How to give away a machine shop?

I started a machine shop when I was a young man at the age of early seventies without knowing anything about managing a business much less a machine shop.

I bought few tools to build models of my patented inventions, got carried away and ended up with an ISO 9001:2008 certified machine shop Certificate Registration NO. 74 300 4168 and enough State of Alabama grant money to upgrade the registration to ASA100.

The ISO registration makes the shop more valuable than the scrap value of the equipment.

Then few things happened almost at the same time:

I lost my two key customers, the key person (the shop foreman) left, and government exercised its eminent domain rights to buy my land, building and pay all equipment moving expenses.

The problem is that I do not have a place to go to and $320,000 after subtracting some reserve for my old age is not enough to build a new building at a desirable location
In my previous post, I proposed to give the equipment to anybody who is capable managing a machine shop for growth and profitability.

For payment of the equipment, I asked the taker to contract me to be the salesman for 5% commissions. My risk is that I will lose everything if I give it to an incompetent person who cannot produce what I sell. Since I am not asking up front money, the taker can just walk away and lose nothing

It is hard to imagine a better deal to help somebody with limited funds to start his/her machine shop with the intention to manage it for growth and profitability vs. making it into a hobby with no intention for future expansion.

However, because it implied giving away something for nothing the readers of the post assumed it to be as some kind of fraud. I am not asking anybody for up front money therefore how can it be a fraud?

I have enough money to keep going even if I sell all the equipment for its scrap value.

I just want to help a young deserving person to get started.

Happy New Year everybody.

[email protected]

Lets put all your machines on my shop floor and I'll run parts you sell for FREE for a year. Then I keep machines and you go away.

You could legally donate them to a business, and ask for a sales job in return? Then sell your patents/product right to the same company for XXX amount of dollars?

But why? Why would you give away the equipment? (Read, it's value...) To secure yourself a job? If you are as good at sales as you say you are, then you shouldn't need to "buy" yourself a job... If you are that good, then you should be able to sell THEM on the idea to create a spot for you, at the lucrative rate of 100% commission/ 0% salary/draw, at 5% of net sales.

Find an established shop already on their way to growth & profitability. Offer them the machines for a price? See if they'd be any good to work for. Then ask for a job?

Come to 169 Bolling Rd Meridianville Al and let's talk abut it.

[email protected]

Jashley73 said:

You could legally donate them to a business, and ask for a sales job in return? Then sell your patents/product right to the same company for XXX amount of dollars?

But why? Why would you give away the equipment? (Read, it's value...) To secure yourself a job? If you are as good at sales as you say you are, then you shouldn't need to "buy" yourself a job... If you are that good, then you should be able to sell THEM on the idea to create a spot for you, at the lucrative rate of 100% commission/ 0% salary/draw, at 5% of net sales.

Find an established shop already on their way to growth & profitability. Offer them the machines for a price? See if they'd be any good to work for. Then ask for a job?

Click to expand...

You are right and one of the purposes for this posting is to find a shop that is looking for this possibility, including and or taking over the possibility of producing my patented products and let me concentrate on engineering.

If you know somebody who is interested in that proposal please let me or come to visit my place and talk about it

[email protected]

Garwood said:

Lets put all your machines on my shop floor and I'll run parts you sell for FREE for a year. Then I keep machines and you go away.

Click to expand...

Come to visit me and lets talk about it

ilmarluik said:

Come to visit me and lets talk about it

Click to expand...

Come to Oregon- Show me that salesmanship you've got all bottled up.

ilmarluik said:

You are right and one of the purposes for this posting is to find a shop that is looking for this possibility, including and or taking over the possibility of producing my patented products and let me concentrate on engineering.

If you know somebody who is interested in that proposal please let me or come to visit my place and talk about it

[email protected]

Click to expand...

Does you want to concentrate on the engineering, or sales? Ithe smells like fish in here. Again...

Thabks for the invite, but I think I'll pass.

ilmarluik said:

I started a machine shop when I was a young man at the age of early seventies without knowing anything about managing a business much less a machine shop.

I bought few tools to build models of my patented inventions, got carried away and ended up with an ISO 9001:2008 certified machine shop Certificate Registration NO. 74 300 4168 and enough State of Alabama grant money to upgrade the registration to ASA100.

The ISO registration makes the shop more valuable than the scrap value of the equipment.

Then few things happened almost at the same time:

I lost my two key customers, the key person (the shop foreman) left, and government exercised its eminent domain rights to buy my land, building and pay all equipment moving expenses.

The problem is that I do not have a place to go to and $320,000 after subtracting some reserve for my old age is not enough to build a new building at a desirable location
In my previous post, I proposed to give the equipment to anybody who is capable managing a machine shop for growth and profitability.

For payment of the equipment, I asked the taker to contract me to be the salesman for 5% commissions. My risk is that I will lose everything if I give it to an incompetent person who cannot produce what I sell. Since I am not asking up front money, the taker can just walk away and lose nothing

It is hard to imagine a better deal to help somebody with limited funds to start his/her machine shop with the intention to manage it for growth and profitability vs. making it into a hobby with no intention for future expansion.

However, because it implied giving away something for nothing the readers of the post assumed it to be as some kind of fraud. I am not asking anybody for up front money therefore how can it be a fraud?

I have enough money to keep going even if I sell all the equipment for its scrap value.

I just want to help a young deserving person to get started.

Happy New Year everybody.

[email protected]

Click to expand...

Progress, Ilmar, progress.

You have two different tribes of problem to sort. Dormant equipment. "Wished for" futures.

The one that needs sorted FIRST is your fixation on your own "wished for" manner of resolving the other.

Your 'recover, operate, grow, transfer' solution and sales commission doesn't make sense to the "proven performers". Those among us with the relevant knowledge, experience, and resources to make such things happen when and where they DO make sense.

Check your premises:

- Any and all 'certifications' are almost certainly ALREADY valueless if they have not been kept current and for a demonstrably 'going concern' of a business entity. You cannot 'warehouse' nor 'inventory' such things, most especially as you do not appear to HAVE a "going concern". Just the fossil record of one.

One just cannot put ISO9XX in a safe-deposit box, haul it out 2 years later, and claim it is worth $XXX.

Worse, it is specious to claim ISO-wotever even HAD a value for very small firms. Boeing, GE, GMC, certainly. One / two man shop? ONLY so long as it is needed to satisfy a peculiar subset of clientele who insist on it for THEIR 'chain'. Most who have such needs do not even deal with uber-small shops at all. If nothing else, they cannot take a risk on too few 'key' players.

Your plan includes a goal of helping someone else bootstrap a no longer functional business into a vehicle that can provide you with a residual income. You cannot help another until you can help yourself. A.N. Other who can DO the needfuls not only doesn't NEED you - you and your 'plan' would be a burden they have no compelling reason to take up nor carry.

How realistic is that? Not very. Trying more than once to 'sell' that flawed concept hasn't changed that, and will not.

The "futures" tribe is only associated with the "asset recovery/disposal" tribe because you wish it so. Otherwise, to borrow a phrase: "That does not compute".

Until you can loosen your grip on the "futures" tribe, you will be blessed with a literal, not virtual, death-grip on the "assets" tribe. THAT tribe's realistic value decreaseth with each passing week.

Your situation is not unique, it is 'vanilla', 'white bread', common to a thousand one/few-man shops a year that fall off their perch for many reasons or few reasons.

Wise up. "Get real". Liquidate what can BE liquidated. Simple sale, no strings.
Then go and do whatever works for YOU with the time and resources left to you.

ELSE consider the machinery 'grave goods' that your Estate will eventually have to dispose of.

I kid you not. That, too, is as common as 'white bread'.

Bill

A) You are losing your building to the airport?

B) Maybe you disclosed what equipment that you have in the other thread, but I didn't follow it much. Doo you have a Chinese knee mill, 14" lathe, and a 1/2" blade band saw? Or doo you have something that folks can actually use?

C) You say that the business as a whole should be worth more than what the equipment is worth, considering the ISO and whatnot certs. I'm not sure how well those certs traverse sale of ownership or maybe even location?

D) I don't understand what you are expecting to get out of this? You say that you lost your customers (or at least your best one) so, what amount of sales doo you expect to land, that will be worth more to you in the end @ a 5% commission than what the equipment is worth in a quick sale? It doesn't sound as tho you have much work at this time eh?


I am the mod that closed your other thread as I was asked to, and the little bit that I read on the last page seemed "out there". So, I will follow this fully to see where this goes. But please answer these questions for me.


Without reading the whole of the other thread, it seems that you are working this on a benevolent level for some young punk, which sounds nice of you. Maybe you should consider talking to the shop instructor at the local tech school to see if he might know of someone that could possibly be ambitious enough to pick up your ball and run with it?

----------------------------

Think Snow Eh!
Ox

Monarchist said:

Progress, Ilmar, progress.

You have two different tribes of problem to sort. Dormant equipment. "Wished for" futures.

The one that needs sorted FIRST is your fixation on your own "wished for" manner of resolving the other.

Your 'recover, operate, grow, transfer' solution and sales commission doesn't make sense to the "proven performers". Those among us with the relevant knowledge, experience, and resources to make such things happen when and where they DO make sense.

Check your premises:

- Any and all 'certifications' are almost certainly ALREADY valueless if they have not been kept current and for a demonstrably 'going concern' of a business entity. You cannot 'warehouse' nor 'inventory' such things, most especially as you do not appear to HAVE a "going concern". Just the fossil record of one.

One just cannot put ISO9XX in a safe-deposit box, haul it out 2 years later, and claim it is worth $XXX.

Worse, it is specious to claim ISO-wotever even HAD a value for very small firms. Boeing, GE, GMC, certainly. One / two man shop? ONLY so long as it is needed to satisfy a peculiar subset of clientele who insist on it for THEIR 'chain'. Most who have such needs do not even deal with uber-small shops at all. If nothing else, they cannot take a risk on too few 'key' players.

Your plan includes a goal of helping someone else bootstrap a no longer functional business into a vehicle that can provide you with a residual income. You cannot help another until you can help yourself. A.N. Other who can DO the needfuls not only doesn't NEED you - you and your 'plan' would be a burden they have no compelling reason to take up nor carry.

How realistic is that? Not very. Trying more than once to 'sell' that flawed concept hasn't changed that, and will not.

The "futures" tribe is only associated with the "asset recovery/disposal" tribe because you wish it so. Otherwise, to borrow a phrase: "That does not compute".

Until you can loosen your grip on the "futures" tribe, you will be blessed with a literal, not virtual, death-grip on the "assets" tribe. THAT tribe's realistic value decreaseth with each passing week.

Your situation is not unique, it is 'vanilla', 'white bread', common to a thousand one/few-man shops a year that fall off their perch for many reasons or few reasons.

Wise up. "Get real". Liquidate what can BE liquidated. Simple sale, no strings.
Then go and do whatever works for YOU with the time and resources left to you.

ELSE consider the machinery 'grave goods' that your Estate will eventually have to dispose of.

I kid you not. That, too, is as common as 'white bread'.

Bill

Click to expand...

Bill, greetings
Here are my responses to the very valid issues which you raised:
1. The ISO is good until May 3 2017. You are also right ISO certification is not needed for most of the selling. However, in my neighborhood, Huntsville AL is it is a great help because this market is dominated by the major aerospace and defense industries and hundreds of their subcontractors. For proof google “Huntsville Alabama a Smart Place You Tube”.

2. Your plan to help somebody else…………..
You are right; I know many people who tried to help others and got burnt in the process. In my case, I am willing to take the chance that I may just find a worthy young man who could use a little aid to get started.

My primary objective is not to get residual income. I have it already. The offer to earn 5% commission income is a nice thing to get if it happens. However, I will do my best to make it happen for the purpose of helping the taker of the equipment to get started.

I wish I had my son to take it over, but he is one of the top executives in a major US oil company and therefore it will be a significant financial loss for him to get involved in the management of a small machine shop.

In any case, the offer will close at the end of February. If not sold or given away by that time I will retail it off on E-Bay.

3. There is an entirely new phenomenon that is happening now in the skilled labor market that most of the employers have not yet noticed. However, it is very likely to become a major issue when Trump’s economics triggers a huge expansion of US manufacturing and thereby creates shortage of the Industrial and Mechanical engineers.

Half of the STEM graduates from the US universities are F1 students. They can stay in the US for 2-1/2 more years after graduation and earn prevailing salaries if they enroll in an OPT program.

US industry has discovered that source of Industrial and Mechanical Engineers. About 12% of F1 graduates are now employed in OPT programs.

OPT program has one more attraction for the F1 graduates. If during the 2-1/2 years they create half million dollars of net worth they will become eligible for a permanent stay in the US.

That creates a large pool of young people who want to start machine shops but need a little startup help. That triggers another argument no small machine shop can produce half million dollars net worth in 2-1/2 years.

A traditional machine shop startup can not do it, but it is possible for a well planned professional corporate style startup.

I made few inquiries in the local University of Alabama Huntsville campus (UAH) and discovered that they want to provide OPT opportunity to their F1 students.

UAH College of Business Administration asked me to propose a business model which will take full advantage of the OPT opportunity. Within a month I will know if there is hope that it will lead to startup of an investor financed OPT based corporation.
If it happens then I will close this post and sell all my equipment for stock in the to be formed OPT based company.

Thanks again for you pointing out problems with my pasting.

Sincerely,
[email protected]

ilmarluik said:

Thanks again for you pointing out problems with my pasting.

Click to expand...

It isn't your posting. It is your private wish-for world-view that is impairing your ability to function in the physical world.

Huntsville?

Yah. We know what it is . or was.

Personally had the dubious distinction of being assigned to fly down for a one-on-one with Werner von whatisface back in the day.

Not one of my favorite memories, that meeting, and I soon understood why more Senior folk at Day Job had dodged the 'honour'.

Now .. 'good luck' with your plan, but... you need to change. And will not.
So the successive flavours of flagellation are simply becoming annoying, here.
Just take it all down the road to some other venue.

PM is bound to be spring-loaded ready to stick a fork in it. Again.

And YOU should be aware that several failed go-rounds at it here on heavily-viewed and globally indexed and searched PM have certainly poisoned your own well.

IOW - you've made something of a 'circus' of yerself in enduring records to anyone who does the LEAST bit of Go Ogling in future as part of THEIR Due Diligence.

Sometimes persistence is not so virtuous after all.

Bill

Ox said:

A) You are losing your building to the airport?

B) Maybe you disclosed what equipment that you have in the other thread, but I didn't follow it much. Doo you have a Chinese knee mill, 14" lathe, and a 1/2" blade band saw? Or doo you have something that folks can actually use?

C) You say that the business as a whole should be worth more than what the equipment is worth, considering the ISO and whatnot certs. I'm not sure how well those certs traverse sale of ownership or maybe even location?

D) I don't understand what you are expecting to get out of this? You say that you lost your customers (or at least your best one) so, what amount of sales doo you expect to land, that will be worth more to you in the end @ a 5% commission than what the equipment is worth in a quick sale? It doesn't sound as tho you have much work at this time eh?


I am the mod that closed your other thread as I was asked to, and the little bit that I read on the last page seemed "out there". So, I will follow this fully to see where this goes. But please answer these questions for me.


Without reading the whole of the other thread, it seems that you are working this on a benevolent level for some young punk, which sounds nice of you. Maybe you should consider talking to the shop instructor at the local tech school to see if he might know of someone that could possibly be ambitious enough to pick up your ball and run with it?

----------------------------

Think Snow Eh!
Ox

Click to expand...

These are the responses to the post:

A. No, the airport made me a good offer for my land, building and
promised to pay all moving expenses to a new location. I accepted the
offer, and by the end of March, I must be out.

It is possible that I may get an extension, but it is not
guaranteed.

B. To see my major equipment click here www.teachingfactory.org and to
see OKUMA in operation click on CNC Setup Helper . There is
much more equipment in other rooms. I do not have any of what is on
you list except a large DOALL vertical band saw and a medium size
horizontal.

C. The current ISO certification is valid until May 3 2017. I have
checked with the ISO certification agency (TUV Rheinland of North
America, Inc.); they assured me that the ISO certificate is
transportable to a new location, to new owners even after the name
change. All that I need to is to certify that all ISO requirements
remain in effect.

The cost to qualify a typical machine shop for ISO certification
costs over $20,000. Therefore, it is a major asset for the machine
shops in Huntsville area which is dominated by the defense and
aerospace customers. They take ISO certification seriously.
(self certified does not count).

I just discovered that you are the moderator who closed my previous
post because it was misunderstood as some kind of attempted fraud
because it appeared to give away something for nothing.

To avoid this sort of impression, I made (or least tried ) to make
very clear that I am not asking anybody to risk any upfront money.

Evidentially that did not register.
I am also aware that I am taking an awful risk by letting some punk to
run away with my valuable equipment. To avoid it I intend to do a
reasonable due diligence before giving anything to anybody.

D. I discontinued selling when I lost my key man, airport made me an
offer and I lost my main customer because he was bought out by a
national company which moved all production to Massachusetts.

Under these circumstances I did the responsible things by notifying
my other customers that I cannot deliver until the shop becomes (if
it becomes) operational again at a new location.

Thus the current lack of sales is intentional and therefore can be
resurrected. Obviously it takes some time to do it to get back to our
best annual sales of little less than $1 million.

The customer base in Huntsville is expanding therefore there is no
limit to how much can be sold.

I am not in money bind for quick sale. If I cannot find somebody to take it over as a business and if my new building is not ready by the end of March I may move the equipment to a temporary location and hold it past the end of May to keep it available for deserving young graduates form the local and very excellent CNC training school (Calhoun Community College). If that does not work out I will start retailing the equipment on it E-bay.

As you can see I had already taken your advice to talk to a local trade school instructor to find if there are young person who want to take the challenge and run with it.

I have already gotten very encouraging response that there are students who want start from scratch or expand their dad’s shop. Same for the dean of the UAH Industrial Engineering , he says that he has many F1 students ready for the OPT opportunity.

The value of posting on this forum is to discover what are the problems with finding a deserving young person to take over. The first discovery happened already. The last thing that I expected was that many misunderstood the offer as some kind of scam.

Sincerely,

[email protected]

Garwood said:

Lets put all your machines on my shop floor and I'll run parts you sell for FREE for a year. Then I keep machines and you go away.

Click to expand...

Please advice where is your shop floor and what you mean by sell for free.

You hereby invited to visit me to talk about it.

[email protected]

ilmarluik said:

D. I discontinued selling when I lost my key man, airport made me an
offer and I lost my main customer because he was bought out by a
national company which moved all production to Massachusetts.

Under these circumstances I did the responsible things by notifying
my other customers that I cannot deliver until the shop becomes (if
it becomes) operational again at a new location.

Thus the current lack of sales is intentional and therefore can be
resurrected. Obviously it takes some time to do it to get back to our
best annual sales of little less than $1 million.

The customer base in Huntsville is expanding therefore there is no
limit to how much can be sold.

I am not in money bind for quick sale.

Click to expand...

THIS is key to what is putting experienced folks off.

"Normally" .. when a business loses a facility... it goes and finds space elsewhere.

"Normally" .. when a key man leaves, we hire a replacement.

"Normally" .. when we lose a customer - major or not - we scramble to find others.

"Normally" .. If owners are not financially pressed for a quick sale, and had nearly a million in turnover, the resources were there to do these things and still have a 'going concern' of a business.

"Normally" .. if Huntsville biz opportunities really ARE growing, AND you 'have certs', they even help you find themselves 'coz your shop can fill their needs.

"Normally" equipment as valuable as you represent it is doesn't go onto ebay directly from your shop, it goes to seasoned dealers for whom eBay is but one channel to market of several. Or not.

NONE of these "normal" actions seem to have even been contemplated, let alone explored or actioned.

Now.. just WHAT is driving this OCD fixation with finding a young vict.. er... partner?

"Teaching Factory"???

Could it be you lose, even have to repay, a State or Federal GRANT?

NNN

THE WORLD WONDERS

This makes me nervous. Considering my current situation.

A.Delaney said:

This makes me nervous. Considering my current situation.

Click to expand...

Shouldn't do.

No more relation to you than a 1/4 lb of Bogart Cheese.

Challenge or not you DO have a 'going concern'. Also a grip on reality.

I think he means nervous for someone else failing victim to this foolishness.

Jashley73 said:

I think he means nervous for someone else failing victim to this foolishness.

Click to expand...

Kinda self-vaccinating ain't it?

Anyone dumb enough to bite is too dumb to make it work.

Anyone smart enough to make it work would make an early meal of the dreamer.

Meanwhile.. I've got a stack of crap piled in front of the damned TV, so it can roll on for its entertainment value..

The whole way you present this is contrary to normal and customary methods of disposing of a business. Not that you have a business any longer, you just have a name and no current customers or sales.

Personally, I think you are over valuing everything except the equipment, which I think I read was in the $100,000-150,000 range.

You could approach this differently, say, offer the machines for sale at $150,000, OR you could pay $100,000 for the equipment, PLUS a commitment/contract to employ you as a salesman at 5% for the year.

That way you are providing an incentive to them to employ you, and if you are such an amazing salesman, that 5% commission will net you much more than that extra $50k. At least this way it doesn't come across as shady and you MAY get better resonses.