Click to Print

Prepare For Liftoff

I need guidance getting my product to a manufacturer.
July 1, 2000
URL: http://www.entrepreneur.com/article/29554

Question: I have done extensive research for a new product that I would like to bring to the market. I plan to outsource its production, but how do I approach manufacturing companies to do so? How do I present myself and which questions should I ask?
Lisa Marie
New York City

Answer: Assuming your research has included a patent search as well as a market search, your next step is to prepare a nondisclosure agreement (NDA). Before showing your new product to anyone-investor or manufacturer-you should get a signed NDA. If you don't have an attorney to prepare this for you, then have one review it. You shouldn't use another party's NDA, which usually favors its writer. Having a formal NDA may scare people, but most will realize you're serious and sophisticated enough to use the law to protect yourself against idea thieves. Use an NDA even if you've already obtained a patent-it's easy to modify a design.

We talked with Joe Croyle of Park-Lincoln & Croyle Marketing Inc., a firm that helps inventors and others with unique products get into distribution vehicles such as home shopping networks. Croyle advises getting quotes on production costs from two or three manufacturers. You need to show them at least an artist's rendition of your product, and preferably a working prototype (a prototype will be needed sometime before the actual manufacturing anyway). If a manu-facturer is interested in your product, it may make a prototype for you for a fee.

While you may make telephone contact first, it's preferable to meet with manufacturers in person, particularly because you'll need to show them your drawings or prototype. Find out how much lead time they need for production, ask whether they have a Dun & Bradstreet rating, and check out other products they've manufactured. We suggest con-tacting their customers and asking how companies deal with credit checks. You should also verify the manufacturer's D&B rating. You don't want to get caught paying a deposit to and depending on a firm, just to see it go under. When you actually enter into a manufacturing contract, get help from an attorney and build into the contract assurances that you'll get your goods when you need them.



Small-business experts Paul and Sarah Edwards recently released their second edition of Getting Business To Come To You (Putnam Publishing Group). If you have a question regarding a start-up business issue, contact them at www.paulandsarah.com or send it care of Entrepreneur.