Interesting concept for new business and product development

Have friend and former co-worker that has retired and now working on a project. He is actually
quite wealthy and has a summer home in Northern Wisconsin. He conducted a college course in
starting a small manufacturing business. He learned from the students that their challenges were finding shop space for a small business. Most of these students already had new product ideas like special fish cleaning tools and products for handicaped people. Another problem was the students had no experience in manufaturing. They had product ideas but were clueless as to how to manufacture their products.

Most people would run to the government looking for money for these people and all their needs. But, not my friend. He purchased with his own money, a manufacturing facility from the local bank.. He plans to rent space by the square foot to people wanting to manufacure their products. It is called a small business inkubator. A place for business to startup, grow and move on to more permanent business space.

In addition, he plans to supply the inkubation facility with a machine shop for people to develop their products and tool up for manufacturing. There will be some liability issues and abuse issues that will need to be worked through but I'm sure it is going to happen.

I have already built some jigs and fixtures for a client in the up North and I did it for FREE as my contribution toward the project.

Some how we have come to believe that when people need help it is up the government. My friend identified people needing a little help. Rather than run to the government, he decided to address the problem himself along with other private investors. Just think how much better off we could be if able people stepped up to the plate and helped others that needed a little help. Leave the government out of it.

Opinions?????
Jim

Sounds good at first, but do the investors expect a return, or are they willing to loose money doing this?

I ask because I would expect about 9 out of 10 of these renters will go broke and leave the "inkubator" owing money.

Not trying to be negative, just realistic after working with many inventors and start-up small businesses.

There's a growing number of hardware-focused incubators out there. These guys are based near me in Boston. Relatively new and not sure how well they're doing.

https://www.bolt.io/

There's also a rapidly growing number of "hackerspaces" which range I scale and level of equipment. The Artisan's Asylum in Somerville has good size welding, woodworking, and conventional and cnc machine shops.

I don't understand.

Your friend is investing in a manufacturing facility to help people that can't get the training wheels off their idea's on their own?

How are they going to make a profitable business venture- A contribution to the US economy- If they aren't resourceful enough to make their ideas reality?

The resources to do these things are already here, no government involvement. My experience is people that manufacture products (idea people) generally think alike and help each other out. The making it part is the fun part. The making a profitable business aspect of it is the challenging part.

JimGlass said:

Another problem was the students had no experience in manufaturing. They had product ideas but were clueless as to how to manufacture their products.

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With just an idea, no sales, no business experience and no idea how to make the item, it should be difficult for these people to find money. If they do get funded, usually that early money only comes from friends and family as any investment is really in the person, the 'business' is just a tiny flame of an idea. imo its not realistic out of college and they need some business, sales and manufacturing experience before they're going to get or are deserving of financing. Always exceptions of course.

Incubators are private equity investing in the these businesses via facilities and advice vs cash.....and imo these things should be financed privately through angels and private equity such as your friend is doing as they provide much better credit/investment adjudication than government ever could.

not sure where you are in the country but in new york there are many many far too many former large companies renting out space, so renting out a bay or 2 in a building which might even have overhead cranes, loading docks for truck, 3 phase electric all extremely very very very common
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many many places selling used machine shop equipment or for that matter selling or leasing a small machine shop with equipment. finding a former machine shop owner willing to sell or lease equipment and maybe willing to stay for awhile to help train people to use equipment not hard...... just check craiglist. of course banks might know who is wanting to sell by who is not paying their loans on time
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where i am now a company that used to have 2000 employees has only 700 now. they have been renting out more and more unused space for easily over 10 years, almost all is rented out by now. another company i used to work for Kodak has hundreds of large buildings they have been slowly selling, renting, etc now for over 10 years too.
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a lot of older cities that used to have large manufacturers it is easy to buy or rent space. i have seen many large multistory building demolished to lower paying taxes on. if they cannot rent or sell the buildings fast enough they often demolish they whole building and just the broken rocks and bricks are left. they do not even pave with asphalt as they would have to pay taxes on having another empty parking lot

Thanks for the comments. I think we have all met people that are strictly dreamers with great ideas
that never seem to ever get launched. I'm certain my friend will encounter some of these people.

However, one client he has that makes the fish cleaning tools is already in business but needs jigs and fixtures made to reduce assembly time. These are the jigs and fixtures I made for free. I think he has other people in the same situation.

I'll keep you posted on this. I'm interested to see this all works out myself.
Jim

There are hackerspaces in every major city... Madison has Sector 67. They have a full woodshop, welding, and machining. There are many guys at Sector running startups and that os actually a big part of the membership.

Sector67 | Madison, WI :: Hackerspace

Not a new idea at all...

The statistics for business survival are dismal, it's like sea turtle hatchlings trying to reach the surf. State-run small business "incubators" are currently all the rage for pissing away the taxpayers' money. I guess it's commendable that a private individual is funding one of those efforts. I mean, WTF, it's his money and there are plenty worse ways to give it away. However, no amount of "incubation" can prepare the inexperienced entrepreneur for that first time a customer's check bounces and inundates him with a cascade of overdraft charges. I would be very surprised if subsidizing a startup business does anything for its five-year survival rate. Time spent getting freebies shouldn't count as time in business. To a banker it likely won't.

I have as many of you know have worked in myriad of businesses over my life, I like to think of it as school though. I have learned more what not to do than what to do, that being said I like the idea but have my doubts it's success. Not because it is flawed or folks involved have bad ideas but more just the way our country is economically. Big business will do most anything to squash what even think may rival them, venture capitalists seem to want a 90% functioning business to invest in and banks don't want to lend money.
What the hell happened to America?

Even if I had the next best thing since the remote control, I doubt I could get investors lend me money for machines, a building, 6 months operating capitol. They would say yes that is great why not have the pieces built overseas and put together here for a fraction of what your business plan suggests. But I want to create jobs here, the kind where once your hired you get profit sharing, hopefully some kind of retirement and so on.

But that doesn't seem the MO any more, I know if I walked out the door of present job (which I kinda like) today or 10 years from now I would have nothing.

I know I kinda got off topic here but it just makes one feel hopeless.

even in the time of James Watt and the steam engine. it is common for an inventor to have a machine shop make stuff and the shop or manufacturer might form a partnership in return for patent rights. it was not unusual to have partnership to have 75% for manufacturer investor and 25% for inventor any profits if any from the invention.
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even in the time of James Watt his original investor went bankrupt and another investor bought out the rights of the bankrupt one. Watt had many years perfecting the Steam engine. quite a lot of time was used figuring out how to make them with more precision.
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Watt eventually was a rich man but many inventors were poor and got very little return for their inventions. Even Thomas Edison formed partnerships and or companies for his inventions. Few inventors retain majority control over their ideals

Problem is that coming up with the idea is the easy part. Being able to successfully market your idea & convince someone to either buy your product, or invest in your project is the hard part. Without the marketing, it is just another idea sitting on the shelf collecting dust.

Any person with enough fight in them to be successful would rather starve than accept help from anyone.

toolmaker96 said:

Problem is that coming up with the idea is the easy part. Being able to successfully market your idea & convince someone to either buy your product, or invest in your project is the hard part. Without the marketing, it is just another idea sitting on the shelf collecting dust.

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Perfect, nails it. Reminds me of or a prof I once had who was fond of saying everyone in the country is a brilliant strategist.....its execution that matters.

Heavey Metal said:

Any person with enough fight in them to be successful would rather starve than accept help from anyone.

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That person would not be very bright.

a gift is the ultimate insult

it(the gift) says not only am I cunning enough to take(legal tender/barter) from you and those like you it means little to me and i disdain you enough here it is back.

Puts the receiver in a position lower than a dog.

toolmaker96 said:

Problem is that coming up with the idea is the easy part. Being able to successfully market your idea & convince someone to either buy your product, or invest in your project is the hard part. Without the marketing, it is just another idea sitting on the shelf collecting dust.

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Every inventor that I have worked with has seemed to think that once they had an idea, they were 95% of the way to fame and riches. In reality, they were 5% of the way there. Marketing is everything. Even bad ideas well marketed can make lots of money, while a good idea poorly marketed will get nowhere.

Semi-jesting... All you would really have to do is say, "Leave the government out of it, and go to work."
Nothing like getting busy and doing it yourself. You'll have it working long before your subsidised help from the government ever shows up. You will have solved many difficulties along the way, instead of having to grapple with them after the help shows up. Just think of how many computer games it took before you decided to "build" this idea. Subtract them and you'd already have the idea perfected.

Regrds,

Stan-

Heavey Metal said:

Any person with enough fight in them to be successful would rather starve than accept help from anyone.

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I think Henry Ford burned two groups of investors before he became successful.

Henry Ford - Wikipedia, the free encyclopedia

The idea is neat. The fellow who is providing this environment is making the investment and I would bet is interested in the ideas and products which may come in. His position is a sound idea provided his expertize can mix with the ideas and people who come to him. I could see him picking and choosing who may come in to utilize the resources. If we can do it ourselves without the Government involvement we are in better shape. Having said that though the government always makes a impact on anyone doing business and is always involved in business. It would not be controlling the ideas or strategy of this good idea which is good. Go things alone if you can yet partnerships are very positive vehicles for success also and should never be overlooked out of hand. Hope it works out. Keep us posted. I would rather have my own equipment and shop and make my own widgets yet a place like this would allow me resources to make them without any major investment on my part. Plus a idea must be protected from being stolen by someone who may have the money to follow through so be cautious and wise.