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Startup a shop from scratch...some questions for those more experienced...

NextGen

Plastic
Joined
Jan 1, 2019
Hi everyone,

I have been looking at the possibility of starting a machine shop from scratch and was interested in some feedback from the community and experience if anyone has done this type of start up before.
I am most interested in prototyping, but am not sure how to get into it just starting out.
My main concern is becoming and staying profitable quickly considering the large expense of purchasing equipment.

Here are some of the questions I want to run by those who are more experienced in the field or who have started a business recently from scratch:

1) If you were starting out on a tight budget or over again, what equipment would you recommend?
2) Is subcontracting work before buying equipment a good option to build up a few customers first and gain traction on the web/advertising/industry contacts?
3) Is the internet a reliable source of work if you have mastered SEO/Adwords?
4) How quickly did you expand, or how long did it take for you to become profitable after taking the plunge and purchasing equipment?

As I work on a startup plan, I was looking forward to get some feedback.
If you think I am crazy or off my rocker, just go ahead and say it :).

-NextGen
 
1) What equipment are you best with? No room to fake it starting out on your own.

2) Are you a tradesman or a salesman? Subbing work with no machines makes you a salesman. If you can make a living doing that, why ever buy machines? If you can't, why start down that path?

3) If you want to make meaningful money, find something specialized. Especially if your plan is to use the internet. A lot more money being the only search result for "custom left handed wheel nut adjusters than the middle of the eleventh page for "machine shop near me."

4) Given that we're headed into an economic downturn, I'd say five years to making as much as you can at your day job now. It took me four.
 
USe the search function, this comes up weekly.

Way to many shops, chasing too little work

I think you meant "weakly"?

:(

Owning a "shop" - or any other biz, Job One is to be sure you can manage fear, and rather well.

Of starvation.

That is not a joke, and we could only WISH it were even an exaggeration.

Same deal as any good sea captain or ground combat commander, any era in history, rafts and rocks to missiles.

All others eat FIRST. His men. Your suppliers, contractors, auditors, taxitors, etc.

The guy in charge eats LAST. If there is anything left to eat.

You've passed that test, not just once. "All the time". Owners and leaders take the bad and the bitter not just the good and the glory.

Those who cannot understand and ACCEPT the reality of it have already failed.

They should go look for "a job" instead.
 
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Nope. Politics or law are the places for those types.

PDW

Politics or any other form of hooring is like the weather. Or herding horseflies.

Lawsters? As with CFII's, many very well DO "go hungry".

Not a problem if you know whom to pick. My Lawyer is second-generation who "eats last" but did not go hungry.

Mind - his late Dad retired a full Colonel, he a Brigadier General.

Success is surely PERMITTED. It simply is not "assured".

As Pilot in Command, you know the same things, I am certain.

Can't stand the heat? Stay out of the "buck stops HERE" seat.
 
There is another search on the web.......its called "shops I can get work done on credit and never pay"....when you are starting you must take risks on customers,and you will quickly run out of the ones that can offer bonded payment (if you ever see one)...........something funny,tho,some of the biggest PITAs that I have ever seen payed in advance........a blast from the past "Crazy Murray Wilson"......even forty years on ,I havent forgotten .
 
The advice I always give and no one ever takes, is before you look for a building, equipment, or anything else, take an accounting course and learn about double entry bookkeeping in general. The usual response is that they are going to give that responsibility to an accountant. Even if you do, you need to understand what is going on and be able to talk to a banker. A neighbor who is in a different business tells me that the accounting programs are all in the cloud now. I will stick to my old program on a separate computer that is never connected to the internet.

Bill
 
I reread the OP......I just laugh and shake my head...........imagine putting this as a business plan to a bank or leasing company.It could work if you have enough cash to cover everything,and enough to walk away when you lose interest....A bit like Paul Dupont buying Indian.....except Indian was a going concern....sort of.
 
Read wheelieking's thread. Start to finish. All 280 pages of it. Twice would be better.

Start there, and then you might have a better idea of some of the questions you should be asking.

https://www.practicalmachinist.com/vb/member-and-shop-photos/b-precision-260814/


In all honesty - that may be the best post in this thread so far.
Big Bad Bill (AKA Sweet William now) really puts it out there, and is not affeared of showing weakness, or concern, or simply hurdles - that I think the rest of us tend not to advertise so much. Not that the rest of us have any more or less than he does, it's just that he discloses it much more-so. This can be very eye-opening for someone not already there yet.


As for what you would need - if you cannot answer that yourself, you prolly shouldn't be thinking this any further.
The only way someone should be asking that question - is if they work for a bigger business that wants to stat their own internal shop, and you as an inhouse engineer have been tasked with getting it started. Other than that - I'd highly question if you should be pursuing.

And on that note, we have a local engineering firm that did in fact start their own in-house shop a few years ago, only to have recently closed it simply b/c they couldn't get enough qualified help to run it. So - just having the work and the machines - doesn't get parts out the door either...


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

Big Bad Bill
Ox
 
Not a shop owner so keep that in mind, but the trend when these posts come up seems to be:

Have a product line to start generating steady revenue to cover operating costs, then start looking for outside work.

Finding work is incredibly difficult. Finding good work is even harder.
 
Have a product line to start generating steady revenue to cover operating costs, then start looking for outside work.

Finding work is incredibly difficult. Finding good work is even harder.

Seems so.

I mean? If it was EASY they'd simply have the Mexicans or the Chinese do it and go play golf, go a-whoring, and trade lies, right?

That leaves JUST WHAT for the local chikn's to scratch for?

Oh. The shittier jobs with tighter specs, tougher deadlines, skinnier margins, and slow/no pay.

If-even.

:(
 
Owning a "shop" - or any other biz, Job One is to be sure you can manage fear, and rather well.

Of starvation.

That is not a joke, and we could only WISH it were even an exaggeration.

I think it should be elaborated that this fear of starvation never goes away. It's not a case of getting through the first few years, and then being on easy street. Each milestone you hit just opens up new potential ways to fail, and just because a business is successful today doesn't mean it will be tomorrow. That fear stays with you forever.
 
I think it should be elaborated that this fear of starvation never goes away. It's not a case of getting through the first few years, and then being on easy street. Each milestone you hit just opens up new potential ways to fail, and just because a business is successful today doesn't mean it will be tomorrow. That fear stays with you forever.

Humans don't really have an ATM card from the Gods that says we shall never hunger, freeze, thirst, stop a bullet, survive floods, tornados, nor head-on impact with a motorbus, after all, do we?

The person who takes the "safer route" of being but an "employee" actually has just as great a risk, if not more-so.

And is not as well-prepared nor "practiced at it" to find a way to JF deal with that lack of any guarantees.

T'was ever thus...
 
I think it should be elaborated that this fear of starvation never goes away. It's not a case of getting through the first few years, and then being on easy street. Each milestone you hit just opens up new potential ways to fail, and just because a business is successful today doesn't mean it will be tomorrow. That fear should stay with you forever.


Fixed it for you.

It's when you get lax that even if you are on top of the game, that some little putz can come along and pull the rug ratt out from under yuh!

Look no further than Cincinatti Milacron, National Acme, and Warner and Swasey as extreem examples.


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

Think Snow Eh!
Ox
 
Fixed it for you.

It's when you get lax that even if you are on top of the game, that some little putz can come along and pull the rug ratt out from under yuh!

Look no further than Cincinatti Milacron, National Acme, and Warner and Swasey as extreem examples.


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

Think Snow Eh!
Ox

You can have what seems to you a large amount of money in the bank, then burn through it in days. And other things can happen. For more than 20 years I lived like a remora hanging on a shark, in this case a shark named General Electric, mostly their railroad service section. Working together we devised a number of repairs for what would normally be throwaway parts, which had the side effect of making me valuable to them. Then someone up in the hallowed halls of GE decided they needed to close the shop, even though it was one of the most profitable ones in the system. For a while I got work from another one of their shops, then they closed it. The collaboration worked really well and made them a lot of money. In the end, that was meaningless.

You need to be ready for business to collapse at any moment.

Bill
 
I am not a shop start up guy but..have seen a few shops make it and some fail..

Perhaps start off with something you know A to Z..You can hire knowledge when you are up and running but getting started you have to get enough work to keep he lights on. Likely need enough money to pay bills for a year.
Have a source of the first work so you might get started. Yes first work has to compete and be good quality because even friends will not support loosing money.

Advertising does little with not a reputation to back it up. Likely need to figure three paychecks because you or a salesman will be knocking on doors.

QT:[ interested in prototyping] but a production job/work might pay the bills.
 
Not as hard as it's made out to be.

Hi everyone,

I have been looking at the possibility of starting a machine shop from scratch and was interested in some feedback from the community and experience if anyone has done this type of start up before.
I am most interested in prototyping, but am not sure how to get into it just starting out.
My main concern is becoming and staying profitable quickly considering the large expense of purchasing equipment.

Here are some of the questions I want to run by those who are more experienced in the field or who have started a business recently from scratch:

1) If you were starting out on a tight budget or over again, what equipment would you recommend?
2) Is subcontracting work before buying equipment a good option to build up a few customers first and gain traction on the web/advertising/industry contacts?
3) Is the internet a reliable source of work if you have mastered SEO/Adwords?
4) How quickly did you expand, or how long did it take for you to become profitable after taking the plunge and purchasing equipment?

As I work on a startup plan, I was looking forward to get some feedback.
If you think I am crazy or off my rocker, just go ahead and say it :).

-NextGen

I have just started a shop in a new area with out any previous known customers in the area.
I will disclose I have 40+ years experience and 33+ years as a shop owner. I sold my business a few years ago and got bored and as my wife says I failed retirement.
My first recommendation is understand how business works, accounting, customer requirements ( insurance, bonds, payment cycles, etc.) Government issues ( zoning, codes, etc.) Suppliers ( discounts, terms, delivery time etc.)
Second go talk to your potential customers. It doesn't do any good buying a machine that there is no work in your area for. There is a shop about 5 miles from me started up about same time. They have 4 brand new Haas CNC machines a Bridgeport with a CNC on it and a 14 x 40 lathe. I have been in their shop a couple times in last 6 months and I don't think 3 of the machines have ever been used. I found out what was needed in the area and bought equipment to do that work. If wanted employees again I could probably keep 3 or 4 machinist busy.
Remember you may be the boss of your company but you are working for your customers.
 
Read wheelieking's thread. Start to finish. All 280 pages of it. Twice would be better.

Start there, and then you might have a better idea of some of the questions you should be asking.

https://www.practicalmachinist.com/vb/member-and-shop-photos/b-precision-260814/

I got nothing to hide. I took a lot away from this site before I ever started that thread. And, volumes more after.
If that helps anybody in any way? It is a small token of my appreciation for all the help I have gleaned.
Indirectly on the down-low lurking. Or, right up top, as a smack to the noggin.
If I have any advice to give? It would be two fold:
Spend some time to figure out who you should be paying attention to (on this forum) when asking for advice.
Then, let said advice soak in thoroughly, whether you like it or not!

You can not go in to this with thin skin, narrow shoulders, closed mind, and blinders on. That is for damn sure!
 








 
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