Technology is ever changing. So much you can barely keep up. It seems like as soon as you get the latest laptop or camera, it’s already outdated. This is great for the tech manufacturing sector. From touch screens to voice control, Innovation keeps that industry thriving. If you have a desire to jump into the tech manufacturing business and you’ve seen the 4-movies (and counting) about how Steve Jobs started Apple, you may be thinking this could be your story. However, starting a tech manufacturing business isn’t the same as it used to be. Here are 2 major ways the landscape of Tech Manufacturing Startups have changed:
START UP COSTS:
Before the tech boom, work was more labor driven. The UNIVAC I (UNIVersal Automatic Computer I) was the first desktop or tabletop computer as it was huge. To make one UNIVAC I took 67 staff workers. The good part was it was enough labor to go around. This was a big advantage for start-ups. Back then, an hourly worker was a cheaper solution for tech manufacturing.
Work is more machine driven. The cost for surface mount technology machines, which build circuit boards for cell phones and laptops, has tripled. Not to mention you also need equipment to test you’re the board’s quality assurance. Between product testing and storage costs for inventory, the expenses can add up to the hundreds of thousands very quickly. Just know if you are a planning to start a tech manufacturing business, you need to start pinching your pennies yesterday.
If you had an idea for a new product that would enhance people’s lives, you saved your own money to pay for it. Bootstrapping is a term for an entrepreneur who starts a company from personal finances. You and a co-founder would completely pay for everything by pooling your savings together and borrowing less. The good part is once the business begins to make money, you and your co-founder are in control of all operations with very little input from investors.
Today, securing funding is a lot different. Bootstrapping is still possible but difficult because technology costs have increased. It’s very possible you may need over a million dollars in earnest money before mass production can begin. This leaves entrepreneurs needing venture capital from an investor. To secure the funding, you may have to give a percentage of your business away to the investor. Once the business starts to make money the investor backing you calls all the shots and you become a supervisor of your own company.
That said, it’s still a great time to start a tech manufacturing business. Sure, things have changed but it’s even more reason to try. Who knows, you may create the next big technology must-have. Innovation is more rewarding than start-up growing pains. Go and start the next tech manufacturing business. The industry needs your creative ideas.