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How to start a business? Machine first or connection first?

john.k

Diamond
Joined
Dec 21, 2012
Location
Brisbane Qld Australia
I ll tell you something else about having a small shop.....it eats up your life !....cold machines and a couple of dummies who work for you eat up every minute ,no time for holidays,no time for weekends ,machines to set up or repair , problems with a job to solve,thousands of bits to put in boxes,......and then like Rip Van Winkle , you wake up one morning old and grey,your house is falling down, everyone you knew is dead ,or moved away.Your whole life eaten up.
 

RC Mech

Stainless
Joined
Jul 21, 2014
Location
Ontario, Canada
already too many crappy machine shops here in ontario that don't pay much because everyone wants more for less.

I agree with the above. There are far too many shops in Ontario, the GTA and Ottawa area to be specific, that are absolute trash and are riding the reputation they may have had in the 60's/70's etc. Most of them bought the buildings fifty years ago and have made more money on the appreciation (through no fault of their own) than they ever did in manufacturing.

If you're in the GTA, forget this machine shop idea. People look at the population and think "large market" but the reality is everyone already has their cronies and kickbacks and you will never break into that space. Paying purchasing agents off is a way of life in Toronto. There is also a huge lack of skilled people to fill any machining jobs, and those who are in the trades are in construction. Doesn't mean they're any good, just that Ontario's entire economy is built on throwing up second-rate building shells in the name of expansion.

I have a machine shop in Ontario but we're not a job shop. I have a shop with machines, to manufacture our own products. I will completely admit I have no idea why anyone would ever consider having a job shop. You take all the risk, customers never know what they want or are qualified to even begin designing components. Then you work your ass off and they go to the next shop who will do the job for $5 less and you never gain efficiencies or perfect the process. And you pay for the most expensive electricity in the world to do it. Why? To spend 25 years putting savings away to finally buy a rodent-infested tear-down for $1.5M in Oshawa? Screw that.

Edit- are you in the Tri-city area? If so PM me. You can see what we do and if you're competent maybe you can do some work with us to gain some more varied experience. I would not quit the gravy train you have currently. Benefits are extremely valuable and will become more so as you get older.
 

Doug

Diamond
Joined
Dec 16, 2002
Location
Pacific NW
I ll tell you something else about having a small shop.....it eats up your life !....cold machines and a couple of dummies who work for you eat up every minute ,no time for holidays,no time for weekends ,machines to set up or repair , problems with a job to solve,thousands of bits to put in boxes,......and then like Rip Van Winkle , you wake up one morning old and grey,your house is falling down, everyone you knew is dead ,or moved away.Your whole life eaten up.

That's a pretty bleak outlook. It's not my experience at all or the experience of other shop owners who became friends.

After an engineering degree it took me 5 years and a bunch of career type jobs to realize I didn't want to spend my life sitting at a desk. My last desk job had me jumping out of my skin so I quit. Best feeling I ever had even though no source of income and $20K in the bank.

I'm not a big risk taker. Quitting that last job wasn't a big risk, I knew I could always go back to engineering if things didn't work out. I decided to use $10K of saving to get started on something.

I always like working with my hands so I needed to find something to support the family (wife, 2 year old and another kid on the way, $150/month mortgage). We had a garage in the back yard with my hobby shop, 11" lathe and small vertical mill. I started contacting local shops for work and found small jobs. I could at least meet expenses. One of my career jobs involved writing software for multi-axis mills so I knew about CNC's. Eventually bought a small CNC lathe which gave me an edge on other small shops (this was 1986 when not so many small shops had CNC). Eventually up to 4 CNC machines and 3 employees, more than 3 employees didn't work for me.

As to vacations, my wife insisted on them. I'd say I'm too busy, she'd say fine I'm taking the kids and we'll wave as the plane passes over the house. I grumbled about taking time off for vacations, but about 20 minutes after takeoff for Hawaii all worries about the business were gone and I came back re-charged in a week.

Retired now and I look at the employees (mostly Hispanic, well paid, top guy makes $45/hr) in my son's construction business. Those employees still consider USA the land of opportunity and I do too.
 

ultraguy

Plastic
Joined
Nov 9, 2021
Anyone who wants to startup their own shop and is asking if they should buy a machine first or find customers first has already doomed themselves to almost certain failure.

A 5 axis machine can cost as much as a literal house. You can't afford a house right now and you want to buy a 5 axis mill? Yikes.

I can't buy a house either, but I also know that I am not in a position to start my own 5 axis shop

I got one for $8,500, works fine, just trying to learn the controller now.

I even have a brand reaching out to me to see if I do sub contracting as they cant keep up with demand.

Sometimes it's just luck.
 

T-Man 1066

Aluminum
Joined
Jul 21, 2019
Location
N. Illinois
Can't stress this enough. You need to have the shop before anybody will send you the work. I got a new customer, sent me a print to make a part, thought cool, I can do this. 2 days later he emails me, he and the plant manager want to do a tour of my shop. 1500SF in an insulated building on the farm. I think they wanted to make sure I wasn't a broker, claiming to be a shop. They came in seen lathes, mills, boring mills, grinders, welders, tooling cabinets, air compressor, surface plate, forklifts, drill presses, saws, etc, and quickly stated it looked like a fine shop and they would be sending more my way, now that they seen what I was capable of.

Also, get the machines, spend at least a year doing hobby projects for cash for your buddies, neighbors, etc. You will find out very quickly where your gaps are. A VMC, 2 axis CNC lathe, or Bridgeport and South Bend lathe isn't enough to do most jobs. Do you have a way to saw material? Measure parts? Load & unload parts or trucks? Chip dumpsters? Work holding? Tooling? Deburring equipment? Oil and fluids? Enough compressed air? Enough power? Storage cabinets? Fire extinguishers? Anti-fatigue mats? Benches? The list goes on and on!

Not to discourage, just being realistic.
 

Jashley73

Titanium
Joined
Jan 24, 2013
Location
Louisville, KY
Meh, I landed a commercial mowing account this year, when I didn't have...

1- A truck/tow vehicle
2- An actual business/LLC
3- Commercial Insurance

All required to get the work done.

I spoke with the customer, got the wheels turning, then hustled to get the rest in place before the service began.

To be honest, I wouldn't invest much in the way of machine-tool capital, unless I had a half-ass idea of a product to make. At least then, you get something productive to do with your time before the contract work PO's come in.

The idea of buying a $350k Hermle with no customers for it is a fools errand. Now, if the kid lived on a farm, and could drag home a vintage 40x20 CNC - Then yeah, take the plunge and find odd-job work for it. But, certainly don't quit the day-job...
 

Garwood

Diamond
Joined
Oct 10, 2009
Location
Oregon
It really comes down to the individual. Some people need huge safety nets and no risks while others will jump into the deep end with sharks and make it work.

I say go for it and quit your day job. Nothing will make you work harder than an empty bank account and rent coming due.

It truly is mind boggling the amount of shit you have to own to make whatever comes through the door. When you don't have it you make friends with every shop in a 30 mile radius, you red label tooling and fumble through stuff with the wrong approaches- whatever it takes. After a decade or so you end up with so much shit stashed away you can handle just about anything.

I still can't fathom starting out as a job shop. Those that have success at it have my respect big time!
 

john.k

Diamond
Joined
Dec 21, 2012
Location
Brisbane Qld Australia
I used the shop as a background to start other businesses...if you have a shop ,you can do any kind of mechanical repairs /maintenance.......very simple strategy is to set employees up in trucking,lawn maintenance ,tree &stump removal etc.......You already have truck work,get a new truck on lease,guy to operate it on a half share,you get the work and collect the money ....it works very well ,if the guy is OK...which you already know if he has worked for you for a while......Same with lawn maintenance /gardening....pickup& trailer,half a dozen mowers ,brushcutters,etc .....all bought used ,but in good condition .....often from customers for the lawn contract......And any bad payers meet the same guys who collect for the truck and earthmoving businesses........You got to be flexible ,sit in a cold shop all day ,nothin will come in the door,get out and about.
 
O

otrlt

Guest
Too many of the comments here are far too negative.

If you want good advise, go to someone that has succeeded. They will offer you one of 3 things; a job, the work that you want, or they will ask you to leave. You have a outstanding chance that you will get more than you've ever dreamed of.

remember, it's not about money. It's about what you want.
 

john.k

Diamond
Joined
Dec 21, 2012
Location
Brisbane Qld Australia
I have a big success story right next to me .....bought the farm next to me in the 80s,today he (and his son) are billionaires.But he did something simple to start ,something anyone could have done....he started a bulk fruit place ....direct from farm cartons to check out.........But he had capital ,as he and his brother had forced the old man to sell his farm and give each half the money....It was a fruit farm ,so the brothers did know fruit.....Both set up giant fruit barns ,one northside ,one southside,made millions ,sunk it into fast food ,shopping centres (not malls),service stations ...and then industrial buildings.....and have ridden the realestate boom 1980-2020..........incidentally,the farm next to me is now a shopping centre,various fast foods ,plus service station...he owns the lot.
 

hanermo

Titanium
Joined
Sep 28, 2009
Location
barcelona, spain
To OP:
As others said.


Basically You need a business plan.
Non formal.

What will I make, how, with what, what will it cost, how will I sell it, and for what ?

The Vast Majority of this is endless crap details You dont want to deal with.
But You have to.
And You have to do them better than the guy next to You who is also starting up a machine shop.

None of it is difficult.
A small percentage of people are able to deal with the endless critical details, well, efficiently, while working 10-12 hour days.
If You also have people interrupting, or pressing You (money, rent, family) the success rate goes way down.

If You cannot deal with the details efficiently You will not make a commercial success.

It is immensely difficult to do all this really well, especially while also working at it fulltime as a startup.
Almost no-one succeeds at it. Well.
Maybe 1% of those who try succeed well - past paying bills.

Things like efficient financing are often critical.
Efficient cashflow.
Both usually need a high-level accountant well versed in corporate cashflow. You need to do this yourself.
You need to get Your customers to finance the time/materials and ideally the overhead for their projects.
? How
Ah, I see, one of the major critical details appeared.
 

1yesca

Stainless
Joined
Jun 1, 2004

Your customers are right there!

As a former shop manager in a state university, I speak from experience. Yes, they don't pay much but the benefits are good. Especially on a walk in the midafternoon on a spring day. But I digress. Check if it is ok for you to do consultation work. That is work after hours and weekends for researchers and professors on campus. The burden is allotting your time, documenting tools and materials as separate. Benefits are no overhead and use of machines and tools Not only will you make side money but will network with people who will hire you or recommend you for a better paying job. Or a partnership in business - both happened to me. No regrets!

or what we like to say save a nickel same a dime make a bundle on there the taxpayers time . play your cards right and you can be like ol lackey jack aka john at city collage become the top cnc prof [because you don't a lot any body enough hr. to be on the same level as you ] and make $80 A H plus all them benefits or you can be a man and stand up say fuc#k you and starve
 

Garwood

Diamond
Joined
Oct 10, 2009
Location
Oregon
or what we like to say save a nickel same a dime make a bundle on there the taxpayers time . play your cards right and you can be like ol lackey jack aka john at city collage become the top cnc prof [because you don't a lot any body enough hr. to be on the same level as you ] and make $80 A H plus all them benefits or you can be a man and stand up say fuc#k you and starve

How many beers went into this post?
 

CITIZEN F16

Titanium
Joined
May 2, 2021
It really comes down to the individual. Some people need huge safety nets and no risks while others will jump into the deep end with sharks and make it work.
I say go for it and quit your day job. Nothing will make you work harder than an empty bank account and rent coming due.

The safety net I used when I started my shop was the ability to function on very little sleep for long periods of time. "Oops, I sure f'd up that quote", but working a 20 hour day for $20 an hour is the same as a guy working an 8 hour a day at $50 an hour. If you really learn from your mistakes, I am now a genius. When I started my shop I was recently divorced with no children. I started in my garage so I could work till I dropped. I only had a dog to take care of and as long as I gave him some of my take out food he was happy and did not complain about me working too much.
 

CITIZEN F16

Titanium
Joined
May 2, 2021
How many beers went into this post?

I had a friend in the past who always drank beers while doing homeowner chores. I once told him he had a huge lawn for someone who doesn't own a riding mower, I ask him how long it took. His response, "a six pack." He said his wife did not complain about his weekend beer drinking as long as he was doing chores. He said if he bought a riding mower he could probably only get two down while mowing the lawn.
 

KennyEaton

Plastic
Joined
Jun 22, 2022
Now imagine that you have a large store with hundreds of employees. I think your small store simply incurs more costs than profits, and your employees want to get paid and sit at the cash register all day doing nothing. Try letting them go and give them a job to do, or else they'll be fired. You know what? No one will do anything. And you should make a point. You could read https://wolfoffranchises.com/newsletter/ to move the store to a franchise. It would be more profitable. After a year or so, you'll just get tired of it.
 
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michiganbuck

Diamond
Joined
Jun 28, 2012
Location
Mt Clemens, Michigan 48035
I know this is a year-old thread but...

QT: (now I'm working in a big city's big university's research institute )
Consider that many universities give your kids a free ride.. which can be a lot if you have a few kids.

RE: (Cant you just get some jobs and run it quietly on the university machine? That would be the best way to start out if you have neither a machine nor customers.)

You could likely not run production on university machines/time.
But you could make some programs to run a prototype part or a few.

I can think of a number of parts/devices that I could sell on eBay shooting for 30 to $60 an hour.
 
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