Lonely machinist seeks partner

[mc-motorsports]

Originally Posted by Geof Golly talk about being made to feel not only over the hill but a longway down the other side. I started my first business when I was 37 and did not become involved in my current line of products until I was 43.

So what did you do for your first 6 years?

Your not old, your just more experienced,

[Geof]

Originally Posted by mc-motorsports ....Your not old, your just more experienced,

Try telling my body and brain that after a good days work. My first business was making prototypes and specialized equipment for university researchers and consulting engineers. It was successful put the cash flow fluctuated wildly from month to month; it is much more stable to have your own product line.

[Dan Craig]

Originally Posted by fredhh47 But, seriously, folks. I'm still here and still lonely. Despite the recession, the collapse of the banks, the cutbacks in just about everything, it appears there's a continuing market for my products. No, they don't do anything obscene or illegal, they're toys, really. I just shipped a bunch to Australia, and have orders from Japan and South Africa. Did I mention they're "toys" for big boys? The market is out there, and the demand is building. I still need someone to put some capital into this operation (and the Small Biz people can go perform an obscene act on themselves, thank you very much, been there, won't go there ever again), and a pair of willing and experienced hands to make the job go smoother. With all the retirements, lay-offs, and business closings, isn't there someone out there with the urge to do something different? Just send your name and phone number on the back of a $100.00 bill and I'll get right back to you. Actually, skip the $100 bill and just call me. 607-687-0143, or e-mail to mercat@clarityconnect.com ...... Please, don't send any money, just call or e-mail. Fred

To see how Fred is doing these days - see his post from a week or so ago. He's still looking for someone. A couple years down the road from his original request. Seems to me he could have hired someone and together they could have created a lot more than just he himself created over the last couple years. The thing about being in business for yourself, alone is the problem with being in business for yourself alone...unless you don't actually want to grow or develop a business or product. In that case, why are you in business for yourself again?

I know why many people strike out on their own (I've done it myself) I just wonder why more of us don't actually plan the business to help us get ahead instead of just allow it to demand all of our time - if we want to get paid.

[fredhh47]

It IS a small world. I'm not that far from Anderson Hill Road. To answer your questions: I have equipment that is up to 30 years old, including the CNC mills, which is paid for, and still running, most of the time. In 1981 my father started the shop with my brother, myself, and respective spouses and it slowly grew to 16 people on two shifts. The economic downturn after George Sr. was elected put us in a really BIG bind (considering we had been riding a huge wave of defense spending from the Reagan days, took out a big SBA-backed loan, expanded, and all that), and the shop collapsed to the three of us and our wives. After a few years, aided by a renewal of defense spending, we built up to 10 employees. Then Bush Jr. came along, as well as a virtual implosion of the defense industry (Lockheed and Martin-Marietta merged, GE bought RCA, then sold parts of its business to General Dynamics, then sold the rest to BAE, Loral bought IBM Federal Systems, then got bought out by Lockheed. If Lockheed had bought IBM-FSD directly the Justice Department would have blocked it, but I believe they fronted the money to Loral to buy IBM-FSD first, then bought them out. How else could Loral have purchased a business valued at 4 times its net worth?), followed by the death of my mother (a true motivating force in the business), the departure of my brother and his wife, and eventually (in 2002) the death of my Dad. Dad's passing precipitated the calling-in of the full balance of the SBA backed loan. To keep the business going, my wife and I dumped our retirement and the insurance from Dad in to pay it off. In 2003, at 55, I tried to get a job in dozens of other shops and outside my trade, but was unsuccessful. If I could have, I would have closed the shop and sold off the equipment. Now at 61, that prospect is even more unlikely. We have what the shop brings in, her teacher's retirement pension, and soon her social security. I am trying to limit my shop hours to 5 day weeks and 8-9 hour days, and "unfortunately" the economy has helped.
New business plan? Bring it on. The capital infusion would fund possibly a little more equipment, plus a rainy day fund to get through lean spots and build some savings. A "partner" would eventually own the whole place (including 2 houses, land, income property, etc) with no further cash input, as I have no children and my brothers and sisters couldn't care less about it.
Fred

[fredhh47]

Originally Posted by davereagan If the business is up and running, why are you looking for capital? I think it would be much more clear if you layed out your monthly output and offered the sell the business. The trick of this is always when it get serious enough for you to open your books, at which point the prospective buyer could balk and use the information to steal your customers. My grandfather said after many years with a partner that anything worth doing is worth doing alone. LOL. Why don't you just hire a competent employee? David

Several years ago, I did just that. Put the whole shebang up for sale through a very reputable nationally known business "broker" the only thing that got "broker" was me, to the tune of 5 grand. Not one serious offer from the few people who responded. Most of the time the reasons were "too small", "bad location", "not enough capital" etc. So, although I would not turn down a serious offer, I don't have much expectation of that occurring. As far as a partner goes, I know the pitfalls. My Dad left one job where he had been a manager, to "partner" with another man who, it turns out, was a drunk and a crook. Luckily for my Dad, he got out before the 'stuff' hit the fan, and all he lost was some dignity. The deal was supposed to be a "sweat-equity" arrangement, my Dad put up his expertise and the other guy put up the money to lease a shop from a gentleman who was retiring (he got screwed, as well). Dad found out that his so-called "partner" considered him just an employee when it came to decision making and planning. As an "employee", he simply quit and walked away.
I wouldn't expect anything from a partner that I wouldn't be willing to do, including working long hours AND cleaning the toilets (which I do already). The partner would have the same flexibility of hours I "enjoy" as well as the expectation of becoming the sole owner at some future point.
Employees are USUALLY not worth the hassle, as that would require all the unpleasantness of Workman's Compensation, health insurance, Unemployment insurance, payroll taxes, time clocks, much more insurance than I now have, and so on and so forth. And weekly paychecks, regardless of how much money is in the bank. No thanks. And also, "competant" at what? I would like someone who is better than competant at almost everything related to the operation of the shop, which doesn't come along in the usual "employee".
Fred

[fredhh47]

Originally Posted by mc-motorsports good advice. Sounds like you need an apprentice. Trust me, you don't want a partner. Anyone with $30K cash and decent credit would do thier own thing before trying to ride your coat tail. To start a shop with a partner is another story, or to hand off for the purpose of retireing, yes. Otherwise, prepare by digging a deep hole somewhere outside the edge of civilization, trust me.

Well, yes, I agree that most people with $30 K and decent credit would buy a mill and a lathe and set up a shop in their garage or their basement, while holding down a full time job until they found enough customers to produce enough income to replace the full time job and support the costs of operating a job shop in his garage. Now, I know from over 30 years experience that you don't do that working a few hours in the evening and Saturday morning. And as one writer put it, "with a lot of friends who stop by and interrupt me" or words to that effect. To replace, say a $50, 000 a year job would require putting in 5-6 hours a night, and all weekend, If he's both lucky and very good (interruptions not allowed, period.) And when does he see his wife and family? Breakfast and dinner, then maybe divorce court. Vacations? HAH! You don't make that kind of money unless you have the contacts in the industry to get the contracts, and you won't get any help from the company that you're working for. You may even get fired for "competing" with them. Walk-ins are not a useful or reliable source of income, and they are generally friends who want it for next to nothing. Mistakes are caused by lack of experience. Experience comes from making mistakes. I have made my share of mistakes.
The point about handing off the business for the purpose of retiring is precisely what I am looking at setting up. I don't want an apprentice to teach, because teaching someone to do the job takes as much time as doing the job myself. Apprentices usually have an over-blown sense of their value, and expect to get paid rather well. I have been told by High School Vo-Tech graduates that they feel that they should be starting out at $18 -$22 per hour, and on a fast track towards management. Been there, done that.
Fred

[ParkerMillguy]

I have a few ideas myself. I designed some downrigger mounts for boats that are low-profile to convert a rec-boat to a fishing boat and back again (You know those woman don't like all the equipment when it's time to sun). Anyways, I'm at the North end of Cayuga Lake (waterloo). Maybe we could kick around the shop some weekend.

[fredhh47]

Sounds interesting. Give me a shout sometime and maybe we can find a time to get together. My phone # is 607-687-0143 for my shop and home. I'm usually around all day, and most evenings, so I shouldn't be hard to get. I don't know much about downriggers, as I haven't had much to do with real boats. But if something can be made out of plastic or metal, I can usually figure a way to make it.
Fred

[masonbcaldwell4]

Originally Posted by fredhh47 Apprentices usually have an over-blown sense of their value, and expect to get paid rather well. I have been told by High School Vo-Tech graduates that they feel that they should be starting out at $18 -$22 per hour, and on a fast track towards management. Fred

Wow, sounds like they should work for the government! Being an apprentice myself, and for the gummint, no less, I see that attitude right regularly. Unfortunately, while my apprentice program, at least in the machine shop, will do well to teach the basics, anything truly advanced will probably be beyond us. programming in a 4th axis? what's that? what's CNC? most of our apprentices will never know the difference between a G and an M code. It's not really their fault, I suppose. the gummint ethic is "milk the job as long as you can" until they REALLY push productivity, that will probably never change. I'd leave if I could afford to give up the bene's... unless anyone here has a shop in the Norfolk, Virginia area, willing to train someone with little experience.... ahh, just though I'd ask

[ParkerMillguy]

Enjoy the ride while it lasts....but prepare for when it's gone. A well respected boss once told me "You make your own opportunities" in response to me whining about why a co-worker got to run the "good machine". The words stuck with me and 11 years later I am very marketable but that has come at a cost. I have turned down higher paid union jobs to work in "nose-to-the-grindstone" job-shops. I progessed within those job shops from a saw operator to a proto-type machinist/programmer to my now current position in process developement for a large OEM (still non-union). I've seen many a people that came knocking on the door of a job with the resume of 20 years in big company XYZ. With little skill. They earn their way right next to the kid out of high school running the band saw. Only they whine more.

[z369]

Originally Posted by fredhh47 The point about handing off the business for the purpose of retiring is precisely what I am looking at setting up. I don't want an apprentice to teach, because teaching someone to do the job takes as much time as doing the job myself. Apprentices usually have an over-blown sense of their value, and expect to get paid rather well. I have been told by High School Vo-Tech graduates that they feel that they should be starting out at $18 -$22 per hour, and on a fast track towards management. Been there, done that. Fred

hmm. im glad you are deciding to hand it over completly because an apprentice with any sense of worth be it "overblown" or not would never consider this kind of responsibility without proper pay. or as i like to call it trying to get something for nothing.

[harryn]

Hi, I hope you don't mind me throwing in my 2 cents. I do Business Development Consulting for a living, so understand the challenges of transitioning a company from an "owner" to a "new owner". As you have noted, it is surprisingly challenging to pull off.

My suggestion is that you start looking at it from a slightly different perspective - not the value of your machinery, but the value of your product and business. Right now, it is somewhat difficult to recognize the value of your business, because you are used to working so hard on it that your time might not necessarily be accurately valued or understood as a cost.

The way to move from "working every day" to "working when you want" involves letting go a little bit. It might be helpful if each month you select 2-3 parts to accurately document their dimensions (and the build process if you like) and find another shop to build them for you. If the region you are in is in fact low cost, then this should not be a problem locally. I know around Toledo, there are many desperate shops looking for work - probably everywhere now. You can get good pricing in North America - there is no need or value to send it to China - and lots of quality risk.

Try to work with suppliers that you can build up a relationship with, and develop 2 suppliers capable of making every part. You can be sure that the prices will be more than you wish they were, but that is the value of your time that you are gaining, as well as improving the value of your business.

Eventually, you will have outsourced the day to day parts machining and can start focusing on subcontracting the assy, packaging, etc. You might even find that you can locally hire some temp assy people to come in and do that for you without having to hire full time employees.

If you have a "Product" that people can take over the business without having to be a 24 hr / day machinist, then that is definitely more marketable. It will also make it much easier to value the business. Just FWIW, at that point, it will be in the range of (1 year of revenue) + (2 or 3 years of profit) unless it is just growing like crazy.

There are other paths to moving out of your business that involve some more sophisticated methods and arrangements, but I don't think they are a good fit for your personality and they only work in more normal business climates. I don't get the sense that you are wanting share holders, really more a partner to transition the business to.

Feel free to write if you want to take this further, but I don't work for $20 / hr either. I am pretty good at helping people make money from their business or I don't take the on the project.