I want to start a machine shop.

I would like to open my own shop for machining and welding. Is there still a place for small shops with one maybe 2 employees with only a few machines? I'm in Florida and have about 70 thousand dollars for this. This is something Im really passionate about, but is it financially reasonable? Any advice from older generations?

There is a place for small shops, but it takes some effort. You mentioned your passion for machining and welding, but are you good at these things? I have a one man shop in Southern WV. It is a terrible place to try and start a business, but it's where I call home now. I got lucky, in that after several years of learning my craft, I had an opportunity to do some work with an out of state client, and that has now been several years of mostly steady work. Local business is a small percentage of my yearly revenue.
$70K isn't a lot of money to just start a shop all at once, or maybe it is. It all depends on what you want to do. Sheet metal is out of the question, but you can get a decent setup if you want to do fabrication. You need to decide what type of work you are going to pursue, and start designing your shop.
At a minimum, you will need excellent CAD skills, welding most metals with most processes, manual machining skills, knowledge of building spreadsheets for bidding jobs, bookkeeping and accounting, salesmanship and marketing, and a capacity to motivate yourself daily with seemingly insurmountable problems all around you. Do you have a building to house your shop already?
Given the vague and open ended nature of your inquiry, I would strongly suggest you get a job, invest the money, and explore your passion with your discretionary income. Going into business for yourself will destroy your passion, but if you have the courage and fortitude to rebuild it, you will have a chance at success.
It's not enough to be the cheapest, or the best, you have to be both if you want to make the sale.

What are you interested in? What kind of walk in work do you anticipate getting in your area?

Nothing stopping you from getting a lathe, a mill and a welder and going around to see what you can scrounge up for work. I don't know that you'd advertise anything until you get some experience under your belt and get set up to at least employ yourself, first.

Are you near central East Florida? If so, I recommend that you give me a visit.

I started with a lot less, but I also had a lot less responsibility 11 years ago. I could live on a couple grand a month.

A solid business plan is more important than the money you have to start out. Took me a few years of being in business to figure that out.

The appropriate question isn't "Can I start a machine shop?"

It is: "Who are my customers?"

Answering that question will define what skills you need, the equipment you should buy, the location, how you'll market your services, and if your knowledge + budget is capable of actually pulling this off. I've been in many really swank shops. With the exception of the high-end prototype outfits, the story behind nearly every piece of gear on the floor is "We had a customer who wanted to do X" or "We had a product that needed Y." I've never once heard "We wanted this Z and we had cash so we bought it hoping we could find some work for it."

I've never heard it because the shops who think that way don't stay in business.

In the oilfields of West Texas, there would likely be tons of work. The larger machine shops are always busy. Most stuff is needed NOW! Often, money is no object, time is the determining factor.

My neighbor has been a one-man fab shop for many years. Sometimes he's slow, many times he is swamped and plans to hire a helper, but I don't think he ever has. He's a great welder, but the only machining he does is on a drill press.

So, in this area at least, there is a lot of work to be had. I don't think $70,000 would be enough to get you started. Expect to work nights & weekends, too.

The advice I always give and they never follow is before you buy a machine, look for a location, or spend money on anything else, take an accounting course. Never mind the cop out "I will have an accountant do it". You need to be able to read a financial statement and talk to a banker.

Bill

9100 said:

The advice I always give and they never follow is before you buy a machine, look for a location, or spend money on anything else, take an accounting course. Never mind the cop out "I will have an accountant do it". You need to be able to read a financial statement and talk to a banker.

Bill

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I 2nd that, PLUS establish the market sector you want to aim for and know you can perform in, ......there's nothing in making left hand pink widgets, because you want to, when all that sells on your patch is right hand blue ones, .................as your name and rep will go down the tubes if you have an ''oh I can do that, no sweat,'' attitude when you haven't a clue what you're doing so won't deliver on time.

Here, in BC, Canada, there is a shortage of machine shop. Many shops have a few months waiting time and some do not even take new customers - many of those are one or two men (and at least one a man and woman operation...) operations. Any decent machinist will have no problem getting a job or starting on their own.

brianweldor said:

It's not enough to be the cheapest, or the best, you have to be both ^^^ plus fast on delivery and willing to accept slow on being paid, more often than not ^^^ if you want to make the sale.

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Pragmatic fix? Or not?

2CW

Monarchist said:

Pragmatic fix? Or not?

2CW

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Word. _

Take the $70K and invest in Bitcoin. Two years ago.

But seriously, there was a guy selling a shop's worth of manual machines down there about 6 months ago. Try to find him, and buy his gear and maybe the business if it can be valued fairly.

And listen to the advice above. Much of it came at a higher cost than the $70K.

Chip

Need a lot more info, what are your skills? Are you going to keep your day job and start slow working out of your garage part time, or are you going full time right off the bat and have no other income. How much money do you need to make ends meat, do you have a wife, two kids, a mortgage and two car payments? Or are you renting a room in the low rent district and have no dependents other than a pet goldfish? Depending on the situation $70,000 is either more than enough or not near enough.

The one important thing you said is that you have a passion for it. That is good. Passion can overcome obstacles and can contribute heavily to success. Good luck!!

OliveDread said:

I would like to open my own shop for machining and welding. Is there still a place for small shops with one maybe 2 employees with only a few machines? I'm in Florida and have about 70 thousand dollars for this. This is something Im really passionate about, but is it financially reasonable? Any advice from older generations?

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my father had his own business and ended up retired with no savings and $1100/month SS when retired.
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some CNC operators working for a company can make over $75,000/yr and saving over $30,000 to $50,000 a year is possible and having easily over a million saved when retired with SS have $100,000 yr (over $8000/month) in retirement income easily possible
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just saying running your own business is like being your own lawyer. most are not that good at it and better off not doing it
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math says $100,000 in 401K makes 6% over inflation rate long term average profit. same $100,000 buying a building and paying 4% taxes and 4% loan interest thats a 8% loss so you need to make 14% just to do as well as just leaving it in a retirement account

I left a job with higher pay to start in a machine shop with crap pay. I like the shop environment and learning about machining. Like yourself I like machining, welding, etc. Before starting in the machine shop, whatever I know was self taught and came from books, Youtube, Google, etc.

I hope to make some money on the side with my own little existing "machine shop" (manual lathe & "Bridgeport" clone, welders, cnc plasma cutter, etc).

However, would I want the stress, risk and responsibility of being a full time job shop, I'm not sure. I've recently had my own excavation business for 17 years and it taught me a lot about customers and business. Don't know if I want to jump in full time business in job shopping. My boss often sleeps at his factory to get the jobs done. Many times he opens the door in the morning with puffy eyes, it's obvious he hasn't had a good 8 or 9 hours sleep.

I know it's easier said than done but I'm always trying to think of things to make and sell. I like the concept of design/make once, sell many times, and improve the manufacturing process. I have a big respect for job shop guys that have to think of a way of making a part every single time. They have to make it fast, good, and on budget. Every time I make something for the first time, it takes design, experimenting, finding parts & materials, blah blah blah. If I had to make it a 2nd time it would be easy, a 3rd time easier still. But job shopping mainly seems to be get it done fast, cheap and correct first time - stressful unless you are really good and it comes easy.

Your passion may fill you full of energy and enthusiam, which may help you through any obstacles, and lead you to success. Hopefully doing your passion as a business won't kill the passion in the process.

Good luck with your direction.

DMF_TomB said:

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my father had his own business and ended up retired with no savings and $1100/month SS when retired.
.
some CNC operators working for a company can make over $75,000/yr and saving over $30,000 to $50,000 a year is possible and having easily over a million saved when retired with SS have $100,000 yr (over $8000/month) in retirement income easily possible
.
just saying running your own business is like being your own lawyer. most are not that good at it and better off not doing it
.
math says $100,000 in 401K makes 6% over inflation rate long term average profit. same $100,000 buying a building and paying 4% taxes and 4% loan interest thats a 8% loss so you need to make 14% just to do as well as just leaving it in a retirement account

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Why don't you do us all a favor and get the hell out of threads about owning a machine shop. You contribute nothing to them, you have never owned a shop or been a manager. None of us give a crap about how much money you make, yet you bring it up over and over again. I think you have copy and pasted the above or a version of it dozens of times here. Many others are like me here I am sure, I would rather die broke than put up with the crap someone does working for the man, especially in large companies they are the worst.

I do too. I have a small shop just can't find any work that I can do with a lathe and mill.

Dualkit said:

Why don't you do us all a favor and get the hell out

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Agreed. DMF_Tom would have no idea how to live without the warm bosom of union protected corporate employment.