It’s every inventors dream to commercialize a product and be rolling in the dough within a couple of years. But in the real world, most startups take at least five to seven years to turn profit. If manufacturing, try 10 to 12.
“One of the things I’ve learned is that it takes twice as long to do everything,” said Shay Curran, founder of Integricote, a startup that manufactures nanocoatings for wood, masonry and concrete out of the University of Houston. “Take that, then add another 50 percent.”
For Curran, who has poured his life into his startup along with many of his dedicated employees, he’s beginning to see some dollar bills on the horizon as he approaches year six. It hasn’t been easy.
“I’ve had one week-long vacation in five years,” he said. “Some of my guys haven’t take a vacation yet. We see some 18 hour days, seven days a week. It’s hard work.”
In today’s manufacturing environment, there’s a few things that greatly slow down a startup, according to Curran, who encourages budding business owners to learn from others before heading down the same path.
Find the Right Space
One of the biggest potential headaches for manufacturing startups is finding the appropriate space. Sure, if you’re a tech startup, you can do business on your laptop at Starbucks. But if you’re manufacturing a product, there’s more you need to consider than available square feet.
“Most startups do not realize all the regulations that govern manufacturing products in a space,” said Curran. “If you don’t pre-plan for these issues, it’ll greatly slow you down.”
Integricote originally leased affordable office space at UH. While excited to be operating out of the university, Curran quickly learned that space coded for offices greatly restricts the storing of chemicals and other products.
“We could only store so much raw product in the space we had due to fire codes, so we couldn’t buy bulk,” said Curran. “That drove up costs for us.”
So even though the space was affordable and a great location, it ended up costing Integricote more money and slowed their progress.
Curran was able to move operations to the Innovation Laboratories at the UH Technology Bridge, which is suited for startups looking to scale up. But it was four years before that opportunity emerged, taking much longer than he expected.
Consider a Wide Range of Markets
Not having a full understanding of the market opportunity is another thing Curran said could greatly slow a manufacturing startup.
Originally, the group identified glass for the solar market as the primary target for their product, but they did not have not having the right applicator for the material, nor the budget to develop it.
They then turned their attention to the local wood and masonry market.
“The wood market is a crowded space,” said Curran. “With no marketing budget and no sales people, we realized how difficult it was going to be to break into that space. We tried about six different markets, but we had to settle on the lowest hanging fruit.”
Breadth of applicability is important, according to Curran, who learned they could have gone into fabrics with their product.But he ran into several issues, especially managing export control while the majority of fabrics are managing outside the United States. Cost and scope of export control, he believes, is difficult for a small startup to manage.
The solution? Integricote decided to go door-to-door with their product, providing a service component and doing demos to showcase their sealer. Curran said they were willing to do what it took, including employing ‘professional sales people.’ But in hindsight, he realizes it required knowledgeable business development people even though it was the much longer approach.
Research the Regulations
Starting a business means you have to play by the rules. Many startups may not have the right people in place to manage regulations. That may take quite a bit of time to learn, backtrack and reorganize operations to meet requirements.
Curran said the regulatory challenges were the biggest hurdles when it came to moving his company forward. Here are a few things to consider, according to Curran:
1. OSHA – The Occupational Safety and Health Administration
Have you considered the hundreds of OSHA standards and training requirements for your industry? This regulatory requirement alone can cause most manufacturing startups to come to a complete halt.
2. Insurance
Curran said to explore all insurance options, especially those for startups. Avoid getting caught up by a door-to-door salesman who uses scare tactics or else you’ll end up overpaying.
3. Fire and Safety Standards
Whatever space you choose to lease, make sure it meets all safety standards for your product production or this will greatly slow you down or cost more money.
4. Emission Standards
Have you checked emission standards in the states and counties you’d like to sell to? These vary from place to place. For example, Curran is restricted from selling in some cities due to limitations.
5. Shipping and Labeling
Curran said one of the most bizarre things he learned was labeling standards when shipping product. Like emissions standards, labeling products for shipment can have different requirements per country it travels across. Ship across the country and you might have several to hoops to jump through.
Despite having had a few bumps in the road, Curran said Integricote is still ahead of the curve for manufacturing startups.
“There is so much I wish I would have known before I started,” Curran said, who believes sharing his experience may help provide a level of realism to other entrepreneurs as they get started with their dream.
