starting a testing lab

[djacobow]

For years, I've been mulling over the idea of going into business as a testing lab. In particular, I have some experience doing informal and precompliance testing of products for Energy Star certifications. I'm an EE and certainly understand the test methodologies and test equipment. Relative to some engineers I've worked with, I think I'm above-average (but by no means brilliant) in setting up meaningful and accurate test setups without obvious faults.

What I'm less clear about is:

- whether this is a viable business. Existing labs seem to do fine, and some like EMC labs seem booked solid in my area (though full-blown EMC seems a high bar to start out, what with chamber requirements, etc)
- how much capital it takes to get going. I think I have a decent sense of the type of gear I'd need to do, say, IEC 62301 (standby power) and similar tests, but I wonder what I'm missing
- how high is the effort to get certified? And how long would that take in best / average / worse case scenarios. How long would I be forced to bleed money with no income

Anyone here been down this road?

[uncle_bob]

Hi

Unless the equipment costs a fortune or the skills involved are exotic, you likely will have a tough time finding customers. The EMI / EMC guys are booked because nobody wants to shell out for the test gear and test setups. In any case, consider that "sales" (finding customers) is a big part of any business. When you are first starting out, it probably is almost all of your time. Even after a few years, you will spend way more time that you might guess on bringing in new business. In a lot of cases, this quickly gets you to a "inside guy / outside guy" arrangement. One of you does the testing and "real work". The other person focuses on customer interface / quoting / collections / and drumming up new business. With the right pair it can work very well. With the wrong person .... disaster.

Bob

[djacobow]

Yeah, I suck at the sales aspect. I think if I did manage this, I would try to have a few customers lined up before starting. But the companies I know that use such labs, I think, really, appreciate one-stop shopping for all their certification, and I would probably only be able to offer a handful at first.

It does seem like a pretty heavy lift for an individual starting from nothing.

[uncle_bob]

Yeah, I suck at the sales aspect. I think if I did manage this, I would try to have a few customers lined up before starting. But the companies I know that use such labs, I think, really, appreciate one-stop shopping for all their certification, and I would probably only be able to offer a handful at first.

It does seem like a pretty heavy lift for an individual starting from nothing.

Hi

Indeed some places are fanatic about one stop shopping. It reduces their costs in surprising ways. The whole "survey to make sure all the traceable equipment calibration stuff is in place" is one way. The "ISO audit" stuff is another way. There also is the more basic "I know who to call".

It is not at all unusual to be good at one set of things and less than stellar at another set of things. The normal answer is a partner. In many cases it's literally a mom and pop deal. Dad does one half of it and mom does the other half. All the money goes to the family so there is no argument over splitting this or that.

Bob

[Ice-Tea]

Something you may not have thought about or budgetted: you say you're decent with Energystar stuff. Nice. What do bought versions of the relevant standards cost you? How much more for all the standards those standards refer to?

It's one thing to scrap bits and pieces of the internet for your own use, but if you present yourself as a lab, you will probably have to buy a stack of standards. And that s**t is expensive.

[uncle_bob]

Something you may not have thought about or budgetted: you say you're decent with Energystar stuff. Nice. What do bought versions of the relevant standards cost you? How much more for all the standards those standards refer to?

It's one thing to scrap bits and pieces of the internet for your own use, but if you present yourself as a lab, you will probably have to buy a stack of standards. And that s**t is expensive.

Hi

Well, if we are adding up overhead costs:

Equipment calibration at least once a year with full traceability and certs from a "real" lab.

ISO certification from a "real" auditor that people recognize (Bob's Finest Audit Service does not count ....)

Standards and updates to standards ..... and referenced standards ... and sub-standards and .... (= the library)

Profesional acreditaron / memberships

Financial audits and all the "tax man" stuff. (Licenses, permits, paper ... paper .... paper)

Building rent and utilities.

Insurance (basic like building and cars, liability to cover the work you do).

.... and on and on.

I'd say that at least what is on the list above is going to be on the questionnaire we would send out. You could easily say that much of that is none of our business. Surprisingly enough, that is a rare response. You may not need to prove all of the above, but you at least need to answer the question "yup, we have that". The one that many people are surprised by is the liability insurance. We want to be able to sue you for our damages if you screw up. If our customer bills us $4.6 M due to a mistake you made, we want to pass that on to you. Before you waffle about customers never doing that sort of charge back, it happens all the time. That doesn't mean we pay it, but there is a discussion.

Lots of fun.

Bob