To build a business around a hardware product is a difficult task. In order to succeed and beat the competition, you need not just a good idea, but also an extremely good product.
Many companies that build hardware products find not just design and engineering difficulties when it comes to the mass production of the product but face many financial challenges as well.
The closer the products get to entering the market, the more money is needed.
The manufacturing process of a product for mass distribution is divided into two main steps. The preliminary production, which is the first step, involves reviewing the product for engineering purposes, testing it, certifying it and developing demo products that are not for commercial purposes.
The manufacturing process is costly. The business owners need to pay the manufacturer before even their products hit the market. Producing a small number of production doesn’t actually reduce the cost. Of course, the prices for different products are specific and increase with the increasements of the complexity of the product.
The second step is related to the inventory purchase and the actual production of the product. During this phase, the cost increases exponentially, rising to an amount that most of the business owners don’t have. At this point, many entrepreneurs are turning to crowdfunding.
The entrepreneurs might have many different options to finance their businesses yet it isn’t very simple to raise capital.
To get the support of VC, the entrepreneurs must show some traction, which means that they need to have already sold their product on the market. Many angel investor will support innovative ideas but rarely will fund the whole manufacturing process. Banks will only give you a loan if they have enough evidence that will secure the money back.
Which leads us to crowdfunding as a great opportunity to kickstart the business and finance the manufacturing process of your hardware product.
Do you believe that you have great technology or hardware idea and want to jumpstart the manufacturing process through the collective power of the crowds? Arikovani is the right place to launch your idea! Check out the rules and conditions and be prepared for an exciting ride in the world of crowdfunding!