- November 13, 2013, Mark Miller
If you'd like to hear from Mark Miller's own lips rather than read his Coating Matters blog post titled, "How to Start-Up a Coating Business," click on his podcast below:
The coating and converting industry may not be as sexy as the dot-com world of Silicon Valley, but the fundamentals of getting a business off the ground are still the same. You still have to balance the books; you still have to market a product; the difference is that a coated product requires more raw materials than electricity and binary code. So what concerns do you have to consider for a coating start-up company?
Business Description and Vision: Every company starts with a vision. That singular idea that defines the problem you want to solve with your invention. The keys to success include boiling this idea down for mass consumption in the marketplace, protecting the idea, marketing the idea, selling the idea, and following through on expectations. Spend the time necessary to make sure you can describe your invention to anyone and everyone. Spend the money necessary to protect your idea through patent or trademark protection. Spend the energy necessary to broadcast the idea through marketing efforts, because even if you have the best idea out there and no one knows, it won’t sell. Finally, spend the effort on the details of the project or production to be complete the first time around. Making sure you have the ability to follow through on customer expectations will pay dividends through referrals and customer satisfaction. Outstanding service is the special sauce of start-up companies.
Definition of the Market: The determination of your converting product or service market should follow the old journalist adage – who/what/when/where/why/how.
• Who is interested in your product? The product or service you are pitching has value to someone, but you need to be able to stand in their shoes and understand the pain that they have to solve their problem.
• What will you sell? Define your product or service as a simple pitch that is easily digestible by your audience.
• When do people buy? Understand the customer’s buying patterns and approval process. Pushing when it is not necessary can lead to poor relationships.
• Where is the highest concentration of buyers? Start-up companies need to concentrate efforts to be successful. Whether it is geographic or industry specific, spend energy effectively.
• Why do your customers buy? There is always faster, cheaper, and better; but what are the issues the customer needs to solve?
• How do they prefer to purchase? There are usually terms that customers are used to. Find out what they are, match them or improve on them to satisfy the customer.
Description of the Product and Services: Most converting companies are developed from an engineer’s idea that takes root when it is strong enough technically that others see the value. The trick is sharing the strong technical idea in a way that you could explain the product to a child. Breaking down the message of the product into a pitch that can be easily explained provides your company with the best platform for building buzz for your product or service.
Organization and Management: People are the bedrock of any company that you establish. I believe in core competencies. You need to look at your business and determine what the core technology is and build your full time employees around this core. If your company specializes in fluid coating onto substrates, then you should look for people that have the aptitude, interest, experience and energy for this technology. Everything else can be contracted out. Your customer wants to know that you can provide the best solution for their issue, not that you can balance accounting books well. It also doesn’t help you to detract from what you do well – concentrate on converting.
Marketing and Sales Strategy: I was told once that sales can be defined as convincing people to purchase what you have on the shelf while marketing is convincing people to buy what has yet to be stocked. Marketing grows interest in your product and sales create cash flow. You need both. Now, I hate used car sales people. Absolutely hate them! So when I discuss sales, I am talking about building a relationship with your customer. The customer does not gain anything by purchasing something. The customer gains when they purchase something that adds value. Value is not the cheapest item available. Value is providing a converting solution for a customer that solves a technical problem. Building a relationship by solving technical problems leads to long term results.
Financial Management: Last, but certainly not least, is the concentration every business must have on the bottom line. Most people in the converting industry are engineers who have a great idea for a business, but little or no accounting knowledge. This is another area that can be outsourced to an individual or firm that can provide the attention to detail that would detract from the day-to-day operation of a converting business. If you have proper financial support, this company or individual can guide your start-up company through financial decision making (like hiring decisions and equipment acquisition) with an independent focus.
With the right support staff, a strong vision, and a well thought out business plan, start-up companies can provide solid business opportunity for the dedicated converting company founder.
If you are interested in discussing this concept further, contact Mark D. Miller, Founder and CEO of Coating Tech Service, LLC (www.coatingtechservce.com) at email@example.com or (612) 605-6019.