EXECUTING a project for sale

I always divide the project up into clearly defined milestones.

  1. Exploration budget & payment plan
  2. Research & Viability of customer's idea
    (identify compliance and regulatory issues)
  3. Ballpark costing of whole project and timeline and repeat from #1
  4. Acceptance & rework to #2
  5. Element tests of subsystems
  6. POC components required for customer approval & understanding
  7. Collaborate on Product Spec & then Initial design expectations
    -- Getting this far lets you see how much the customer is committed and understands
    -- You may walk away now...!

**1. ** FUNCTIONAL prototype budget & payment plan
2. FUNCTIONAL prototype development
3. Acceptance & rework to #2
4. PRODUCTION prototype budget
5. PRODUCTION prototype development
6. Acceptance & rework to #5
(engage compliance and regulatory testing protocol)
-- The proposal and exploration budget / milestone payments only get this far
-- Customer may walk away now !

  1. Review and marketing analysis
  2. PRODUCTION budget & payment plan
    *3. * Away you go...
    Steps can be combined - but payment schedule just gets compressed - may get slightly higher if timelines are also compressed.
    Also let the customer know up front - in writing - that unwritten variation orders don't exist.
    Written variation orders will probably cost extra in time and/or money.
    Also let them know of limitations up front that are keeping the budget under control...e.g. limited memory, performance goals, specific suppliers etc

If I'm not sure of the customer's position or the budget is more than I can risk...
Payment per stage is 60% up front, 30% on delivery, and balance of 10% on first beneficial use.
All these terms and milestones are clearly repeated with each offer document.

Very useful.

Have you done any development of a commercial product where you had no initial customer - i.e. you were financing the design and development on your own and carrying the risk that there might be too few sales to recover your costs.

...R

What about a milestone, very early in the process;

X. Check regulatory and legal compliance requirements.

For a self-funded project, obviously the milestones are a lot more fluid...

While the budget should be defined, labour costs are often pushed out of sight due to passion and enthusiasm... but the overall plan sequencing should stay fairly true, otherwise if you don’t review your own work appropriately, you can drop a lot on rework, or warranty make-good. (Even software updates can blow out in the field)

Thanks - added...
Regulatory, or compliance testing REQUIREMENTS (possibly outsourced) should be determined in the initial steps 1 & 2, or your basic design may fail later!
Of course actual testing and certification / compliance would occur at PRODUCTION 5 & 6

Good point though.

Hmmm. Don't see DOCUMENTATION mentioned even once.
Paul

Haha, good point...
I start the docs from the very beginning, so any minutiae aren’t missed, but a really important part of the project - thanks !

Block diagram
Schematic
Mechanical (& pcb layout if needed)
Software Reference
Theory of Operation
User Guide
Troubleshooting

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