Perhaps the next new thing isn't a thing but a new way to get products to the market. Little add ons like 2meter modules will have a small incremental revenue but not generate the dollars for developing products.
Let's say Elecraft does 10 to 12 million a year in gross sales. I would assume a hefty pre-tax profit of 2.5 million on those sales. So now what are we going to do with 2.5 mill. By now the company should be debt free so no debt pay down is needed. OK we need to keep building cash reserves etc so let say we have 2mill for product development. . Lets look at the New Flex offerings. Based on my past experiences the cost through first production units of the new Flex could be as high a 1mill. These costs would include tooling, prototypes, field testing, marketing etc. Ok let us do a 1mill product. So let's say that Elecraft has 1mill left over to put into new enhancements of old products. Now comes the hard choices. Do I spend the money adding tricks to old products hoping to keep the revenue growing or do I find other ways to market the products and just sell lots more of them. Perhaps shrinking margins. Basically one has to answer the question what do we want to be when we grow up. Hey, 25% pre tax nothing to sneeze about and Elecraft could stay that way for a good 5 years. But the electronics business is a shark infested industry and there are a couple of old saying I going to use here......... If you stand still, you will fall behind.............If you always do what you always did, you will always get what you always got. George, W6GF PS All of this is my wild ### guessing I do not know Elecraft sales or profits!!!!!! And for you purests out there no I did not considered multi year projects tax loss carry foward, currency,cost, inflation, obsolete parts. And by the way obsolete parts could cost the company dearly. ______________________________________________________________ Elecraft mailing list Home: http://mailman.qth.net/mailman/listinfo/elecraft Help: http://mailman.qth.net/mmfaq.htm Post: mailto:[email protected] This list hosted by: http://www.qsl.net Please help support this email list: http://www.qsl.net/donate.html
