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Economy and your business

playr_78

Aluminum
Joined
Feb 24, 2008
Location
Iowa
I am curious to know, how everyones business is doing in this economy. I read on the news and see in my investments the economy is going to hell and alot of jobs are going over seas, but yet I talk to sales reps and they say most places are just as busy or even more busy than before gas went through the roof. The main reason I ask is that I am seriously considering starting my own job shop, basically just looking for the work then going to buy a machine, but I am holding off a little bit. There are some good deals out there especially on new machinery and buildings because of this economy but I want to hear what you guys think. Maybe its mainly location and type of work related. Thanks for your time and info!
 
We are pretty busy.
Our business is based in two main areas... agriculture and oil.
It seems to be that when one of those is a little slow, the other picks up.
That makes sense too if you think about it.
Oil and gas prices go up, ag based entities have to spend their dough on fuel.
The same amount of fuel for producing the same amount of product, but it costs them much more.
Who gets the benifit of that?? Oil companies...of course. So, now they have more money, and so they spend it.
When the oilprices drop, the aggies have more money to spend, and so they do.
....I have been seeking leads on alternative energy, but have so far come up empty.
...There has got to be lots of machine work in that area somewhere!!!
Evidently a long way from me:-(
Best wishes in your endeavors!
 
Despite what is being said on the news, we are swamped. Hopefully this year we can pay off those debts from those lean years and upgrade equipment.

Our worst years were in the late 90's when the high tech went belly up and were were left with unpaid bills from customers that were worth millions months before. At the same time we lost our die work from the can industry when they closed up due to foreign food being dumped on our markets.
 
We're doing ok, better than last year but not as good as '06. Flood screwed us big time. :willy_nilly:
Gotta be selling, selling, selling. Can never have too many customers. When some are down hopefully others are up and you can stay in the black. I also think in the midwest we are a little sheltered from the housing thing. If AG goes down then we'll feel it. :confused:

If you are thinking of starting a business I would highly suggest reading the book, "10 things to do before you quit your job"
 
This year went pretty good, for the past month and half I had 1 to 2 weeks ahead of me which seemed like a slow down compared to 4-5weeks back log for much of the year, but now I'm booked for the next 2-3 months which is reassuring and there's more coming... stressful times ahead. Fall is always a busy time leading up to Christmas. Then January is the panic for all the stuff that didn't get done by Christmas haha.
 
I am curious to know, how everyones business is doing in this economy.

We're slammed, then again, its only two of us, so I don't have to keep a whole shop full of guys busy(then again, I can get more work out than when I had a shop full of guys). Refusing work and no quoting stuff that doesn't seem like any fun.

Since I guess it matters what we do, government (sub) contractor, we are set up to go direct ourselves, but we're kept plenty busy working on others stuff. The gravy money is the nasty stuff nobody else wants to touch, the steady money is low tolerance, medium quantity (50-200), grunt work that can just run. Taken a couple of referred walkins lately, and I got to make a prototype aluminum coffee table, it was cool, it was fun to do, one of those you want to post a picture of but can't, NDA and all.

Put a down on another machine today, nothing huge $$$, used, about $2.30 a pound, a really good deal. I'll find out in the AM if the lease goes through, this credit BS got me a little worried, but the salesman/agent of the lease company(that we have another lease with) said that it hasn't effected them at all and they are still writing leases and loans on equipment like they have been. I guess it has something to do with which banks they deal with.

The main reason I ask is that I am seriously considering starting my own job shop, basically just looking for the work then going to buy a machine,

One thing I found out is its hard to get work when you have nothing to do it on. Its also hard to get a machine when you have nothing to pay for it with. Catch 22 I guess. I bought my first 3 CNCs for $7300 total about 20 months ago, and one of them sat in storage for a year until a large enough building was found. You don't need the biggest, bestest and fastest to start since all you have is time and the one thing you don't have is money.

Take it for whats its worth, but try to stay out of debt, there are going to be risks, just try and limit them.

One last bit of advice, don't give your work away, when somebody walks in the door, or calls you don't want to hear.

"XXX referred me, he said you could do this cheap"

You want to hear

"XXX referred me, he says you don't work cheap, but you do good work".
 
Thanks for the replys so far, how did you guys go about getting your first jobs? did you know some body, cold call (write/email) businesses in your area asking if they did any outsourcing, any further information would be very useful. Thanks very much!
 
Largest client...

I was on a glorified delivery (p.r.) mission, and drove past this plant every month. Green highway sign with an arrow stating plant entrance. That day I decided to stop...what could they do??? Tell me to leave...if they did I'd leave.
I pulled into their drive, and topped the hill only to see a guard shack....shucks....well, I didn't want to turn around and leave, so I pulled up to the gate. Out comes the security Guard. "What's the name of your company?" he asked.
I told him..."Who are you here to see?"....uhmmm
"Outsourcing" just kinda popped out my mouth.
"O.k. gotcha down here...you have a nice day." then up went the gate.
Dang I'm in.....what now....hmmm main office...that sounds good.
I walk in the door, and there is another "guard" nice lady now, but that day she was very flat!! "Who do you represent???" again I answered.
"who do you need to see?" same answer as before...Outsourcing!!...it's gotten me this far.
"Sit over there and wait...we can't let you guys go up there anymore!"
O....k A few minutes went by, and down came the nicest guy...shook my hand as if he'd known me forever. Took me up into his office, and said "Randy, what can I do for you??"
"well sir, " I kinda stuttered....
"Jamie...call me Jamie..."
"O.k. Jamie I drive by here at least once a month making a delivery to another client, and today I had an urge to stop."
I told him who I represent, and what type of machinery we had, and where we were located...blah blah blah....
He said...."so you deliver?"
I said "yessir...Personally if I can get away."
"Man that's great..."
He whipped out some prints, and asked if I'd mind giving him a Quote on them.
I looked them over, asked if that number written on there represented quanities...he said yes. I scribed a number on the print and + material...he said "no, we will provide the material...didja bring a trailer?"
Uhhh "Matter of fact I did."
"Well let me get you a P.O...."
I walked outta there that day with 30k worth of parts on my trailer...turned them out in two weeks...delivered. All three of us were tired afterwards, but now, are used to it....yes only three of us back then. Now, I get e-mails every day, no bid stuff that I don't feel like messing with sometimes....and deliver on the last friday of every month
That guy holds me up high... I got him out of a big mess, and also walked into the best thing our company has ever had, and all because some other vendor had scrapped a bunch of simple parts...
My lucky day I guess...my advice....Follow Your Gut!!!...and don't make scraps!!!;)

Oh...and the client I was originally delivering to....yeah, he still spends his few hundred dollars a month too.
 
"How do you get your first job? Where do I find work?"

The question that every new shop owner wants to know. Do a search for that in this forum and shedule hours for reading replies.

Couple of things to think about. I know it's a PITA but write a business plan. There are plenty of examples on the net to follow and if you have a small business developement center (UNI and NIACC have them) they can help for free. I laugh everytime someone says,"I have 10k to buy a lathe." I hope they have another 15k to purchase tooling, and support equipment to make the tooling you can't buy! It adds up in a hurry and if you're not ready the debt piles up. One man shop gets to handle EVERY aspect of the business.

Don't be just another shop, find a niche that can make money and go with it.

Oh yea, you wanted to know where to get work. NETWORKING! It is without a doubt who you know. Always be listening and ask questions at the right times. We have several customers by, "I know a guy who works at so and so......."

Bluechipper - That is the best story I have ever read on this forum.
 
Thanks for the replys so far, how did you guys go about getting your first jobs?

I was lucky, my partner already had the business shell established and it was mostly sitting dormant, he was doing a few odds and ends here and there recovering from a not so fun divorce and waiting for me to quit my job and for us to have a place to put some machines.

We both had a presence and reputation in the area since we both ran the same shop, him for 3 years and me for 3 years. He got the word out what was going to happen, I kept my mouth shut since I had given a 1 year notice and vowed to myself first and then told the owner of the shit hole I ran that i would not talk to any existing customers for a year. Little did the owner know that a stipulation of these people bringing work to us was that they didn't have to deal with the owner, who had his own reputation.

Anyways, I didn't talk to a buyer or anything for a year, but the work followed. They knew who was getting the work done, and it wasn't the owner. I still didn't talk to any existing customers for a year, except one, who didn't know my partner.

I guess I was lucky to be in a situation where I was the face of the shop. I did the quotes, wrote the invoices, bought the material, hired, fired, fixed the machines, set them up, programmed them, purchasing decisions, everything a shop owner does, except for payroll and the actual book keeping.

I know I may have "stole" customers, but I never asked for them to do that, they just wanted me to do the work, since it was a known. I guess I really didn't steal them, since all the prices have gone up on stuff that has been done before.

Other customers besides those came from word of mouth (referrals), or just meeting people. I haven't had to knock on doors yet.
 








 
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