Revenue projections were intended to be conservative. The real trick to a startup is managing the operations expenditures of growing demand in production. There comes a point in the growth curve where there are no easy answers to increasing capacity demands. Proper planning, risk management and out source support will be key to a dynamically changing profile of products.

Mfg takes up-front capital proportioned to the foretasted quantities. the types of manufacturing options you choose tend to be optimized for a given throughput. If your profile changes dramatically, it can be very hard to predict what the right expenditures are. It is very easy to under build capacity and not be able to meet demand thus driving customers to your competition. It is very easy to over build and have way more idle equipment than your demand requires thus increasing manufacturing costs. Of course, there is always outsourcing. In that scenario, you are competing with all sorts of other companies and perhaps competition to garner the attention from the Contract Manufacturer (CM). Little guys are served last. Big guys have little room for expansion. So, the dynamics in the contract house can be very temperamental.

Successful companies generally have a reasonable growth ramp that allows the company to better investigate their options as capacity issues arise. Too fast growth or too slow growth will kill you.

JMHO.

DSUS -