Finding Suppliers in China

If you're making a product for sale, then the specific cost of manufacturing of that product will make all the difference to your bottom line. It's no secret that Chinese manufacturing can deliver a wide variety of products are very competitive rates.

If this is your first foray into the world of outsourcing manufacturing to China, you need a smart approach. Sourcing from China comes with its own set of challenges that need to be overcome. Here's how to not make it a problem.

Determine Your Needs

 

Sure, you know what you want to make but in China there are different approaches to each manufacturing contract. Basically there are big corporations that will take on the job or farm it out to a 3^rd party vendor. As a small business owner, you might want to seek out the smaller family owned business for the startup. This type of company will probably be in a better position to provide you with direct access and support. You will avoid the markup when a larger manufacturer subcontracts out your job.

Research All Angles

Before you book your first flight to China, you'll want to do a lot of research. Build up a database of potential manufacturers by searching trade directories, chamber of commerce listings in China, Export Development Corporations or business associations. This can happen when you research comparable products to yours online. You'll start seeing some of the same company names popping up. Clearly these are the dependable factories. They should be your first stop.

Pick Your Top 15 Suppliers

Once you've put a list together, start making calls or sending out emails to set up relationships. You'll want to find out all the costs associated in hiring this company from raw materials to transportation. Make a list of questions that you'll be asking of all of your suppliers and then you'll be able to narrow down the list to your top 15. These you might want to visit in person to make sure they can handle the job. It's going to take time to find the best fit for your company's needs but you're better off exhausting all the possibilities before firing up the assembly lines. Do not put your entire manufacturing assembly line on one company. Spread the work between two or three companies depending on your volume of work.

Get a Local Guide

If you are traveling to China you'll definitely want to find a local business representative to help show you around. Hopefully, this will be someone who comes highly recommended and who you've set up arrangements with before landing. The best guides are usually the government trade representatives between your country and China. You don't want to ask around at the airport for a guide!

How to Manage your Independent Contractors

Every day more workers are joining the ranks of the independent contractor. As someone who is considering tapping into this potential workforce you want to make sure that freelancer is going to get the job done right. Here’s what you need to do to make sure you’re getting the work you’ve contracted for.

1.      Make the Interview Call

A lot of freelance work can be conducted exclusively via the internet. This means you can search, hire and accept work all through email. However, to make sure the independent contractor you’re considering is reliable, reach out for a quick telephone interview. You can put forth your expectations and find out more about the candidate over the phone then you could with an email exchange.

2.      Write an Employee Contract

If you expect nothing then you’ll never get disappointed. However, if you want a freelancer to achieve certain goals then put them in a contract. There should be no question as to your expectations of their performance, their compensation and what measures it would take to terminate the contract. Start out by being on the same page.

3.      Set Specific Deadlines

Every project should have a delivery date. Your freelancer should be well aware of those dates and be able to deliver on time. What they don’t need to know is if the deadlines you’re providing are the actual deadlines. There is nothing wrong with a little padding on your side! That way you can make any corrections or fill in the gaps if that contractor doesn’t deliver. And all the deadlines should be in writing.

4.      Don’t Micromanage

With every new type of employee there will be a learning curve. You’ll want to make sure they understand the assignment and that they are delivering on time and on budget. In the beginning of a new working relationship, you might feel the need to check in on the progress. Nothing wrong with that. But once that contractor has proven they can deliver, let them do the work. No need to keep poking them for progress.

5.      Make Yourself Available For Clarification

It goes without saying that your employee can ask you for clarification about an aspect of a project. The key is to make sure you’re responding to their query in a timely manner. You don’t want them to stop the work while waiting a day for your answer. This could prove to be a challenge if you’re managing someone in a different time zone. Keep checking your email when you’ve got a deadline approaching.

6.      Reserve the Right to Terminate

If you reach the point that a freelancer isn’t living up to their end of the contract, then you’re well within your rights to terminate the agreement and move on. There are too many talented folks out there who can deliver exactly what you’re looking for without the hassle. 

How to Protect your Company from a Lawsuit

Nobody likes getting sued. If you’re a start-up, a lawsuit can bring your business to a screeching halt.

On some level, you can’t ever provide 100% protection against a lawsuit. Anyone can sue anyone at any time. The issue becomes whether that lawsuit has merit or not. Hopefully you can institute the following steps to make sure you would be protected against lawyers bringing frivolous lawsuits against your company.

Step 1: Be patent and copyright compliant

If you are selling a product that you invented, you should have patent and copyright protection in place before you make any sale. There are plenty of internet resources you can tap into that will let you determine whether or not you might be infringing on someone else’s copyrighted material. If you’re making a new product is “like” another product then having your own copyright or patent should insulate you from a lawsuit going forward. This type of research should also apply to any type of logo or other marketing device you intend on using. For instance, if you’re selling a new patented blend of cotton T-shirt but have Mickey Mouse imprinted as the design you could be sued by the Disney Company unless you have licensed that image.

Step 2: Incorporate

As the sole owner of a start-up business, you might think it’s not necessary for you to incorporate yourself. After all, you’re making all the decisions, right? In truth, incorporation provides a layer of protection against liability. If your business is sued it would only be the assets of that incorporated business that would be at risk. All of your personal assets would be safe. In the worst case scenario, an incorporated business can declare bankruptcy and you can turn around a start a new business the next day with a new corporation.

Step 3: Always get it in writing

There isn’t an aspect of your business that couldn’t benefit from a well written contract. Whether that document is between you and an employee, vendor or client having all the terms clearly spelled out will help reduce the instance when someone could find fault with your practices. That’s why contracts should always include clauses to consider all the possibilities of a particular outcome. 

Step 4: Don’t steal staff

Too often the best potential workers are already working somewhere else. There is nothing wrong with hiring a worker away from another company. It happens all the time. However, when you get into situations where intellectual property is involved it might cause some problems down the road. For instance, if you’re starting a mobile game development company and you poach a great designer from another company, that company might take exception with the kind of knowledge their former employee is bringing to your company. This is why there are non-compete clauses in a person’s severance contract. If you are hiring someone in a situation like that make sure they are coming to your business free and clear.