prototype

I’m a Limited Liability!

Yesterday I got a thick envelope from the New York State Department telling me whether or not my LLC filing was accepted. It brought me right back to senior year of high school, waiting to hear back from the colleges I applied to. I ripped it open, and there in courier font it said “I hereby certify, that BeddyBye, LLC a New York Limited Liability Company filed Articles of Organization blah blah blah.” Yea it’s official!  I just need to advertise the formation of my LLC in trade journals for a few weeks and then it’s really official.

My prototype is also taking shape. I’m up to my third version, and it’s really starting to look unique and functional. My awesome friend, Pam, offered up her house to host a focus group with new moms. Only one mom was able to come, but seeing her baby sleeping in the BeddyBye was priceless. Plus the feedback I got was really useful. I’m looking forward to making the adjustments and presenting it to more moms (and babies).

If you know any new moms in the New York City area who would like to give their input on a new, groundbreaking, amazing baby product,  let me know!

The Roller Coaster of Prototyping

the drama of prototyping

When I first came up with the baby bed idea it seemed so simple – all set, right? But then I started drawing out the plans and I realized a bunch of design flaws that I needed to work out. After that I was all set, right? During the Thanksgiving break I decided to take advantage of my dad’s tools and the big open space of my parent’s house to make the 3-d model. That’s when I ran into even more challenges.

AHHHH this foam's going to my head

Mike found me huddled in a mass of styrofoam cut outs and cardboard scraps. “What’s wrong?” He asked.

“This is never going to work. I keep figuring out more and more problems with the design, and I’m going to fail, and this is just a big waste of time,” I said in a fit of hysteria.

“But what are you doing when you find a flaw?”

“I fix it duh.”

I don't know where I would be without Mike's support

“Well then you’re not going to fail. The whole point of making the prototype is to foresee any future problems and fix them while it’s still cheap. If you don’t face your problems right away, then you fail.”

Don’t I have a smart boyfriend!

This whole process has been an emotional roller coaster. Sometimes I think I’m brilliant and I’m going to be on the cover of Business Women Today, and other times I think I should give up while I still have some savings and get the first safe job I can get. But you need that mix of emotions to be successful; the brazen self-confidence to take a risk, and the crippling self-doubt to say this isn’t good enough. If you have to much of the former you’ll never challenge yourself to improve- why would you, you’re perfect as is. If you have to much of the latter, you’ll never actualize your dreams – they’re not good enough anyway. So while it’s unsettling to ride the roller coaster I wouldn’t have it any other way.

p.s. Thank you Marika for the photos.

Just Another Step in a Long Journey

Yesterday I met with Creative Engineering to see if my designs for the baby bed are viable and marketable, as well as get a better sense of the production costs. It was bittersweet. Paul Dowd met with me for 2 hours and explained:

  • Patent research
  • The difference between injection molding, blow molding, and vacuum molding (phew)
  • Certain design refinements
  • 3-d imaging software (Rhino and Solid Works)
  • Manufacturing in the US vs China

As if you didn’t know this already, but I learned that google provides a free version of pretty much everything. You can make 3-d models using Google Sketch Up. You can research patents using Google.com/patents.

The meeting cost $45o – a price which seemed astronomical to me at first. Now I’m realizing any amount you pay to avoid wasting thousands in the long run is totally worth it. I was really nervous before the meeting. I was afraid he would tell me I’m wasting my time. My fears weren’t based on him criticizing the idea, it was facing the reality that I might not make it as an entrepreneur. The meeting was bittersweet.

The Sweet:

He thinks the design is good and worth pursuing.

The Bitter:

Just to make the molds for the prototype can cost $10,000 -$20,000. I can work around this by making a prototype out of foam without breaking the bank. I won’t be able to test it out with babies, but at least it will  be able to give potential investors a better sense of my concept. But even so, eventually I will need to get the molds and they’re going to cost big bucks. The thing is, plastic molding is really expensive to make small batches, but in large volume it gets cheaper. But if I spend $20,000 on the molds, then $5,000 on website development and marketing, and $5,000 in miscellaneous costs, will I ever be able to order a large batch??? Will I ever break even??? Am I going crazy???

OK I’m just playing devil’s advocate here. I still believe in the concept and in my ability to follow through. And I know there is always a cheaper way to make something happen, and I just need to do my due diligence.

So I guess what I’m trying to say is that I need to stick with my goal, and not get bogged down with future challenges. Things will come together. One step at a time. A thousands points of light. And all those other great cliches.

My honorary doctorate

I figure any classes I take after grad school are going towards my doctorate, right??? Right! So pretty soon I’m going to go by Dr. Tracy, or Dr. T for short.

I’ve been taking free business classes at the NYC Business Solutions Center in Jamaica Queens (there’s a center in every borough, and if you’re not in NYC I’m sure your city has great resources too. If not, move here!). Although the information is daunting, and hard to wrap my brain around some times, I’m learning a boat load. For instance, an LLC is more expensive to set up than a sub chapter S Corp, but you don’t have to pay city taxes on the first $100,000 of profit each year. That’s about a huge savings every year. Also, if you have any full-time employees you need to have workman’s comp – even if you’re running an internet business and the only inherent danger is a broken nail.

The hardest thing to accept is that my original budget was completely unrealistic. I can’t believe a random number I guessed without doing any research could be unrealistic, but such is life. I was figuring my prototype would cost $500-$1000. Ha! I’m meeting with the engineers this Thursday and just the initial consultation is $500. They said that prototype development usually starts at $5,000. Eek! I know I can find a cheaper place, but I can’t find a single bad word written about this place, it’s relatively close, and they focus on making prototypes that are ready to be manufactured – that means I won’t have to start over again when I find a manufacturer.

I figured I would be able to do all the accounting with Quickens, but now that I learned payroll tax, unemployment tax, sales tax, and metro tax are all on top of city/state/federal taxes, and they all have different deadlines I’m realizing it’s not worth the time to become an expert, and the potential for making mistakes are too high. But fortunately I met a great CPA at business school and she’s helping me out.

I figured I wouldn’t need a lawyer since I’m working alone, and I’m not going to sue myself. However, there are so many gray areas of the law that I don’t understand, and I can end up paying a lot more in the long run if I don’t have someone to help me dot my legal i’s.

Originally I laughed at the guy who wanted to sell me my domain name for $1,800, but now that I’m seeing the costs of everything else it seems silly to lose out on the perfect marketing name just to save a couple hundred dollars.

At first I was budgeting $10,000 to have the prototype, LLC status, website, and first order of inventory. Now it seems like $20,000 at minimum (I’ll explain where this money will come from in a later post). At first this number made me gag, but then I looked at it in another light. I wouldn’t balk at paying $20,000 for business school if I really thought I needed it. But now I’m going through the Tracy Business School (TBS -characters welcome), and better yet, once I graduate I will have a fully running business. OR I will have a big expensive failure. But even if it’s a failure I will still be exactly where an MBA grad is – looking for work.

Follow up on my new career!

So I’m sure you’ve been sitting on the edge of your seat waiting to hear about my next business step. A few weeks ago I mentioned that I had a great idea for a new product. I thought I should let you in on what I’ve been doing since then.

Alex Eben Meyer

by Alex Eben Meyer

  • I bought the domain name. Unfortunately, someone already owned the original name I wanted. I was able to email the owner and he was willing to sell it for $1,750!!! Can you believe it? I decided to tweak the name a little and register with Active-Domain.com   for $4 a year. However, most other resellers are a lot more reasonable so if you’re interested in buying a domain name that’s already taken you can find the contact info for every domain owner at Whois.com .
  • I’m filling out the paperwork to form an LLC. After talking to a few small business owners I learned that it’s necessary to separate your personal finances from the business. If there is any potential that you’ll be sued, and let’s face it in this day in age you can get sued for anything, your personal finances will be safe. If your company goes bankrupt, your personal savings won’t be in jeopardy. I certainly don’t want my couch to be repossessed. Where would I write my blog posts!
  • I signed up for a free small business owner course at Queen’s community college. NYC.gov is a great resource for free advice.
  • I ordered foam and I’m busy making the prototype. Working with it has caused me to completely revamp the original idea. If you have an idea for a product I would really suggest trying to make it first – no matter how much you think about it, or draw the designs you can’t foresee the actual design flaws until you’re holding it in your hands.
  • I’m sharing my idea with with my target audience. I’ve gotten lots of great suggestions for marketing and design improvements. Everyone has said they would buy it, so that has been really encouraging!
  • I’m blogging about it. Making it public has held me accountable and pushes me forward. Almost everyday someone who’s read my post about finding my future career has asked, “so, ahh, what’s goin’ on with that?” It’s super motivating!
  • I've been so busy my kitchen's a disaster.

I found my future career!

Yea I have a business idea! I came up with it after talking to my friends who are new moms. It seemed so obvious, that I didn’t give it much thought. But then when I was hanging out with my dad I mentioned the idea, and he was really interested. In fact he said, “Now that’s something I would want to invest in.”

Today I went to a few relevant stores to check out the market for my product, and the applicable trends. There’s definitely a need for my invention! I’ve also been going over the design details with my dad, and we came up with an awesome name! Sorry to be vague here, but I have to protect my idea. It’s not that I don’t trust you – I just don’t trust the creepy guy who’s reading over your shoulder. Made you look!

Next, I need to make a prototype, test it out on my friends, refine the design, and then find a manufacturer. Easy! But actually writing this all down does make it seem simple and manageable. After all, it’s just one step at a time.

Here’s something to glean from this: Always share your ideas. When you start to talk you flush out the concept and you can sense from your audience’s reaction if it’s marketable or not. If you just leave it in your head it’s easy to dismiss, but some of the best ideas are ones that seem obvious; seem like they already exist but some how don’t. Also write down a game plan. Otherwise it can seem to overwhelming to start.

This image of Albert Einstin sums up how I'm feeling right now.