Starting a microcontrollers kits business

[Arkham00]

Sorry ... maybe the following is a bit off-topic here.

Few days ago, I read on EDN magazine a nice article about the 15 steps to start a successful small business to design and sell microcontroller kits.
**broken link removed**
The article was nice and so the comments. Someone says that you are wasting time and money and other say that you'll earn a lot!
I think it's difficult today, with the world that's a single huge market, to have visibility and every product you think and design will have very strong competition from lower cost countries ...
What do you think? Does it make sense to leave an engineering job to try to start your own business or even good starts will terminate in a couple of years?
Do you have such business experiences to share?

 

[richard.c]

Hi Arkham,

You are trying to enter a fiercely competitive market, so any thoughts of giving up your day job should be left until your business is actually making enough money to support you and your family.

You need to address all the fundamental business issues - like what have you got now that will sell better than others ? - and why should it ?
What can you do in the future in a quickly changing market, can you beat the Fast East guys, have you got the technical expertise or a particular product like BlueRoom Electronics JuneBug to stay ahead of them ?

If you can clearly define your market and product/s then produce a standard business plan, that the banks usually ask for, which should include cash flow projections etc. - bear in mind that projections are nearly always over estimated.
Also investigate the time and costs involved in shipping goods around the world as these can dramatically affect your selling.
A classic example of this is Microchip Direct who would sell me a Pickit2 for $35 but try to charge me almost as much again in carriage charges !

Doubtless many people do not bother with the things mentioned above, if you prefer to try it your way, put a specific amount of money into a local savings account and use it as if it was a true business account, market your products in your spare time, using Ebay etc .
If the account money runs out - then you have a fixed loss and know not to continue any further.


HTH

Richard

 

[arhi]

What do you think? Does it make sense to leave an engineering job to try to start your own business or even good starts will terminate in a couple of years?

Hi, AFAIC you are in Italy. That might be the "issue" as 90% of the "shipments" would be abroad meaning "expensive", "complicated", "slow".. On top of that, you have few competitors in the region, you have one in Croatia, one in Serbia, 2 in Germany, one in Holland .. those are just the ones I know about... Add to the issue that Microchip have distributors in 99% of european countries (for e.g. PICkit2 Debug Express that is 49.99$ on MicrochipDirect cost 55$ at local Microchip distributor, 39E to be precise including VAT, and this is Serbia! the last hole off the world, elco is here 200% more expensive then in rest of the europe)...

I can give you some second/third hand info about mikroE as I know people who know the people owning that company... most of the profit comes from compilers, 99% of the business is export - so only 1% they sell locally... they manage to live well, pay good wages to employees from that business alone (cost of living in Belgrade is cca 10% higher then cost of living in Rome from what I compared with few friends living there)... It took them time to get where they are and for long time they had "real job" while developing those compilers and dev boards...

IMHO, it is much more cost efficient to make a deal with some "good" supplier, for e.g. microchip directly or blueroom from canada and resell the boards while offering support, expertize and custom solutions, then starting up the business from scratch...

just my 0.2$

 

[Arkham00]

Thank you Richard, thank you Arhi.
Your words are my doubts. I think I'll not start my business: to difficult to find the "killer product" and too money investment in trying to be a reseller.
But ... what do you do? Do you work for a company and do electronics in spare time or do you have your own business? In the forums I see a lot of people with very strong expertise (and a lot of people, too, that want a reply without even reading the first page of a manual) that could work as a successful consultant or in a personal business but it seems that it's just an hobby ...

Arkham

 

[arhi]

for the resale, it might not have to be "too much investment" ... you can check out with manufacturers and get initial calculations ... as for what we do .. I for e.g. work in some company, doing something that is absolutely different from what this forum covers ... and not even remotely related to it's content .. elco is my hobby, I like it, I know bit about it .. but I only spend money on it, do not earn for bred and butter with it... it is my window to the real world as I'm sick and tired of purely virtual things I do whole day

 

[Alexandra]

Greetings;

First and foremost, are you looking to make money or are you doing this as an enjoyable business venture? You can only pick one, though the other may trail as time goes on, but first pick one of these options.

If you are opting to build the business for money's sake then just keep putting your money into interest bearing bank accounts and you will be nicely compensated for your efforts by the time you retire.

If you are opting to build the business because you enjoy doing electronics, then I say GO FOR IT! As with every entreprenuer that I know, they started a business in the area which was their hobby. After some time they nurtured it and grew it into a nice comfortable business.

They didn't worry about whether it would make money, they had their day job and more importanltly, they we enjoying every minute of what they were doing whether they made a sale that month or not, though they kept a mindful eye on trying to create income.

I have built a few businesses and can vow from first hand knowledge that doing it for primarily money will render you ill with sleepless nights, cashflow problems, stress, relationship problems and headaces.

Also, I swear by this rule of thumb:
The fastest way to kill your dreams and your business is to go into business with a partner. You get half the profits and twice the liabilities!

If by chance you ever do have a partner, make sure to obtain no less than 51% of the business ownership.

Start the business by your self. As you grow you can hire help as needed. Plus, you can always fire bad help, you can never fire a bad partner.


If you are still unsure whether you want to start a business or not, I suggest the reading of the bible of business; THINK AND GROW RICH, by; Napoleon Hill.

They also have free downloads of this book out on the net. If you need a copy please email me and I will forward a PDF version for anyone who wants it.

Best Wishes and I hope you follow your dream! You will regret it if you don't.

Alexandra
ElectroTechOnline@CatJammies.com

 

[petrv]

THINK AND GROW RICH .... yes I have enjoyed that book, it is certainly an interesting reading. I was also thinking about starting a business (certainly more for a fun than money)
but I am not sure if all the paperwork and bureaucracy is not too much a burden.

Petr

 

[ericgibbs]

But ... what do you do? Do you work for a company and do electronics in spare time or do you have your own business? In the forums I see a lot of people with very strong expertise (and a lot of people, too, that want a reply without even reading the first page of a manual) that could work as a successful consultant or in a personal business but it seems that it's just an hobby ...
Arkham

hi,
I would recommend that you start your own business.
For the first two or three years you will most likely be in debt, thats not unusal.
Just keep your cool and dont panic when the money runs short, the customers can smell the sense of failure.

Its who you are debt to that matters, avoid venture capital, they want to have a big say it how you run your company.

The Banks are fair, you need a good business plan, they will want guarantees and possibly some security.

I started my own electronics company in 1980, using the Banks money.
We were quite succesful and within 2 to 3 years, funding all our own development and manufacturing, I retired in 2006.

Find a 'niche' in the market, its no good trying to copy other established businesses.

Finally NEVER go into partnership within a business.
If you are married or have a close girl friend its 100% essential that you get her full support,
also she can go on the payroll when times are good.



Regards

 

[ericgibbs]

THINK AND GROW RICH .... yes I have enjoyed that book, it is certainly an interesting reading. I was also thinking about starting a business (certainly more for a fun than money)
but I am not sure if all the paperwork and bureaucracy is not too much a burden.
Petr

hi petr,
You can get a qualified Book keeper, to work one day a month to deal with all the paperwork.
An Accountant will do the company annual returns.

Working for yourself can be fun, if what you are doing, is your hobby, you will never work a day in the rest of your life.

 

[Alexandra]

Petrv;

You can start by doing what many hobbyists do. Just start doing whatever it is that you enjoy doing and start to market your goods or service to local like-minded people. You do not have to "start the business" in a formal fashion, do some research, some R&D just for the fun of it.

Start to study other people doing similar things. Ask them questions about their business. Find out what their trials and tribulations were when they first started out in business. This way, if you do legitimately start a business you will already be that much further ahead and prepared.

You are creating a "Schematic diagram" of your business, or better known as a business plan.

Follow me on this analogy...

Can you ride a bike? Most people can. When you first started to learn how to ride, were you concerned about falling and skinning your knee, or breaking a limb? Even if these were concerns, the desire to gain your freedom on those two wheels was far more alluring than the possible pain of falling, yet you prevailed nonetheless.

Who cares about the paperwork and bureaucracy, That's what book keepers and accountants are for. As a mentor once told me... Do what you do best; create, and let everyone else do what they do best, your books, your accounting, your banking, your payroll, etc.

Remember this... when the fear of something you want to do overrides the joy of doing it it's then time to find something else. Ask every man and woman if they were afraid the day they got married, took a final exam, went on a first date, over charged their first electrolitic capacitor.... the answer is YES all the time.... Yes,they were scared, but they did it anyway. The enjoyment altimately exceeded their fear.

And frankly, answer me this question..... How excited do you get when you put on a pair of pants, drive to the store or watching tv? Probably not too excited, right? There's also no fear involved...

But... parachute from an airplane, repel off a mountain, snowboard a steep hill.... These all create a sense of fear thus, will ultimately result in ENJOYMENT & ACCOMPLISHMENT!

How exciting is it to watch a gold fish??? not very... how exciting is it to watch a shark, or tiger, A T-Rex... Much more exciting... ONLY because they are feared preditors of humans, or were...

Fear propels us as well as keeps us alive!

Now that I've lectured you, and probably bored you to tears, go out there and do what ever the hell you want.... Start that business.... Build that circuit.... Fear is a good tool to have. The day people lose fear is the day they overstep their boundries and die!

Petrv, "F" the paperwork and bureaucracy! Just go out there and enjoy your dreams!

Mind you, I am not suggesting to quit your job and start a business, that will surely kill you... but I am saying, Just Start Doing What You Enjoy, the money will ultimately follow! You will know when to transition from your job to your business, if you even feel the need to.

If you have any questions please do not hesitate to ask. I will gladly assist you in any way that I can. Entreprenuership can be awsome!

Alexandra
Pittsburgh, Pa. USA

 

[Hero999]

In short, I think you should just start doing it for fun, then if you're really sucessful good for you but the chances are you won't be so don't give up the day job.

 

[ericgibbs]

hi Alexandra

Just Start Doing What You Enjoy, the money will ultimately follow!

Sorry, I cannot agree with that part of your posting.

I have seen quite a number of businesses fail, where the owners are enjoying themselves in what they do, but have little idea how to run a business.

I am not saying they should not enjoy what they are doing, its a case of remembering its a business and they will have to do lots of things they dont enjoy.

 

[Alexandra]

Eric, I do see what you re saying, but I think you missed my point, or maybe my point was not articulated clearly, either way, I am saying to start your hobby, Not the business at first. once the hobby starts to emulate a business by means of income and a client following, then and only then do I suggest formalizing it into a business.

Mind you, this can be performed from the basement of your home. There is no need to run out and occupy a commercial building with all the expenses associated with it.

Every one of my business started from one room within my house, then branched out to where I bought the building rather than rent it. then I rented excess space to other people thus offsetting my total expenses. But being a landlord may not be for everyone. It was just the option that I chose.


I do apologise if my posting lacked clearity. Yes, I do agree with you, we do things in business which is not fun and sometimes dawnting but, the enjoyment of the hobby / business shall overcome

Alexandra

 

[petrv]

Hi Alexandra I guess you must have a lot of experience with managing a business.