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  1. #21
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    Quote Originally Posted by fmari --MariTool- View Post
    Contract, forget it. Worthless. Customer can make up any reason to break it. Quality not how it should be, delivery 1 day late, etc. etc. Plus how are you going to enforce it. Sue him. Good luck. Just gonna make lawyers richer.
    I agree with this ^^^^^ 100% !!!!!!

    I will rely on my judge of character every time over a "contract".

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    Quote Originally Posted by kustomizingkid View Post
    Sounds like you should have bought a mill and kept the golden goose happy... I don't say that to kick you in the nuts just a different way to look at that same story.
    I drug my feet on that due to the fact I live in a machine tool desert and the local riggers are expensive and reckless. Also since I sold off a bunch of CNC Mills during the recession when I quit playing OEM, I was getting a little sticker shock and was waiting for a deal. Don't worry I have kicked myself in the nuts plenty of times over this.

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    I recently asked a customer if they'd front me cash to add a spindle(s). They are willing to do it but I backed out because I don't want to to be beholden to them. In the mean time I'm cranking out as much as possible and plan to pay cash for new spindle(s) when I can. I know I'm moving slower than they want so I'm risking they find someone else and jump ship like Dualkit's guy. It's a dilemma I lose sleep over....wish I had a crystal ball.

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  6. #24
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    Quote Originally Posted by Dualkit View Post
    The worst ones for me are the cycle times in the 45-60 second range. Long enough where you have to wait on the machine, but too short to have time to pick up a broom or do anything else.
    There the ones that caught me a couple of times...I'll just go fill a bucket of coolant and nip back and press the button...and I get distracted...

  7. #25
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    Quote Originally Posted by metal-ica View Post
    I recently asked a customer if they'd front me cash to add a spindle(s). They are willing to do it but I backed out because I don't want to to be beholden to them. In the mean time I'm cranking out as much as possible and plan to pay cash for new spindle(s) when I can. I know I'm moving slower than they want so I'm risking they find someone else and jump ship like Dualkit's guy. It's a dilemma I lose sleep over....wish I had a crystal ball.
    Been there done that burnt the T-shirt!

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    Quote Originally Posted by wheelieking71 View Post
    I agree with this ^^^^^ 100% !!!!!!

    I will rely on my judge of character every time over a "contract".
    Contracts are only useful when both parties desire to honor the agreement.

    Once you have one side that wants out, it becomes a lawyer/money battle. He who has the larger army (most cash and lawyers to send to battle) will win.

  9. #27
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    The 40% rule isn't a limit on a customer, it means you have to do the work to grow the business with other customers.

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  11. #28
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    Quote Originally Posted by Archer120x View Post
    The 40% rule isn't a limit on a customer, it means you have to do the work to grow the business with other customers.
    And a warning when you feel all smart that your bank account is booming

    I would not go so far as paying cash as mentioned above, it is just you must feel the impending doom of 'not' getting a new machine

    The problem with cash is you are playing with your money rather than other people's money, generally one would rather have one's own cash and a huge debt than zero cash.

    There are people who finance a big shiny new shop, and others who toil for years to buy a machine

    There is a middle ground

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  13. #29
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    Good topic!

    What I've found for the customers around here is that once the volume gets up high enough, they all hanker to buy their own machine(s) and pull the work back in house.

    The customer that I got started with 23 years ago did just that. They were telling me to "ramp up, buy machines, increase capacity because it's coming". Through the grapevine, I found out they were buying a larger building and were getting quotes from all the major machine tool distributors.

    Well, you don't have to guess what happened. I went from doing about $20k per month with them (huge business for a fledgling startup shop!), down to ZERO over about a 6-month period.

    I tend to not trust customer's "big plans", and take everything they say with a grain of salt.

    ToolCat

  14. #30
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    Quote Originally Posted by barbter View Post
    There the ones that caught me a couple of times...I'll just go fill a bucket of coolant and nip back and press the button...and I get distracted...
    What could possibly go wrong?!
    img_20181218_174720_139.jpg

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  16. #31
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    Tough call with a 1 man shop. I have always judged the need for new equipment on how long my lead times were or how much I was subbing out. If either was excessive and I couldn't solve it with another employee, we would add equipment. Taking a calculated risk is something you have to do to grow the business. If you already know how to run a used machine, not too much to lose. Sell it if it doesn't work out.

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    Quote Originally Posted by Archer120x View Post
    The 40% rule isn't a limit on a customer, it means you have to do the work to grow the business with other customers.
    This. ^^^^^ Grow or die is kind of a business reality. Some folks manage to run a small business and keep it small and still be profitable, but usually in niche/craftsman/service industries like gunsmithing or plumbing, not businesses dependent on technology like CNC machines that have relatively short lifespans and high costs with rapidly changing technology.. What I've seen is the single entrepreneur grows whether he likes it or not until he gets overloaded then has a big readjustment whether he likes it or not.There are books and classes based on this phenomena - like The E-Myth. Adding other customers will dilute the effect of the ebb and flow of the main customer (not being super cynical, but if they don't impact you negatively at some point you'll be different from everyone else) For example, long ago in my area a machine/automation builder was jobbing out work to job shops in this area, and the shops were sucking it up and growing from the work, adding capacity to compete for the work. The builder unexpectedly went bankrupt for $950,000 (1970s) and took several of those shops down completely when they didn't get paid. A couple owners took corp. jobs, one lost a house. Builder reorganized and kept on running for 10+ more years.

    I had one large customer/OEM driving my sales to my first $1M year and we loved it. Suddenly they decided to copy my product overseas and stopped buying completely. The overseas copy failed, but in the meantime the OEM failed too. They stuck others in my industry for millions, I looked like the smartest guy in the world to those others because I had put them on COD when they started looking shakey to me, which they claimed was the reason they went overseas, not because I didn't knuckle under to their cost cutting demands. As it was I got stuck with $50K of inventory that no one else wanted - that made it risky and uncertain to put them on COD. You aren't seeing anything shaky from your customer, but that's not a sure sign of health because the builder I mentioned earlier fooled a dozen or more local shops by seeming healthy, paying on time, etc,

    Quote Originally Posted by cnctoolcat View Post
    Good topic!

    What I've found for the customers around here is that once the volume gets up high enough, they all hanker to buy their own machine(s) and pull the work back in house.
    I was once that guy. I farmed out all my CNC turning as long as I could until I could justify buying my first turning center. No one was surprised or hurt. I've had others do it to me also. Fact of life.

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  19. #33
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    I work for a large Fortune 100 corp in the R&D dept. We have put MANY jobs shops out of business over the years due to us being their only customer and then yanking the work at a moments notice. Sad but true.

    We had a contract with one place who purchased machines for the upcoming work. We pulled out of their shop less than 6 months later. Because there was a well written contract stipulating we would provide them work if they bought new machines, we were on the hook for the machines when we pulled the work. We bought the machines (IIRC it was 6 machines, all 5-axis vertical mills) from the job shop and then placed them on our floor to use in production.

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  21. #34
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    Well, most of what you all told me I already knew or at least guessed........just wanted to see if'n I was missin' anything..........thanks for the replies.

    I have kept any inclination of a machine purchase solely for this customer's work on the down low. I can always hint at them putting a something on my floor if they want more output from me. It could be an avenue to look into, but I won't hold my breath.

    As far as hiring, how's that working out for shops short on manpower? I mean it's slim pickins out there. I do have a few part timers, but they are just helping keep up with the current work load.

    It'll work all out one way or another.................we'll just have to wait and see I suppose.......................

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    I find it surprising that guys are recommending extra staff vs a new machine. A friend runs a tier 1 automotive plant and his rule of thumb is given the choice between 1 robot or 1 person the robot wins all the time. Not sure how the value of the machine in discussion compares dollar wise to a robot. But how long before the extra wages would pay for the new machine and then you own the machine. Running your current machines more hours with an extra employee will wear them out faster so you will need to buy a machine anyways. To get more output is going to require someone to work the an off shift unless you have machines currently sitting idle which means you can't hire someone who needs a lot of supervision.

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    Quote Originally Posted by david n View Post

    As far as hiring, how's that working out for shops short on manpower? I mean it's slim pickins out there. I do have a few part timers, but they are just helping keep up with the current work load.
    I have done enough hiring for other peoples shops to know: I have had much better luck hiring inexperienced people. And, training them.
    Than, trying to hire actual machinists. Every time we ever tried to hire somebody with experience, it went south for one of many reasons.
    They either couldn't back their "experience" up. Were egotistical know it all pricks with BAD attitudes. Or primadonna whine-bags that were nothing but trouble.

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    As soon as you cut a check and a robot shows up ready to work...

    Its not like you just click click, sign check, install robot, ship parts. I think there are lots of people here who would love to automate further if it was simpler to implement.

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    Quote Originally Posted by Pattnmaker View Post
    I find it surprising that guys are recommending extra staff vs a new machine. A friend runs a tier 1 automotive plant and his rule of thumb is given the choice between 1 robot or 1 person the robot wins all the time. Not sure how the value of the machine in discussion compares dollar wise to a robot. But how long before the extra wages would pay for the new machine and then you own the machine. Running your current machines more hours with an extra employee will wear them out faster so you will need to buy a machine anyways. To get more output is going to require someone to work the an off shift unless you have machines currently sitting idle which means you can't hire someone who needs a lot of supervision.
    I am definitely in the "I would rather own another spindle, than pay another paycheck" camp!
    But, not all work lends itself to that mentality.

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    Quote Originally Posted by kustomizingkid View Post
    As soon as you cut a check and a robot shows up ready to work...

    Its not like you just click click, sign check, install robot, ship parts. I think there are lots of people here who would love to automate further if it was simpler to implement.
    You just have to have the quantity to justify not only the investment in $$$$. But, also time.
    People think making fixtures is time consuming? Wait until you have to start playing with end-effectors!
    Simple shapes are easy. But, it can get real fun when you get in to complex stuff. Not the ideal situation for a one man shop.

    But, you don't have to have a robot to automate. A bar-feeder, and parts-catcher, on the right machine, is all Dave needs to automate right now.

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    Quote Originally Posted by wheelieking71 View Post
    I am definitely in the "I would rather own another spindle, than pay another paycheck" camp!
    But, not all work lends itself to that mentality.
    I know that as I am in that position myself. None of our work is production work so there is lots of modeling and toolpathing time and most jobs need a lot of stock preparation time and finishing time and other manual work. But IF the machine can replace an extra person it wins.

    I was not recommending a robot for Dave I was only equating a robot in an auto parts plant to the more automated lathe in a machine shop.


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