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  1. #1
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    Default First Post - Setting up shop

    Hello,

    I need some input/advice from those with experience in establishing, running, and maintaining their own shop.

    History: I have spent ~6yrs evolving and perfecting a product that I think the world is ready to see and I'm ready to fly-the-coop from the hobbyist/home shop I've been working in. I make small metal assemblies with tolerances that vary between 'standard' and press-fit and now that I have my first (used) machine I'll need a shop to put it in.

    If you could go back and tell yourself something that you've learned along the way, or advice you wish that you had available when you set up your shop, what would it be?

    I'll take whatever advice you have to give!!

    Thx,
    Bones

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    It's hard to give anyone advice if you don't know the context. There's just a little bit more than nothing to work with here.

    Quote Originally Posted by Bones288 View Post
    History: I have spent ~6yrs evolving and perfecting a product that I think the world is ready to see and I'm ready to fly-the-coop from the hobbyist/home shop I've been working in.
    Am I to take that to mean that you haven't actually sold any yet?

    Unless this is a consumer product that you expect to sell like hot-cakes and requires you to beat other people to market (six years makes that seem unlikely, but you never know), I would be very, very careful about the kind of outlays you commit to getting it into production.

    Have you run a business before? Sales, accounting, supply chain, etc.

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    Quote Originally Posted by Bones288 View Post

    If you could go back and tell yourself something that you've learned along the way, or advice you wish that you had available when you set up your shop, what would it be?
    In a nutshell? DON'T!

    Seriously, I would never try to discourage someone who wants to pursue their dream (hell, I did it), just be aware that this WILL be the most physically, mentally and financially exhausting thing you will ever do in your life.

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    Quote Originally Posted by Bones288 View Post
    I'll take whatever advice you have to give!!
    YouTube

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    I don't know where to begin. I used to live in Cali, it is a big place, where are you at? Your location could have an effect on my advice. Some cities are flat out hostile to manufacturing businesses and have ridiculous regulations that can blind side someone even if they have done their research. I fled that state over 8 years ago and am pretty sure it has gotten worse for the likes of us, not better.

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    Only Buy what you can pay Cash for

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    "Only Buy what you can pay Cash for"

    Real good advice debt kills most startups. I did borrow a couple of times when the cash flow was real good, but I paid them off real fast. If I had instead carried the debt and lived large, I would not have survived the lean years.

    I worked with a company that sold my products for a couple of years, they lived large when things were good. The year 2000 came and sunk them. They went out of business owing me $212,000.00, they just closed the doors and did not have enough money to declare bankruptcy. The last I heard of one of them he was living with his 70 year old father and making pizzas.

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    A single product is like a single client- might keep money coming in but it might not.
    What is the plan if the one product stops selling?

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    That's a pretty vague intro. I'll give it a poke because I'm procrastinating.

    Everyone thinks there product will fly off the shelves. It rarely works like that.

    Focus on the product you make and nothing else. It's easy to get bogged down in branching out into new products too soon. I ran into this problem with my own side business. It's more of a way to scratch an itch than for money anyway so I don't mind.

    Stay lean. Only buy the material you need and only get the tools you'll need. Keep an accurate schedule with built in flex time to accommodate waiting a day for a replacement tool. So many guys tie their cash flow up in the 2 extra cutters they haven't needed for 2 months or the extra material ect.

    Keep overhead low. Just becasue a certain tool might make it easier doesn't mean you have to own it. Cash buying will ensure you can focus on making product and not on where your gonna hide the banker's body.

    YouTube

    Standard and press fit aren't tolerances. It probably doesn't matter if its widget anyway. Don't buy expensive inspection equipment unless you actually need it.

    I would keep it on the DL until you prove it can support itself. It seems like every other day someone complains about CA and their bogus laws regarding business and you don't want them up your ass.

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    Quote Originally Posted by yoke View Post
    It seems like every other day someone complains about CA and their bogus laws regarding business and you don't want them up your ass.
    One of my favorites is in a lot of cities in Southern California it is illegal to wash your car at home. They want the water recycled and out of the storm drains. In California mobile auto detailers are pretty common. Those guys are now required to put a barrier around the car they are washing and vacuum up the water and recycle it. I remember decades ago in So Cal as a night shift foreman a bunch of fireman came in the building asking who was in charge. I was told someone was illegally washing their car in our back parking lot. Dude was doing it on his last break at about 10pm. We got off with a warning, the guy said we could be fined up to $25,000. I was in shock, I was waiting for them to tell me I was on candid camera and they weren't real fireman.

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    Partner with someone with commercial experience.
    (non-exclusive, time limited)

    If the product is any good, the commercial sales guy will make 100x the sales volume from it.
    At 50%, or 10k$ / month burdened.


    Quote Originally Posted by Bones288 View Post
    Hello,
    I need some input/advice from those with experience in establishing, running, and maintaining their own shop.

    History: I have spent ~6yrs evolving and perfecting a product that I think the world is ready to see and I'm ready to fly-the-coop from the hobbyist/home shop I've been working in. I make small metal assemblies with tolerances that vary between 'standard' and press-fit and now that I have my first (used) machine I'll need a shop to put it in.

    If you could go back and tell yourself something that you've learned along the way, or advice you wish that you had available when you set up your shop, what would it be?

    I'll take whatever advice you have to give!!

    Thx,
    Bones

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    Water regulation in CA.

    Too little too late perhaps.
    Aquifer drawdowns are putting the entire states infrastructure at risk.
    That risk puts pressure on municipalities to try to regulate which causes some to chafe at “over regulation”.

    Overdrafting - Wikipedia

    Critically Overdrafted Basins

    Take a look at Mexico City.
    Here is a nice example of a water infrastructure which is headed for complete collapse:

    BBC - Future - How a city that floods is running out of water

    So what- do nothing, be oblivious to the issue or pretend there is no problem, or worse second guess those charged with administration?

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    Only quiggly - std / press fit are tolerances.
    1. 2. 3. 4. 5.
    Yes.

    You, anyone, everyone, are either already making money on xx widgets or You will never make money as the machinist.
    At least a reasonable profit after legal requirements.

    A widget either makes money, or not.
    A high quantity new widget is unlikely, and 100% prepayment is std.
    Most small company failures are related to similar stuff.
    Direct up-front cash/advance policies avoid this.


    Quote Originally Posted by yoke View Post
    1.
    Everyone thinks there product will fly off the shelves. It rarely works like that.
    2.

    Focus on the product you make and nothing else. It's easy to get bogged down in branching out into new products too soon. I ran into this problem with my own side business. It's more of a way to scratch an itch than for money anyway so I don't mind.

    3.
    Stay lean. Only buy the material you need and only get the tools you'll need. Keep an accurate schedule with built in flex time to accommodate waiting a day for a replacement tool. So many guys tie their cash flow up in the 2 extra cutters they haven't needed for 2 months or the extra material ect.

    4.
    Keep overhead low. Just becasue a certain tool might make it easier doesn't mean you have to own it. Cash buying will ensure you can focus on making product and not on where your gonna hide the banker's body.

    YouTube

    5.
    Standard and press fit aren't tolerances. It probably doesn't matter if its widget anyway. Don't buy expensive inspection equipment unless you actually need it.

    I would keep it on the DL until you prove it can support itself. It seems like every other day someone complains about CA and their bogus laws regarding business and you don't want them up your ass.

  19. #14
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    Quote Originally Posted by FredC View Post
    "Only Buy what you can pay Cash for"

    Real good advice debt kills most startups. I did borrow a couple of times when the cash flow was real good, but I paid them off real fast. If I had instead carried the debt and lived large, I would not have survived the lean years.

    I worked with a company that sold my products for a couple of years, they lived large when things were good. The year 2000 came and sunk them. They went out of business owing me $212,000.00, they just closed the doors and did not have enough money to declare bankruptcy. The last I heard of one of them he was living with his 70 year old father and making pizzas.
    Debt makes sense when you need it to scale the business. But you should have a verifiable business need, where you're either bringing a part/process in house or providing a service your customers are paying someone else for but have told you they would rather have you do to shorten their lead times, procurement complexity, or whatever.

    People throw around the word 'startup' too much today: a startup is a company with massive growth potential. Most people are starting a small business, not a startup. Startups take on a lot of debt because it's risk versus reward and debt shortens the time to market, which is usually a critical factor. Small businesses should not take on a lot of debt, because they are not going to grow so fast that the debt becomes unimportant in a few years.

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    Quote Originally Posted by Trboatworks View Post
    Water regulation in CA.

    Too little too late perhaps.
    Aquifer drawdowns are putting the entire states infrastructure at risk.
    That risk puts pressure on municipalities to try to regulate which causes some to chafe at “over regulation”.

    Overdrafting - Wikipedia

    Critically Overdrafted Basins

    Take a look at Mexico City.
    Here is a nice example of a water infrastructure which is headed for complete collapse:

    BBC - Future - How a city that floods is running out of water

    So what- do nothing, be oblivious to the issue or pretend there is no problem, or worse second guess those charged with administration?
    The strange thing is in Cali they have boat loads of golf courses and farms out in the middle of the desert that get cheap subsidized water. It takes a lot of water to keep the grass green and veggies growing when it hits 110+ in the day time with night time lows sometimes that don't dip below 85. The people that pay the price are homeowners. I bailed out of there in 2010. It cost me $100 a month extra to keep a garden watered that wasn't any bigger than a single car garage. I wasn't in the actual desert, but pretty close. It is strange now living in Virginia, none of the farms around me even have sprinkler systems the 50"+ of rain a year is more than enough.

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    Don't quit your day job until/unless your business takes off. Minimize your financial commitments like shop rent, or worse a shop mortgage.

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    Golf courses.

    Yeah- you’re right- a sister of mine lived in Phoenix for a long time- same deal.

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    Quote Originally Posted by Booze Daily View Post
    In a nutshell? DON'T!

    Seriously, I would never try to discourage someone who wants to pursue their dream (hell, I did it), just be aware that this WILL be the most physically, mentally and financially exhausting thing you will ever do in your life.
    I really wish someone had told me that, my plan for self employment envisioned lots of free time, while still raking in the bucks, I was sooo wrong.

    If I had to start over again, first thing I would do is buy a warehouse, with the plan that if business did not fly, I'd just become a landlord. The money I paid in rent that first 10 years would have bought a nicer place. If you can't afford to buy a warehouse, keep working out of your garage till you can.

    Good luck! Better be a damn good widget!

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    Definitely as others have said keep payments low and keep your day job as long as you can. Also do not bank a thing on promise of future orders. If someone wants to distribute your product and says they can sell a thousand a year but need three dozen "free samples" to test market, tell them to go take a long walk on a short pier.

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    Its really really easy to quit your job when you are so busy selling so much of your product that you can't even find time to go to work anymore. Its a little less easy but doable to find someone to box and ship product while you are still working at your day job.


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