Dan, I think Grant has a good point (in so many words) about first deciding if you want to be a machinist employing other machinists, or if you want to be the owner of a machine shop employing machinists.
That could have a noticeable impact on how you structure things.
You also need to look at who you currently have doing the books and other "supercargo" operations that don't directly contribute to getting a part off the machine. I know of one-man shops that have the one man (or woman) working in the shop and the spouse doing the books, answering the phone, ordering parts, invoicing, calling up deadbeat suppliers/customers etc. As soon as you start adding employees you get an increase in the amount of paperwork that has to be done. You also start having to manage people instead of parts. Parts don't talk back, call in sick when hungover or angry, or quit when you've got 500 more parts that have to get out by Friday.
You've got to have customers, but I'm not sure if you are worse off having customers or employees.
Having both could easily make you a machine shop owner instead of a machinist.
In my last semester at university in business school we had a class called "senior seminar" where groups of students worked with an SBA employee to "consult" for one of the SBA clients. My main memory of that is of some skilled artisans who were horrible business people.
How many hours can you put in week after week after week? Do you want to make parts personally, or just make money by having someone make parts?
I know of a local guy who does stuff for the old Porsche speedsters. He designs and prototypes the parts and then farms them out to a job shop to get them made. If you're the "idea guy" then that makes a lot of sense. It is that old specialization of labor thing. Spend your time doing the R&D and let someone else pay for the $500K 5 axis machining center. Keep your investment manageable. Perhaps it is better to have $3-5K of parts that you had to pay to have made that might take a couple of years to sell sitting on the shelf instead of an expensive machine that is eating up your cash reserves every month when no one is buying anything.
As old and basic as your Tree now is, it would seem to put you a big step up from a lot of people. Add a smaller/affordable CNC lathe and
you can start prototyping those kinds of part, or doing smaller production runs.
If you are doing bike stuff, like your Buell parts, you know how that stuff can be boom/bust/fad of the moment.
If you really need a tool changer and an enclosure I'd think that one of those small Sharp VMCs might be the ticket for you, based on what I"ve seen here at PM. You might be able to slide that in next (or in place of) the Tree at home and have enough of a boost in short-run productivity to make it worth staying free of employees, rented space, etc.
I closed my little side business at the end of December after about 15 years. Frankly, if I do something in the future (which is very debatable) I can't see ever holding an inventory again, or dealing with retail customers. Trying to sell dozens or hundreds of items is a lot of work, and you've got to start doing advertising and that kind of activity to get the word out.
What seems to me to be a better way to go for the small entrepreneur is to stay a "one wo/man band" and do custom stuff. Rich people often seem to have money to spend, even when the economy is down.
Ross' shop might be an example. He and his partners actually have a number of employees, but they target the folks that have very high-end vintage race cars and those people appear to be pretty happy to take their place in line, wait a year or two, and then pay however much is needed for however long the work takes because they know that there are very few other places to go to where they can safely entrust their mega-expensive vehicle and not have someone butcher it.
Or be someone like Evan Wilcox who has people who are happy to pay very good money for shiny aluminum bodywork,= and also are willing to deal with an 8 month lead time. I've met Evan and my impression is that he doesn't have a huge capital investment yet he seems to have no shortage of work to keep him busy, and people are paying
his prices.
The drawback is you have to be good enough to build the repuatation, and that rep doesn't get built overnight. But if you can find a niche that doesn't have a lot of serious competition it seems like there is a lot to be said for NOT getting bigger and getting sidetracked from doing what you are interested in doing and instead becoming a manager.
That may have gotten a bit off your topic, but perhaps it will help you discuss both sides of the "getting bigger" decision in your paper.
cheers,
Michael
