opening a shop

[Shawn Grieff]

I am looking for some free info from people who have had experience in this and seem to know what they are talking about. I am looking to open a machine shop, it has been a dream of mine since highschool. I am an experienced machinst and know what I want to do. My question is do I buy the machinery and hope the work comes or do I beat on doors get the work hurry up and buy the machinery and hope I can keep my first customers happy with my delivery time. I already have the building so that is not the problem.
Thanks to all that help.
Shawn

 

[cook]

Equipment first, customer second. When I opened my shop I went and bought a cnc mill, I had no customers and still had my old job. It's hard to get customers without equipment. customers want to know what your capabilties are, can you handle the work you are trying to get? Not sure what type of work you are trying for. as far as cnc stuff haas is a good place to start, with about $500. down and good credit you can lease a haas mini mill for about $500. to $700. a month I think you can do just about the same with a lathe. There are lots of used machines out there as well shop around. The one thing thats difficult is to have enough money on hand at all times for material, tooling, hidden costs equipment break downs and so on. Hope this helped, I would think you are going to get a lot of advice on this subject. Lots of luck. You can't fail if you don't give up.

 

[RMT]

On the other hand, anybody can buy a machine, but getting work for it is a different story, that's my personel experience.
I think the ideal get the job , get what ever equpment You need after You that job. In reality it's a little both, buy equipment here and there at good deals, and still add more for certain jobs.
If You like to spend money and buy things, starting a machine shop is the way to go......
Live is an adventure
Frank

 

[C&L Precision]

I started my shop 3 years ago. The first thing I did was line up a couple of customers with jobs that had long lead times. I then went out and bought the machine that I need for the majority of the work. I ended up buying new because it was a lot easier to get financed, and I could get better interest rates.
The one piece of advice that I would give you is, figure out how much $$$ you think you are going to need for the first few months, then double it. As cook said the toughest thing in the beginning is having the money for tooling and material, until you start getting paid.

Good Luck!
How hope things go well for you.
Clint

 

[Shawn Grieff]

Thank you all for the advice so far, keep it coming. I need all the advice I can get. If someone outthere has seeds for the money tree let me know.
Shawn

 

[robert neff]

Robert Neff

Cook makes the best sense.Equipment first then the work.Otherwise you're putting the cart before the horse.If you are working elsewhere keep the steady job till you really know what you're getting into.Especially aerospace.You'll need iso certification and all sorts of other crap for aerospace.My advice is prototype and r&d work for your own product.If you're a well seasoned machinist there's no limit to what you can create.I'm presently engaged in doing exactly that.But with mini machines (taig cnc micromill,harbor freight mini lathe,etc).If just one out of several of my ideas catches a stores interest and i'm shure more than one will then it's just a matter of farming the work out perhaps even to my own boss and let them deal with the production problems.If you believe in your skills then use them to your fullest potential.Over 25 yrs i've had to invent a jig or fixture to make some other persons part (mostly aerospace) and if i can invent that then why not something of my own.Thats the way i look at it if i don't i'll be spending the rest of my days doing other peoples inventions making them ritch and me old.Good luck on your endeavor whatever it may be.

 

[coalstove]

Hi Shawn,
First off, I wish you the best, starting down the path of becoming a new machine shop owner is a extremely tough at best, some the keys to success are; solid business plan, good credit, good contacts, good salesmanship and thick skin. We have been in business for 30 years, with many ups and downs, even more now with our overseas competition. Foresight only comes with experience, so expect to fall every once in a while and learn from it, quoting from many; "A good business man makes a mistake once, a poor business man makes the same mistake twice and expects different results". Now enough of my BS, and onto the sales pitch, If you are in need of some good used equipment, I have several VMC's, lathes and misc equipment for sale. These are all running on our shop floor. We have learned our lessons too, and we are redesigning how we do business, more production oriented equipment.
GOOD LUCK and BEST WISHES!!!!!!!!!!!!!!!!!

Chip Coale
Digna Machine Corp
410-876-6336

 

[Shawn Grieff]

I am looking for a lathe, let me know what you have.
Thanks for the advice.
Shawn

 

[coalstove]

You have a PM

Chip

 

[J. Matsko]

Shawn,
I went down the road a couple of yrs ago, I did just go out and get the equipment then I found the customers. The one problem that I had was my partner was young and was happy to be an owner and not work anymore.
So that left me to do all the work, find the sales, buy the materials,do the programs, etc. I quickly realized this and decided to buy him out.
What I would recommend is that you stay in the place you are and purchase the equipment outright do what you can on the side for a discounted cash price, keep good records the thing you won't be prepared for will be the extra costs, Insurance is huge especially on new equipment and property, and taxes
materials just starting out are going to be COD until you establish yourself (about 2 yrs.) not trying to discourage just thought of a couple of things.
Jerry

 

[TFreeman]

Hey Shawn, I'm with Robert on this one. I don't have much room to give advice though since I don't, nor have I ever, owned a shop. But God willing come the end of october I will be ordering a 8x14 lathe from lathemaster. Ive heard nothing but glowing reviews on these machines and for a grand delivered and ready to turn precision parts it's affordable with a little cutback on the beer etc. Like many of the folks here I work full time in a shop for a millionaire with a shop full of nice machine tools. My boss is cool and I don't hate my job by any stretch of the imagination. But as machinists (those that are good anyway) we thrive on creative process. To me having a small lathe at home is a dream, I can tinker and anything I can imagine, I can build. This is why I'm buying the lathe. I'm looking for work so the ol lady wont crow to loud about the purchase. I'm a pretty good machinist and I know this from my 15 years of doing it. Its only a matter of time before I find my niche' with my kick ass little 8x14. If your at all unsure about your path as far as business goes I would suggest looking into the smaller equipment you can pay cash for and have no stress of machine payments. Theres lots of work out there for this scale of machine, but if you cant find it then at least your not stressed about a machine payment thats coming up. If this has been your dream since high school then I suspect that like many of us you suffer from the incurable urge to make stuff. Get the little machines (quality machines if you can) and go from there. I hope that helps!

 

[Sequence]

Business Venture Opportunity

Shawn, We are an Injection Mold Maker/Molder with diversification into Blow Molding, Thermoforming, Stamping, SIlicone and Urethane Molding. Production and Prototype. Automotive, Medical, Consumer Products, and Proprietary products are manufactured with Largest customers being Foreign Automotive (Toyota) and Medical. We first started 8yrs ago from my home, grew to 10,000sq.ft. in US now have 70,000 sq.ft factory in China, 2,000 sq. ft. in Costa Rica, and have down sized the US operation to 4,000 sq. ft. due to moving most of the business to off shore. Business in this industry is tough but can become a pleasing alternative to working for an owner. (when owning your own business you still work for someone, the customers and this is no easy task so keep in mind that it is much tougher running your own busines then working a job or everyone would have their own company) We are looking for partners, investors, ect. so we can keep expanding and not loss the large package jobs that we cannot afford to finance. This can be a great side investment for your cash or a job, your choice. Prefer someone experienced in the Injection Mold, Blow Mold, Thermoform industry. This is brick and mortar, no retail Monday-Friday 8 to 5, some weekends. International manufacturer with operations in US, China, and Costa Rica. Can be active or passive owner. Cash wanted to pay loans from current manufacturing investments (machines and large job programs). $100,000 - $500,000 with estimated 3 year ROI on investment, firm on partnership cost. 2006 sales of 1.8 million from US operation alone. Due to the International aspect some travel may be required. Must have proof of ability to invest to discuss i.e. letter of financing through Bank, pre-approved, cash in bank, Bank statements etc. No tire kickers or time wasters please. This is a lot of work (selling/partnering) and adds hours to the work week and day, who has time? Dreamers, lookers please move on. Nothing personal.

 

[TFreeman]

Sequence:
Any prudent businessman to take advantage of your offer would insist on a letter of promise for work to be farmed out before buying machines (the finance company will also be interested in seeing these). Also I'm confused are you selling bonds or stock? I may be interested in stock if you can provide a prospectus, but bonds I'm totally uninterested in. Thanks guy, I'm not ragging you but these are the questions that come up from your post (for me anyway).

 

[Sequence]

I'm sorry I wasn't clear, what I'm wanting to do is bring a few businesses in the same feild to one location (same building, same industrial park, ect.) to offer a full service operation with out the hassel of out sources to many different places, this could be done by bringing machines, offering up a big enough building for several businesses, cash investment to pay for machines or to finance big projects that I typically have to turn down because I cannot afford to handle the million dollar programs for 2 years until PPAP approval. (recently had to do this on 2 projects that were did win) I'm not interested in Farming out the work, I've been there, done that. I've had nothing but bad luck, from suppliers supplying junk, to being 6 weeks late, to going out of business and sticking us with nothing. In this environment I have decided it is not worth the trouble so I have been trying to bring all the work back in house. This is where I came up with the Manufacturing Mall idea to keep more control over our projects. We are looking to have Moldmakers, diemakers, molders, stampers, blow molders, ect to complement each other in one operation but still as seperate businesses. I do have overflow of work but cannot guarranty that 6 monthes from now there will be. The idea of a manufacturing mall is what I believe will help all invested with additional work that they might not of aquired before and to have each business help each other so all can prosper.

I hope I made it more clear.

Regards,
Ken

 

[TFreeman]

Ive seen a few people try this mall your talking about. If you can pull it together it should work. As of yet though Ive never seen anybody with the drive to make it happen. Also there the same problems you get with "farming" out work. Not all of your parters are guaranteed to share your work ethic. A situation like that is built first upon relationships I believe. It would scare the hell out of me to setup a business that had all of its eggs in one basket. Nonetheless I've always thought something like that could work if the right talent was pushing it. Good luck man!

 

[cook]

Sequence, I feel You have managed to hijack Shawns thread?

 

[Sequence]

Toyota is the company that suggested I try this, they do this form of business with their T1 suppliers. Toyota offers to have them setup shop in the same location for a percent of the work, this helps them cut logistics costs and headoff issues before they get too big. Many toolmakers and production companies do this in China and it seems to work so why not here. We need to do something to try and keep us a little more competitive without spending millions on the latest equipment every couple years. Many of these large companies are looking to cut the supplier base and one way to do this is work with a company that offers the Mall concept, so why shouldn't it work.

 

[Sequence]

Not hyjacked, just offering up ideas and opportunity for him and others to grow business. Shawn has been responding directly just not thru this thread.

 

[cook]

got it....

 

[TFreeman]

Toyota is the company that suggested I try this, they do this form of business with their T1 suppliers. Toyota offers to have them setup shop in the same location for a percent of the work, this helps them cut logistics costs and headoff issues before they get too big. Many toolmakers and production companies do this in China and it seems to work so why not here. We need to do something to try and keep us a little more competitive without spending millions on the latest equipment every couple years. Many of these large companies are looking to cut the supplier base and one way to do this is work with a company that offers the Mall concept, so why shouldn't it work.

I agree this thread is being hijacked lol. Lets discuss this on another thread though. Sequence Ive got plenty to say about your last post buddy. As a matter of fact the last time I saw this idea surface I was working at a small shop where we made almost the entire anti lock brake assy for a foreign car manufacturer. My job there was only a two year contract so I dont know how it went personally after I left but Ive heard its still the same. Lets discuss.