A software bug costs a deploy. A hardware bug found after the production run costs a warehouse of units, a rework bill and three months. That asymmetry is why hardware and deep tech founders plan more, raise more and argue longer before saying yes to a purchase order.
This page is for founders building physical products, from consumer devices to industrial sensors and lab instruments. It covers the money mechanics first, then the work around certification, suppliers and buyers, and where a company workspace helps or doesn't.
Why hardware startup operations eat cash
The useful idea here is the cash conversion cycle. The Corporate Finance Institute defines it as the time a company takes to turn its investment in inventory into cash, calculated as days inventory outstanding plus days sales outstanding minus days payable outstanding. Inventory and slow-paying customers lengthen it. Paying suppliers later shortens it.
Here's a made-up but typical example. Your factory wants payment 30 days before shipping, so payables work against you. Units take 45 days at sea and sit 60 days in a warehouse before they sell. Your retail partner pays in 60 days. Cash you paid out in January comes back sometime in July, and if you're growing, the next, bigger order needs paying before that.
So in hardware, growth itself uses cash. A software company that doubles sales usually improves its runway. A hardware company that doubles sales can run out of money doing it. Every plan you build should show this, month by month.
Where hardware work fits in Nautis, and where it doesn't
| Need | In Nautis | What it covers | Specialist system |
|---|---|---|---|
| Unit economics and cash | Financial Planner | Unit price, cost of goods per unit, tooling, loans, cash flow | Inventory costing in your accounting system |
| Runway | Startup Health | Monthly cash, burn and runway with alerts | None |
| Spend before revenue | Expenses | Budgets by category, approval rules, receipt scanning | Purchase orders in an ERP once volumes grow |
| Certification | Task Boards, data rooms | The project plan and the shared test reports | Accredited test labs and their reports |
| Suppliers and factories | Contacts, DocSign, Meetings | Who's who, signed NDAs and supply agreements, call notes | Supplier portals, a PLM tool for drawings and changes |
| Retail and distribution buyers | Leads CRM, Invoices | Buyer pipeline, deposits, overdue tracking | EDI or a retailer's own portal |
| Inventory and bills of materials | Nothing built in | A sheet can hold a simple list early on | Inventory, MRP or ERP software |
Modelling units, tooling and loans
The Financial Planner works in units, which suits hardware. On Revenue Items, set a unit price, a billing frequency of one-off and forecasted units per month, then enter cost of goods sold per unit. The guide's templates include SaaS, E-commerce, Restaurant, Services and Mobile App. There's no hardware template listed, so start blank or from E-commerce, which is closest for unit sales.
Put moulds, test fixtures and certification fees under Non-Recurring Expenses on the Model Inputs tab, with the month they're paid. Add equipment as a starting balance on the Balance Sheet tab. If you've taken a venture loan or equipment finance, add it on the Loan Schedule tab with principal, rate, term and start date. Interest flows into the P&L and repayments into cash flow.
Then stress it. Clone the project and change three things in the copy: cost per unit up 15%, the production run a quarter later and the first retail payment 30 days slower. Compare shows both versions side by side. If the stressed case runs out of cash before the second run, raise more or cut the first order. Use the Notes tab to write down yield and lead-time assumptions, because those are what an investor in hardware asks about first.
One quirk to know about in Startup Health: its revenue field is for recurring revenue only. Unit sales are one-off, so the guide's rule is to treat them as cash, not MRR. Your growth tile may look flat while sales climb. Runway, which comes from cash and burn, stays accurate, and it's the number that matters most for you.
How do you control spend before the first production run?
Put a budget and an approval on every category that can surprise you. In Expenses, create budgets for Prototyping, Tooling, Certification and Freight, monthly or quarterly. The Budgets page shows actual spend against each with progress bars, and alerts you when one goes over.
Add an approval rule for anything over a threshold you choose, say $2,000, so a single engineer can't commit you to a new tool run without a second person seeing it. Policy rules can warn or block, for example on rush freight without a reason. Engineers on the road can use Scan a Bill to log a receipt from a supplier visit on the spot.
The biggest spend decisions need more than an approval. Log the first production order in the Decision Loop as a Finance decision with Reversible? off, since you can't un-order 3,000 units. Write the key assumptions: yield above 95%, retail sell-through of 40% in the first 90 days, no tooling change after pilot. The form suggests a 24 to 48 hour pause for irreversible calls. On a purchase order this size, that pause is cheap.
Certification is a project with a deadline
Many products can't be sold until they meet the rules of each market. In Europe, the European Commission says CE marking is the manufacturer's responsibility: carry out the conformity assessment, set up the technical file, issue the EU declaration of conformity and affix the mark. It also points out that the mark doesn't mean the EU has approved the product as safe, and that putting it on products outside the rules is forbidden.
Run certification on a task board of its own, with the lab booking, pre-scan, fixes, formal test and paperwork as tasks with owners and due dates. Board-level due dates and priority make it visible next to the production plan, so nobody books a ship date before the test date.
Keep the finished test reports and declarations in a data room. Retailers and distributors often ask for them, and a private link with downloads allowed is quicker than email chains. Each file keeps its version history, which helps when a minor design change means a report gets reissued.
Suppliers, distributors and the buyers who pay late
Put every supplier, factory contact and freight agent in Contacts, in a Suppliers folder, so the whole team works from one list. Send NDAs and supply agreements through DocSign, which handles PDFs for signature and keeps an audit log.
Distributors and retail buyers are a sales pipeline. In the Leads CRM, set stages such as Intro, Samples sent, Line review, Purchase order and Reorder. Use the Expected Close Date for the buyer's line review date, since that's when the decision actually happens.
Then chase the cash. In Invoices, record deposits as partial payments, and watch the aging analysis for retailers paying past terms. Nautis doesn't send dunning emails on its own. You send a reminder from the invoice page, or approve one when the Chief of Staff briefing flags an overdue invoice.
A month before the first production run
- Week 1. The pilot build comes back with a 7% failure rate. The team logs the fix, a revised enclosure, as a Tech decision with a 30-day review.
- Week 2. The revised tooling cost goes into the Financial Planner as a Non-Recurring Expense. The stressed scenario now shows four months of runway after the first run, down from six.
- Week 2. The founder asks the existing venture lender about extending the loan. The new terms go onto the Loan Schedule in a cloned project to compare.
- Week 3. The test lab confirms a date. The certification board moves the ship date task by two weeks, and the retail buyer gets an honest update.
- Week 4. The production order goes through an approval and into the Decision Loop as irreversible. The deposit is logged in Expenses against the Tooling and Production budgets.
When Nautis isn't the right tool for hardware
- Inventory and stock levels. Nautis has no inventory module. Use inventory or MRP software from your first real production run.
- Bills of materials and engineering changes. A PLM or BOM tool tracks part numbers, revisions and supplier sources properly.
- Accounting with inventory costing. Nautis isn't an accounting system. Inventory valuation and landed costs need accounting software and an accountant.
- Factory floor and quality records. Work orders, inspection data and quality systems belong with your manufacturer or a dedicated quality tool.
- Hands-on manufacturing help. NIST's Manufacturing Extension Partnership serves small and medium-sized US manufacturers through nearly 1,400 advisers at more than 450 service locations. Software can't replace that kind of help on the floor.
- A long track record. Nautis launched publicly in July 2026, so independent reviews are still few.
If your hardware is also a climate technology, read the climate tech startups page for grants and project finance.
FAQ
What software does a hardware startup need?
Early on, a unit-level financial model, runway tracking, spend control with approvals and a way to run certification and supplier work. From the first production run you also need inventory or MRP software and accounting that handles inventory costing. Nautis covers the first group, not the second.
What is the cash conversion cycle for a hardware startup?
It's the time between paying for inventory and collecting cash from the customer, calculated as inventory days plus receivable days minus payable days. Hardware startups often have long cycles because they prepay factories and wait on retail payment terms. Shortening it frees cash without raising more.
Can I track inventory in Nautis?
Not properly. There's no inventory module. A sheet can hold a simple parts list before you have real stock, but once you're buying components and holding finished goods, use dedicated inventory or MRP software.
How should hardware startup operations handle certification?
Run it as a project with its own plan, owner and test date, and don't promise ship dates before the lab confirms. For the EU, the manufacturer must carry out the conformity assessment, keep a technical file and issue a declaration of conformity before applying CE marking.