Staring new CNC shop - what do u suggest

[xyzeugene]

Hi,

I am starting to take classes in machining. I have saved up $40,000 to buy equipment and have the ability to save $1400 per month. I have am using my family's Houston welding shop space for free so I don't have to worry about rent. I have a day job as an corporate internal auditor and I grew up in a successful welding/body shop - so my business skills I think are quite good. So my question is with $50,000 what machines would you buy to start off. I'm sure I will be buying a lathe and a CNC mill. Do I spend $40K on a CNC or go with a CNC in the $14K range. Should I be thinking of being a machine shop or is it feasible to set my goals to be a manufacturer.

I ask these questions early as I want to plan for all this.

Thanks for your suggestions
Eugene

[jvangelder]

We have picked up a few used VMC's for around 40k, two of them with 20x12 cutting area's, full enclousers, fanuc oi-mc controls etc

You could start a line of credit with a seller and easily afford two machines and use that 40k for payments for a couple of years.

Any specific industry you want to serve?

-Jacob

[Geof]

Don't start yet.

You are taking classes in machining while working as an auditor which suggests you do not have any experience in machining. Starting your own operation is a risky enough venture even with years of experience and many contacts in the machining business; starting it without either of these multiples the risk of failure manyfold.

Keep working as an auditor and once you have finished your classes find some machine shop that will take you on starting at the bottom. Apply yourself and build your skills and experience then in 3, 4 or 5 years time take your, even larger, nest egg of money and buy your machines to start your business. By this time you will have the experience and knowledge to know what machines you need without asking anyone, you will also know whether you are going to be a subcontract shop or will have come up with some ideas for a product to manufacture.

[Caprirs]

Along the lines of what The Esteemed Geof stated, what are you going to machine? What quantities? Those questions must be answered before anyone can recommend a process. Turning? Milling? 5 axis? Waterjet?

Consideration for what else will be purchased along with the CNC is not to be taken lightly. If the machines seem expensive, add in the cost of vises, tool holders, retention knobs, tool bits, and coolant. Then, there's the electrical power and a compressed air supply. In other words, if the machine was free and sitting on the shop floor, how much will be spent so the machine can be turned on, hold a part, change tools, and just make the machine move around?

Will you be hand coding while standing at the machine or sitting at a desk with CAD/CAM software? CAD/CAM runs from dirt cheap to $20K. The price spread exists because of the diverse needs of the machining industry. Knowing your needs is critical to getting software that will best fit your application. It's not just the cash outlay, but the time invested in learning the software. Over time, there will be all those parts files that only work with that CAD/CAM.

If making parts for someone else, find out what kind of inspection is required for acceptance. A lot of bigger companies now require incoming inspection reports showing the parts were inspected prior to shipping (or in process). In many cases, that means having a CMM, video inspection like OGP, along with all the usual hand tools for inspection. Some companies even audit their suppliers to check the calibration of all components.

So whatcha gonna make? The analogy is trying to buy a car without knowing what sort of driving you'll be doing. Someone who tows a horse trailer cross country has very different needs from someone who goes to the store once a week.

[cadman]

One more thing to add, probably the most important, is you don't appear to have a business plan at all. Its one thing to have an idea to start a business and another thing entirely to have an actual detailed plan, especially in the current manufacturing climate.

The most important part of your plan should be the actual customers. Who are they, where is the work, how is that work forecast? If you know the answer to these questions, the equipment, tooling, etc... will fall into place. Looking for customers after the fact is a pretty risky move and I have seen many local shops go under faster than they started because they had no work to begin with, or only had a single customer and believed it was enough to successfully launch their business. The worst part is they start taking in work they normally wouldn't do for next to nothing out of desperation.

Plan carefully and good luck on your venture.

[xyzeugene]

Thanks guys for all your insights - this will go well into my planning.

I'm not totally starting from scratch - my family welding shop has a 14,000 sqft building paid off - thanks to my dad and his customers. Ive been around it since I was a kid.

My plan is to move it into a new era of growth. I really don't want to finance things as that will get me personally in trouble. I was thinking of leveraging off my dad's customer base or go into manufacturing.

Asking for financing to me doesn't seem like a good idea-thus using a nest egg. I am trying to remove as much up front risk as possible.

I have not bought any equipment yet until i am certain this is a way to go.

I will probably come up with a plan once I finish my studies - Also I probably won't quit my day job until I get enough revenue.

So what would you do if you were in the situation of just finishing machine and CNC studies, have no overhead and have a generous nest egg for capital? Would you go leverage off the existing welding customers or start trying to manufacture some sort of product? I was thinking looking at expired patents and try to manufacture - for example - stethoscopes.

What do you think? Comments are will give good direction in my 1-2 years of planning.

[awerby]

There's a huge amount of competition in the manufacturing sector, and anything you can make can be copied elsewhere for less. If there's no patent, it's just a race to the bottom which you will lose.

If you've already got a welding shop up and running, I'd think that something that leverages that equipment -and customer base - makes more sense. How about a CNC plasma cutter? You can probably build most of it yourself, and it would be able to produce parts that would immediately expand your capabilities in terms of what you could make for your customers.

Andrew Werby
www.computersculpture.com

Originally Posted by xyzeugene Thanks guys for all your insights - this will go well into my planning. I'm not totally starting from scratch - my family welding shop has a 14,000 sqft building paid off - thanks to my dad and his customers. Ive been around it since I was a kid. My plan is to move it into a new era of growth. I really don't want to finance things as that will get me personally in trouble. I was thinking of leveraging off my dad's customer base or go into manufacturing. Asking for financing to me doesn't seem like a good idea-thus using a nest egg. I am trying to remove as much up front risk as possible. I have not bought any equipment yet until i am certain this is a way to go. I will probably come up with a plan once I finish my studies - Also I probably won't quit my day job until I get enough revenue. So what would you do if you were in the situation of just finishing machine and CNC studies, have no overhead and have a generous nest egg for capital? Would you go leverage off the existing welding customers or start trying to manufacture some sort of product? I was thinking looking at expired patents and try to manufacture - for example - stethoscopes. What do you think? Comments are will give good direction in my 1-2 years of planning.

[Karl_T]

I've been in business over 25 years. If i had waited till i had everything figured out, i never would have started. leveraging your customer base is the key here. See what needs you might fill, visit their sites.

From there, machinery is on fire sale right now. its a good time to buy quality used equipment. Personnally, I think inflation is due to re-ignite; another reason to get your money out of cash.

Nearly every weld shop I've been in has a large mill and lathe. Buy one and start making stuff evenings. There ain't nothing like experince and you really really learn fast at the school of hard knocks.

Karl

[xyzeugene]

Would making pistols and rifles be a good business???

[universalfab]

Originally Posted by xyzeugene Would making pistols and rifles be a good business???

Not for you, there is alot of competition in that field as well. You could mess around with it, but as far as making functioning pistols and rifles you'd be crazy to think your little $50,000.00 will get you enough to be in any way competitive. Just being honest not trying discourage you, but if you knew anything about guns you'd know that. You could make gun accessories though. I think you've gotten good advice from this forum, you need to get the equipment that there is a need for or use for right now. If it were me I'd be trying to get your old man's costumers. What all does your dad do?

[xyzeugene]

Originally Posted by universalfab I'd be trying to get your old man's costumers. What all does your dad do?

Thanks for the advice - he welds aluminum for the most part but also does exotic metals such as magnesium- mostly wheels - and some car frames BMW etc.- he's got most of the AL welding work from car dealership in Houston. If your from Houston you probably heard of SABS welding.

Welding doesn't really appeal to me - - grew up with it and its not my cup of tea.

[MBG]

Since you say you have business skill one wouldn't think you would be asking these kind of questions.

Me personally. I would subcontract out the programming/set up and hire a $10 an hour loader. All this will free up your time to go out and get new jobs.

I know from personally experience you will NOT be able to hold a full time job (espically if it is during day time hours) and be able to answer calls for your business and then go home and set up and run the machine.