Many startups will reach a stage where they must find someone to manufacture their products. Whether you are manufacturing in the USA or with a Cuba business, this is the important moment where the idea that pushed forward the startup becomes an actual physical item. As the owner of a startup at this point, you may be concerned what whether this stage will go well. Moving into manufacturing products can be costly and risky for your company. There are ways to decrease this risk though. Here are 5 tips to manufacture products for your startup.
Do Your Research
The best way to avoid disaster when choosing a manufacturer is to do as much research as possible before picking one. While capable manufacturers are out there ready to help your company for a reasonable cost. There are also a lot of shoddy manufacturers and scam artists. Get references from potential manufacturers and check them. In doing research, also consider where the manufacturer is located, and how that will affect transport costs. A mistake when picking a manufacturer can be costly. Don’t make such a mistake through lack of preparation.
Be Concise In Communications
When writing emails to your chosen manufacturer, be clear, short, and too the point. Remember when communicating with them that they are considering you as much as you are considering them. Asking too many questions or describing too much detail can make you look unprofessional or demanding. If the message is too long, you also risk the manufacturer deciding you contract isn’t worth the trouble and turn down your offer. Efficient communication can certainly accelerate your business performance. Consider how you look in correspondence and write appropriately.
Hire An Agent
If you hire and oversees manufacturer, make sure you hire a local agent. This agent will represent your interests at the factory and solve any disputes. This is the only guaranteed way to make sure a foreign factory produces your products to normal quality standards. An expert agent can also make sure the factory operates efficiently. They understand how business is conducted in the country you choose. As a result, they can make sure you get the best results out a foreign manufacturer.
If your startup is cash-strapped, you can save money in manufacturing through a license agreement. Instead of hiring a manufacturer to produce your product for a fee, you can license, or rent, the product to the manufacturer. They then handle the building, distribution, and marketing. They then pay you a royalty and keep the rest. This is one strategy that works for struggling companies who are just getting started. While this royalty is less then the profit you could make, your company doesn’t have to have upfront cash to start the process. Licensing also means that you must trust the manufacturer more than you would if you just hired them.
The best way to protect your investment is to start small and gradually expand. This ensure that if your manufacturer isn’t up to the task, you won’t lose all your money at once. This will also give you a transition period to get to know your manufacturer and establish trust. Slow growth will also ensure that there is a continuing market for your product. This gradual process will preserve your funds while building you experience.
A few tips can help you sort out how to manufacture products for your startup. Do thorough research before picking a company to manufacture. Keep your communication with the manufacturer short and to the point. Hire an agent if you are hiring a foreign factory. Consider a licensing deal if you are strapped for cash. Start slow and build your capacity slowly. Keeping these tips in mind will ensure your dreams become a practical reality.