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? for used-to-be small shops. how did you scale up your capacity? and...

dsergison

Diamond
Joined
Oct 23, 2003
Location
East Peoria, IL, USA
i already do that. :)

I sell a $200 handle to put on a $100 paintball gun

---but it's a damn sweet handle

wood_grip_brass_frame-150x112.jpg
 

cdn farmer

Aluminum
Joined
Oct 24, 2007
Location
Grimsby, Ontario
One piece of advise given to me when I was starting out on my own was that "you must know what you don`t know" ,, sounds kind of silly but very true,,
In other words you need to take a hard look at what skills and knowledge you have or don`t have,,
 

BobWarfield

Hot Rolled
Joined
Mar 4, 2006
Location
Northern California
Profit is a function of doing something unique. It can be something unique in your geographic region assuming that region is a large enough market, or in a market.

There are many possible distinctive competencies you may have that lead you to a unique product or service:

- You may be a specialist in some kind of machining that's hard to come by but in demand in the region you can service.

- You may be a good designer, in which case I'd be looking at products you can manufacture and sell, and I'd be wondering what markets you know really well.

- You may be really good at squeezing the last bit of efficiency. That can be because you're a fantastic businessman, an awesome machinist who builds a better process for each part more quickly, or have invested in unique machinery or tooling. That means you can be the low cost provider, which is how Dell and Wallmart got big.

- You might have the next great marketing concept for selling your goods and services. eBay is essentially a marketing engine. It allows just-in-time inventory as well. If you are really good at applying eBay or some other marketing innovation compared to the guys you compete with, it is an advantage.

Check out a guy like Maritool. He uses several of these. He is on eBay. He sells quality for less money than a lot of others. He can design his own products. Hence he has a thriving business. BTW, I'd try to talk him into letting you telephone interview him for your paper. You'd learn a lot.

The real question is, "What will you do that's different than what the other guys already in business are doing?" If you can't offer something new, it's hard to grow the business and be highly profitable without things becoming a total grind and vulnerable to the next guy who is more creative than you were.

Cheers,

BW
 

bryan_machine

Diamond
Joined
Jun 16, 2006
Location
Near Seattle
Having worked for a large company that made a lot of us rich, and owned a small one that lost a ton of money (most of it mine) the following simple point applies.

Business is about numbers. You cannot be about shiney parts, or happy mechanics, or comments in code, or whether the employee of the month makes the front page of the neighborhood paper. (Though all of those things may well matter.)

You have to be about numbers. Materials cost. Scrap rate. Payment rate. Interest rates. Machine hours before machine must be replaced. Tooling costs.

All cost numbers have to be "total costs" - what the software world calls total cost of ownership. This means not just "don't buy cheap crap because it breaks" - it means that buying what you know may in fact be the right thing, because spending a lot of time looking for other stuff is really quite costly.

It can mean that paying more money to get employees who come to work and don't do stupid things is really a big win, but only if you don't pay too much more.
 

bryan_machine

Diamond
Joined
Jun 16, 2006
Location
Near Seattle
Uniqueness and Human Energy

(This actually applies directly, but read to the end.)

Money always goes to people. Even when you buy some hard physical thing like an end-mill, all of the money eventually goes to people. This is because money is a human construction. Nobody gives money to the carbide mine or the natural gas deposit. The money goes to the people who extract these resources and make something from them.

Money buys the effort/energy/talent/risk of people, nothing more, nothing less.

Making money, especially in manufacturing today, has to be about getting a lot of output or value (that is, harvesting a lot of money) compared to human effort to produce that value. This means output per unit of your (the owner's) time, as well as output vs what you paid the people who made the machines, cutters, and raw materials.

How this applies to the question at hand -> any business needs to think really really long and hard about various levels of automation, and about in-sourcing/out-sourcing. Not just CNC, but unattended CNC. Can the part be made on a screw-machine or bar-feed lathe? Ganged in a CNC mill? Can one person working 8 or 10 hrs keep several machines making parts that sell for money (not scrap) for 16 or 20 hours per day?

Can you afford somebody to cut parts on a bandsaw all day? Or, is better to hire some entry level person to do that and put the automation $$$ in a better lathe?

In short, can your business make money while you are working on something else, or asleep?
 

Bobw

Diamond
Joined
Feb 8, 2005
Location
Hatch, NM Chile capital of the WORLD
I'm going to throw a theory in the mix here. Its my business partners, not mine. We are a small business, machine shop, assemblies, some coatings, a bit of heat treat, riveteing, passivating. There is occasional design work, modeling and prototyping.

His theory, business is all about BullS**t. Who can BullSh** the best. The person who can Bull**it the best gets the money.

I can see this working in a very large business where everybody wears a suit and has no clue(at least the people making decisions), but we deal with other small businesses.

My theory on his theory is that, for a small machine shop his theory is 75% BullS**t.

Why? quick explanation, we both have our strengths, his being, design, 3-D modeling, smartest SOB I've ever met, doing things on the cheap and charming people with his technical knowledge (which he has in abundance).

Mine, more practical(he likes to start from scratch on his theories, I find every bit of info I can, and then take it a step further), not as cheap(he always sees the cheapest way, and sometimes better). I have more machining knowledge, he models it, I cam it, off we go $$$$

So, what he thinks is BullS**t, is real. He knows what he's talking about, I back him up on the machine side. And we can deliver, (pick two, quality, price or speed).

So basically, as a small business, you need to deliver what your customers need, not what they want, since what your customer actually wants and needs are two totally different things, take advantage of that. At least in our case, producing a product for general consumption is a totally different thing altogether.

Could we get bigger, in a second, but WHY?, its just a big bunch of crap, I am so sick(not now) of dealing with employees. Our goal is to, as much as possible automate a job shop. Robots, pallets, little carts going from machine to machine.

Dsergison, you sound to be in a pickle. You need to do a study of fixturing, and check out the thread on the square inch fairy. I don't know what machines you are running or what you are making, but, set yourself up to machine a complete assembly, all parts at once. 1st op and 2nd op, 3rd and 4th if needed, keep a backlog of each op so it can be inspected and deburred while the machine is running, and is ready to go in as soon as the machine is done.

If its one product in multiple sizes, fixture it so you are making all sizes at once, keeps you away from the machine longer, and keeps your inventory level.

I wouldn't push too hard for growth, when it comes it comes, give it a good nudge, but don't push too hard, it seems that is when you get in trouble.
 

dkmc

Diamond
My theory on his theory is that, for a small machine shop his theory is 75% BullS**t.

WOW.....neat theory.
I say his theory is 100% Sales and Marketing! :D

Thinking about it, I have seen many a company grow based on how great they -think- they are....and they carry that right thru from sales to the owners bank account.
I have lost bids over the years to shops that promise impossible delivery dates, and run late after -they- get the PO.

Classic local story.......
Hardwood flooring company, supposedly makes a crappy product. Contractor/installers HATE the stuff, but when the owner/salesman gets thru with his pitch to new home builders, they -have- to have HIS flooring because its simply the best you can buy. Been in business for years now, not sure if quality has improved or not.....

Sales and marketing is about believing about your company and -believing- your the best at your game.
Then -convincing- your customers of that.

No harm to run with that theory IMO.

I was telling a friend recently that Job Shop sales "seems" to be mostly about pestering engineers, and being friendly with the Purchasing Dept; till they give you some work to make you go away. Then if you can impress them in some way, you gain credibility and
notch yourself up a bit on their supplier ladder. Technical sales can be pain, but getting a good line, and repeating it regularly, sometimes makes it about that simple.


dk
 

cnctoolcat

Titanium
Joined
Sep 18, 2006
Location
Abingdon, VA
I have to agree with the bulls**t theory. Most successful machine shops in my part of the country (southwest VA, east TN) are run by cheapskate SOB's who couldn't machine their own way out of a paper bag.

These dumbass owners manage to get a good machinist or two, and a few button pushers, and with their ability to bulls**t the customers eyeballs out, they load their shop up with work. The owner depends almost solely on the machinists to do all the work. And I mean, all the work! From telling the boss how many hours it's gonna take, to telling the boss what tools they need to buy, to scheduling, everything.

These shops deliver useable quality, not world-class quality by any means. The owners wouldn't know the difference between a world-class machine part versus a part made in a hack shop. But, I can. By holding and carefully examining, I can tell you if a part was made in a professional shop, or by a bunch of pretenders. No measuring equipment needed.

These shops almost always deliver parts late. And, depending on the customer, these shops can be the low bidder, or they can get a premium because the owner has convinced the buyer of his shop's "superior" capabilities.

But boy, the owner sure makes the cash. Lives in a big house, drives a big BMW, travels around the world. On the surface, he sure looks like he knows what he's doing.

It's all bulls**t.

Greg
 

Doug

Diamond
Joined
Dec 16, 2002
Location
Pacific NW
.........
But boy, the owner sure makes the cash. Lives in a big house, drives a big BMW, travels around the world. On the surface, he sure looks like he knows what he's doing.


Maybe he does know what he's doing......cash, big house, BMW. travel.......
 

dkmc

Diamond
Toolcat.......lots of those type owners couldn't turn on let alone Tram a Bridgeport....but they probably can play a fair game of golf...and buy drinks.....and talk about the 'game' last night.

.....and verbally slam their
competition......and look the yuppy part...as you say.

Think about Hollyweird and the entertainment industry......isn't that really all BS? It's not -real-.
-That- whole industry is based on 'make believe'.

And then we have 'stuff' like American Chopper.
Do they make their money based on a real functional
product, superior engineering, and value? Or hype, BS,
and perceived value?

dk
 

Racer Al

Stainless
Joined
Feb 20, 2006
Location
Oakland, California, USA
Technical sales can be pain, but getting a good line, and repeating it regularly, sometimes makes it about that simple.

You've hit upon the magic formula for MY industry, which is advertising.

It really doesn't matter how good or bad the presentation of the message may be, but the number of times you can afford to REPEAT it to your CUSTOMERS makes all the difference in the world.

Think about the Ronco ads -- "it slices, it dices" -- horrid ads with a home-video look, and a balding salesman whose eyes are too close together.... Ron Popeil, the owner. Yet, they sell the heck out of their silly little gadgets because he's enthusiastic, and they repeat and repeat and repeat their ads.
 

micro

Hot Rolled
Joined
Jan 26, 2005
Location
NYC
Maybe he does know what he's doing......cash, big house, BMW. travel.......

The only problem I have with any of these people is if they call themselves machinists. I worked for a company started by 2 collage friends making door hardware. One was the business end the other was the mechanically inclined one with a passion for restoring old houses. The company has grown from a 2 man operation to a 200+ employee operation with show rooms in the US and Europe in just 15 or so years. Yes the products are well made but they aren't so unique that they justify the astronomical prices. we did all the hardware in Bill Gates's house. i wasn't privy to the quote, but a smaller residence we did earlier was well over $250K. This is just for the door hardware. What it comes down to is that the partner in charge of the business ens is a hell of a salesmen who loves the game of it all. he could be selling used cars for all he cares. The employees don't speak highly of him mainly because he doesn't have a lot of respect for them. And for the most part they are both right. He hires at a low wage, and most of these guys have nearly zero ambition so it works out. He is in a lot of ways the archetype of the guy you are all talking about. He gives customers unrealistic delivery dates, and he definitely spins the company in a very positive light. He's not dishonest but many of you would call him slick. The point is that he is very good at what he does. We may not value that skill as we do a talented machinist but he has his place too. I've heard it argued that through his skill 200+ people get to feed their families but to me that is irrelevant to this discussion.

On the topic though; I have always found that success is your ability to recognize and evaluate opportunities. The more experience and education you have in a particular field the better you are able to spot them. They are, in my belief, all over the place, but they may not be obvious, and they may need work and skill to bring them out. Remember, if it were obvious then everybody would be doing it.
 

dkmc

Diamond
On the topic though; I have always found that success is your ability to recognize and evaluate opportunities
Sometimes privately referred to by "slick operators" as "sizing up your victim" :D
Be an interesting world if literal words were used
to describe sales,marketing and business ;)

Around these parts we have some Heating outfits that constantly push "free checkups" for your furnace.
The obvious goal is to strike fear in the lives of senior citizens and sell them a new furnace......and they do.
Been going on for years.

dsergison:
What to do about growing your business?
Hit the trade show circuit...
Bring along a couple spokes models.
Girls with guns.....in camo... can't loose.
Hand out propaganda designed to convince prospects that your product is the best there is and all your competitors are either crooks, crack heads, or junk peddlers......in not-so-plain language of course......
But that is the blunt goal anyway.

I know a guy that's gotten into industrial chemicals.
He's exploring ideas on trade shows and car shows.
Already has a pretty good marketing program and is growing steadily. Big markup in industrial/ automotive chemicals....

dk
 

micro

Hot Rolled
Joined
Jan 26, 2005
Location
NYC
Sometimes privately referred to by "slick operators" as "sizing up your victim" :D
Be an interesting world if literal words were used
to describe sales,marketing and business ;)

That's not really what I'm referring to. Don't get me wrong, I worked in advertising doing music and jingles for years just out of collage so I know all about polishing a turd. I meant it more like seeing a need for something that doesn't yet exsist, or recognizing the early signs of a trend etc.

Around these parts we have some Heating outfits that constantly push "free checkups" for your furnace.
The obvious goal is to strike fear in the lives of senior citizens and sell them a new furnace......and they do.
Been going on for years.

I have a motorcycle dyno that I use for developing engine mods and parts. I used to team up with a local Harley and custom shop and run their customers bikes. We did it not only as a diagnosis for but in the process we used to find all sorts of other problems (worn chains, wheel bearings, clutch assemblies, primaries etc). We never had to make up anything nor try to scare anybody. Usually just pointing it out to the customer was enough, as they could easily see we were telling the truth. Not everybody is out to sell people something they don't need. My parents had one of those "inspections" a few years ago and the guy found that a large section of the chimney liner had separated and collapsed nearly blocking the flu. Good thing he found it when he did. His company didn't repair chimneys so there was nothing in it for him.

That said I live in a city where you can famously buy the Brooklyn bridge any number of gentlemen on the street in Times Square. :)
 

pilgrimtt

Cast Iron
Joined
Dec 15, 2005
Location
St. Cloud, Mn.
"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."

Boy is that a mouthful. I met a guy who owned a couple of shops. Big equipment. And he hated the office so he refused to work in it. He loved buying and selling machines and fixing on them. If you walked thru his shop you would never guess who owned it. He probably had the dirtiest clothes on of any of the guys. Strangest thing I ever saw. He had a bunch of employees. He is a very smart commensense guy. I have no idea who organized everything. He must have found somebody he liked. He wasn't afraid of risk. One of the most interesting fellers I ever met.
 

dsergison

Diamond
Joined
Oct 23, 2003
Location
East Peoria, IL, USA
boy, thanks. lots to think on.

I did 10k in sales this year and burnt through 3k in stock and cutting tools. this is just a hobby income right now. I have a day job that I really like. A wife and 2 year-old boy I love. a house we really like etc...... I don't have time or inclination to work MORE. so I'm focusing on SMARTER.

I personally need to automate and organize my processes if I'm to grow my personal business..

The other thing: I'm going to school full time. Hence this paper.

The paper has a bit different and larger scope than my personal medium range target. I set the papers scope at: The stumbling blocks a shop faces as it grows from 1 to around 30 employees. I have included things like employment law and the thresholds of compliance. And all kinds if MRP junk. It's kind of a 20 year plan that I could follow, maybe, don't really want to though.

my real dream, move to the mountains, make a small highly specialized and very profitable product line, either with few but highly motivated people, or automation. :)

actually if i can squirrel all this hobby income away i can just retire early. -or pay for my boys college.
 

Joe T.

Cast Iron
Joined
Jan 29, 2008
Location
NY
I once had a conversation with a customer who was a business owner. His business plan was ‘put out your sign and hire someone to do all the work’. He said you can always find somebody to do the work. He was in the auto body business. I didn’t know him very well but I don’t think he was personally skilled in the field.

As a boss who worked side by side with the employees, I found it troubling that I was paying good money for people who only had a fraction of my skills and experience. On weeks where the money was rolling in it didn’t seem so bad. It was the slow weeks or times where parts didn’t come in and work couldn’t get done that hurt. You never seem to make those weeks up. My productivity was hampered because I was spending my time keeping the others busy. Now I work alone. Less stress, same money. I won’t be rich but I can go fishing when I want as long as I keep getting something done every day.
 

SND

Diamond
Joined
Jan 12, 2003
Location
Canada
I got to meet a nice interesting man today. He used to own a manufacturing business and he said that he simply played it safe and he bought new machines when the money was in the bank to pay them instead of just taking on debt. This is how I play it too, although I'm only just starting out. I'm at a point right now where I too am not sure how to properly grow a bit more. I'm stuck not having space. Although there isn't always enough steady work to justify growth at this time either and looking for more work and new customers is somewhat not working so well at this time, I need to push them harder I think. I guess I don't BS enough and I do tell people to look at other sources when I know I can't properly do something. I likely don't quote half the drawings I get for this reason while I know most shops quote just about everything even if they'll deliver parts that are not up to it or lose doing it because they don't have the right tooling. Maybe thats the way to do it? take everything just so nobody else gets it???? For now I think the plan will be to stay hidden, low overhead and hopefully come up with a few products I can sell, ideas are finally starting to come but marketing is not my strong point yet.

Whichever way it goes, look long term and make sure what you work for stays yours.
 








 
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