Protect capital. Try low-volume manufacturing.
High-volume manufacturing gives you the best price. Right? It is absolutely true that you will always get a better per unit price with a high-volume production run. It is also absolutely true that the upfront setup costs for high-volume production runs are steep. Low-volume production runs, as a first step, can offer a more sustainable path for most entrepreneurs and businesses.
When you are a small business looking to establish yourself capital is everything. Capital gives you choice. Capital gives you power. Capital gives you independence. If you are new no bank is going to give you a loan based on your patent and no bank is giving you a loan to make a manufacturing run based on a purchase order. The capital needed to bring your design to life will be coming from you or investors which means you want to treat it like gold.
Smaller production runs cost more on a per unit basis, but often not as much as you may think. If you can still be profitable with a low-volume production run then it is something to strongly consider as a first step. Here are a few examples of how using a low-volume production first strategy can help protect your capital.
1. Using low-volume manufacturing services such as 3D Printing and CNC Machining is a great way to protect valuable capital as there is no tooling required with these options and zero or almost zero set up costs with these options. A good option to consider if they line up well with your design.
2. Using rapid injection molding tooling (low-volume tooling) will give you parts that are exactly the same as a high-volume injection molded parts but the upfront capital costs required are typically anywhere from 25% to 50% of your high-volume mold, saving you valuable capital.
3. Low-volume production runs typically mean you will have product available to sell faster and the faster you can start selling the faster you can start replacing capital dollars with revenue dollars. If the market accepts your product you can keep selling and your valuable capital dollars stay intact.
4. Your design, as is, may not be perfect for the market, yet. Better to know this early on with feedback from the market based on your investment in a low-volume production run. If you find out that the market does not accept your product after you have invested all your capital into high-volume production setup, then holy…
When I look back at past projects I was involved with for bringing a product to the market there are several instances off the top of my head where knowing what I know now, we would have had much greater success if we utilized low-volume production more.