Business Expansion

squeekyduck

I run a small medical device consultancy company that is doing well from start up (3 years ago) and I am now reviewing the future of the business. I am looking at a 5 and 10 year plan and one main factor in the plan is the building of a clean room.

The plan would be to rent out the cleanroom to small companies, start ups, universities and provide an overspill for larger companies. Over time the aim would be to design and manufacture devices on site and hpefully have a small company that is self sufficient.

On paper this is all too easy but being in the business I know the difficulties with this with the main one being finance.

If we built a clean room I wouldnt know what to do next or how to go about ensuring it was making money. I was toying with the idea of employeeing a sales team that pester people up and down the country as well as worldwide but I am unsure of this approach. Does anyone have any ideas?

onedmc

I know nothing about clean room but I'm certain that the best way to do this is get the booking for the facility before you build it.

The best sales people would have it sold twice over before a brick was laid. Show prospective clients the specifications, benifts, process, costs, get the first X numbers of years booked and the finance will fall into place.

squeekyduck

Thanks for your response. The costs to build the clean room and maintain it are significant but with a customer base it would be a viable option. It would also facilitate the company goal of designing and manufacturing their own devices in the future.

It would take a large ammount of time to build the clean room, certify it and then maintain it but its nothing new for me. I would need at least 2 engineers to work along side me so that's is the added cost of hiring these people.

I guess the best route now is to talk to a sales consultancy and get their feedback. However I am afraid that they will promise me the earth and then fail to deliver and in turn leaving me with a costly box to run. Does anyone have any recommendations for sales companies??

I like your suggestion of taking orders early, I may even take the risk of doing this at the pre planning stage. At least I can get market feedback before I progress.

antoinolachtnai

You have to get in the market and talk to prospective users. You will find out what alternatives they have and if they are planning anything themselves.

If you want expert help, I would suggest getting some sort of research firm to carry out research on market requirements.

This is a big capital investment project, maybe bigger than it might seem at first. I'd imagine it's a bit like building a film studio. It isn't just the actual core facility you have to build, it's all the ancillary facilities you need to support it.

This is a different way of looking at it, but it might make the most sense of a larger scale property development. It could be an anchor facility to attract biomedical tenants.

Duckett

I suggest you talk to the Lifesciences teams at both IDA and Enterprise Ireland. There may well be some unused cleanroom capacity - what class do you need - 1,000 or 100? A greefield investment is big bucks so validate the market before spending scare resources. Alternatively encourage your customer to co-fund the upfront investment.

pedronomix

Idea seems rather fanciful to me. The notion of some third party sales consultancy selling anything that is not currently a functional deliverable is bizarre, if any such sales consultancy exists in the first place. Any future commitments would by definition be a watertight as a teabag and few sign up on what they cannot see or check.

It seems you want to build a clean-room to provide for your own company's future capability without having established that there is any commercial demand or opportunity for it as a 3rd party service! You need to answer the second part first!

pedroeibar1

The one thing any manufacturer should never, ever do is produce for stock. That is what happened for e.g. to Waterford Glass; they were left with a shedload of stuff that was unsellable. That is +/- what you are proposing to do by manufacturing a ‘product’ for which you have no clear idea if a profitable demand exists.

Cleanrooms differ and given the amount of money invested by the hirers before using one I imagine they would be very fussy considering use of a ‘cleanroom’ over which they did not have 100% certainty. Something or anything goes wrong, they take easy way out and sue you ‘because it is all your fault’ (and that way they can keep their investors off their backs and on yours!)

It is a big investment, much more expensive than a high quality sound studio (that would have a bigger customer base), used for a few weeks at a time and depreciating and costing a bundle for the rest.

Talk to EI, IDA, your contacts at NUI & TCD, ask what they think and if they would be prepared to use it. Co-funding would be very difficult IMO, unless you could prove that you would be using it yourself on a paying basis and had proof of your own financial stability and ability to do so. I'd keep it separate to your present operation.

As for using an external sales team, it is a “speciality sell” and the buyers would be far smarter than that type of sales person, it is something you would have to do yourself IMO.

I'm not an expert in that area, but I think it seems a good idea but not financially viable - it's the type of service EI should have for new developers.