New Valve Company Advice (?)

[ValveSteve]

I've been designing knife gate valves for about seven years and have recently separated from my employer. I'm seriously considering starting my own company and would like to hear from anyone here that may have any thoughts and/or experience with such an endeavor.

My basic business plan is to handle design and sales from my local office, and contract the manufacturing to outside fabricators. For consistency and to insure quality, I plan to develop a fairly tight quality assurance program to hold the manufacturers to.

Some other concepts I've been kicking around:
* Creating a basic manual(guide) to help more generic fabricators adapt their shop for valve construction and testing.
* Develop a marketing kit for oncoming distributors which will include flyers, technical brochures, posters, sample/show valve, etc.
* Obtaining ISO 9001 certification.
* Confidentiality agreement for contracted manufacturers.

Any and all insights anyone is willing to offer would be greatly appreciated.(good or bad)

 

[HitokiriAoshi]

Approval, approval, approvals. Next is Delivery. Last is connection with buyers. All the things you've listed are just minor details really.

QA/Delivery balance is a fun game.

 

[gerhardl]

.....and sale, sale, sale! Even the best technical products will not find customers if there is no byers!

What are the most important criterias for your potential largest 10 buyers? (Technical level, quality, deliverytime, references and guarantee and price?)

In addition: knife-gate valves as such is as you know either commodity (smaller valves with or without actuators) up to (say about) 300mm, built to fit low-pressure flanges, working pressure (both sides for the best) up to pressure class (lower for cheapest). Above this size, and in pure SS more specialized.

You will compete with producers (or find possible producing partners) all over the world.

For the special valve section you will probably need to finance the production and first later (after startup of plants/installation) get your payment.

For this section you need a solid financial backing, or you could alternatively offer your consultant services for technical specification and purchasing.

 

[Fishman6699]

I sell valves in the Alberta Oilsands, approvals for sure as well as local or international documentation ie: Canadian registration number here in Canada is crutial. Tons of investment in competitive markets. Pick a reputable distributor and hit the streets, good luck.

 

[jbeckhou]

steve

Where are you located?

Petrotrim Services

http://www.petrotrim.com

 

[bcd]

Valve production is a high capitol, low margin business. Certainly there are exceptions for specialty type products, but for your basic gate, globe, ball, check, etc. commodity type valve, the buy-in cost is very high and yields little profit. High volume production is key to survival in the market.

Be careful and really understand what you are getting into. Ensure you have plenty of financial backing as it will take longer than you plan in order to become established in the market. There are knife gate manufacturers and customers will not openly switch to another supplier without a compelling reason. Displacement of current suppliers can take a long time unless you have a significantly better product. Even better if you can get any improvement Patented.

Since the tooling to produce the valves is very expensive, and you intend to purcahse the valves from outside suppliers, you will have one, maybe two manufacturers, and since their costs will be high, most of your profit will end up with the manufacturers. They are taking risk and are burdened with costs. Casting patterns, machining fixtures, special assembly and test equipment, quality certifications, inventory cost, etc.

You may be better off joining another well known valve manufacturer who desires to add knife-gaes to their portfolio and let them provide the capitol and manufacturing expertise.

 

[ValveSteve]

Thank you for all the great responses and advice.

The market I intend to target is custom designed/fabricated valves. I'll add commodity valves to the line later when I have storage and the investment $$ to stock them.

As far as delivery, I plan to ship straight from the manufacturer(s) which is one main reason behind holding them to a QA program.

My last employer sells heavily in the Alberta oil sands. I went through the process of obtaining their Canadian Registration Number so I know the process well and plan to get the same.

As I mentioned, I plan to contract out the fabrication being as I'm a one-man operation at the moment. Most of the fabrication with the valves I design is pretty straight up fitting and welding. But a concern I have is testing. Would it be fairly safe to assume an outside manufacturer worth their salt could setup testing operations with minimal valve experience?

jbeckhou: I'm located in western Washington, just north of Vancouver.

 

[geos44]

Steve -

How are things going? Have you settled on a business model? Partnered with a fabricator yet? It's been a while since your last post, so I'm not sure if you are still looking for advice.