Looking at buying shop - Page 2
Close
Login to Your Account
Page 2 of 4 FirstFirst 1234 LastLast
Results 21 to 40 of 61
  1. #21
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by CITIZEN F16 View Post
    I second that. I hired a friend who actually told me he did not expect that I would want him to work as hard as everyone else.
    Thank you for the insight. I have read some other posts here after reading this, and I will take this suggestion to heart.

  2. #22
    Join Date
    Aug 2002
    Location
    West Unity, Ohio
    Posts
    27,746
    Post Thanks / Like
    Likes (Given)
    8083
    Likes (Received)
    9802

    Default

    Boy doo I have tons, MANY tons - of accumulated Schidt!
    Complete buildings full'o, and then some....




    Some days it sure is nice to be able to rummage around and find what you don't need to buy today.

    Spare compressor?
    Spare saw?
    A axis or 2 (or.... maybe 4?)
    skids of extra material?
    Spare screw machine or 7?
    Extra CNC lathe and 5x boring mill?
    A chip spinner or 3?

    Yeah, well that extra Schidt can come in handy when you need it....
    Big albatross when you don't.


    ---------------------

    Think Snow Eh!
    Ox

  3. Likes Bobw, Garwood, dkmc, wheelieking71 liked this post
  4. #23
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by Ox View Post
    I am going to say that the "will the customers stay when Bill doesn't answer the phone anymore" concern is a real concern of any other point in history, except now. As a rule, I am going to say that no-one is going to be pulling work until you prove to not be able to get it out the door.

    If you can buy a running shop that can make it's own payments as is, for the price of the equipment, if all goes bad, as long as equipment prices don't go down the tubes (Jan 2009) then you really can't get hurt too bad at all. (?)

    If you think that there is growth potential w/o having to buy more equipment, then all the better.


    I say this - ass_u_ming that you are not including the value of a bunch of legacy equipment that you wouldn't need if you were starting out, but it doesn't sound like it.

    It sounds like you might be the right guy for the job.


    ---------------------------

    Think Snow Eh!
    Ox
    Thanks Ox.

    The only reason I am considering this shop, is that the machinery is all in tip top shape, and relevant. There is not a single item in the shop of legacy, machine, tooling, etc. The shop is immaculate as far as organization and cleanliness. It's practically the only smaller machine shop in the area that didn't have a bunch of stuff that was horded, either because of owner/management saving for a rainy day (a rainy day that hasn't come in 3 decades, but 1/3 of the shop floor is not usable, just so we might save $200 one day, kinda situation), or revolving staff not actually knowing what things are for.

    As for growth potential, the machinery is well selected, with redundancy. I see the shop being able to handle 2 machinists, a machinist/programmer/QC, and myself, with no need for upgrades, unless we can tap a market that makes sense.

    About the customers, I have been given permission to contact all customers, past and present, and represent the company for any new ones, to see the availability of new work. I plan on visiting them all to confirm availability of any work, and to inquire if there are any problems they need solved, that currently creating issues.

    Regards,

    William

  5. Likes DouglasJRizzo liked this post
  6. #24
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by Ox View Post
    Boy doo I have tons, MANY tons - of accumulated Schidt!
    Complete buildings full'o, and then some....




    Some days it sure is nice to be able to rummage around and find what you don't need to buy today.

    Spare compressor?
    Spare saw?
    A axis or 2 (or.... maybe 4?)
    skids of extra material?
    Spare screw machine or 7?
    Extra CNC lathe and 5x boring mill?
    A chip spinner or 3?

    Yeah, well that extra Schidt can come in handy when you need it....
    Big albatross when you don't.


    ---------------------

    Think Snow Eh!
    Ox
    I've mostly only seen it as an albatross. People tripping over everything because there isn't any space for production. You're list sounds more like a spare machine shop or 2. I suppose the places I have seen didn't know how to hoard properly. Best was, nobody knew what anything was for.

    I'm a big fan of clear spaces, with only the necessities. Clear flow, no clutter, and space to do maintenance.

    Regards

    William

  7. #25
    Join Date
    Dec 2002
    Location
    Pacific NW
    Posts
    5,241
    Post Thanks / Like
    Likes (Given)
    8
    Likes (Received)
    946

    Default

    "I have managed a machining job shop and foundry for close to a decade. "

    I have to ask if you've been doing the above why are you asking for advice? It seems to me you should already know better than any of us whether this is a viable situation.

  8. Likes ElCrasho liked this post
  9. #26
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by Doug View Post
    "I have managed a machining job shop and foundry for close to a decade. "

    I have to ask if you've been doing the above why are you asking for advice? It seems to me you should already know better than any of us whether this is a viable situation.
    Hi Doug,

    If it was just about operations I would have it down no problem.

    To specify, my experience is with running established shops. I did not have to canvas for sales either. The main point of my question was in relation to being able to wrangle up new sales in 3-6 months. I'm looking to see what is plausible/possible to analyze if I should buy a fully turnkey shop, vs a shop with anemic sales.

    They both have their advantages and drawbacks. My thought was that with a purchase of a company without great sales, I would be somewhat hedged by holding tangible assets vs good will. If the turnkey company would lose some customers, I would be in the same position, and the balance sheet would be decimated.

    Hope that answers your question.

    Regards

    William.

  10. #27
    Join Date
    Sep 2006
    Location
    Abingdon, VA
    Posts
    3,796
    Post Thanks / Like
    Likes (Given)
    5018
    Likes (Received)
    3809

    Default

    If you've really got the entrepreneurial bug, I say go for it.

    Not often do you find a shop for sale that actually has good equipment that has been properly taken care of! Most shops rag the hell out of their machines, and maintenance consists of only adding coolant and oil.

    And most shop owners looking to sell ask an exorbitant amount of money for said beat-up equipment. They all seem to want a fortune for the "goodwill" of the business. Well, unless a shop has an established product line, goodwill for a contract shop just isn't worth that much, and can evaporate fast if you're not a good people person, and good at sales.

    Like Ox says, the customers won't be in a hurry to take the work to another shop, because in today's economy, there aren't a lot of other shops with open time available. I know in my area there are less shops now than they were two decades ago, and the ones still here are doing well.

    There's more contract machining work out there than you can imagine, you just have to look!

    If you can't manage money, then don't do it. Money management sounds so simple, yet most of us aren't worth a lick at it, especially in business.

    Good luck with your decision, and keep us posted.

    ToolCat

  11. Likes Bobw, WilliamSK, Garwood liked this post
  12. #28
    Join Date
    Jul 2004
    Location
    Reddington, N.J., U.S.A.
    Posts
    3,694
    Post Thanks / Like
    Likes (Given)
    744
    Likes (Received)
    471

    Default

    Quote Originally Posted by WilliamSK View Post
    Thanks for your input Lott.

    Agreed somewhat that the sale is the equipment. There is a small customer base that will carry the business for a year or 2. I might be wrong, but this customer base is the most important to me, vs just buying the machines, as it will provide some cash flow.

    Regards,
    William
    His customers may choose not to become your customers. No guarantee of loyalty once the original owner's name is not attached to the business.

  13. Likes Mcgyver liked this post
  14. #29
    Join Date
    Jun 2011
    Country
    UNITED STATES
    State/Province
    New Jersey
    Posts
    1,717
    Post Thanks / Like
    Likes (Given)
    933
    Likes (Received)
    753

    Default

    Quote Originally Posted by WilliamSK View Post
    Good day all,

    First post, but have been lurking here for the better part of a decade.

    I have the opportunity to purchase a nearby shop, at the price of machinery (multiple mid-tier CNC mills(3 and 5-axis) and lathes, about 8-10 years old).

    The downside is sales are stale. I would make just enough money to pay the bills. The shop has never marketed, and does not have an online foot print. They reject work, that in my opinion would cover sunken costs of the business, until the marketing engine makes some moves.

    The owner works alone, but it should be a 3-4 man show. He has lost the customer that put him over the top, and is unwilling to find new work and would rather retire.

    Upsides:
    It comes with ISO and AS.
    Very clean and organized.
    Best maintained machines have seen in a long time.
    Being sold at asset price allows for easy access to loans.

    Question for you is, is it possible to start building up a customer base in 3-6 months, or should one walk away from this situation?

    The way I see it is that I'm buying used machines, that I could buy 1 or 2 at a time as needed instead, but I wouldn't have any base to work off of.

    Thank you for taking the time to read my post.

    Regards,

    William.
    How good at you at marketing and sales?
    This is a classic example of what I would call an "old time" shop, where the owner has more or less retired even tho he's still there.
    Is the work coming in holding up the day to day expenses? Is it steady?

    If "yes" then you could allot yourself a year or two (or more) to build the business and get it cooking.
    At this point, you're buying something that is just above water - and some nice tools.
    Have your attorney do a search and make sure nothing is pending - like a lawsuits or collections.
    It could be brought back, if you're willing to pound some shoe leather and start with an online presence.

  15. #30
    Join Date
    Feb 2005
    Location
    Hatch, NM Chile capital of the WORLD
    Posts
    9,804
    Post Thanks / Like
    Likes (Given)
    16801
    Likes (Received)
    12008

    Default

    Quote Originally Posted by WilliamSK View Post

    I'm a big fan of clear spaces, with only the necessities. Clear flow, no clutter, and space to do maintenance.
    Most people are, though there are some that HAVE to have a pile of crap around them.
    Its the application of organization where most of us fall down.

    I really wish I was good at cleaning and organizing. But I'm just not. Or maybe
    I am, and I just hate doing it.

  16. Likes dkmc, wheelieking71 liked this post
  17. #31
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by DouglasJRizzo View Post
    How good at you at marketing and sales?
    This is a classic example of what I would call an "old time" shop, where the owner has more or less retired even tho he's still there.
    Is the work coming in holding up the day to day expenses? Is it steady?

    If "yes" then you could allot yourself a year or two (or more) to build the business and get it cooking.
    At this point, you're buying something that is just above water - and some nice tools.
    Have your attorney do a search and make sure nothing is pending - like a lawsuits or collections.
    It could be brought back, if you're willing to pound some shoe leather and start with an online presence.
    Marketing and web presence will be no problem. I have a site ready to go, with blog articles relevant to customers....which will help with the SEO. In 6 or so months I will be the top search in my area.

    Sales I have no idea. I've been successful closing proven leads, but that is a completely different story.

    My plan is ensure a great web presence, network and add contacts, call every single shop for overflow work, and cold call businesses that require machined/assembled parts, by offering services for parts they are having trouble making. The forte of this shop has been solving manufacturing problems, but they didn't realize the impact they had.

    I have some interest from the maker space. I'm not sure if it is a very profitable sector, but it allows to build a gallery of very interesting parts. A lot of the younger guys/gals in purchasing these days are heavy users of instagram and reddit. Not putting much stock into this, but it is perhaps worth a try.

    Current business is holding steady. There are a couple of other customers I have been asked to go speak with, that have historically placed orders. They have been slow the last couple of years, but show signs of recovering.

  18. Likes boosted, DouglasJRizzo liked this post
  19. #32
    Join Date
    Aug 2002
    Location
    West Unity, Ohio
    Posts
    27,746
    Post Thanks / Like
    Likes (Given)
    8083
    Likes (Received)
    9802

    Default

    Well, make sure to let us know if you go with this, and keep us up on how it goes.

    It is always good to hear stories - hopefully ones that end well.


    ------------

    Think Snow Eh!
    Ox

  20. Likes boosted, WilliamSK, wheelieking71 liked this post
  21. #33
    Join Date
    Jan 2019
    Country
    UNITED STATES
    State/Province
    California
    Posts
    141
    Post Thanks / Like
    Likes (Given)
    96
    Likes (Received)
    80

    Default

    I would ask him to carry some paper. Give him 25% down, terms of 5 years + maybe some percentage of the profit. If it's legit he will make more money on the deal and you both win. If it goes south he takes the equipment back and you're off the hook without owing a bank.

  22. Likes Bobw, WilliamSK liked this post
  23. #34
    Join Date
    Jun 2011
    Country
    UNITED STATES
    State/Province
    New Jersey
    Posts
    1,717
    Post Thanks / Like
    Likes (Given)
    933
    Likes (Received)
    753

    Default

    Quote Originally Posted by WilliamSK View Post
    Marketing and web presence will be no problem. I have a site ready to go, with blog articles relevant to customers....which will help with the SEO. In 6 or so months I will be the top search in my area.

    Sales I have no idea. I've been successful closing proven leads, but that is a completely different story.

    My plan is ensure a great web presence, network and add contacts, call every single shop for overflow work, and cold call businesses that require machined/assembled parts, by offering services for parts they are having trouble making. The forte of this shop has been solving manufacturing problems, but they didn't realize the impact they had.

    I have some interest from the maker space. I'm not sure if it is a very profitable sector, but it allows to build a gallery of very interesting parts. A lot of the younger guys/gals in purchasing these days are heavy users of instagram and reddit. Not putting much stock into this, but it is perhaps worth a try.

    Current business is holding steady. There are a couple of other customers I have been asked to go speak with, that have historically placed orders. They have been slow the last couple of years, but show signs of recovering.
    It sounds to me like definitely worth a shot then.
    Knock it out of the park!

  24. Likes WilliamSK liked this post
  25. #35
    Join Date
    Aug 2021
    Country
    UNITED STATES
    State/Province
    Michigan
    Posts
    17
    Post Thanks / Like
    Likes (Given)
    11
    Likes (Received)
    10

    Default

    Quote Originally Posted by mhajicek View Post
    Does the shop have a niche, or will you be competing with every other shop in the world?
    Current company is a solutions provider for difficult to machine parts and materials, in aerospace and mission critical components. I will be further assessing more definitive specializations, that I can use to target specific customers. Your point has moved to the core, and foundation of my sales strategy, of defining who we are, and what we can do, and being honest about it to ourselves and customers. This will also drive us to develop into areas we should be targeting for capabilities and self-growth.


    To all...Thanks for the great feedback you have provided. I will be doing DD and assessing the feasibility over the coming months. I have incorporated many of your suggestions, and have added or re-prioritized any of the risks brought forth by the comments. I cannot believe how helpful this community is. Thank you!

    However it goes, I will provide updates once the situation comes to some resolution, and hopefully some shop and parts pics down the road.

    Regards,

    William

  26. Likes DouglasJRizzo, Ox, mhajicek liked this post
  27. #36
    Join Date
    Apr 2007
    Location
    Pillager, MN
    Posts
    6,399
    Post Thanks / Like
    Likes (Given)
    1936
    Likes (Received)
    6248

    Default

    Quote Originally Posted by Bobw View Post
    I really wish I was good at cleaning and organizing. But I'm just not. Or maybe I am, and I just hate doing it.
    Yeah, tell me about..............

    My shop "looks" organized...........it's just an orderly mess. Neat stacks and piles on shelves.................

  28. Likes Bobw, MetalCarnage, wheelieking71 liked this post
  29. #37
    Join Date
    Dec 2002
    Location
    Pacific NW
    Posts
    5,241
    Post Thanks / Like
    Likes (Given)
    8
    Likes (Received)
    946

    Default

    I said you should know the answers about getting work. You know the area and what type of work is available, but most importantly you know from previous shop supervision your ability to convince people. Selling is convincing others. Didn't you have customer interaction when running shops?

  30. #38
    Join Date
    Apr 2018
    Country
    UNITED STATES
    State/Province
    New York
    Posts
    79
    Post Thanks / Like
    Likes (Given)
    38
    Likes (Received)
    25

    Default

    Not that my opinion means much, not being a shop owner, but I would talk to those customers ASAP. Make sure that they want to continue to do business under new management and that whatever product the company provides has the same terms as with the old owner. My company is one of those shops that are grandfathered in with a few of the existing customers, when it comes to specs/requirements (not exactly using proper terms to explain myself). As long as the dies make parts that meet the print and function, the dies are accepted. You would be the only employee or...?
    I have been thinking about buying a shop myself, the only hang up is employees and a consistent customer base.

  31. #39
    Join Date
    Dec 2002
    Location
    Pacific NW
    Posts
    5,241
    Post Thanks / Like
    Likes (Given)
    8
    Likes (Received)
    946

    Default

    Quote Originally Posted by chuckg7442 View Post
    ................................. My company is one of those shops that are grandfathered in with a few of the existing customers,........................................ ....................
    Whoa, be careful of counting on being grandfathered in. I did CNC work for a small, 1950's style mom and pop shop. They retired by selling the operation to their shop foreman. Looked like a good deal for everyone involved. Nope, with the new owner the grandfather'ing ended with the customer accounting for 60% of their work so the shop would have to qualify as a new vendor, insurance, ISO, etc killed the deal.

  32. #40
    Join Date
    Apr 2018
    Country
    UNITED STATES
    State/Province
    New York
    Posts
    79
    Post Thanks / Like
    Likes (Given)
    38
    Likes (Received)
    25

    Default

    Quote Originally Posted by Doug View Post
    Whoa, be careful of counting on being grandfathered in. I did CNC work for a small, 1950's style mom and pop shop. They retired by selling the operation to their shop foreman. Looked like a good deal for everyone involved. Nope, with the new owner the grandfather'ing ended with the customer accounting for 60% of their work so the shop would have to qualify as a new vendor, insurance, ISO, etc killed the deal.
    Exactly my thoughts. Just because the current owner has a deal with the customers, doesn't mean that they will have the same deal with the new owner. Friendship goes a long way.


Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •