Funding Enterprises

The Need for Funding

 

There are three types of product, each requiring a requiring different scale of funding.

1/  (Hardware) Products. This is the classic “factory gates” type of hardware product. Anything physical needs manufacturing. This leads to operational and fixed costs. The operational costs will include:

  • Manufacturing costs
  • Raw materials
  • Wages
  • Packaging
  • Logistics (to move and store raw materials, part-finishing goods and finishing goods). Fixed costs include development, mobilizing production etc.
  • Marketing

2/ Software Products. Where I used to work, the product cost was assumed to be zero: this is not true! The recurring costs is much lower than for a hardware product but finite none-the-less. The raw material might be media and packaging, but this probably represents a tiny part of the value of the product. The fixed costs are considerable. Although you probably don’t need tooling or a factory, development will be no less than for hardware product.

3/ Services. This may be the easiest to fund, but it’s difficult to scale. There are still costs. Operational costs include salaries and expenses. In addition there are fixed costs. These my include development, training and equipment. Development and training may be have already.

Types of Funding:

  • Bank Loan
  • Issue of Shares
  • IPO
  • Private Equity
  • Venture Capital
  • Angel investment
  • Equity Crowdfunding
  • Crowd loan

 

Please read on:

Business Plan.

Product Management Process.

Idea.

Solutions Marketing.

Funding Enterprises.