By 1795, Boulton and Watt had erected some 300 engines, but had no engine factory and seldom built complete engines. Their engine business was complicated and hard to control.

James Watt's important patent on the separate condenser - the foundation of his engine business - was due to expire in 1800. Thereafter, engine-making would be thrown open to many new competitors.

To prepare themselves, Boulton and Watt decided to consolidate their position and 'systematise' engine construction. The result was the Soho Foundry.