I want to Rent my Shop and Building to someone. Any Ideas how to go about it?

[Overland]

I'm with the others that see lots of risks, pitfalls, bad relationships, etc.

Maybe get in touch with a local community college and ask the staff there if a particular young student stands out. Maybe this could be your apprentice ?

Maybe you spend time developing the individual to the point where they could run the machines unaided. Maybe you fall back to a managerial / admin role.
You never know, if you find the right person the business could be developed with maybe more employees.

I think I would start this way, or something similar, as a way to reduce my involvement. I would not worry about selling or liquidating the business, and treat that separately, in time.

The girlfriend's father, about 50 years ago, offered me an apprenticeship in his small pressings business. I told him I wanted to take up an apprenticeship with a big car maker, go to college, and then talk to him. He rejected that idea.

She was pretty hot though !

 

[Joe Gwinn]

Kustomizer, Thank you for the response. That is definitely a good warning, I would probably be able to mitigate that risk. As I would still be working in my building, I would only rent about half the space, and keep the other space / office for my other work. This is how I would be available to assist if needed. I would probably need the last 3 or 4 months upfront to cover any shenanigans that may occur. The most expensive items I have, all weigh north of 5000lbs, so that would pose a logistical issue as well.

Tooling is often small but with high value density, evaporates unnoticed, and sells well on eBay. A physical wall with locked doors is needed.

 

[bhigdog]

Thanks Bob! What would be the nightmare scenarios you think? I definitely am open eared to the good and bad of going down this road.

Just off the top of my head.
Damage to equipment, theft, profit skimming, liability, personal conflicts, law suit legal fees, book keeping, and in the end at least a year of legal gymnastics ($$$$)trying to evict the dead beat that seemed sooooo responsible. You know.... the same guy that pours a bit of lapping compound into YOUR gear boxes before he's forced to leave.......Bob
If you don't have enough time and not enough troubles now, be a land lord.......Bob

 

[Scruffy887]

This is interesting. In my experience, when you bring someone else in to do the work while you 'just take a percentage'.....they inevitably come to resent you since they 'are doing all the work'.

I can't count how many times I've talked to someone who is unhappy because they run the whole business but 'the guy who owns it' insists on having a say in what happens and/or takes a cut of the action.

Human nature is an ugly thing.

I used to ask them, "If you are so unhappy, why don't you start your own place?" But, that never ends well because it forces them to admit, or dance around, the fact they don't have the money to start a business and don't want the 'hassle' of dealing with taxes, accounting, risk of loss, insurance, etc.

I had employees leave many times for that reason when I was starting out. I worked in my small shop and made ok money with some basic small machines and my own methods. Once they learned how few machines were needed to do what I did they left and started their own shop. 2 survived in a different market, the others failed.
But that all goes away when you start buying many machines in the 6 figure price range. Those do not fit in their parents basement.

 

[gustafson]

What you are suggesting is getting a partner.

I have never seen a partnership work out

NO offense, but you are expecting a lot from the person you wish to bring in. If you do not have time for this, it is not profitable enough to distract you from other things, it is not going to be different for anyone else.

First, sell the equipment and rent the space to someone who wants it at full retail. This is going to be your long term best deal

Small, what I call 'ego driven' businesses[small machine shop, sub shop, small retail] are worthless. I have posted this before, but a friend asked if he should buy the business of a competitor, I replied 'why, you already have their business' They were out of business a few months later.

They make your living for you, but if someone paid for them, they could not make enough money to pay you back and eat and live indoors. Anyone would be better off buying their own machines and doing it themselves.

I

 

[dalihbt]

Thanks everyone so far, I really appreciate all the input.

Thats how I'm kind of looking at it Scruffy887. Its one thing to make a small living machining in the basement (so to speak), its another to break into a decent business and the potential for good growth. I know Wire EDM better than most, and know how to make these machines work, and for someone with the time, knowledge and willingness, they can piggy back off of what I already have. I mean a good Wire Machine (Like I have) is minimum low six figures and up. I can easily show someone how to run a few of them on there own, AND lights out if they are ambitious enough to do that, I had 4 in the past on my own, so I know it can be done. So whatever I have the time now to produce on my own with 1 machine, I can pass on to someone who can give it a bigger push than I can. My customers work with me and have stayed with me because I can handle what they require when it comes to Wire work and how to maximize what the machine can produce. If I pass this onto someone who can carry the torch, they can not only benefit from what I give them in work, they could easily expand into more Wire machines if they are willing, which I can guide them if needed. Along with that I have the 2 Vertical CNCs that I don't use, and a TON of other shop tools and equipment, so they are ready for a whole other side of business that I can't tap into, and I will provide a start for someone to break into that, so that's a whole other business for someone too. They get the building as well, and all the power and air hooked up.

What I will probably ask for in rent, most of it would be payed for with the work I provide anyway (even after they kick 25% back to me) it would take years to build a good customer base, and would potentially require paying a salesperson and their commission. I can make sure my customers get their parts still so they are happy, because its good consistent work, that they have become used to getting from me.

 

[triumph406]

95% of my work is Wire EDM, and I don't really run the CNC mills at all. So I would source all of my existing customers work to the leaser, which they would pay me a percentage of maybe 25% to 30% for all the work that comes from my customer base. The work I could feed would more than likely be able to pay for half (or more) of the cost to rent the business and building. I would be available most of the time to run the Wire EDM if needed, they would just pay me a Wire EDM operators wage, and once they are comfortable with the machine they could run it themselves or hire someone to do it. I have a LOT of experience on the Wire, so I would always be available to help with new projects if they needed it.

You want to get paid a percentage, and then get paid to run the machine..........

 

[dalmatiangirl61]

Do you not have a long standing employee willing (and trustworthy enough) to take over?

I was in a similar situation a few years back, I had a long standing employee I could trust, but they had no desire to take over my business. What worked out for us is I let her start her own business out of a corner of the shop, when the time came I moved my stuff out and she started paying full rent, so far its working well.

 

[dalihbt]

Yes, I will pass on 15+ years of customers and work, which would take Years to build, and a probably a salesperson to drum up more work for them, which they would be needing a commission as well. IF....if they don't have anybody to run the machines for them, I can do that. If not I could care less if I have the work or not, Im simply providing support if needed. On top of that, I'm providing well into the six figures of equipment, and the ability to learn to use the EDM, and providing a fully functional infrastructure. Most if not ALL of which will be payed for with the work I pass onto them anyways (Even After they kick something back to me). I'm not trying to screw anybody here, I'm simply trying to keep my customers happy, and give someone an opportunity they wouldn't have otherwise.

 

[dalihbt]

You want to get paid a percentage, and then get paid to run the machine..........

Yes, I will pass on 15+ years of customers and work, which would take Years to build, and a probably a salesperson to drum up more work for them, which they would be needing a commission as well. IF....if they don't have anybody to run the machines for them, I can do that. If not I could care less if I have the work or not, Im simply providing support if needed. On top of that, I'm providing well into the six figures of equipment, and the ability to learn to use the EDM, and providing a fully functional infrastructure. Most if not ALL of which will be payed for with the work I pass onto them anyways (Even After they kick something back to me). I'm not trying to screw anybody here, I'm simply trying to keep my customers happy, and give someone an opportunity they wouldn't have otherwise.

 

[BoxcarPete]

Yes, I will pass on 15+ years of customers and work, which would take Years to build, and a probably a salesperson to drum up more work for them, which they would be needing a commission as well. IF....if they don't have anybody to run the machines for them, I can do that. If not I could care less if I have the work or not, Im simply providing support if needed. On top of that, I'm providing well into the six figures of equipment, and the ability to learn to use the EDM, and providing a fully functional infrastructure. Most if not ALL of which will be payed for with the work I pass onto them anyways (Even After they kick something back to me). I'm not trying to screw anybody here, I'm simply trying to keep my customers happy, and give someone an opportunity they wouldn't have otherwise.

None of that matters, it's the basis of the deal that's sour. You are proposing that someone pay you for the privilege of doing your work, the profit portion of which you are still keeping. If the part of the cash that you are not skimming covers cost, what's the benefit for the lessee compared to just... not doing all that work to break even for themselves and make you money?

If the wire EDM work is so easy and profitable, you should be able to find someone to work for you and crank it out, make their payroll, pay for the building, keep the rest, and still have the other shop space available to rent. Two separate arrangements, and you aren't double-dipping on the poor sod who has to pay for the privilege to line your pockets.

 

[henrya]

Don't see it working unless you had a child or right hand man who had worked with you for a long time and you got along with perfectly. Even then it would be no surprise if it went sideways.

Pretty much anything else looks real shaky. Maybe one of these, already suggested.

1. Hire a manager. Pay them well and let them run it. You come and go as you please.

2. Sell the machines, rent the building.

 

[Overland]

Dal,
You've repeated your basic argument 4 times now.
I don't think you're really listening.
This is a tough bunch, but they are trying to tell you something, and its not clear you're very receptive, when you keep repeating your basic argument.
Bob

 

[dalmatiangirl61]

Dal,
You've repeated your basic argument 4 times now.
I don't think you're really listening.
This is a tough bunch, but they are trying to tell you something, and its not clear you're very receptive, when you keep repeating your basic argument.
Bob

I've made 1 post in this thread, so I don't quite get what you are saying........

 

[newtonsapple]

Talk to other local wire shops about buying the jobs and maybe the wire EDM from you. If you stayed involved as essentially a sales rep that could earn you a percentage of ongoing sales. Probably 5-10%, maybe more for a fixed period of time.

Sell all the other equipment and rent the shop. The odds of finding a single person to come in and take things over is nearly zero unless you already knew that person.

 

[BoxcarPete]

I've made 1 post in this thread, so I don't quite get what you are saying........

OP's name starts out the same as yours.

 

[memphisjed]

switch over to co space. Have community equipment, coffee pot, microwave, edm, wifi and retail rent 200 sq foot cubicals. Someone will be hungry enough to run your parts at a rate you set - you get the environment of creativity and potential and much higher rent profit. You also help more people starting out or thinking about it.

 

[john.k]

I let some guys into my shed on a no rent for starters basis ....pleasant young guys,not dishonest types.....Anyhoo,they made box trailers,nice product sold well......came to the notice of another trailer maker who ratted them out for not paying/charging sales tax @ 25% IIRC......they did a runner ,leaving one chop saw /one mig ,and a massive sales tax assessment......which the tax inspectors tried to pin on me...had to go to court to get the assessment set aside.

 

[adh2000]

I also don't expect it to work out. Somehow I've become old, but 40 years ago I tried to go after a couple "opportunities" like you claim to offer. The problem is the older shop owner expects the young apprentice to work 60 hours a week at minimum wage because "by God that's how I did it" and "these young kids just don't have any work ethic". Thing is no one cares how you did it back in 1945. Kids today have options, jobs are all over the place, good paying jobs. Your "opportunity" needs to compete with that or they'll just do something else. Which is what I did, my own thing, worked reasonably well.

 

[Limy Sami]

It strikes me the OP's already decided what he's going to do and isn't really prepared to listen / consider the naysayers.

Please do - cos with over 50 years experience in various machining and mechanical trades, I've come across many many more thieves, rogues and general assholes (of both sexes!!) than I have honest upright citizens in the trade itself (and that's without the customers!!)

That said, if the OP does go ahead with his plan, I wish him luck - he going to need it ;- by the semi load!!