Thread: Newbie Another new to CNC
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Old 09-14-2008, 12:43 PM
sansbury sansbury is offline
 
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Forgive me if I'm being presumptuous but I have more questions about your business plan than the machinery side of this. My perspective here is as a business owner (different industry) who has learned some hard lessons along the way

The number one problem in any business isn't supply, but demand--sales, not manufacturing. You've found out that no local shops want prototype jobs. Why? Perhaps they're set up for production runs because that's all buyers there want. Or maybe it's because no one is willing to pay what it costs to make small volumes.

I'd do another round of interviews but from the other end--go talk to race teams, garages, the places who might buy from you, and ask them where to get stuff made. One thing you may find is that there are other guys in their backyards cranking out parts who simply don't advertise. Second I'd ask them about how much work like this they actually might have to give you. Take whatever they say and cut it in half. Multiply by the number of places like them you can find in the yellow pages. This gives you some sense of what the potential market is really like.

The thing that kills small-run/prototype shops is the cost of sales, which can be very high relative to the cost of the first job it brings you. Prototype shops tend to be established and heavily supported by word-of-mouth and longstanding relationships. If you're going to break through those you will need to offer something special.

The flip side is that small independent operators can work with very low overhead, no OSHA, insurance, overtime, etc. Some guys are genuinely happier making $15/hour working for themselves than $20/hr for someone else. Nothing wrong with that but worth keeping in mind the economics of why it works and whether that's really what you want.

Last, I wonder a little given your "new to CNC" statement and talking about getting a whole pile of expensive software and machinery. Are you a machinist just moving to CNC or a hobbyist who thinks this would be a fun way to make money? I've spent most of my career building software companies and I know how they work, where the costs and leverage come from, etc. By comparison I know almost nothing about machining. I know a little of the trade skills and some of the business dynamics from talking to friends who own shops.

If I was going to do this as a business, my first move would be to get a job with an established shop and learn more from the inside. If you have some capital to work with, one angle might be to try and partner up with an established smaller shop, maybe one with an older owner (not uncommon here in New England) who might want to retire and sell. Buying machinery is the easy part. Any idiot with cash or a credit line can do that and many do. Being able to crank out real work and selling that capability is the hard part.
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