of an idea than an actual instrument, and it's not something I could (or would want to) try and compete with. But yeah until I produce a first few banjos there's really no telling if there's a market for what i've got in mind. --- End quote --- Reading this, you aren't looking to start a business, you're looking to start a hobby ! |
| CHA5:
--- Quote from: Baron on July 01, 2014, 02:37:12 PM --- Reading this, you aren't looking to start a business, you're looking to start a hobby ! --- End quote --- To be fair, a hobby that pays for itself, or at least contributes is a good thing, but it should NEVER be confused with starting a business ! I'm gobsmacked that more folk aren't making a little money off what they 'enjoy' as a hobby. |
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