To the Bosses in ETO.

[Vizier87]

Hi guys,

I have been thinking a lot about setting up my own electronics company. Perhaps focusing on optoelectronics, but any projects will do. Slowly but surely, nearly everything that I do with my free time intended for productivity is directed towards this dream. However, I cannot be classified as the ones who have even started. I have my own electronics workbench, an old HP scope, and I hope to buy a hot-air rework station in the near future, all that with a reasonable amount of projects in mind.

To the ones out there who have set up your own electronics company, what kind of advice can you give?

I couldn't really be specific with the question, but here's what I have in mind that I wanted to achieve:

1. A small company with 4-5 people, perhaps relatives included. I prefer a simple hierarchy.
2. A place in a village, where I can work while occasionally pay a visit to an old relative.
3. (Ooooh here's the hard part) Be creative with the revenue stream.

So, to the gung-hos, let's hear it from you!

Cheers,
Vizier87.

 

[Ian Rogers]

From your post, it seems as if you want to be a "Repair" electronics company...

I very much dislike repairing electronic devices ( apart from my own )... You need to find a market!

You must know what you can / like repairing.. If the market for repairing these devices is good, well that's a start.. If you need to work out electronic devices before you try and repair, then you will need to factor the lack of experience with these devices.. Trying to repair electronics can be ball breakingly difficult if you have no schematics... When working for yourself, you need to ensure you make enough to break even + 20% or more....

I try to make sure anything I repair isn't going to end up costing me money.. (Always one though )

 

[atferrari]

Not a boss here in ETO in any way but, relatives in your business could turn out being the worst of the ideas. You will keep meeting them out of the lab whether your relationship is good or bad with them.

Been there...

 

[ericgibbs]

Don't go into a partnership with others, especially family members.

Get premises that you can make VERY secure, on a short Lease with option to extend the lease as you see fit.

You will not make a profit in the first year, most likely a loss, so have plenty of cash to cover this period.

Organise an Accountant, Book-keeper [part time] and a Bank account, don't use the Bank where you have your personal account.

Decide if you are going to operate as a Sole Trader or a Limited company.

Choose a business name that relates to your company.

If you sell products you will most likely need some form of third party insurance as well as insurance on your premises and equipment.

The list just goes on and on... Most important thing is DON'T PANIC when everything seems to be going horribly wrong, usually in the first 3 months.!.

E
If you want more, just ask.

 

[JoeJester]

There are resources to guide you.

Looking to start a business ... visit https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business

The links on that page will reiterate what was previously stated plus more. The topics we sometimes forget.

In the realm of electronics repair, you need:

- a population that will support your dream, This includes
--- a sufficient number of people that want their electronics repaired cheaply.
--- a sufficient number of people to offset the MTBF rate.

A population of 3000 in 1600 square miles with a failure rate of 20% of the electronics per year would give you little work, even if you were the only repair facility. To support yourself and your family, your prices would be high ... so ... the cost of repair -vs- buying new and improved, is one obstacle. You can figure the electronic devices in your own home and get a general estimate of the electronics failure rate. If your restricting yourself to one particular subset, televisions, then the MTBF could be higher.

If you can expect one television failure per year per 1000 people, you would need a decent population to get enough work for a year. Then you can increase the population by the reciprocal of the percentage you expect that would want their equipment repaired. Then multiply by the reciprocal of your productivity figure. I suspect the population figure will be much higher.

It could be tough if you don't have alternate revenue streams.

For repairing electronics these days, an ESR meter is a good investment, as dried up electrolytic capacitors seem to fail frequently. You can build your own from schematics found on the internet.

Your investment in inventory can get out of control. You need good source(s) of supply. In some area's, you pay property taxes on inventory you have sitting on the shelf.

Lots of things to think about.

 

[tvtech]

Consumer electronic repairs now days are are a no no. Especially if you are not thoroughly experienced in the field. Even with lot's of experience you will still burn your fingers...just not as badly as a an inexperienced tech...

If you love fixing things, learn how to fix your own stuff...

My 2c worth.

Regards,
tvtech

 

[killivolt]

Don't go into a partnership with others, especially family members.

Get premises that you can make VERY secure, on a short Lease with option to extend the lease as you see fit.

You will not make a profit in the first year, most likely a loss, so have plenty of cash to cover this period.

Organise an Accountant, Book-keeper [part time] and a Bank account, don't use the Bank where you have your personal account.

Decide if you are going to operate as a Sole Trader or a Limited company.

Choose a business name that relates to your company.

If you sell products you will most likely need some form of third party insurance as well as insurance on your premises and equipment.

The list just goes on and on... Most important thing is DON'T PANIC when everything seems to be going horribly wrong, usually in the first 3 months.!.

E
If you want more, just ask.

I owned my own repair business for Fifteen years; and tried 3 startups and I was successful for the first 7 years. I worked Part-Time in a TV repair shop as a Manager for 10 years and ran the shop by myself for 2 years. I've done in Warranty Repair and when I stopped.

Whirlpool and Kitchenaid still owed me money; the parts you buy from them is 10 days net; yet they pay for work on 90 net. Large companies will also reject claims long after the work is completed; it can be difficult to get them to see it your way.

I learned the hard way; it's not a win win. In the beginning it was worth it; but now it like pulling teeth to get your money. I got out 16 years ago; maybe it's gotten better?

The ever declining prices of Electronics and Hard Goods and the decrease in shipping weight costs has led the repair industry to falter; customers want new and purchase using credit over time.

I agree with "Eric" on all points and I will add "this" if it's something you believe will run itself; you might be disappointed.

Doing business analytics of your potential market and calculating the incomes of potential customers in your general area. Plus, knowing how strong your competition is; gives you a margin of success.

Not knowing these things could determine if you make money or loose money along with your time.

I know I sound harsh; but thats just business.

Nothing wrong with dreams; I do it all the time.

Good Luck

kv

 

[Vizier87]

Thanks for the feedback guys! I knew I could get much more input here.

From your post, it seems as if you want to be a "Repair" electronics company...

Not really. I plan on building custom-made devices for specific customers. Repairing comes next when the item I built is damaged or malfunctioning and so on.

Not a boss here in ETO in any way but, relatives in your business could turn out being the worst of the ideas. You will keep meeting them out of the lab whether your relationship is good or bad with them.

I see. I did watch a scene in "Gone in 60 seconds" where the brothers working together are quarreling and then another guy said "This is why I don't do business with family". Haha. But I wasn't sure if I was to take that scene that seriously.

Don't go into a partnership with others, especially family members.

Okay, aside from the other points, this one seems to be quite agreed upon. Gulp. However, do you mean I should work sorta, alone while having the book keeper and the rest?

 

[Vizier87]

In the realm of electronics repair

Consumer electronic repairs now days are are a no no

Hi Tvtech, Uncle Joe, thanks for the link. Would it be a lot different if it were a prototyping company?

I owned my own repair business for Fifteen years; and tried 3 startups and I was successful for the first 7 years. I worked Part-Time in a TV repair shop as a Manager for 10 years and ran the shop by myself for 2 years. I've done in Warranty Repair and when I stopped.

Whirlpool and Kitchenaid still owed me money; the parts you buy from them is 10 days net; yet they pay for work on 90 net. Large companies will also reject claims long after the work is completed; it can be difficult to get them to see it your way.

I learned the hard way; it's not a win win. In the beginning it was worth it; but now it like pulling teeth to get your money. I got out 16 years ago; maybe it's gotten better?

The ever declining prices of Electronics and Hard Goods and the decrease in shipping weight costs has led the repair industry to falter; customers want new and purchase using credit over time.

I agree with "Eric" on all points and I will add "this" if it's something you believe will run itself; you might be disappointed.

Doing business analytics of your potential market and calculating the incomes of potential customers in your general area. Plus, knowing how strong your competition is; gives you a margin of success.

Not knowing these things could determine if you make money or loose money along with your time.

I know I sound harsh; but thats just business.

Nothing wrong with dreams; I do it all the time.

Good Luck

kv

Yeah, I did realize it wasn't going to be easy. The idea is that I want more time for myself and my family. Thanks for the advice.

 

[Inquisitive]

Its like they say. You can pick and choose your friends but, you're stuck with family.

 

[JoeJester]

I just fed off the first assumption it was a repair business. As a prototyping business, your selling products. There are other things to consider.

It's good to hear you are going to service what you sell, when it fails for whatever reason. You will need to look at liability insurance, in case your product is named as a cause for damages.

Like Eric said ... there are a lot of other topics you need or might need to consider. I'll let those who create and sell products to answer your questions. The basic business principles in the link would follow for all types of business.

 

[KeepItSimpleStupid]

Are you in a locale where a 3D printing business would thrive. One just opened up near me. They are also offering classes. They claim you can print a small part for like $20 USD.

Fix for me is becoming impossible. The sources of info just dried up. No Sam's Photofact of yesteryear or driving 10 miles for 2 or 3 suppliers.
Everything has custom parts. A retired embedded engineer friend may actually re-invent the programming for an old piece of audio equipment because it doesn;t behave right. Two units will not respond the same when facing one remote control, It skips commands and won't stay in sync.

I maintained stuff where I worked like DEC PDP-11/2 and 11/23 system, DEC had levels of support. We used "module exchange". They sent a price book, so you knew what it would cost. I think you also had to pre-pay something, like escrow money. Generally, it was the same repairs over and over again: replace floppy drives, fans and power supplies. Sometimes we had to call some one in.

I had to lube X-y recorders.

A vacuum gauge would typically have the same failures. A fair amount of re-lamping was done.

Sometimes, I did upgrades and sometimes I told the manufacture things like, "You know a 10 A rectifier should not be used in a 40 A power supply". They re-engineered and fixed it free.

Nearly everything became module or "instrument swap" and we took that mentality to vacuum pumps even. The same connectors on the inlet/outlet and power. Pumps were sent out for re-build.

At times, we found it cheaper to make our own than to buy the part from the manufacturer. This company charged $80 for a radiator used that they re-branded as a vacuum hose and $125 for a switch.

A hoist switch was a difficult re-wire.

Sometimes I would engineer and.or build electrical, electronic or elctromechanical systems.

None of this was full-time. As we shrunk - more stuff was sent out.

In one case I designed an entire remote "demand side management" platform for a instrumented house a little further than across the street.
Problem #1 was figuring out why the inverter for a solar demonstration never worked. The arrays were not matched to the inverter. I designed and ordered all the major parts and someone else put it all together and yet another group did the study. This was pre-internet.

At one time I did all the electronic repairs on an Scanning Electron Microscope and set-up a cheap EDAX (Energy dispersive X-ray analysis) system. I set up an ebic system or electron beam induced current https://www.google.com/url?sa=t&rct...=I1lsJdauZqOKx0zZoRihxA&bvm=bv.77412846,d.cWc system.

I did audio amplifier repairs at my convenience. They were basically subletted to me, but I didn't have to deal with getting parts or service info. Even then, I made changes so the amp would stay fixed.

 

[Vizier87]

Are you in a locale where a 3D printing business would thrive. One just opened up near me. They are also offering classes. They claim you can print a small part for like $20 USD.

Something like that. 3-D printing is in the pipeline but I'm more inclined towards research equipment. You know these whacks who always screw up their gizmos and wishing there are simpler setups which can be a substitute rather than overkill modules linked together.

Fix for me is becoming impossible. The sources of info just dried up. No Sam's Photofact of yesteryear or driving 10 miles for 2 or 3 suppliers.
Everything has custom parts. A retired embedded engineer friend may actually re-invent the programming for an old piece of audio equipment because it doesn;t behave right. Two units will not respond the same when facing one remote control, It skips commands and won't stay in sync.

I maintained stuff where I worked like DEC PDP-11/2 and 11/23 system, DEC had levels of support. We used "module exchange". They sent a price book, so you knew what it would cost. I think you also had to pre-pay something, like escrow money. Generally, it was the same repairs over and over again: replace floppy drives, fans and power supplies. Sometimes we had to call some one in.

I had to lube X-y recorders.

A vacuum gauge would typically have the same failures. A fair amount of re-lamping was done.

Sometimes, I did upgrades and sometimes I told the manufacture things like, "You know a 10 A rectifier should not be used in a 40 A power supply". They re-engineered and fixed it free.

Nearly everything became module or "instrument swap" and we took that mentality to vacuum pumps even. The same connectors on the inlet/outlet and power. Pumps were sent out for re-build.

At times, we found it cheaper to make our own than to buy the part from the manufacturer. This company charged $80 for a radiator used that they re-branded as a vacuum hose and $125 for a switch.

A hoist switch was a difficult re-wire.

Sometimes I would engineer and.or build electrical, electronic or elctromechanical systems.

None of this was full-time. As we shrunk - more stuff was sent out.

In one case I designed an entire remote "demand side management" platform for a instrumented house a little further than across the street.
Problem #1 was figuring out why the inverter for a solar demonstration never worked. The arrays were not matched to the inverter. I designed and ordered all the major parts and someone else put it all together and yet another group did the study. This was pre-internet.

At one time I did all the electronic repairs on an Scanning Electron Microscope and set-up a cheap EDAX (Energy dispersive X-ray analysis) system. I set up an ebic system or electron beam induced current https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCcQFjAB&url=https://en.wikipedia.org/wiki/Electron_beam-induced_current&ei=4go-VJ-QB_T-sATy4IC4CQ&usg=AFQjCNE7JNbglcR_CvN05fVz1kzrhc2V6Q&sig2=I1lsJdauZqOKx0zZoRihxA&bvm=bv.77412846,d.cWc system.

I did audio amplifier repairs at my convenience. They were basically subletted to me, but I didn't have to deal with getting parts or service info. Even then, I made changes so the amp would stay fixed.

So... in conclusion was it a nice ride? Or both bad and good? Would you choose an executive position writing memos and stuff after going through all that?

 

[ericgibbs]

Okay, aside from the other points, this one seems to be quite agreed upon. Gulp. However, do you mean I should work sorta, alone while having the book keeper and the rest?

No need to work alone, hire people as you need them, casual labour basis at first, until they prove their worth and commitment to the company.
There are many retired engineers who would be willing to help with technical matters for a small fee.
For assembly work you could use low cost outworkers, who work at home, on a payment per job basis.

My book keeper came in one day per month to do salaries and keep ALL the company records and paper work in order.
You don't want to waste your valuable money making time shuffling bits of paper, also a tidy record system will make it easier for you and hopefully cheaper for your accountant to do the end of year figures.

Basically I am saying don't hire permanent staff until your company is well established.

E

 

[atferrari]

A friend of mine, an electronics technician, in a partnership with another colleague, managed to create a very succesful company dedicated to power generation worth a lot of $$$ nowadays.

Years ago he told me: do not associate with people that is only going to do the (technical) work; only with those capable of atracting more work or new customers.

 

[tvtech]

A friend of mine, an electronics technician, in a partnership with another colleague, managed to create a very succesful company dedicated to power generation worth a lot of $$$ nowadays.

Years ago he told me: do not associate with people that is only going to do the (technical) work; only with those capable of atracting more work or new customers.

So, they were capable Technicians. And they needed new orders that only Salesmen can generate....with an exaggeration here or there. Product better than specified

Anyway, I have seen it all.

Just saying

Regards,
tvtech

 

[tvtech]

Deleted. Off Topic.

 

[Vizier87]

There are many retired engineers who would be willing to help with technical matters for a small fee.

Excellent advice. They'd have lots of contacts too. Thanks Sir Eric.