Manufacturing & Distribution Option

Two options exist for a Research and Development company can develop manufacturing and distribution capacity. The first will require the R&D company to develop (build) the manufacturing and distribution capability from the ground up. This involves the following:

  1. Build a plant with the sufficient capacity to meet market demand
  2. Recruit a strong management team
  3. Develop a skilled workforce
  4. Establish a distribution network through existing wholesale or retail chains (e.g. Wal Mart, A&B Sound)
  5. Raise sufficient capital to finance both the operating and capital requirements of the business.

The second option is to purchase an existing company with the required manufacturing and distribution capability. Where potential acquisition targets exist, it is generally cheaper to buy than to build. A variant on this option is to merge the R&D company with an existing manufacturer.

Regardless of the method chosen to get into the manufacturing business, once the decision has been made to manufacture the product "in-house", a full production manufacturing plan must be prepared. This will require the following issues to be addressed:

  1. Marketing and Sales
  2. Human Resources
  3. Technical issues
  4. Manufacturing issues
  5. Financing requirements