What does a $10 Million job shop look like? What departments, people? - Page 2
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  1. #21
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    Person to clean toilets is the best investment we've ever made.

    He also sweeps, mops, mows, weeds, salts, paints, changes lightbulbs and ballasts, empties trash cans etc.

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    Quote Originally Posted by Comatose View Post
    Person to clean toilets is the best investment we've ever made.

    He also sweeps, mops, mows, weeds, salts, paints, changes lightbulbs and ballasts, empties trash cans etc.
    Ummm ... I thought that was the job description for the owner?


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    Quote Originally Posted by Gobo View Post
    3-5 full time programmers? What kind of slugs you got working for you?
    Indians....get's them Cheep Cheep Cheep.

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    Overhead is rediculously high at that ratio to true direct labor. 3.6 indirect to 1 direct is a horrible ratio, but I suppose in some areas it would be accepted.

    Sales per employee at 434K on lose side numbers? Doubt you would see that with only 5-8 people operating equipment. That said, no true definition of number of work centers and volume. If you see that kind of sales per employee, you would have a mint despite the heavy overhead. You guys could burn $100 bills to keep the shop warm in the winter.

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    What size are you now? Seems to me you're starting at the tail end.

    First question is what group of reliable repeat customers is going to send $10 million your way each year. Maybe you know?

    That work will then determine how much automation you can do, how much QC you'll need, how complicated material receiving and shipping gets, what should be outsourced, the effort required for sales and marketing, etc. etc.

    Figure out what's going to feed the business, and the tail end will sort itself out. One $10 million manufacturing business might get by with a couple very expensive CNC lens grinders. Another might need 50 welders/fabricators working from trucks.

    So far the business sounds (from the programmers and operators and sales staff) like yet another place with mostly CNC mills, maybe a couple CNC lathes, and a few assorted manual machines making parts to print and competing to be low bid. That kind of place often shows up selling off its assets at going-out-of-business auctions when there's some blip along the way -- you could ask there what didn't work??

    Bad idea, IMO, to start with a picture in your mind of how many people (or what machines, or what shop layout) you're aiming to have in place. The "build it and they will come" approach requires a huge amount of luck and determination to succeed, especially in job shop manufacturing.

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    You are going to have to divulge at least a little about your work to get accurate feedback.

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    Quote Originally Posted by countryboy1966 View Post
    ..... Doubt you would see that with only 5-8 people operating equipment. .....
    Where do people get 5-8 billable people?
    I get (8+2)* 3 which is 30 or 240 hours per day.
    At 15% SGA and 15% raw material that puts you at about $120 per hour. Put them on two machines per man and now down into 60-80.
    Yea, that's a very high target but some run there.

    From those I know 10 million shops usually have right around 100 people on staff.
    Personally I would not want to own a shop this size now. Too many headaches and ulcers.
    Ex-employees are suing you, everyone has gripe or compliant about work load not being fair or not liking their co-workers, someone is sleeping with someone else's wife......
    I once thought it a good idea........ hard to keep a team of this size happy and productive.
    Above 30-40 people you lose track of those around you and it becomes different with layers of management and supervision and different than small shop.

    Get 60 plus working and someone will come up to you in the mall Christmas shopping with his wife and say "Hi Bob, how are you doing".
    You will not know this person although he seems very familiar. With the blank stare he will say "I run the Blanchard on 3rd".
    At this point you will feel like such an ass and a not good boss. There is no rock big enough to hide under.

    I guess it gets to some point when you have 500 or 1000 people and there is no way you keep track of them but they all know you so you now have to care about the businesses and not people.

    Nothing wrong with the OP having some sort of crazy plan and goal and it is a starting point.
    Sales, sales, sales. Can you generate theses? All your capability to make means nothing without customers buying.
    We could all be rich and big if we had the sales side.
    Building a big shop does not bring in work.

    I see no real sales and marketing in your plans, where is that money?
    Bob

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    Quote Originally Posted by nitrousmudbogger View Post
    I know what we build and how to get there. Just asking if im missing a person to clean toilets, or web programmer, or something. what others have people doing in what positions
    If you know what you're doing, and know how to get there, by default you know the answers to your question.

    Remember one huge bit of golden advice though:-
    Turnover is vanity
    Profit is sanity

    and the bigger you get, the more of an employment agency you become...

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    Using your lowest number of 5 worker bees, that's 2 million per bee per year.If you could do that I would be highly impressed!

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    Quote Originally Posted by nitrousmudbogger View Post
    Im saying not relevant to you, I know what we build and how to get there. Just asking if im missing a person to clean toilets, or web programmer, or something. what others have people doing in what positions
    If you know what you claim to know you wouldn't have started this thread and be asking daft questions.

    1.If corn oil is made from corn and vegetable oil is made from vegetables. What is baby oil made from?
    2. Why is an electrical outlet called an outlet when you plug things into it? Shouldn’t it be called an inlet?
    3. Why is an alarm clock going “off” when it actually turns on?
    4. Why is it that to stop Windows 98, you have to click on Start?
    5. Why is lemon juice made with artificial flavor and dishwashing liquid made with real lemons?
    6. If money doesn’t grow on trees then why do banks have branches?
    7. Why does the sun lighten our hair, but darken our skin?
    8. How come you press harder on a remote control when you know the battery is dead?
    9. What’s the meaning of life?
    10. Why is the man who invests all your money called a broker?
    11. If an orange is orange, why isn’t a lime called a green or a lemon called a yellow?
    12. If quizzes are quizzical, what are tests?
    13. Why does it take 15 minutes to cook minute rice?
    14. Why does someone believe you when you say there are four billion stars, but check when you say the paint is wet?
    15. Why do kids learn math when they could just use calculators like the grown-ups?
    16. If the #2 pencil is the most popular, why’s it still #2?
    17. Can’t the postman give it to the garbage man and save us the hassle?
    18. Did they purposely make dyslexia hard to spell?
    19. Why do we call them oranges when half of ’em are yellow?
    20. Why do most cars have speedometers that go up to at least 130 when you legally can’t go that fast on any road?
    21. Why is it that when you’re driving and looking for an address, you turn down the volume on the radio?
    22. Why do they sterilize needles for lethal injections?

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    Quote Originally Posted by CarbideBob View Post
    Where do people get 5-8 billable people?
    I get (8+2)* 3 which is 30 or 240 hours per day.
    At 15% SGA and 15% raw material that puts you at about $120 per hour. Put them on two machines per man and now down into 60-80.
    Yea, that's a very high target but some run there.

    From those I know 10 million shops usually have right around 100 people on staff.
    Personally I would not want to own a shop this size now. Too many headaches and ulcers.
    Ex-employees are suing you, everyone has gripe or compliant about work load not being fair or not liking their co-workers, someone is sleeping with someone else's wife......
    I once thought it a good idea........ hard to keep a team of this size happy and productive.
    Above 30-40 people you lose track of those around you and it becomes different with layers of management and supervision and different than small shop.

    Get 60 plus working and someone will come up to you in the mall Christmas shopping with his wife and say "Hi Bob, how are you doing".
    You will not know this person although he seems very familiar. With the blank stare he will say "I run the Blanchard on 3rd".
    At this point you will feel like such an ass and a not good boss. There is no rock big enough to hide under.

    I guess it gets to some point when you have 500 or 1000 people and there is no way you keep track of them but they all know you so you now have to care about the businesses and not people.

    Nothing wrong with the OP having some sort of crazy plan and goal and it is a starting point.
    Sales, sales, sales. Can you generate theses? All your capability to make means nothing without customers buying.
    We could all be rich and big if we had the sales side.
    Building a big shop does not bring in work.

    I see no real sales and marketing in your plans, where is that money?
    Bob
    I got 5-8 billable from the amount of operators. The set up machinists should not count as its set up and is amortized across the work of the 5-8 operators. (Of course we both know of all the different ways to skin that cat). Set up time is downtime the way I see things.

    I have no problem with the OP planning as well, Just pointing out that from my walk in life I see a lopsided organization. Too many people on the cart for the 5-8 operators to push. I would be pissed off as an operator in that scenario. Especially since I don't understand how that many people would be 100% "applied" in their respective job roles with only 5-8 people generating value(Except for anyone on the sales side). I suppose I could be looking at this wrong. If this was designed to be a lights out organization I suppose the dynamics could be different.

    FWIW - Not putting it out there to assert my hierarchy in life as I bet you have far more experience than I, but a shop I used to run that was at the 25 mil annual sustained point ran on 75 people with only 20-22 overhead (all in CFO, Set up, QA, Shipping etc). High volume, but still had 6-10 set ups a day across the 45ish work centers.

    I agree completely about your viewpoints on the size. It gets very aggravating all things considered.

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    spend your days dreaming up a product or acquisition of one instead of a 100 person job shop.

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    Shops that constantly create more than 10 mil in sales have one thing in common... At least 1 "BlueChip" customer. A product line would help, but to maintain stability, satisfying the needs of a major corporation is the only way your going to get there.

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    Quote Originally Posted by digger doug View Post
    Indians....get's them Cheep Cheep Cheep.
    Theres dingbat doug, do you have a link?

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    The key to getting to $10 million is sales which everyone knows. We are our biggest customer now. The sales in our experience at this point are easy as we are turning work away outside of ourselves. What is not easy is getting the work done to take on more. We have standing equipment and our productivity with many of the machines being under 10% utilization.
    For 10 years I have been looking at it as get the sales and everything will fall into place. That is not the case at all when you leave money on the table.
    I recently started to think about visualizing being there already. What would it take for people? Departments? Certifications? Locations? and so on.
    We have been up to $4.5 before with around 18 people. But the leap from 18 to 50 people to get to $10 million is a whole new animal. Redundant employees as someone said because of vaca, sick time, hiring, firing, etc. And then what I dont see needed.

    So I believe I know how to get $10 million in sales. What I dont know is who all get me there to bill it out reliably, consistently, with happy smiles all around and no one banging bobs wife. Bob wouldnt like that.

    The goal is for me to work more on the business, which Im doing here now than in my business. I mopped this morning, but my time is better spent elsewhere for everyones sake

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    Quote Originally Posted by nitrousmudbogger View Post
    The key to getting to $10 million is sales which everyone knows. We are our biggest customer now. The sales in our experience at this point are easy as we are turning work away outside of ourselves. What is not easy is getting the work done to take on more. We have standing equipment and our productivity with many of the machines being under 10% utilization.
    For 10 years I have been looking at it as get the sales and everything will fall into place. That is not the case at all when you leave money on the table.
    I recently started to think about visualizing being there already. What would it take for people? Departments? Certifications? Locations? and so on.
    We have been up to $4.5 before with around 18 people. But the leap from 18 to 50 people to get to $10 million is a whole new animal. Redundant employees as someone said because of vaca, sick time, hiring, firing, etc. And then what I dont see needed.

    So I believe I know how to get $10 million in sales. What I dont know is who all get me there to bill it out reliably, consistently, with happy smiles all around and no one banging bobs wife. Bob wouldnt like that.

    The goal is for me to work more on the business, which Im doing here now than in my business. I mopped this morning, but my time is better spent elsewhere for everyones sake
    On the first post I wondered if you'd just read the emyth revisited, now I'm convinced of it. imo this doesn't add up, or at least the language is confusing....or at least I don't get. You're a job shop, then you're your own biggest customer? Is this an in house maintenance dept or your business? I'm thinking its not production as you called it a job shop, but hows a job shop be its own biggest customer?

    $4.5MM and 18 people? Even if all are production workers, that's billing 125/h at 100% productivity. Heck of a job shop. You're your own customer and get to bill 125/h? Unless you've found the secret sauce or have something incredible unique on a regional scale, that's not a job shop that's a transfer pricing issue.

    The only people who claim sales aren't an issue are those who haven't done it. I don't know what your situation is where you are your own customer at $125/h at 100% productivity (maybe 150 billable) but imo its a far bigger challenge and question "where does the additional 5.5mm in revenue come from" vs an imaginary org chart. Curious what think of that and what the plan is to scale sales at that same sort of rate.

    Anyway, you're saying "assuming sales" (which makes it a bit of circle jerk imo), as such the gaping hole in your org chart imo is Production Manager/Scheduler. Allocating resources becomes a great challenge when ops grown and if everything isn't where it needs to be when it needs to be there, you lose money. Next would be Purchasing Manager....job shops constantly require misc stuff as the work is every changing....you've got to manage and control how stuff is bought. Its still a fairly small business to have CFO, but maybe VP finance or Controller

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    You are asking the wrong questions and looking for the wrong goal. You should be asking what it takes to make 1 million (or whatever) in profit for yourself and not total sales. I know a few companies than make 1 million a year but are spending $950k to do it. They aren't going to last very long.

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    I think this is quoting Sami "Cash flow is vanity, profit is sanity".

    My own thought on looking at your numbers is you have to quit renting out the upstairs to the brothel.

    Quote Originally Posted by nitrousmudbogger View Post
    We have been up to $4.5 before with around 18 people. But the leap from 18 to 50 people to get to $10 million is a whole new animal.
    That is going backwards. Each additional person should add to the efficiency, not subtract. If 18 make 4.5, then 36 should make 10.

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    Weird thread... what do you really want? Like really truly what do you want, whats your goal, what is the chase for?

    You can do Billions in sales and lose many millions at it, whoops.

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    I think I get it. My answer is poach a successful CEO. Give up day to day control and let them restructure. Your trying to find the vision you have lacked until now. I don't think you will find that meaningful insight here.


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