Starting Small


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Thread: Starting Small

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    Default Starting Small

    About 4 months ago I had a career change from working in shops on CNC's to a manufacturing engineer for a massive plastic container manufacturer. I absolutely love my job, but I find I miss machining. Not on a level of changing careers back to it but starting my own little adventure. I found at past shops I got frustrated getting told how to machine a part or how to structure the schedule for parts.

    I've had an interest in Tormach's for some time now but always found them weak and lacking useful features. I just learned this week Tormach unveiled their new 440 model which now has many of the qualities I've been looking for. My plan is to get a CNC and start creating some of my own parts/products. It is hard however to justify a $8,000-$12,000 purchase to simply make my own little parts. I'd like to use the machine as a job shop. I'd plan to also buy a small manual mill and a small lathe, and slowly start building my little garage shop. I'm looking for feedback on people in situations like I'm in where the shop isn't your main source of income. Now this whole en devour is at least a year or so out. I'm currently on a project traveling the country for the rest of the year and when it completes I'll be relocated to somewhere in the country.

    - How are some good ways to find work/bids?

    - Is there anything worth reading places to learn more on the business side of things?

    - Should I define the business as an LLC for liability purposes?

    My degree is in Manufacturing Engineering so the production side of this I'm fine. It's the business side I want to work on. Thanks!

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  2. #2
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    Default Re: Starting Small

    I'm not entirely sure what kindof work you're looing for, but I know of a few machine shops in my area that will sub out extra work when they are busy! While this may be much less common in your local market it's worth a shot to touch base with some of the machine shops and see if they ever sub anything out.

    I would avoid LLC if possible due to double taxation, but if you're making parts that can kill someone like structural motorcycle, automotive, or aircraft parts it's not a bad idea! If you are just performing work for other people you can get by without an LLC if you check everything against specifications and make sure it's perfect before it goes out. If you can meet specifications every time the liability usually falls on the engineer or designer. What would you be producing?



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    Default Re: Starting Small

    Hey Scubaru, I'm in a similar position. I was recently promoted out of the machine shop, and now I'm finding myself really drawn to the idea of starting my own shop. The tormachs seemed really appealing to me just because I can fit one of them in my garage, and I already have the power for it. I started watching the NYCCNC youtube channel, it is run by a guy who started a really small shop and has grown it quite a bit. https://www.youtube.com/user/saunixcomp

    My original idea was to just be a job shop, and make small lots of parts to order. I still think that I might go in that direction, but I also think that it would be a good idea to have at least one "product" that I make and sell for myself. This way I'll have some revenue even if I don't have any "outside" customers at the time.



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    Default Re: Starting Small

    If you are doing something as a hobby, then a small machine is great. If you are serious about business, then that is entirely different, at least in my mind.

    Assuming that you want the machine to do productive work while you are doing other things (working, sleeping), then it might make more sense to have a larger, automated loading type setup capable of running all night rather than just a few evening hours.

    Your machine options will open up a lot more if you can supply sufficient power, usually 3 phase. Few people have that at home, so that might mean a generator.

    If you are still single, consider instead to rent a machine shop space for both living and working in it as available.

    As far as tax aspects, I am a big believer in C corporations for a business like this.



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    Default Re: Starting Small

    I'm in a similar situation. I should have my home shop up and running in a few months. I plan to continue working my full-time job while using my cnc for prototype work on my own products. I like my current employer, the work, and the health benefits and don't feel the need to completely change my life for a side business/hobby.
    It is my hope to make a few parts and shop them around their related forums to see what feedback I receive. If sales are there but low I will make the parts in house in my spare time. If sales are high I will send out RFQs to local shops. I plan to do an S corp. if/when it becomes an official business.
    Good luck!



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    Default Re: Starting Small

    Quote Originally Posted by michaelwoodcock View Post
    I would avoid LLC if possible due to double taxation, but if you're making parts that can kill someone like structural motorcycle, automotive, or aircraft parts it's not a bad idea!
    There are a few different ways to structure your LLC, several of them are pass through tax entities, which avoid double taxation. The business files an informational return, but all profit/loss then gets reported to your personal tax return on a separate worksheet. We set up our two owner LLC this way, and though we haven't been through a tax cycle yet it felt like the right step in our small company. We can change to have our tax structure treated as an S corp. later, but not I think the other way around.

    We also do plan on making aerospace parts, so we specifically wanted that kind of liability structure available to us.



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