From start-up to manufacturing scale-up
From start-up to manufacturing scale-up
For manufacturing starts ups proving that there is a market for your product is just the first step on the road to success. Scaling up for manufacture can make or break your business, it’s when the serious investment starts and will set the tone for the future – here’s what you need to consider before you invest in equipment and machinery.
Consider production from day one
At its most basic level you need to find ways to manufacture your products as cost effectively as possible so that you can maximise your profits and revenue. Your research has revealed that there is a market for product, but that does not mean that your business will be successful.
You need to consider not just your product but how you will manufacture it right from the beginning. Just because you can produce a part using say 3D printing as a prototype does not mean that you can produce the same part using injection moulding when it comes to manufacturing it at scale.
Beyond this even if you can produce the part using your chosen production method, ask yourself whether your design will produce your part at the price that you need for it to be sufficiently profitable. Could you tweak the design without affecting its functionality or quality in the eyes of your customers and produce it at a lower price?
Get the right expertise
As a startup you may not have the expertise in house to know the answers to these questions. In the long term you will need this expertise, but in the shorter term you can often find it elsewhere. You may employ a non-executive director for example or even look elsewhere such as your supply chain.
If you can find a rapid prototyping supplier who also manufactures products using your chosen final production technology, then they can help you avoid pitfalls further down the line. The sooner you consider final manufacturing during the development phase, the easier and cheaper it is to get it right before you commit capital expenditure.
If you use us at Protolabs this development starts when you upload your CAD onto our digital manufacturing platform. This provides a quote and also checks that your design can be manufactured. If it can’t, it will suggest design iterations that are needed or even ones that will make it easier.
Once you have uploaded your design and got the design for manufacturability feedback you can choose to talk to one of our application engineers for more nuanced advice. While automation is great, sometimes you need the feedback of another human to help you progress; for example, just because you can manufacture your design does not mean that you have the best or most cost-effective answer when it comes to production.
These are all questions that it pays to know the answers to before you make a hugely significant investment in equipment and machinery.
How are your finances?
It is often not the idea that kills a business, but the lack of cashflow in its early days. It means that scaling up requires careful thought and planning before you invest significant capital. Most startups will need wider access to financing options at this stage of their development and the good news is that if you have proven your concept then there are many businesses and individuals who will be willing to invest in your company.
You won’t have all the answers of course but having an idea of realistic sales projections for future cashflow is also vital. This will influence the scale of investment that you will need. This is a difficult period because if you leave such decisions too long then another business may spot the opportunity and take away market share, but equally you want to get it right to keep your production lines running to get a fast return on your investment.
Consider outsourcing manufacturing
Fortunately, in today’s age of digital manufacturing you can allow some wiggle room in your plans.
It may not seem obvious but you can outsource your manufacturing in the early days either completely or to help plug some gaps. Digital manufacturing allows you to control such an outsourced production line from your laptop.
You may for example invest in the core elements of your production line for your product but outsource some of the parts to keep early investment expenditure down. Using our online platform as an example you can control every element of this process from design, through production, quality control and the shipping date that you need.
As an alternative you may need to generate revenue and need production while you wait for the installation of critical equipment for your own production line, or perhaps tooling for injection moulded parts. This is where on demand manufacturing can help you bridge that gap.
Or you may decide that you need to run a pilot launch in a small area to better assess future market demand before you decide on the capital expenditure that you need for your own production line. This information would certainly help build your case if you need investors to get involved.
Scaling up is tough for any new business, but if you are a manufacturer on the cusp of investing in machinery or equipment then getting it right is critical for your future.
Fortunately, we live in a digital age so you can connect to relevant expertise when you need it, including from your supply chain to leverage skills you may not have in house. And in today’s age of IIOT this networking goes further; to include outsourcing product development and early manufacturing to help reduce your risk and capital expenditure.