Shop Start-up Funding

[Freedommachine]

As far as a market to target I'm not really sure.

The reason people are asking; "what would you like to make?" Is something worth serious consideration.

Most new machine shops are started to support a business, not to be the business itself.

For example; Let's say you want to develop a method and process to repair some sort of otherwise disposable (and expensive) oil well equipment.

The process you develop will dictate what machinery is required and defines a clear direction in which you will go - all business decisions need to be weighed against what you are trying to achieve. If it does not support the mission, don't do it.

So, to continue with our example -our focus is 100% on the mission of repairing oil well widgets... What do we need to carry out the mission of your business? Let's say you will need; a space to work, a VMC, a tig welder, a cylindrical grinder, specific test equipment and basic hand tools.

^^^these would be mission critical items for the business. If a lathe isn't required to get the job done, then a lathe should not occupy the work space until it is required.

Who is our target customer? Oil well equipment service contractors? drillers? Purchasing agents? Gas station attendants? Librarians?

When we pinpoint exactly who our customers are; we can find out where they are, study them and develop a custom tailored plan to market the product.

The owner's focus should always be on what the business sets out to accomplish. The machine shop is just a large tool box; custom built to carry out the mission of the business.

Many job shops that you see these days started out this way. They either lost their market due to competition, their product was phased out, or something else happened that pulled them away from what built the shop was built to do in the first place.

They are left as a business with nothing to make so they branch out and take on work in multiple directions.

The result is not always bad. Like @Garwood said; You can never tell where fate will lead - for some businesses they will adopt a new, far more lucrative niche and this is when the real growth starts to happen.

TLDR: there are many shops, already well established who can and will make parts to print. You have to come up with a mission; plan and goals so that you can make and market your specific products or services. Without doing this first, you will likely waste time and money figuring it out.

 

[SND]

Start working 7 days a week now to put more $ aside quicker and get things going, then keep working 7 days a week once you have the shop started, reinvest every cent, then maybe in 10-20 years you'll be out of the hole you dug yourself into if you're lucky but still not have a life. Took me 15 years and I was very careful with spending and lucky many times, never had a customer not pay yet. Only just starting to look at other things than working every single day, life went by too fast... I'm happy of the position I'm finally in, I'll let you know 30 seconds before I'm dead if it was worth it or not...

 

[artengineering]

I've kind of been swimming in the boat the last 2 years. I started out as a Design Engineering business and am restructuring into fabrication and machining. I was a machinist before going to Engineering school and my clients the last 2 years have steered me where I want to be able to offer the service and not outsource it. I always like working with my hands and am kind of tired of always 24/7 desk work. Starting with manual machines and am trying to go CNC eventually. My feeling is there is always shops that will outsource work, clients who may just need help programming if you have that experience, as well as having your individual clients for small prototype stuff. And in the mean time try to come up with your own products as sort of a passive, lean back on income. I am staying a float and can see a financially secure and time freedom future, but it is a grindstone and A LOT of time now.

 

[Rex TX]

your going to invest 100,000.00 to make what? 30.00 an hour net? if your job is good and you get benefits you are making close to that already, and can turn it off when you go home. at that investment number your competing against retired old machinists who want to make toy money, keep their minds sharp, and hide from their wives. You might make it work but it would be brutal, be better off if you love it to buy an old machine and do it as a hobby and keep your job. of course that's what I was told as a young guy buying my first 1950s drill rig though also. you can make it work but you better love it and not need the money for a few years.

This ^^^ In a prior life I was in the wholesale auto parts business. A regular part of that was meeting with people who wanted to open their own parts store. In most cases they had a solid job with benefits, vacation time, and income that let them sock away thousands for their future business. So I would sit down with them and plug in numbers into my ROI spreadsheet. 9 times out of 10 the result was they would spend their life savings to buy a job that they would turn down if it offered offered them: 60 hour work-week, no vacations for years, no health insurance, responsible for the business 24/7 etc., for pay equal or less than they were making now. Most saw the light. A few came back later with a better plan.
Those that did well bought an existing troubled business at a fire-sale price, some times just the contents to be opened up elsewhere. Sometimes they got the building as part of the deal. Sometimes a retiring owner was looking for someone to take over his business and would carry the note. Usually the buyer had local connections with almost a guarantee of their business - fleet operators, big farms, local industry. Those guys made it if they had a bit of sense and a decent personality. People trade with people they like.
A machine shop is not that much different IMO. Put the word out in your area that you would like to buy a small shop. Leave contact info. Keep asking, keeping in mind the busy shops may be looking for a small operator that can take the smaller jobs they don't want. Chances are a golden opportunity will present itself. It might be an ugly duckling that you can turn into a swan.
It's just like race cars. Don't build from scratch right out of the box.
And don't spend your life savings to buy yourself a $30K job with long hours.

 

[BarnFab]

You don't need $100k, you don't even need $10k. If you think it is about $$$ then you will probably fail. List the top 5 things you have done to get yourself ready to open a business ?

 

[BarnFab]

your going to invest 100,000.00 to make what? 30.00 an hour net? if your job is good and you get benefits you are making close to that already, and can turn it off when you go home. at that investment number your competing against retired old machinists who want to make toy money, keep their minds sharp, and hide from their wives. You might make it work but it would be brutal, be better off if you love it to buy an old machine and do it as a hobby and keep your job. of course that's what I was told as a young guy buying my first 1950s drill rig though also. you can make it work but you better love it and not need the money for a few years.

That is so true its funny and I am that old guy lol

 

[kpotter]

I started with no money and went to work for a machine dealer to get beat up free machines. Knowing what I know now I would have financed the first cnc and hit the ground running. I spent years working on old equipment to be able to afford to buy new stuff for cash. Finance what you need and start going life is short. I have 27 employees now. I could be totally wrong.

 

[Ox]

Boy, that girly that you hired to run the office must have REALLY changed things there!


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Think Snow Eh!
Ox

 

[john.k]

At one time the rationale for starting a business was that the wife and kids could work there .....didnt matter if the hourly rates were low,overall the result was positive.