Starting up a laser-based business or transitioning anexisting equipment-based operation into a servicesbusiness, Specialty Contract Manufacturing (SCM)affords the entrepreneur some interestingopportunities. SCM advantages are (1.) the ability tobe selective in projects and customers, and broaden outthe customer base; (2.) having cashflow early in thebusiness cycle assuming you have laser systemsavailable; and (3.) leveraging your client-paid projectsinto Intellectual Property that protects both clients andsuppliers from competitive pressures. Onedisadvantage is the questionable valuation of yourcompany at the time of an exit because of theinvestment market’s perception of ‘contractmanufacturing’ as nothing special.
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