Matt@RFR
Titanium
- Joined
- May 26, 2004
- Location
- Paradise, Ca
The last 4 years have been frustrating, humbling and downright miserable... and things are coming to a head. Quick background:
Hit with big customer, kept us (and 3-4 other shops) busy 7 days a week for years. I immediately saw how much money was going to other shops and started to look for buildings to expand in to. We searched long and hard, found nothing acceptable to lease or even buy, and finally stumbled on a developer who was getting a project going in our town. We signed up for a new building for less than anything local was listed for, and with renting two bays out my payments will be less than any of the existing shitholes was going to cost to lease. All good, right?
We started looking for buildings to lease over 4 years ago, and this new building has taken almost 1.5 years to get to the point that they are starting finish stuff inside (sheetrock, finish plumbing, etc.) In that 1.5 years, things changed drastically with that big customer and the bottom line is, we are very close to going out of business. The strain that this project has put on my business has been fascinating to watch. And even though I specifically asked how much money out of pocket we would be in total before I signed any papers, I've had to use all of my reserves I built up over the last few years to get the building going and to cover a couple slow spots.
There's no physical way I could fit another machine in the current shop, and no way to expand it since we're not legal to be here in the first place. I put a downpayment on a new machine 10 months ago, and have had an NC bandsaw in storage for much longer than that. Hindsight being what it is, I should have overpaid for one of those shithole rentals years ago, but every time I thought about it, things were looking good to head in another direction so it never made sense at that moment. Knowing what I know now, we would have had the new machine paid off by now, but crystal balls are a real bitch that way.
The irony is that a large motivator for us to expand was to get away from this one big customer making up such a large percentage of our sales. I never liked that and wanted to diversify within the first year, but I couldn't turn their work away and I didn't have any available machine time to work on bringing in new customers, so we were stuck until we could expand.
So that's the sob story in a nutshell. The new buyer at our big customer has taken things in a completely different direction (low prices with no concern for quality) and we are actively getting boxed out. We've still got a ton of work to do (we're booked through the end of March), but at barely-better-than-break-even-prices so I have no choice other than to tank quality (only aesthetics, not accuracy) on purpose to be able to compete, and I HATE that.
We will never be low bidder except maybe on what has ended up being our specialty, which is small, complex, tight tolerance parts in a small production setting (we typically deal with quantities of 1 up to 1500 or so). However I can tell you that we have delivered late exactly twice in the last 8 years (both due to equipment breakdowns), and our attention to detail is next to flawless. Every part is 100% machine chamfered unless otherwise specified, and nothing leaves this shop further than .002" off nominal, no matter how loose the drawing tolerances are. Fit and finish are our top priority.
So now, after coming up mostly empty handed pounding the pavement locally, I get to beg for work here. We excel at long term relationships, and I can provide customer references to back that up if you'd like. RFR Custom Fab | HOME
Equipment:
2017 Brother R650 pallet changer (in less than a month)
2007 Haas VF-2ss, 4 axis
NC bandsaw (when we move)
Micro-Vu 6"x6" video measuring machine
Hit with big customer, kept us (and 3-4 other shops) busy 7 days a week for years. I immediately saw how much money was going to other shops and started to look for buildings to expand in to. We searched long and hard, found nothing acceptable to lease or even buy, and finally stumbled on a developer who was getting a project going in our town. We signed up for a new building for less than anything local was listed for, and with renting two bays out my payments will be less than any of the existing shitholes was going to cost to lease. All good, right?
We started looking for buildings to lease over 4 years ago, and this new building has taken almost 1.5 years to get to the point that they are starting finish stuff inside (sheetrock, finish plumbing, etc.) In that 1.5 years, things changed drastically with that big customer and the bottom line is, we are very close to going out of business. The strain that this project has put on my business has been fascinating to watch. And even though I specifically asked how much money out of pocket we would be in total before I signed any papers, I've had to use all of my reserves I built up over the last few years to get the building going and to cover a couple slow spots.
There's no physical way I could fit another machine in the current shop, and no way to expand it since we're not legal to be here in the first place. I put a downpayment on a new machine 10 months ago, and have had an NC bandsaw in storage for much longer than that. Hindsight being what it is, I should have overpaid for one of those shithole rentals years ago, but every time I thought about it, things were looking good to head in another direction so it never made sense at that moment. Knowing what I know now, we would have had the new machine paid off by now, but crystal balls are a real bitch that way.
The irony is that a large motivator for us to expand was to get away from this one big customer making up such a large percentage of our sales. I never liked that and wanted to diversify within the first year, but I couldn't turn their work away and I didn't have any available machine time to work on bringing in new customers, so we were stuck until we could expand.
So that's the sob story in a nutshell. The new buyer at our big customer has taken things in a completely different direction (low prices with no concern for quality) and we are actively getting boxed out. We've still got a ton of work to do (we're booked through the end of March), but at barely-better-than-break-even-prices so I have no choice other than to tank quality (only aesthetics, not accuracy) on purpose to be able to compete, and I HATE that.
We will never be low bidder except maybe on what has ended up being our specialty, which is small, complex, tight tolerance parts in a small production setting (we typically deal with quantities of 1 up to 1500 or so). However I can tell you that we have delivered late exactly twice in the last 8 years (both due to equipment breakdowns), and our attention to detail is next to flawless. Every part is 100% machine chamfered unless otherwise specified, and nothing leaves this shop further than .002" off nominal, no matter how loose the drawing tolerances are. Fit and finish are our top priority.
So now, after coming up mostly empty handed pounding the pavement locally, I get to beg for work here. We excel at long term relationships, and I can provide customer references to back that up if you'd like. RFR Custom Fab | HOME
Equipment:
2017 Brother R650 pallet changer (in less than a month)
2007 Haas VF-2ss, 4 axis
NC bandsaw (when we move)
Micro-Vu 6"x6" video measuring machine
