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Well if you are looking for a new shop then the most important thing is you must be check out all the shops around you and get know the demand of peoples around of you
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I am in the planning phase of opening my own shop after I retire from the military. I have roughly 4 years to really think this out and plan it right. What I am asking from you guys is your opinions as to some of the pitfalls you ran into as you grew your business. I am not looking for your trade secrets or anything, just your "fair warnings" of what you came across that you wish you would have known prior to going down this road and some sound business advice for a fledgling business.
Thanks for the advice!
Brad
Well if you are looking for a new shop then the most important thing is you must be check out all the shops around you and get know the demand of peoples around of you
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If possible, you diy your machine, so when your machines break down, you can repair them. I got machine w/fanuc 10T which is very hard for me to repair it, but I can repair gecko. You need cad-cam, you need times to learn.
You need to have a minimum $50k liquid cash for incidentals, another $100k or more in leases for machinery. After that you must have at least your first years salary set aside. If you can cross those hurdles then start looking for a hole in the market place. Find a building and form an LLC. Most landlords will give you a month or 2 without rent to set up the shop. Then be prepared to pay in the area $0.15 to $0.90 per square foot of area leased. While your in you setup stages hire some sales reps or get out there and pound the streets for customers. Oh, and ones that will actually pay you. Most cases if the customer comes looking for you its because they already have exhausted there credit with another shop.
Just my $0.02 but it would make a lot more sense to take your skills and work in a shop that is already set up. Get paid (if well skilled) between $60-100K a year with insurance. Work 40-50 hours a week instead of 70-100 for much aggravation.
Success is the ability to go from one failure to another with no loss of enthusiasm-Sir Winston Churchill
The above comments are dead on.
If you really want to "own a shop" and you are coming in from ground zero (no existing clients, etc) then consider to instead "buy" a shop from someone that wants to exit the market, or - that has run into a cash crunch.
No matter the skills of a person, a business will have good and bad times. The key is to find a shop that is "decent and respected", but needs some investment to pull it out of a problem.
Don't buy new cheap chinese crap machines. Buy used, good quality machinery that if you have to sell a machine, you can get out of it roughly what you paid.
If you find that a machine limits you in your niche market, you can easily sell it and get a machine that fits your needs without taking a bath.
Once you get established, then consider new if it fits into a good business model. To tool up, figure on spending at least 25% of the machine's cost on tooling for it, and buy at auction if the deal is good. You can often get really good prices on bulk tooling...but be careful and don't get caught up in the excitement.
Figure on learning a common CAD/CAM program in the time you're gearing up. A great craftsman can always make money in a small manual shop, but in today's market, CNC is almost mandatory with manual machines as support and backup.
Don't bite off more than you can chew in bidding and taking in work. Flubbing a job with a new customer can be the kiss of death. Baby steps within your abilities and shop capabilities.
If you're married, budget for a divorce. Your wife is gonna hate the hours it'll take to get a new shop up and running, and successful. And plan on getting up at 3:30am,,, that's when you can get the most work done before the phone starts ringing at 8.
On the other side to going to bed will not be an option either when meeting deadlines. Here is what I would do before even to think about opening a shop now days. Now to I know if you are retiring out of the service you will have some income either way. So has long you keep you head on straight and stay out of all other debt you will eat and keep a roof over your head.
One talk to others owners in the area you are in now. EX military usually move to where they want to live so you will not be going after their market.
Check the area you are thinking of setting up a shop. How many others are around and want type of work are they doing? Is there a shortage of shops for the manufacturing in that area? Several companies around that might need the one offs or limited quantity of a part. Which means they will be looking for someone close to do the work instead of chasing do a distant shop. Here you are finding that little niche.
EI a shop in say Texas could do the work and the manufacture is in NY. They could produce the part for $10 apiece. But the shipping will cost them $5 apiece to get them to the company in NY. Now seeing you are just down the road from them. You could produce the same part for them at $12 apiece and get it to them for $1 apiece. See you have to look at the whole big picture on where and why you opening a shop.
What are my abilities to do what type of work? or in your case what do You need to do to get where you are comfortable to do that work.
These are somethings that you might want to consider before jumping in to starting a shop. Has other here have said you want to explore all options. You might just want to learn the CAD-CAM side of this and offer this to small shops so that they can do the work and you can keep yourself busy after your service retirement.
Another ingrate.
All of these thoughtful responses, time spent trying to help a guy that is going to be a competitor.... and whatcha get???
Nothin'. Not a thank you, get lost, ... nothing.
From now on, If I'm willing to respond.... I'm replying with a "Respond to this if you're serious"
No response gets no response.
Original posted by Antonio111Well if you are looking for a new shop then the most important thing is you must be check out all the shops around you and get know the demand of peoples around of you
I agree with you that the first step is to check the demand of people. Then you have to decide which type of shop is suitable for you. After that you have to choose a area or a market and find a available shop. Then you have to purchase the good which you have to sell on your shop. This is a quite long setup but if your shop's sale going well then you have many chances to become a rich but on other hand it can b flop. It is depends on the information which you have get during your survey and also depends on luck.
Well Good luck from me.
Last edited by Jacob123; 09-08-2012 at 08:03 AM.
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Running a successful business is about one thing: Having a market. It only starts to be about equipment when there is a market.
In that respect, buying a running business that may have a bit of a problem that you could fix makes total sense. But only if you can get dead accurate numbers and figures.
I personally feel it is absolutely ridiculous to say that you'd need 200 k in cash. That will totally depend on what you plan to do with your market.
If you find a niche that you can serve with a very particular self built machine and are reteired (as OP seems to be by then) you need the machine and somewhere you can put it and use it, and some cash to run the business/ pay expenses.
That will take time to build (OP has 4 years) and some money for insurance and stuff. Now that probably is expensive in the US, but it would not be 200K...
Sven
http://www.puresven.com/?q=building-cnc-router
The biggest single factor that stops most people from owning their own business is the belief that they should start with the business they would own in thirty years, if all goes well for them.
That is not how most successful businesses actually start. You do not need Ft Knox to go into your own business, but what you do need is perseverance, and the ability to keep your fixed expenses to the bare minimum while you are getting established
Above all else, do not think it to death, step in and do it, you will have plenty of time to sort out your thinking as you go. Give it reasonable thought, but trying to analyze every single detail before you start is one sure way of never starting.
There are no guarantees to the small business person, do not waste your time trying to find what does not exist. You make your own guarantees by putting out a good product at a price that will pay your bills.
-John
My Dad gave me the best advice on business I ever got. A 3 rd generation banker who saw way way too many people loose their stake in life over a small business dream. (yup, Im the first non finance guy in the family)
Have your customers before you open up.
Sounds obvious.
But many rely on quality ,customer service ,turn around, price, whatever, to launch the day. Those are all things you and every one else must have.
Get out there and find out what aspect of job shopping isnt over covered. Every one has a VMC, what about 4th 5th, in house case / heat treat, polishing, cryo treat.
Free delivery, and you make the delivery, talk to their floor guys, ask about business and their product, clip articles in trade papers that may be a benefit or interest to their PM or engineers. Be likeable, be helpful, but be careful not to waste their time or wear out your welcome. Stamp the side of your boxes or crates with your company name. Make sure boxes are neat and tidy on delivery. Crazy, but people equate the box itself with a order of quality.
ALWAYS look for a opurtunity to save the day.
Call Fwd, no answer machine
Never mix a excuse with a apologee
Be nice to everyone from the janitor to the book keeping chicks when on site.
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