Six months and a failed business!

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Get help, and assist others in with open source kits and running a business! Do not ask for legal advice or for consulting services in this forum, only general biz questions!
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magician13134
 
Posts: 1119
Joined: Wed Jun 13, 2007 9:17 am

Six months and a failed business!

Post by magician13134 »

Well! I have yet again gained a higher respect for Ladyada! About six months ago, I figured I would follow her lead and start a "Kitbiz" of my own, and let me tell you - it is NOT easy. For those of you interested in trying it yourself, here's a few things I learned...
  • Make SURE there is an interest in your project before ordering
  • I mean, REALLY sure
  • Start small, not too small, maybe 100 circuit boards, turn 50 into kits
  • Use a prebuilt site. I made the mistake of trying to write my own. It failed. Unless you are up to a huge challenge and are a very talented programmer, use something like ZenCart to create your store
  • Planning kits means planning EVERYTHING. I ordered a bunch of bulk components, which led to me having to tape them together - either get cut tape or individual, tiny anti-static bags for components
  • Get the word out! I cannot tell you how important this is! Try AdWords if you're adventurous, otherwise, a local paper, classifieds, word of mouth, forums, this is the 21st century, it isn't too hard
  • Be polite, friendly and understanding when people contact you
  • Order at least 5% extra on your kits, some will inevitably get lost, or someone will claim they didn't get something (even if you are sure they got it, send it to them if it's reasonable)
  • (Hypocritical)Don't give up! (I'll be rethinking my business process and redoing my website and I'll give it another shot)
I hope this is helpful to anyone starting their own business or considering it. Feel free to add anything I missed if you've got advice...

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macegr
 
Posts: 293
Joined: Fri Apr 04, 2008 4:46 pm

Re: Six months and a failed business!

Post by macegr »

What's your definition of failure?

I think you're on the right track. The only points you mentioned that are super important are the interest, the bags, and Zen Cart. And for small quantities, you can usually get interest. If all else fails, eBay!

You want to limit the time that you actually have to touch merchandise. Time spent packing is time you aren't designing new products or finding markets. With my business, we actually have split the duties mostly down the middle, but we're maybe 3-6 months away from going three ways and spinning off an order-fulfillment business. I was thinking that we could actually provide the shipping service for other small-business electronic hobbyists; basically you forward orders and then the kit gets built and shipped with no further input. There's a certain level of sales before this is useful, but I wonder if more one-man shops would spring up if they didn't have to worry about the whole shipping hassle.

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nphillips
 
Posts: 60
Joined: Wed Nov 05, 2008 8:50 pm

Re: Six months and a failed business!

Post by nphillips »

macegr wrote:What's your definition of failure?
Bingo.

Don't forget, too, that appx 90% of all small businesses fail pretty quickly, and I think most of the "survivors" die off in five years (numbers are pulled out of a dark orifice, based off of real numbers I heard not too long ago). Not to be discouraging with that info...but more to let you know that "it's not just you."

Keep plugging away at it, learn from your mistakes, and from your successes, and build upon what you've learned.

@macegr: I love your idea about providing order fulfillment. I would certainly use that service, if I was at a point where I'm ready to sell. I think you are definitely on to something, there.

adafruit
 
Posts: 12151
Joined: Thu Apr 06, 2006 4:21 pm

Re: Six months and a failed business!

Post by adafruit »

it took me maybe a year before i was really getting going. it takes -time- to build a business organically, so 6 months is really not that bad

magician13134
 
Posts: 1119
Joined: Wed Jun 13, 2007 9:17 am

Re: Six months and a failed business!

Post by magician13134 »

Right, failure isn't really the right word here. Dead-end is better. So I need to back up and take a new path. Thanks for the input

leongriffin
 
Posts: 5
Joined: Fri Nov 20, 2009 3:44 pm

Re: Six months and a failed business!

Post by leongriffin »

Don't call it failure; call it iteration..

Leon

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lucidguppy
 
Posts: 5
Joined: Thu Oct 23, 2008 12:47 pm

Re: Six months and a failed business!

Post by lucidguppy »

So how did you handle the book keeping, taxes, and law stuff for your new business?

Ladyada how did you do this? Seems to me like a product selling or not selling on a website is the easy part. The hard part is the taxman and all that jazz.

adafruit
 
Posts: 12151
Joined: Thu Apr 06, 2006 4:21 pm

Re: Six months and a failed business!

Post by adafruit »

quickbooks & nolo press

Airbag
 
Posts: 7
Joined: Thu Nov 26, 2009 8:30 am

Re: Six months and a failed business!

Post by Airbag »

I don't understand what your problem is.
The projects you see here were just well-documented do-it-yourself electronic projects, right? First you have an idea, then you build it for yourself (when inspired by some purpose), then you document it and share it with the world, then if people are interested in your information, you turn your project into a kit so that even people with few electronic skills can build it - and then you have a business.
Unfortunately, people never were really interested in my projects in this direction - especially not the other BANNED -, so alas, I branched off to other directions such as applied physics. You just develop what you are good at, and what finds reflection in others. I think you need to be good in creative electronics first to run a kit business.

I made a robot project for graduation of high school around 2003 - I documented and systematized the end result in such a way that it eventually could be mass-produced, if neccesary. That seems the logical end result of working systematic on an electronics project such as a robot, a power supply, a preamp, a midi-controller or whatever popular electronic projects are around that inspire these projects these days.

http://www.xs4all.nl/~sbolt has some inspiring work in this direction. And it is just playing with electronics, then building something, then systematizing it (so that you document every step of the creation process), then provide it online so that other people can reproduce it, and eventually sell some half-fabricated kits for the beginner. I wish I were there yet, but I never had time and money to make as much progress in kit design as I see here at this site. Maybe I will in the future - just don't think you can create such things with money on your mind. Do what you do well, and the money will follow eventually, is an approach I always saw being confirmed in the end - LadyAda's kit business is no exception. It is cool, really. But I don't think you can ever succeed if your goal is a business in kits instead of being creative with electronics and just create stuff and document it for the sake of it. For which you need a lot of spare time, dedication, determination, and no worries about money at all. I don't think you get very creative in electronics by starting to think in terms of money and business.

But it is interesting to see you share these insights of yours. I sometimes wish I had such a business as well.

magician13134 wrote:Well! I have yet again gained a higher respect for Ladyada! About six months ago, I figured I would follow her lead and start a "Kitbiz" of my own, and let me tell you - it is NOT easy. For those of you interested in trying it yourself, here's a few things I learned...
  • Make SURE there is an interest in your project before ordering
  • I mean, REALLY sure
  • Start small, not too small, maybe 100 circuit boards, turn 50 into kits
  • Use a prebuilt site. I made the mistake of trying to write my own. It failed. Unless you are up to a huge challenge and are a very talented programmer, use something like ZenCart to create your store
  • Planning kits means planning EVERYTHING. I ordered a bunch of bulk components, which led to me having to tape them together - either get cut tape or individual, tiny anti-static bags for components
  • Get the word out! I cannot tell you how important this is! Try AdWords if you're adventurous, otherwise, a local paper, classifieds, word of mouth, forums, this is the 21st century, it isn't too hard
  • Be polite, friendly and understanding when people contact you
  • Order at least 5% extra on your kits, some will inevitably get lost, or someone will claim they didn't get something (even if you are sure they got it, send it to them if it's reasonable)
  • (Hypocritical)Don't give up! (I'll be rethinking my business process and redoing my website and I'll give it another shot)
I hope this is helpful to anyone starting their own business or considering it. Feel free to add anything I missed if you've got advice...

User avatar
westfw
 
Posts: 2008
Joined: Fri Apr 27, 2007 1:01 pm

Re: Six months and a failed business!

Post by westfw »

you turn your project into a kit so that even people with few electronic skills can build it - and then you have a business.
Ah, but there is a significant difference between having "a business" and having "a profitable business", and then another rather huge leap before you get to a business capable of being your sole source of income...

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