Manufacturing Start-ups - Navigating Common Pitfalls

Posted On 01 October 2022 By Protolabs

Starting your own business is hugely rewarding but not for the fainthearted. An estimated 90% of new businesses will fail and startup manufacturers face additional costs and pressures. Here we take a look at some common pitfalls and how to avoid or at least minimise their affects.

If you have taken the plunge then you will have spotted an opportunity and let’s face it small companies are agile and can solve issues that larger manufacturers have either not spotted or are too slow to take advantage.  In addition, many large businesses are looking to secure their supply chains which often means they explore options closer to home – which could be a money spinner for you.

The trick is often to get through those initial startup stages as a manufacture to ensure that you get it right and earn enough revenue before your cash runs out.

Will it sell?

Most businesses start with a great idea and a passion to make it succeed.  You may well have spotted an opportunity but it’s time to take off those rose-tinted spectacles and inject a dose of realism before you commit your capital to manufacturing.

There is no substitute for research at this stage and there is only a certain amount that you can do from your desktop or simply talking to customers, although this is important.

You may be tempted to move straight to manufacturing, not least because you can see your cash running out; but time spent doing initial “show and tell” research increases the chance that you will get it right and be able to cost effectively manufacture your product and then sell it at a price that is profitable.

Time is of course an issue which is why you need answers quickly. Fortunately, rapid prototyping can mean just that; if for example you upload your CAD into our online system you can have a prototype back in as little time as a day. 

First stage prototypes may simply be cost effective models to show to potential customers and investors.  It’s a lot cheaper to get feedback at this stage than when you’ve already committed to manufacturing.

 

Can you manufacture it cost effectively?

You also need to check that you can manufacture the product or part cost effectively.  Think about this right from the first design.  If you outsource early-stage manufacturing then your supplier should be able to help and advise you through the product development to early-stage production.

At Protolabs, for example, you can upload your CAD and get a design for manufacturability report back with a quote within a couple of hours.  Its automated so it’s quick and acts as an early sense check that costs you no money.

We can then help you with the prototyping through to manufacturing of a part. If your design needs altering before manufacture, it’s better that you know it at the design stage before you actually commit your money. And if you do need some advice then you can talk to one of our engineers at no extra cost.

You may decide to have several iterations of your prototype – from the first stage to see and feel a model for initial research and then latter prototypes to test fit, functionality and for compliance. Read our whitepaper “Rapid Prototyping Processes” to help find the right process for you at different stages of development before you move to manufacturing.

Running out of money

The number one reason that businesses fail is that they run out of cash.  It might be because they cannot sell their product at the right price, or perhaps they simply run out of money before they can earn any enough revenue to be self-sustaining.

One answer of course is to attract more investment – which is where prototypes can help.  But it’s also important to think about how you spend your seed capital, particularly in the early days before you establish your business.

Consider outsourcing early manufacturing

Can you make your product or part more cost effective to produce using your chosen manufacturing method?  Also do you need to commit capital to expensive manufacturing equipment early on or are there parts of your production process that you can outsource?

In the early stages you may not have the equipment or personnel with the right experience to answer these questions.  One of the great advantages of living in a more connected world is that you can see and control outsourced manufacturing from your own desktop.

It means that you can delay investment in equipment and also tap into the production expertise that such digital manufacturers have.  If you use Protolabs you can control the whole process from design, through prototyping to manufacturing and quality control from your desktop. 

There are a number of advantages of this:

  • you can get your product to market faster
  • you can market test small production runs and earn revenue while you do it
  • You can ensure that there is sufficient demand for your product before you commit to your own manufacturing
  • And you ensure that you don’t burn through your seed capital too early

The dangers of scaling up

And finally, even when you have a product that you know that you can sell and it’s time to commit to manufacture there are still pitfalls to avoid. Many businesses fail when it comes to scaling up their model because of the cost of equipment and also trying to attract skilled engineers and operators – but that is a topic for another blog so watch this space.

If you would like some advice about taking your concept through prototyping, product development to manufacturing then give us a call on (+44 (0) 1952 683047).

Or if you have a CAD and want to receive a design for manufacturability analysis and quote at no cost then click here.