sperry-ga:
Actually it’s a reasonably clear-cut process and if your idea is a
compelling one you can expect help along the way. You will want to
concentrate on the paper end of the process (e.g. Market Analysis,
Business Plan, etc.) before committing any funds to manufacturing. If
there are any ‘Kill Points’ you will want to discover them before
major capital is committed.
I noticed in the comments that you wanted to hand the selling off to
the to a third party. It’s a good idea to stick with your ‘core
competencies’, however as an entrepreneur you will still have to do a
lot of selling. You will have to convince Investors, Venture
Capitalists, and/or Angel Investors. But, we’ll come back to that,
first lets step through your questions.
-What does HTC do and don't do?
You bring the idea and the money and they’ll do the rest.
HTC, like a lot of contract manufacturers, offer a range of services,
from design (Software and Hardware) through Marketing to End User
Fulfillment.
The following is from HTC’s web site
http://www.htccorporation.com/index.html
Design
“Our staff will offer comprehensive support at every stage of the
product development process to aid ODM customers in delivering winning
products to the market.”
Marketing
“Our sales and marketing team will design product proposals that
ensure commercial viability for ODM customers. We will collaborate
with customers to manage product planning, including essential
measures such as usage scenarios, customer requirements, feasibility
studies, component analysis, product customization and value chain
analysis. We always design a product with a target market in mind.”
Fulfillment
“Through our global service network, we can effectively manage
international order fulfillment. This enables us to ship products to
our ODM customers or directly to end consumers worldwide.”
Remember all these services cost and anything you can pull in-house
and perform effectively will be money in your pocket. You should shop
and qualify the Contract Manufacturers to get the best deal and the
smoothest delivery.
-What would I, as the distributor and owner, be responsible for?
This goes back to how much you want to pull in-house. If you have the
distribution channels set up then that is your domain. If not, yet
that’s what you want to do, that’s something I would be glad to
address under another topic.
As an owner you will be the CEO responsible to your investors for the
profitable management of the company, unless you want to hire that
out, more about that under later under Funding.
-How do I get this process started?
Write a business plan. Use a proven template like the following.
http://www.sba.gov/starting/indexbusplans.html. I would suggest
avoiding business plan software or online business plan sites. What
you and your investors want to know is will the business work and the
only way to document that is by carefully considering and answering
the questions contained in a business plan.
-How does one get funding for this?
There are three main sources of money for a venture like yours. 1) The
manufacturer, providing services for an equity stake. 2) Angel
Investors, people in the community that have money to invest and enjoy
the process of participating in business startups. 3) Venture Capital
firms that invest other people’s money.
I’m sure you heard the quote about if you build a better mousetrap the
world would beat a path to your doorstop. It’s not true. You will have
to locate the funding sources in your community and sell them on how
much money you will make them.
Professional investors guiding interest is a return on investment that
is better than the stock market or other investment vehicle. Just
remember that Angels and VC’s are focused on the harvest, when they
can cash their chips in.
Other than a solid business plan demonstrating a viable market and a
strategy for capturing it, Angel’s and VC’s will want to see a strong
seasoned team, especially now after the .com bust. You will hear
someone along the way say that they will back a grade ‘A’ team with a
grade ‘B’ idea over a grade ‘B’ team with a grade ‘A’ idea any day.
This can’t be underscored enough. If you don’t have the selling,
financial, marketing, or other required skills you will have to find a
team that has them. The team is what the investors are betting on.
This may mean that you may have to step a side as CEO and sit on the
sidelines, this happens frequently and can be a painfully experience
if you are not prepared for it.
I would suggest not focusing on the funding now. Write the Business
Plan. It will highlight what you know and what you will have to learn,
but more importantly it will give you the knowledge and confidence
when you are convincing potential investors.
Remember the VC community and Angel Investors are actively looking for
the next opportunity. If you can structure it they’ll fund it.
I hope this serves as a point of departure for you and Happy Trails!
Waldo |
