Entrepreneurs need to learn the ins and outs of nearly every aspect of running a business — and fast! What better, safer way to learn than from other people's mistakes? That's why we've launched the “What I Wish I Had Known" series — to share lessons that successful business owners have learned through experience. We hope their advice prepares and informs you for your own entrepreneurial journey. So far we've covered what seasoned small business owners wish they had known earlier when it comes to building a website, prototyping and financing. For tips on manufacturing, stay right here.
We've spoken with the founders of two businesses, each with a different manufacturing approach. Rosie Parkes, founder of Whistle + Bango, works with outside manufacturers to create stock enamel jewelry for her business, which she then personalizes by hand as custom orders come in. Will Chapman and Kevin Glover manufacture their high-quality artisan wood boxes themselves and co-founded The Box Bros & Company to sell their products. Though their manufacturing processes differ, most of their advice overlaps.
Fair warning: You may want to settle in — and bookmark this page — because this post is bursting with great manufacturing advice for small businesses and entrepreneurs. Hey, we did say there are TWELVE things in the title, and we'll go in-depth for some of these lessons. Without further ado...
Lesson 1: Prove your product before investing heavily.
“Never launch a product or service until you have proven that there is a strong, long-term desire for it," Parkes advises, adding that while friends and family are a good start, keep in mind that people love helping startups, so widen your testing audience. “Make sure you do as much research on the product that you plan to launch as possible — social media polls, LinkedIn, networking events. Pinpoint exactly who wants it and why."
Chapman and Glover also saw the value in finding and testing their market before spending large quantities on materials.
“We were sort of in this mysterious space and didn't know if there would be any return on our investment," Chapman explains, noting that he and Glover first used raw material because it was cheaper. The low price, he says, was a blessing and a curse. “It meant that when we sold, our profits were high, but it also meant putting a lot of work into our product to get it up to the quality we wanted. We ran through A LOT of sand paper — A LOT."
In a nutshell: Don't spend too much on materials before you know your product works and will sell.
Lesson 2: Heavily research before deciding on materials, tools and partners.
Do your research. Look for quality, a fair price and reliable suppliers. Try to get them on the phone as well as online. Parkes suggests to cross quote as much as you have time for and have a good understanding going in both of how much you can afford to spend and how much you actually need, being realistic in your sales predictions.
“Do not let manufacturers [or materials suppliers] pressure you into ordering enormous quantities that you can't afford to buy — or can't sell for that matter!" she warns. “Stick to what you need and don't budge."
Chapman and Glover learned the hard way not to order tools before knowing for certain that they'd be necessary long-term. “We have definitely bought tools that we no longer use," Chapman explains. “Do your research and find the right thing for the job. Research, research, research. Sometimes simple is better."
In a nutshell: Understand what you need, how much you need and the ins and outs of your processes before making any purchases.
Lesson 3: Invest in quality tools, materials and processes.
Remember how Chapman and Glover used raw materials while proving their product? Yeah, that didn't last forever.
“We realized that time is, in fact money. Once you have faith in your product, and you know it will sell, it is ok to streamline the process by spending a little extra," Chapman says. He and Glover now buy a more finished — and more expensive — wood which makes their manufacturing process simpler and faster. The Box Bros have also improved their tooling because, they say, the right tool for the job is crucial. “This is definitely the best lesson we have learned – that it's ok to invest in yourself. It only makes your product and process better, so you can focus on the next level of quality."
In a nutshell: “Don't go for the cheapest you can find because if the price looks too good to be true, it probably is," Parkes says. “Quality will be poor, and those first impressions from initial sales will kill you before you've begun. You will regret the choice for a long time."
Lesson 4: Create efficient processes for customization.
“We typically do large runs of our most popular products and have things sitting on the shelf, ready for customization," Chapman says, explaining how this strategy speeds up their custom order-to-shipment timeline. “We have begun to use laser engraving for more detailed work, which has made our process quicker. Now the thing we are most proud of, getting that perfect customization to the customer, is a bit less of a bottleneck."
Parkes, who says her business is built on personalization, says that these pieces of jewelry require a faultless level of attention to detail. “My orders are constantly being checked, checked and checked again. I'm always working to make adjustments to the process to better enable me to deliver personalized pieces to my customers within three days or less."
In a nutshell: Attention to detail is important and sometimes hard to achieve with large batch manufacturing. Hone in on what process works best for you business through trial and error.
Lesson 5: Plan for scalability.
To make larger production runs more efficient, which is essential to scale up operations, Glover and Chapman break each larger product into parts, creating each part repeatedly until they have enough. Assembly is the last step. “It's the old Ford manufacturing model," Chapman says. “People are good at doing one thing at a time."
Parkes' main scalability tip: “You've got to have a company picking and packing for you," she advises. “Set this up before you need it." She also suggests identifying two to three back-up suppliers and manufacturers just in case of emergency or for a large, watershed order. “You never know what may happen with someone else's business. Imagine if your number one manufacturer closed down."
In a nutshell: Don't wait for a dynamic sales boost before implementing efficient manufacturing and shipping processes. Have those in place from the beginning.
Lesson 6: Never stop experimenting.
Both companies constantly look for ways to improve their manufacturing and order fulfillment processes. And this doesn't have to be a chore.
“Have fun with it. Set a timer for every smaller part of your process and constantly be thinking about how you can do things faster and with better quality," Chapman suggests. “Every once in a while, take a day to try things differently and see what works.
In a nutshell: Don't keep doing things the same way just because it's comfortable. Consider how you can improve and experiment with new processes.
These next six lessons are for business owners who plan to work with outside manufacturers to produce their products.
Lesson 7: Research and network to learn the ins and outs of manufacturing in your industry.
When Parkes started out, she researched the best locations for manufacturing high-quality jewelry – which turned out to be the UK, Italy, China and India – before shopping around for the best price and quality. How did she go about doing this?
“I found and went to events for people who were starting fashion and jewelry businesses," she explains. “The Q&A sessions were very helpful and featured speakers who come from larger brands." She also suggests searching for online forums and chat networks where you can ask questions. Though they're not quite as useful, she says, they can still be handy in a pinch. “There's so much advice out there for small brands." If, like Parkes, you plan to start a UK-based business in the fashion space, she suggests you check out UKFT Rise.
While many are willing to help a scrappy startup, don't make the mistake of thinking you can reach out to your future competition. Rather than dole out their manufacturing secrets, they'll more likely think you're off your rocker. Instead, seek out mentors in other related industries – ones who may have relevant experience and can pass on their knowledge. “Look to your network," Parkes suggests. “Do friends, parents or siblings of your contacts have experience in your space?"
In a nutshell: Prior to making any decisions on manufacturing partnerships, narrow your search by seeking to understand the full manufacturing landscape in your business space.
Lesson 8: Understand the pros and cons of working directly with a manufacturer versus through a broker.
When outsourcing your manufacturing, there are two main options. You can push up your sleeves like Parkes did, doing the searching, the quoting and the communication yourself, directly with the manufacturers, or you can enlist the help of a broker. So how do you decide? Parkes was kind enough to break down the pros and cons of each.
When and Why to Go Direct
The main pro of going direct is that it saves you money. You'll learn a lot and you won't have to pay commission to a broker. So, when does this make sense?
“When your design is very simple and when health and safety legislation doesn't apply, like it would be with food or technology," Rosie explains, adding that this strategy is not only best for people with low-risk designs, but also for businesses that don't have a large variety of products and in industries where manufacturers are easy to come by, such as jewelry and fashion accessories.
When and Why to Hire a Broker
Brokers will know a lot more than you do about the manufacturing space, the best manufacturers and how to get the best prices. They also handle the communication for you, including if (or when) something goes wrong.
At what point it makes sense to use a broker? “If you have highly complicated, high-risk designs or will often work on a tight timeline, then it could be best to work with a broker," she explains, noting that products with a more complicated design, and especially ones with more potential legal issues surrounding them (i.e. that health and safety element), often require specialized manufacturers.
The right broker, she says, should have existing relationships with those manufacturers and will know which ones are trustworthy and what they do best. That said, be prepared to pay a commission on each of your orders and make sure you hire a broker you really trust, Parkes advises.
“You don't want to work with someone who might not have your best interest at heart," she explains. “They could encourage you to make larger orders to up their commission or to work with a manufacturer they have a deal with. Even so, I know that as I develop new and more complex designs, it will become riskier to go direct to a manufacturer. Language barriers, time differences, and no fall back when mistakes are made will — and have in the past — caused damaging wastes of money." Because of those reasons, Parkes is now more in favor of using a broker to do the dirty work and lower the risk on her orders, especially if a supplier starts to tell her that her minimum order quantity isn't big enough. “A broker might have a better relationship and more bargaining power with the manufacturer."
In a nutshell: Consider the pros and cons of working with a broker or directly with your manufacturers. Then decide which makes more sense given your product designs, especially their level of detail and risk.
Lesson 9: Have a solid plan for communication and feedback.
Looking back, Parkes wishes she had dialed her manufacturers' numbers more often to discuss each step of the process rather than relying on email. “People are more transparent on the phone, and you can hear confusion or confidence in a voice," she explains.
Her current favorite communication tools, especially for international manufacturers? Skype, WeChat and Whatsapp. “I am lucky that, thanks to our modern day high-tech world, I have any country I need to talk to at my fingertips. Always speak to your supplier on the phone or Skype, talking through every minute detail of your design, the materials and the expected finish."
In a nutshell: Pick up the phone — yes, even if you're a phone-adverse millennial. Don't rely on email and text messaging. Over-communicate when it comes to getting your designs right.
Lesson 10: Always order a sample.
“One time an entire stock order, for which I had been waiting for several weeks, arrived and was completely wrong. I had already transferred the money, so I had no comeback," Parkes remembers. That was a big learning curve. She says the fault came down to a misunderstanding caused by the language barrier.
“Always get a sample, even if it means you have to hold launch for a month," she urges. “It will be worth the time!"
In a nutshell: This one's pretty self-explanatory — never order a large quantity until you've approved a sample. And when you get that sample, try to break it. “You need to know its weaknesses," Parkes says.
Lesson 11: Work with a professional to create and document the technical aspects of your designs.
One of Parkes' biggest lessons is that it's worth it to pay a professional to create proper specifications for your designs, including minute measurements, color details and material details. “This gives you comeback if the stock turns up incorrectly," she explains. “Never assume your supplier can guess how you want your item to look."
In a nutshell: Make your briefs as detailed as possible, including professionally created product specifications complete with sketches, measurements, colors, materials, finishes and weight.
Lesson 12: Develop a friendly relationship with your suppliers and manufacturer.
The hard truth is that when you're a small startup, you don't have much buying power.
“It's hard to be at the top of your manufacturer's production list when you only order in small volumes, so it pays to have a healthy, friendly relationship with them," says Parkes. “They'll be more likely to do you a favor when you need it."
In a nutshell: Once you find a good supplier and manufacturer, treat them well!
Whether you decide to manufacture your initial products yourself or work with a manufacturer, we wish you the best of luck. We hope our entrepreneurs' advice helps point you in the right direction and saves you from potentially devastating early mistakes. Stay tuned for our next installment of this series. We'll talk everything branding!
Until then, let us know in the comments about your own manufacturing processes and lessons. We'd love to hear – and so would you fellow Weebly readers.