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What would you do differently the next time?

rj newbould

Diamond
Joined
Aug 29, 2005
Location
Hernando, FL
Hindsight wanted.

In starting, operating, managing your (or another's) business, what have you done that produced less than optimum results that you would do differently given the opportunity to do it over?
 
This list can be a double edge sword..sometimes things you did " wrong by conventional knowledge" can be your biggest success.. but the one thing I would do is get an accountant to help set up the bookkeeping properly. Its where most machinists are probably weakest in my experience and can have long term effects.... kinda like staring on the wrong operation on a complex part.
 
In running somebody else's shop, the thing I regret the most is trying to make the owners business successful, and make him money. I put a lot of time and effort into it, made a lot of sacrifices, brought in customers, seminars and trade shows on my own time etc.., and got it completely shoved up my ass on a rotating basis.

If I had to do it differently, I would have embraced the owners mentality of wanting to be perpetually broke and when I left it would have been because there was no business left. I should have helped him drive it into the ground instead of trying to keep him afloat.

Thats not what you wanted to know, but its what I would have done differently.

With what I'm doing now, more capital to start, certainly more than what a pile of credit cards can hold.

Other than that. Everything seemed to work out really well, there was a few skinny months, but that was mostly due to moving and settling into a new building.
 
This list can be a double edge sword..sometimes things you did " wrong by conventional knowledge" can be your biggest success.. but the one thing I would do is get an accountant to help set up the bookkeeping properly. Its where most machinists are probably weakest in my experience and can have long term effects.... kinda like staring on the wrong operation on a complex part.

For sure on this one.. I had one, but didn't think to have one who understood the specific nature of a jobbing shop, so it was a minimal gain.
 
In running somebody else's shop, the thing I regret the most is trying to make the owners business successful, and make him money. I put a lot of time and effort into it, made a lot of sacrifices, brought in customers, seminars and trade shows on my own time etc.., and got it completely shoved up my ass on a rotating basis.

If I had to do it differently, I would have embraced the owners mentality of wanting to be perpetually broke and when I left it would have been because there was no business left. I should have helped him drive it into the ground instead of trying to keep him afloat.

Thats not what you wanted to know, but its what I would have done differently.

Do you think the owner deliberately kept being broke or was he/she just incompetent?

I don't have preconceived notions as to "I want to know" I just want to hear different viewpoints and experiences. I wish there was a place like this to learn from when I started a long time ago.
 
Do you think the owner deliberately kept being broke or was he/she just incompetent?

He was blatantly incompetent, but also would sabotage anybody in the companies that he owned that actually were effective and got things done and made him money. Even his own relatives. BTW, he didn't start these companies, his father started them.

I figure after having worked for this guy, I've seen every single bad small business decision that could ever possibly be made. I just posted one example over in the CNC forum under packaging and deburring.

I've seen this guy and his brother, who has another one of Daddy's companies get in bidding wars. Undercut, Undercut, Undercut, to the point where a job is devalued to 30% of what it was 5 years ago.

This guys philosophy was based on sales. Hey a 10k job, great, but the material alone is going to cost 22k. That didn't matter, you just made 10k.

When the accountant would tell him we are out of money again (loans), in meetings he would say we need to start bidding stuff lower to get more sales, not we need to bid stuff higher to make more money, or bid stuff we can actually do.

Here is an excerpt I posted on another board, you decide if this guy was incompetent or trying to go broke.

Ended up running a small shop, Mazak mill, Mazak lathe, Fadal 4020, Accuslide, and some other support equipment. The owner stayed on the bidding/contracting side and was at a different location. In 2005 my pay was cut $4 an hour, but now with bonuses, which I was susposed to be getting already. I saw one quarterly check for $900, with the other half coming at the end of the year, never saw that either. After a year I did get back $2.50 of my pay, but nothing more, never a bonus.

This owner was on a mission to lose money and make sure nobody ever got a bonus no matter what. I did outside work, that I bid and dealt with the customers, and also did our stuff that came from the owners side of the company, which was way way way way way way way way underbid. When I started making money he would swamp me with crap that we didn't have the equipment for.

Ex 1) I had lined up a nice job, 30 castings at $600 a piece. With fixturing and everything, and me babysitting and setting up other machines, 3 weeks tops, 1 shift. However the owner decided that I needed to run a rush job of piston rings(I don't know what they were, they looked like piston rings). He could have bought them off the shelf for $800 total, 4" diameter, .070 wall thickness, .030 thick with 7 grooves .015 deep, .030 wide, out of 321, it could have been made out of any 300 series stainless 303!!!!!!! but no, 321, not even 304, 3fricken21. They ran 10 hours a day for a fricken month, and I had to pass on the $18000 dollar job. So that machine for the month made $800, not $18000 plus a week. Not a job we had the equipment for, and he bought the worst material possible.

Ex 2) 2500 pieces, 304, susposed to be made out of tubing, 1.09 long, cross holes. The company is selling them at 75 cents each, so he goes out and buys the wrong sized tubing, then buys solid, so I need to put a 1" diameter hole into 304, 2500 pieces, and the shop is getting a grand total of $1250. I won't even tell you how much we lost on that one.

Ex 3) Sitting in a meeting, the owner is saying that I'm late on a bunch of jobs, "like what?" knowing I'm not late, he throws one at me. Due 2 months ago, I never saw it, so I ask where is the material, he hasn't ordered it yet(He loved ordering material, which he never actually did), but its my fault that it hasn't shipped yet. Brain dead aluminum part, perfect for a VMC and a turning center, 4hours tops. Needs an alodine(chromic conversion coating) we can do that and a solid film lube, which my friend up the street does, get the material here tomorrow and it will be out in 3 days, quick $1300. So 4 weeks later the material shows up, and its being sent out to another shop because it is the kind of work that we ACTUALLY HAVE the machines to do. 6 weeks later, the other shops lathe goes down and won't be up for 6 more weeks, and since it was so late the contract was cancelled. What a dumb ass.

Ex 4) Material shows up, simple part, square chunk of brass with an acme thread stuck through it. I didn't have a PO from the owner yet, but dug through the files to find the prints and quantities, and the owners nephew who was overseeing things in the warehouse/shop told me to go with it. Done in two days(actually a few hours, but I had to get the tap), 3 weeks after the job had already shipped to the gov (the material showed up after the due date), I got reamed because they already had a PO and quote to send it to another shop. I'm sooooo sorry for trying to make the company money and get jobs out on time.

Ex 5) Big quantity job for us, 1000s of pieces, Aluminum bronze thrust washer, 5" in diameter, some freaky slots and tight tolerances, made out of tubing. Material shows up 3 months after the job is due, the day the material shows up is when I find out I have to make the parts, I get told to drop everything and start on them. 5 weeks running 12-16 hours a day, 3 ops, eating up the lathe and one mill. I got *****ed out because I wasn't "scheduling" properly, now, if I can even speak english and understand the word "schedule" I can't "schedule" something I don't know about it, especially if it is going to take 5 weeks.

Ex 6) Big pin out of 17-4, 12.375"long, 11" of ±.001, 1.5" diameter. I have a PO for 3 of them, and a print(holy crap!!!!! I actually got a print!!!!) Knurled head, my PO is for a HUGE $60(there goes the bonus). The material that shows up(before the due date believe it or not) is TWO(<-- I have a PO for 3) pieces 2" diameter ONE INCH LONG!!! What does the owner tell me, "rub it, it will get longer" Months later I finally got his nephew to order me the material, he was frustrated also, and now also gone from that sh**hole. Another late job, my fault, of course.

I could keep going on and on and on, about the stupidness. When I quit, I didn't even work out my notice. When I went to get my tools, the owner showed up to yell at me. He said he never wanted to see me around again, that changed really quick, when in about 3 weeks he was calling my business partner wanting me to go over and help. I *****ed at him about the paycut, "You should work more overtime". A**HOLE.

Oh well, we did a heat treat job for them a few weeks back, and we got $200 of the $315 left in the bank. All tooling vendors have cut them off, they are 3 months behind on machine payments, they have parts sitting at another machine shop(they have their own fricken machine shop??????) that they can't get because they don't have the money to pay COD for the one JOB that will save the company(you can't pay 3 million in bills with a 3/4 million contract).
 
I think most machinists-turned-business-owners weakest skill is selling.

If you can't get out and shake lots of hands to drum up the business, it really does not matter if you're a great machinist.

I was guilty the first few years of staying with a couple of customers I should have dumped early on.

We all know the type, wanting quotes for big quantities, then ordering just a few. Making their prints with ridiculous tolerances, then crying about the cost. Giving you a PO based on 4 weeks delivery, then calling wanting the parts after 2 weeks. Paying whenever the hell they felt like it. And on and on.

I stuck with these clowns way longer than I should have because I didn't have the selling skills a small business owner must have. If I would have got out and found better customers years ago, I would be a lot farther ahead today.

Actually, to tell the whole story, me ex-wife was suppose to be the "selling-arm" of our machine shop. Yet, she never made the first cold sales call. She was good at keeping our current customers happy, but did nothing to get us more and better customers.

So, another lesson is don't count on your spouse for a vital function like selling.

Greg
 
Like peterve, I would've started sooner, but I lacked the confidence to do it. I finally got fed up working for a boss like Bobw had, and figured if this clown can do it, so can I. And I can, but I wasted some years figuring that out.

Like CNCtoolcat, I've also wasted some time with the wrong customers. Took me awhile to learn that one too, finally got it explained to me by another small business (not machining related) owner. After I figured out I was free to "hire and fire" customers that did or didn't fit my program, I did much better. But it takes time to learn all of this.
 
In running somebody else's shop, the thing I regret the most is trying to make the owners business successful, and make him money. I put a lot of time and effort into it, made a lot of sacrifices, brought in customers, seminars and trade shows on my own time etc.., and got it completely shoved....

I had a similar experience. The owner that I used to work for had 2 shops, an electrical panel shop and a machine shop. The machine shop was profitable, and the panel shop was not. He kept propping up the other business with money from his machine shop. I was the foreman of the machine shop, he paid well and we had good benefits, so I didn't care. All was ok until one year, he told us that there would be no Christmas bonuses. That day, I decided to start looking. Eventually, I was able to become partners with another guy, and we started our own shop.

(I guess that what I would do differently is start my own shop sooner than I did.)
 
I don't run a machining business, but do run my own graphic design business.

+1 on hiring an accountant. I got in a crap-load of trouble with the IRS when I first started because I was unaware of, and unsure of tax law. For the purposes of this board, the accountant needs to know and understand manufacturing.

+10 on marketing. I work in the advertising & marketing business, and I have a terrible time doing it for myself! It's hard to accept, but, business owner is a salesman first. I'm currently very comfortable with one big client that provides about 60% of my bottom line. I had a nasty scare earlier this year: they had a terrible year last year, and were unsure if they could last until their next seasonal upswing. Even though I've been running my own business for 15 years, I still make the rookie mistake of not having a diverse client base! HUGE mistake, one which I hope to correct in the next year.

Not having a realistic pricing schedule. This can be a result of two things: just starting out and under-pricing either from lack of confidence or trying to win business by selling on price; or, having too high of a price because of ignorance of the market. Selling on price is a downard spiral that earns you stingy clients. Selling on quality takes confidence and is far better in the long run. I sold on price early, and had the biggest PITA client and never had enoug money, despite working really hard.

Skipping health and life insurance. It's penny-wise and pound-foolish. It's easy to think "I don't have enough money to pay for health insurance" but it's a bad gamble. In my case, I was drunk on new-found freedom from the workplace, racing motorcycles, and generally acting like a wild man when I first started my company. Sure enough, I got hurt racing and didn't work for a month, had a big fat hospital bill, got behind on a lot of stuff, and was generally financially miserable for a long time.

Run your business "like a man". This might sound like some kind of sexist comment, and it probably is, but I certainly don't mean to offend by it. When I first started, I had trouble assuming responsibility -- see the "wildman" comment above. I used to make excuses for problems, such as missed deadlines, or whatever. As I've gotten older and more experienced, I can anticipate the problems better and warn the client that there is a problem *before* it's a disaster, and I can also own up to problems that I've created or didn't anticipate. Clients generally respond better to "Yes, I dropped the ball" than "It wasn't my fault", and you can negotiate a solution from a position of equals, not from the weak position of childishly trying to escape responsibility. It took me a lot longer to figure that out than I'd like to admit.
 
Al, perhaps you might say "run your business like a responsible adult".

I think that's what you are actually talking about, and being a responsible adult is certainly not anything gender specific. Lots of people of both sexes do a pretty crappy job of it. :)

Unwarranted expectations have been a problem I've faced, where I took on work that really was more than I should have undertaken, and then I was stuck dealing with it. That might also be put "learn to do a better job of estimating".

Figure out what you really can do, and if a particular job isn't going to be a good fit, don't let any other concerns like "I'd like to help this person out, this sounds like it could be interesting, etc" get in the way of avoiding taking on that job.

cheers,
Michael
 
Unwarranted expectations have been a problem I've faced, where I took on work that really was more than I should have undertaken, and then I was stuck dealing with it. That might also be put "learn to do a better job of estimating".

Figure out what you really can do, and if a particular job isn't going to be a good fit, don't let any other concerns like "I'd like to help this person out, this sounds like it could be interesting, etc" get in the way of avoiding taking on that job.

cheers,
Michael

Michael - For me, the lesson you describe, and a lot of what Al described, was better named "learn how to say NO". I took on anything that looked interesting, and just about anything I was brought, because I feared that to turn work away would cause me to lose future business or that I would not have enough work tomorrow if I didn't. Plus one element of success is a desire to help others, but it can be carried to far. Even when I didn't want something, I still allowed myself to get talked into it against my better judgment. So I continually overbooked myself and suffered the problems that that brings, until I learned how to say no at the right moment.
 
:)

Unwarranted expectations have been a problem I've faced, where I took on work that really was more than I should have undertaken, and then I was stuck dealing with it. That might also be put "learn to do a better job of estimating".

Figure out what you really can do, and if a particular job isn't going to be a good fit, don't let any other concerns like "I'd like to help this person out, this sounds like it could be interesting, etc" get in the way of avoiding taking on that job.

cheers,
Michael

+1 on the estimating. It's always been my weakest link. The last paragraph has gotten me in trouble too :(
 
MMM I started on my own pretty young at 23, through force of circumstances, so in no particular order;-

1 Listen to advise from those with age and experience.

2 Trust my initial gut reaction more than I did.

3 Get all the fine details (like money?) sorted out before cutting metal.

4 Learn to say no.

5 Learn when to walk away.

6 Don't price jobs just to keep working.

7 There are things in life other than work.

8 Don't expect to be succesfull and liked, especially by those you knew before starting on your own.

9 Be very firm over when and how you're being paid and making sure you do.

10 Lighten up and try to make it if not fun at least enjoyable.
 
The biggest change I would make is not to deal with so-called "Inventors"... My business partner always liked taking on these projects, and we wound up dealing with some real nutty people,,, Druggies, Drunks, Eccentric people that would haunt us for years after we did their silly projects, which we seldom got fully paid for... I will never willingly deal with any inventors again..


And add the things posted by Limy Sami... He summed it up...
 
Now, to balance that: Coming from the inventor side, I actually have to say that one of the things I would have differently was to not deal with some of the machinist shops.

The machinists had very little knowledge of the application, or the critical factors, still they went ahead and changed the specifications to whatever they think they should have been. (Being professionals they assumed that whatever they didn't consider as important as actually not being important. And vica versa). They then had the nerves to ask for extra payment to correct their faulty work back to the original specifications.

Further, being classified as a "project" they didn't prioritize our work and slipped schedules time and time again. All in all a very serious loss of time and money for us.

(We now have our own prototype shop, and ironcally I'm at times plagued with less than commercially or technical savvy inventors, some not terribly affected by reality at all...)

This being a machinist forum I'd say that if you do take on a project for some one off prototype work, simply treat it every bit as serious as usual. Including payment and prices - serious inventors have the serious money. The difficulty will likely be effective communication.
 
the biggest lesson learned from past mistakes for me? In order of how important to me....

1- Don't spend it as fast as you earn it, set some aside for the lean times. Also, related to that, just because you need a new (whatever), doesn't automatically mean the brand-new-latest-greatest-most-bells-n-whistles model....sometimes you just need the used one, worn but not worn out, 'cause you're only realistically going to be needing it 1/2-dozen times a year.

2- again, only for me....all jobs cash on the barrelhead, and charged for actual time spent (including parts chasing and phone calls), and do not, under any circumstances, 'hard' quote ahead of time. I understand for most of you this isn't a possibility, but in maintenance and repair, time-and-materials is the only sure way to get paid for work performed.

3- be damn proud of what you do, and damn proud of your skills (hey, you earned them), and price accordingly....if you go into pricing 'hat in hand', your client will have you for lunch....the reality is, they need you, and your services. You're selling a very valuable (and increasingly rare) pair of assets: skills and your time
 








 
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