[sdiy] Pitfalls of the synth 'small business'

[Peter Grenader]

Other points:

A) For those who are abundantly responsible, don't like to take risks, or
who do not happen to be protected by a trust fund, any small business
venture -- ESPECIALLY analog synth manufacturing -- may not be for you.

If you're the type who's perfectly willing to jump into a bog and figure out
how deep it is once you're in there, what are you waiting for...start
building synth modules asap.

B)  If you do do this, I strongly recommend that you arrange payment terms
with your major suppliers and  that you make it a point to pay them back on
time, every time.

C)  While the temptation to purchase parts from the humungus one-stop
outfits such as Mouser, Digikey, Allied, etc is great, a little web browsing
can and will land you some incredible deals on the same high quality
component parts you would have bought from the 'big boys'.  If you knew the
deals we've landed by doing this you'd be flabbergasted.  You've got to buy
more than you may need this way, but in our case anyway those quantities
were pretty much free due to the per piece savings.

D) Avoid the temptation to purchase off the wall, wack, or otherwise bizarre
surplus parts which *may* work, just because they are cheap.  If you're not
absolutely sure of the long term reliability of everything you stuff into
your assemblies it's going to bite you in the ass one of these days.

E) Whenever and as soon as possible, arrange for outside manufacturing if
your outfit is not self-equipped with individuals to do this.  The only
thing worse than your life becoming tied to a soldering iron is having to
feel guilty to design new products because it takes you away from those
shackles. The $15 your gonna give up paying for this service is well worth
the increase in productivity and in a lot of cases, the outside assemblers
are going to do a superior job than you would anyway.

F) Remember - a built assembly is a module, but it's not a product until
it's packed in a box and ready to ship.  Do not overlook  packing and NEVER
takes risks in this regard.  Design your packaging as well as you design
your circuits.  There's nothing worse than getting the call or letter that
this thing you toiled on for days arrived at your customer's place in three
pieces.

G)  Don't overlook the mechanics of electronic product design.  You're not
just producing an electrical circuit, you're making an electro-mechanical
devise that will hopefully last years and years.  More times than I would
like to comment on I've seen very wacky mechanical conventions in place to
mount boards to faceplates or make interconnects.

That's the ying.  The yang of this scenario is don't overdue it.  Do all of
your connections require heat shrink just because it looks cool?  Does your
cabling really need to be twisted pair?  Do your service loops have to be
quite that big? Do these add to reliability or performance, the structural
integrity -or- do they actually just introduce another part which will add
long term reliability risks?  If you've spent time as a reliabilty engineer
(I have), you know that the less parts, the better. There's a long standing
misconception that heat shrink will improve the strength of a solder joint.
Dude, if you're relying on heat shrink to make a bad solder joint good,
you're in the wrong bid'ness.

H)  Design servicability into your products.  Nothing lasts forever and no
matter what you do as a safeguard, your customers are going to blow your
shit up once they get it.  That ain't the problem, the problem is designing
something that cannot be easily serviced.  Always take this into account.
Are the trim pots located so that they may be accessed easily when power is
applied?  Can all parts of the assembly be removed or replaced with a
minimum of de-contsruction?  I recently repaired a module (not of my design)
which required that a 17 wire cable harness be de-soldered in order to
change one cap on the PCB. There were also three switches soldered via solid
core busswire that I had to yank to get to the problem area as well.  At
very least, it's going to cost your customer more to repair the unit if it's
out of warranty.  The worse case, it's going to take you more time to repair
it (at no charge) if it IS in warranty.

hope this helps -

- P



Paul Schreiber wrote:

> Rule #1: you must value your time at either $0.00/hr or $75/hr. There is
> *nothing* in-between that makes sense.
> 
> $0.00/hr is if you have no children, and your wife/girlfriend has a job, or
> you 
> live alone.
> $75/hr if married with kids. If you have a 'day job', the rate is $100/hr.
> 
> Point: if married, you have to very carefully balance the time factor. Expect
> to 
> do the *majority* of the work late at night (say 9PM-1AM, like me!). Time is
> what you have the least of: you have to *plan in advance* exactly what you
> will 
> do every day to generate $$$. You can't afford to dwadle on the internet. You
> have to go-go-go with a purpose.
> 
> Rule #2: Electronics is NOT A CHEAP HOBBY/BUSINESS.
> 
> In order to do it "right", you have to have decent stuff, a large workspace
> (seems to be difficult in EU) and inventory. You need bench test equipment
> that 
> HP or Tek made, not you :) You need parts storage, record storage,
> book-keeping. 
> You need boxes, tape, puffy folders, stamps, labels and customs forms.
> 
> For pcb: this issue is minimum buys. I have to buy 50pcs at a time or more.
> There is a big price drop over 150pcs (not *total*, for each module) but then
> that's more total $$$. You can panelize so that 1 large panel has 6
> *different* 
> pc boards, but then you have no control over inventory levels if 1 is a big
> seller and 2 are not.
> 
> Rule #3: Cash flow is *KING*.
> 
> Cash flow is what kills off most "hobby-to-business" ventures. Your suppliers
> want to be paid *before you can ship*. If you then try to get money up front
> (like "pay me 1/2 now"), expect many hostile emails because human nature is
> that 
> once you have *some* money, you are under more pressure (and all of it
> negative) 
> to ship. Even though you've been in business 8 years (cough), people act
> *COMPLETELY DIFFERENTLY* if you have more than $10 of their $$$ versus just a
> order in hand. The attitude is: You have MY money, I want MY STUFF!!! Ask
> Brice 
> about PSIM and Cynthia at Cyndustries about this. Personally, I'll never do
> this 
> again.
> 
> If you have no money to begin with, *DON'T EVEN TRY*. You are better off
> *saving 
> up for 6 months first*, get a few $1000 in the bank, THEN start. NEVER use
> credit cards to buy stuff unless you pay 100% of the bill when due.
> 
> Rule #4: do not be afraid to charge what is needed.
> 
> Don't try to offer Moog 960 clone pc boards for $10/set. Charge at LEAST 3X
> what 
> stuff costs you. I remember talking to Dave Rossum of EMu in 1977 about this
> thing: he said they charged 6X the parts cost and made just enough money to
> support 2 full-time people.
> 
> Rule #5: the market is big, but not THAT big.
> 
> Understand that selling 100 of *anything* in this market is A LOT. Focus on
> doing a good job selling 25 at a time.
> 
> Paul S.
>