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Old 01-08-2012, 07:45 PM   #1
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Need help from business owners on feasibility study


  • One electronic product.
  • 13 components.
  • Assembly requires hand tools only.
  • One work cell for each employee.
  • Each employee assembles complete product from start to finish in his own work cell.
  • Have manufactured 4,000 units in last 5 years.
  • Looking to manufacture 5,000 in the next year.
  • Present building is small 1500sq/ft.
  • Would like to turn present building into office/training/shipping & receiving.
Idea:
  • Let each employee assemble units at home, providing their own tools, heat, electric and all of the other overhead.
  • Will provide each with kits and at same time pick up assembled kits.
  • Will pay by the unit.
  • Employees will not be sub contractors, just employees that work at home.
Yes, No, Maybe?

Thanks
Craig

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Old 01-08-2012, 08:24 PM   #2
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Need help from business owners on feasibility study


More info!?

RF

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Old 01-08-2012, 08:27 PM   #3
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Need help from business owners on feasibility study


Are you going to cover "SS" - deal with Income Tax -
Do they get 1042's or 1099's?

RF
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Old 01-08-2012, 08:43 PM   #4
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Need help from business owners on feasibility study


Thank you for your reply

We handle all tax and SS issues. Everything is above board.

Mostly looking for ideas on employees working at home in stead of building a larger facility, then maybe next year not needing it.

Thanks
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Old 01-08-2012, 09:08 PM   #5
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Need help from business owners on feasibility study


Sounds like a bad idea to me. Unsupervised assembly will be slower.
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Old 01-08-2012, 09:13 PM   #6
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Need help from business owners on feasibility study


No finished kits, no pay,
If we get the order, it will be for 5000
If you can make 30 kits in one week, you get paid for 30. If you make 6, you get paid for six. There will be a min.
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Old 01-08-2012, 09:36 PM   #7
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Need help from business owners on feasibility study


Some concerns I might have:
  • Quality control
  • Liability using their tools/location
  • Productivity forecasting
If they are subs or contractors I don't think you'd have the same liability issues.



What is the workplace culture like for your company? Are people going to miss coming to work? Distributed companies like you're talking about can lead to depressed employees...no sense of community or camaraderie...and to higher turnover and lower productivity.
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Old 01-08-2012, 10:45 PM   #8
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Need help from business owners on feasibility study


I like the idea. You would want each employee to prove that they have a separate room in their house where they will be doing the work. A room with a door to keep children (sticky fingers touching clean components & spilled drinks) and pets (hair and dander getting on components) out.

A woman who brings her daughter to my daycare used to work in an office building handling insurance claims. I believe she works for Aetna. Last fall they told all of their employees that if they could set up a separate office in their house, away from noise, they could keep their jobs because they were closing down the building they had been using.

She and her husband walled-off a small room in their basement and Aetna sent someone over to set up the computer, internet and phone.

She loves working at home - no commute on icy roads, no traffic to deal with, doesn't have to buy nice clothes, no fuel costs for her van, etc. When she punches out for the day, she can have dinner on the stove a few minutes later.

I think that paying for the # of pieces finished gives good incentive to work faster for a bigger paycheck.
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Old 01-09-2012, 05:08 AM   #9
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As long as everything is legit, it sounds like it could work. Gma2rjc makes some good points
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Old 01-09-2012, 05:16 AM   #10
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I've known two different people who have done home electronic assembly---

Both were hard workers and liked the job---worked well for them---Might be a good deal for both parties.

You need to talk to your accountant---But I think you will find this to be a plan with real possibilities.
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Old 01-09-2012, 09:06 AM   #11
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Need help from business owners on feasibility study


Quote:
Originally Posted by CNM Design View Post
No finished kits, no pay,
If we get the order, it will be for 5000
If you can make 30 kits in one week, you get paid for 30. If you make 6, you get paid for six. There will be a min.
This sounds more like subcontract/contract work which would be of less cost to you tax wise and insurance wise. The subs/contractors would need proof of liability and workman's comp and they would pay their own unemployment insurance, you just wouldn't have control over how, when or where the product is manufactured.

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