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Thread: Should I start my own CNC business?

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    alico111 is offline Aluminum
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    Default Should I start my own CNC business?

    I currently work as a CNC Machinist and would like to start branching out. The main question is I own an apartment building and make good money with it and have the opportunity to buy more of those but it is not fullfilling to me. I would like my own business in cutting chips. I have some contacts in the area im in. I just hear stories from people here and around the business that they end up going to work for someone. My thoughts are do these people actually have business plans or just start buying machinery? Im open to anyones thoughts on opening a business and starting out of two car garage.

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    I started in a 1+ truck garage 20+ yrs ago.

    I'm still here _ working for someone else every day. (hopefully)

    How are you at self employment. I was born/raised a dumb farmer, so it is in my blood. It apparently aint for everyone as I am told. ???



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    alico111 is offline Aluminum
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    I have never been self employed except for apartment building i bought which ive busted my ass on . I live in one unit and rent out the other two and have large two car barn. I guess there is just some fear involved i get paid 25 an hour where i work now. I am the supervisor but im not a super machinist but can hold my own on CNC with making pieces.

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    Quote Originally Posted by alico111 View Post
    I currently work as a CNC Machinist and would like to start branching out. The main question is I own an apartment building and make good money with it and have the opportunity to buy more of those but it is not fullfilling to me. I would like my own business in cutting chips. I have some contacts in the area im in. I just hear stories from people here and around the business that they end up going to work for someone. My thoughts are do these people actually have business plans or just start buying machinery? Im open to anyones thoughts on opening a business and starting out of two car garage.
    Personally I would stick with the apartment building gig, if I had my time over, I would not 'invest' in a machine shop.

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    Jalbus is offline Plastic
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    I say do it brother! Somebody else is doing it and making it, so why not you?

    And cultivate uncommon skills that nobody else is doing--or at least, develop skills that few can compete with you at. For some it might be having the largest manual swing over bed lathe in town, or expertise in a process, or a product. The people that I see making it usually have a product or process that feeds the machine, without that the machine won't make you money at all. I'm still stuck with a little crappy lathe and some ideas, but suprisingly that little lathe has paid for itself and seems to want to pay for more machines.

    More apartments sounds like a bigger headache than a machine shop, IMHO.

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    Dualkit is online now Diamond
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    Tough economy for manufacturing right now, but it maybe slowly starting to rebound. If you have some cash it might be a good time to start collecting equipment as prices I believe on used equipment are at the bottom. Most people start collecting equipment, then scrounge for work. I don't know any shop owner who started with a business plan. I know I didn't. I was contemplating collecting equipment and I worked with a guy who had a small screw machine shop on the side, and needed a source to second op his parts, so I bought a manual mill and lathe and started working for him.

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    Another question is can you stay busy enough to pay for the machines and make some money? I'm sometimes busy for 3 or 4 weeks, then nothing. I wouldn't mind having a cnc lathe but can't justify it right now...

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    alico111 is offline Aluminum
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    Got like 60k and very good credit and some backing for start up . I would really like and i know its probably I pipe dream is to have a fanuc based controll so i could put a fanuc robotic arm on it. Thats just my dream . Beat the chinese by outsmarting them. I know im asking alot.

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    You don't need a Fanuc machine to use a Fanuc arm or vs/vs.

    24vdc is 24vdc nomatter who it comes from or goes to.
    (Or a closed loop - whatever it is that makes things go bump in the night.)



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    Quote Originally Posted by alico111 View Post
    I currently work as a CNC Machinist and would like to start branching out. The main question is I own an apartment building and make good money with it and have the opportunity to buy more of those but it is not fullfilling to me. I would like my own business in cutting chips. I have some contacts in the area im in. I just hear stories from people here and around the business that they end up going to work for someone. My thoughts are do these people actually have business plans or just start buying machinery? Im open to anyones thoughts on opening a business and starting out of two car garage.
    Coming from me this might sound a bit strange.... but.....I think a business plan, even an informal but thorough one, might do you a lot of good. Then take an imaginary trip about doing it.

    It's not an easy decision to reverse, and once in, you can end up with a tiger by the tail or in your best dream.

    There's a LOT more to starting and running a business than making chips. It often turns out that making chips is the smaller part of the business.

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    Quote Originally Posted by alico111 View Post
    I have never been self employed except for apartment building i bought which ive busted my ass on .

    I guess there is just some fear involved i get paid 25 an hour where i work now.

    .
    You will be bustin your ass on a shop if you start one. Do you think you can bust your ass twice with the apartment buildings AND a machine shop?? I think you're going to be spread too thin...

    If you make 25 an hour and can still do the apartment thing I would stay away from another venture like a shop. Enjoy your time off, you will live longer and happier.

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    Barry Weeks is online now Stainless
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    Not to be a smart ass, but I would keep the day job, keep going with the apartments, and start the shop. That way the day job and rental income can cover the losses from starting the shop. Then in 5 or 10 years, if the shop is looking promising, you can decide what to keep or throw.

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    Quote Originally Posted by Barry Weeks View Post
    Not to be a smart ass, but I would keep the day job, keep going with the apartments, and start the shop. That way the day job and rental income can cover the losses from starting the shop. Then in 5 or 10 years, if the shop is looking promising, you can decide what to keep or throw.
    Good one...

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    Gary E is online now Diamond
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    Ever since Numerical Control came out in mass for the small shops in the early 1960's the productivity of shops has increased by leaps and bounds. This allowed components to be made at less cost to the buyer, just look at what stuff costs today in 1965 dollars... And so far the only reason new machines are bought is so that you the buyer of the fancy dancy full featured CNC with a boat load of tools so that you can make the parts faster and cheaper than your competitor down the street is because YOU INVEST a BOATLOAD of $$$ so your customer gets to buy the parts cheaper... Does that make sense?? Not to me. There would be only one way I'd ever get involved with your idea of "making chips"... and that's if I had my own product line to sell. Otherwize,,,,buy more RealEstate... they aint making any more of that.

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    Doug is offline Diamond
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    Quote Originally Posted by Dualkit View Post
    .................................................. ..

    I don't know any shop owner who started with a business plan. I know I didn't.


    .................................................. ...................................

    That's an interesting comment. I never had a written business plan and never really considered that I needed one.

    But, I guess I did have one. It was in my head. I wanted to run a successful shop and make a good living. Basically that was my plan. Not something you could take to the bank to get a loan though.

    I started with the idea to have a screw machine shop specializing in short runs. That got me kick started, and I was able to move up to CNC machinery. After CNC, I mostly dropped the screw machine type work. For a short time I was involved in competitive bidding on CNC work, didn't like that. From then on I concentrated on establishing relationships with small high tech companies, essentially being their machine shop. That's worked very well for the last 15 years or so.

    I don't know how I could have mapped that out in a business plan. So, I've never understood exactly what a written busines plan is or what it's supposed to do for you.

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    Quote Originally Posted by Doug View Post
    That's an interesting comment. I never had a written business plan and never really considered that I needed one.

    But, I guess I did have one. It was in my head. I wanted to run a successful shop and make a good living. Basically that was my plan. Not something you could take to the bank to get a loan though.

    I started with the idea to have a screw machine shop specializing in short runs. That got me kick started, and I was able to move up to CNC machinery. After CNC, I mostly dropped the screw machine type work. For a short time I was involved in competitive bidding on CNC work, didn't like that. From then on I concentrated on establishing relationships with small high tech companies, essentially being their machine shop. That's worked very well for the last 15 years or so.

    I don't know how I could have mapped that out in a business plan. So, I've never understood exactly what a written busines plan is or what it's supposed to do for you.
    A *properly done* business plan largely reminds you, or informs you, of all the bases that need covered when thinking of a business. To begin with, you can estimate the investment required for startup, cash flow for a given set of circumstances, what is needed for breakeven, and do some market research. That's just some of the basics.

    Whether you need (or think you don't need) financing if you shoot from the hip, you will likely miss a lot.

    Had you done a good business plan, you might have passed by some of your paths which didn't turn out to your liking, and be further ahead now.

    I started in 1965 just like you, with no plan, just a goal. Along the way if I had been smart enough to develop a plan I'm sure I'd be much further ahead.

    It's not a panacea, but it can be a great help.

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    sean9c is offline Cast Iron
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    It's been a lot of years since we were a job shop but I sure remember getting tired of always getting beat on prices unless you priced it so low that you could barely make any money.
    I'd say if you have a product, a super loyal customer base or are in a restricted industry here it's tough for others to compete. We were lucky (sort of) and got in the commercial aviation parts biz where to compete you had to deal with the FAA and their approvals. A whole new set of problems but it kept the competition down.
    I don't know what industry you're thinking about servicing but remember you have to carry all the manufacturing costs. You scrap the parts, you make them again for free, if there is 3 months of outside processing involved before you can ship parts you carry your costs for a long time.
    Just as an observation but NC has sure changed the industry. When times are good it seems like every joe with 2 years of tech school figures he's a machinist because he can press the Cycle Start button so he goes out and buys a CNC something and starts competing with you. Drives the prices through the floor before his inexperience finally kills him off, then the shops that are left spend a whole bunch of time working the prices back up to where they should be, then the cycle starts all over again.
    Good luck

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    KIMFAB's Avatar
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    You are obviously good at doing two things at once as is evidenced by the two identical threads, this one and this other one
    Should I start my own CNC business?
    edit: looks like don figured it out and now both threads reference this one

    I was a little confused at first but luckily confusion is my normal state and I managed to get through it.

    You are doing well with your land-lording, if you get another place keep it close (less than 5 mi.) and if you are at all handy a fixer upper is even more profitable.
    All is not roses though, I can give you the name of my last tenant that I just got rid of, He would come by sporting another new tattoo and tell me he couldn't afford the rent.
    Last edited by KIMFAB; 04-19-2010 at 10:29 AM. Reason: get everyone as confused as I am

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    Doug is offline Diamond
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    Quote Originally Posted by rj newbould View Post
    A *properly done* business plan largely reminds you, or informs you, of all the bases that need covered when thinking of a business. To begin with, you can estimate the investment required for startup, cash flow for a given set of circumstances, what is needed for breakeven, and do some market research. That's just some of the basics.

    .................................................. ...............................
    You could be right......

    But, I have a theory about small business startups. If they all followed the "book", business plan, etc, etc, I doubt there would be many startups. Most businesses don't make any sense in the beginning, the plan is no more than a dream of the owner.

    My start sure didn't make "business" sense. I was in a well paid engineering position with job security. I just couldn't stand sitting at a desk all day long. So, one day I decided to give my notice. I had one customer who I'd done some side jobs for in my not well equipped basement shop. No knowledge of business, I didn't even know what "Net30" meant or even heard the term. There was also a recession at the time, but I was young and didn't know what a recession was. What I had was determination to make it work.

    If I had developed a properly done business plan I don't think anybody on earth would have thought starting a business was a good idea for me.

    After a couple years running, I took a Small Business Administration course in starting a business. Wow!! I had done everything wrong. I didn't have the lawyer they recommended, or the accountant, didn't even have the correct permit/zoning to run a business from my home, not to mention the business plan. If I had followed the advice given, the lawyer and accountant would have bled me dry before I ever got off the ground.

    I don't think my startup was all that different from most businesses. We learned as we went or we drowned.
    DyeGuardian likes this.

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    alico111 is offline Aluminum
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    I understand that im just used to fanuc controlls probaly wouldnt buy one if i went looking, but we have alot of support for fanuc around here.

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