Starting any kind of new business is challenging, and launching a new electronics company is no exception. In fact, it can be downright frightening.
Indeed, in today’s marketplace, entrepreneurs have to contend with intense international competition and a slew of beloved domestic brands. However, with a quality product and judicious leadership, great things are possible.
Accordingly, here are four tips on how to launch a thriving electronics manufacturing company.
Prove Your Concept
If you look at the list of the greatest crowdfunding flops of all time, electronic devices make up half the entries. So, why do so many novel and appealing products fail to make it? The inventors didn’t prove their concepts before coming to market.
The importance of this tip can’t be overstated. If your iBackpack has a power supply problem you can’t crack or your laser shaver just doesn’t work, keep tinkering. Selling the public on a faulty prototype or nonexistent product will kill your business in its infancy.
Use Electronic Modules
If you grew up reading about history’s greatest inventors, you’ve likely imagined your first company as an artisanal enterprise. While the notion of leading a company that manually solders in-house components to its circuit boards is romantic, it’s also impractical. Wave soldering is essential to the viability of an electronics firm.
Moreover, your large-scale soldering operation should utilize electronic modules. Using prefabricated components is a good idea for three reasons. It saves on development time, it saves on production costs, and it helps with regulatory challenges.
U.S. law mandates that the Federal Communications Commission certify all new electronic devices to ensure that they don’t cause radio interference or emit dangerous levels of radiation. Utilizing pre-certified electronic modules in your production process will allow your company to cut through a lot of red tape.
Don’t Go Overboard on Infrastructure
If you answered, “Buy a warehouse and a bunch of equipment,” go directly to bankruptcy court.
As Entrepreneur explains, spending too much money on facilities and tools is a mistake. You don’t want to get locked into a long contract or a specific method of production early on. Instead, rent or lease a production space and equipment when first establishing your supply line.
Choose Your Vendors Carefully
Earlier this month, Qualcomm won a $31 million judgment against Apple for patent infringement. The semiconductor manufacturer alleged Apple copied its proprietary technology in its recent iPhone models. Apple contended Qualcomm was only suing them because the corporation gets its chipsets from Intel now.
The lesson any burgeoning electronics maker can take from that lawsuit is to choose your vendors very carefully. Perform an extensive vetting process before approaching a components company about a partnership. Similarly, work with an experienced attorney to craft an agreement that gives you a robust amount of legal protection if things go bad.
It’s always better to be safe than driven out of business due to spiraling court costs.