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A humble request for mentor. Potential new shop.

I tried. Customer was ready, machine was ready, and investor went silent when it was his turn to work.

Plan B'ing it now

So your plan was to start a one man machine shop by financing machines, giving an investor a return and earning a living?
 
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So your plan was to start a one man machine shop by financing machines, giving an investor a return and earning a living?
The plan has all been laid out prior in the thread.

Not sure what end you're trying to reach.

I hope it's not the one that matches your incredulous tone.
 
The plan has all been laid out prior in the thread.

Not sure what end you're trying to reach.

I hope it's not the one that matches your incredulous tone.

I skimmed this thread before I wrote that and I just skimmed it again and my reading comprehension must be terrible today as I did not see mention of any investor party in your plan.

It is not an incredulous tone. I'm concerned over the investor part.

Your tone has sure changed rapidly.
 
I skimmed this thread before I wrote that and I just skimmed it again and my reading comprehension must be terrible today as I did not see mention of any investor party in your plan.

Your tone has sure changed rapidly.
Not a high moment in life my man.

I asked you about your tone and provided a gracious way out in case you were being pointed.

Most just react. Not sure what more I could do given the circumstances.

What's your intention and I can better direct the conversation?
 
Plan b is a better option. Or is it plan g?
Not the part about loans or investors, plenty do really well with that model. Especially with investors that can mentor thru the parts of bizzness you suck at or just do not know. The part where you are starting a shop to make the parts your ex bosses shop already makes and sell back to them…. That is taking 1/2 million loan to maybe possibly make slightly more than the 50k a year doing it as employee.
If your plan c is to run the people’s machine shop and folk music studio in the Heights I see it working better. Something that plays to your strengths first. Not having much 5 ax experience and learning new cam day one with one target customer sounds wishful, not dreamy.
May the odds be ever in your favor on whatever plan you look at next and now.
 
Not a high moment in life my man.

You might see this as a blessing when you look back in 5 years.

I bought an entire retail product/parts business once for one years net. Seemed like a great idea. The numbers looked pretty good. It was a pretty good chunk of change I had to pay every month or I lost it.

I didn't look at the precise breakdown of where the money came from before I bought it. I made some assumptions about what products were the most profitable. I knew it made money and I thought I understood it, but turned out the biggest profit center was a branded product I had no choice but to source from one of the partners I bought the biz from.

-This is kind of a scenario like spending half a mil on a 5 axis on the promise you'll be fed work-

I thought no biggy, I'll keep the guy happy and I'll get the product from him and all will be good. Well, it didn't go that way. 6 months in guy took my big up front payment and it took 3 months to get parts. He lied over and over about delivery which meant I looked like a flake or a fraud to my customers.

I eventually figured out a work around and salvaged the situation, but it was way more stress than I wanted and I downsized back to my core business after paying it off.

Earlier in this thread I commented something like "Base your business on real assets and cash in the bank, not credit and risk." Basically work hard, buy assets smartly and grow organically. You'll be on really solid ground in a decade or so. If you leverage your ass into a hole and work yourself to death to pay off a machine and pay a lease you might not be so excited to own that fancy machine by the time it's paid off.
 
You might see this as a blessing when you look back in 5 years.
Even though there is disappointment and anger with investor flaking out, I agree with your sentiment. Blessing in disguise kinda thing. Sometimes I look at results as though the world is guiding me through what should and shouldn't happen.

Basically work hard, buy assets smartly and grow organically. You'll be on really solid ground in a decade or so.
Wise words.
Would you consider buying a Mini-mill in cash better than buying a proper mill using a modest SBA sized loan ($200k)?
(ignoring type of work, etc... Finances concept only)


I appreciate the insight and you following through with your addition to the conversation.

Apologies for the worse than friendly attitude earlier. I was trying to ward off a possible 'well that's a dumb f***in plan' kinda thing.
Ive been put 'back on my heels' at the moment and slightly defensive/stressed.
 
I have an opportunity at the moment to start a business
I am very analytical and can generally reach optimal decisions but I am ignorant to many business concepts (reading, discussing, and learning now)
New to this thread.....and haven't read the many posts....

But I can tell you for a one man start up their aren't many business concepts you can't pick up as you go. You find a customer, make his/her parts. Get paid, report that income on a Schedule C less all costs like material, tooling, shop rent, etc, etc. Having the ability to balance your check book is about the level you should be at before starting the business.

At least that's the way I did it. I was 15 years down the road in successful business ownership before I needed an accountant. And a lawyer later, but that was mostly for some real estate issues not directly involving the business.
 
Even though there is disappointment and anger with investor flaking out, I agree with your sentiment. Blessing in disguise kinda thing. Sometimes I look at results as though the world is guiding me through what should and shouldn't happen.


Wise words.
Would you consider buying a Mini-mill in cash better than buying a proper mill using a modest SBA sized loan ($200k)?
(ignoring type of work, etc... Finances concept only)


I appreciate the insight and you following through with your addition to the conversation.

Apologies for the worse than friendly attitude earlier. I was trying to ward off a possible 'well that's a dumb f***in plan' kinda thing.
Ive been put 'back on my heels' at the moment and slightly defensive/stressed.
You’re not going to get support across the board here about a Haas specifically, and we don’t need to hash that out here for the 1000th time. But I would put a small machine in your garage and get a job. When you’ve added a few more machines and don’t have time to have a job anymore quit.
 
You’re not going to get support across the board here about a Haas specifically, and we don’t need to hash that out here for the 1000th time. But I would put a small machine in your garage and get a job. When you’ve added a few more machines and don’t have time to have a job anymore quit.
Sure. Mini-mill was just used as a place holder for some small limiting cheap machine. Brand unimportant.

Small machine in garage vs proper machine using loan was essence of question.

Sounds like baby steps is the most advised option so far. Thanks
 
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Sure. Mini-mill was just used as a place holder for some small limiting cheap machine. Brand unimportant.

Small machine in garage vs proper machine using loan was essence of question.

Sounds like baby steps is the most advised option so far. Thanks

That's the path I took, there is really nothing to lose. If I were to do it over again; I would start with facilities and support equipment first.

Good insulation and lighting; upgrade electrical panel, wiring and outlets, 3 phase solution; set up a real nice compressor shed with filters and air dryer, then plumb air lines into the shop.

Figure out a rough floor plan and watch auctions for quality cabinets, drawers and benches. Lista, vidmar and stronghold stuff can be found at great prices with enough patience.

If I were to do it over, I'd spend the first year learning about business, setting up the company and working through everything mentioned above.

Take on a few customer jobs during that time; sub out the machine work and do finishing / assembly work in-house.
You can write off all of the $ spent building your shop, it gets deducted from your W2 income earned at your day job, thus giving you a larger tax return to reinvest in the business.

Buying a machine and setting up a shop takes either a lot of money or a lot of time. It also takes a lot of money to do work; tooling, material, vendor services, ect.
A revolving pile of cash is a requirement for any business venture. I would suggest having $20k on hand reserved for doing business only. I call it my "boomerang fund" because it never gets spent on anything that does not come back to me directly through an invoice.

If more people did this, we could do away with a lot of the net 60 or net 90 B.S. that gets forced onto people in this industry.
 
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That's the path I took, there is really nothing to lose. If I were to do it over again; I would start with facilities and support equipment first.

Good insulation and lighting; upgrade electrical panel, wiring and outlets, 3 phase solution; set up a real nice compressor shed with filters and air dryer, then plumb air lines into the shop.

Figure out a rough floor plan and watch auctions for quality cabinets, drawers and benches. Lista, vidmar and stronghold stuff can be found at great prices with enough patience.

If I were to do it over, I'd spend the first year learning about business, setting up the company and working through everything mentioned above.

Take on a few customer jobs during that time; sub out the machine work and do finishing / assembly work in-house.
You can write off all of the $ spent building your shop, it gets deducted from your W2 income earned at your day job, thus giving you a larger tax return to reinvest in the business.

Buying a machine and setting up a shop takes either a lot of money or a lot of time. It also takes a lot of money to do work; tooling, material, vendor services, ect.
A revolving pile of cash is a requirement for any business venture. I would suggest having $20k on hand reserved for doing business only. I call it my "boomerang fund" because it never gets spent on anything that does not come back to me directly through an invoice.

If more people did this, we could do away with a lot of the net 60 or net 90 B.S. that gets forced onto people in this industry.
A nice and thorough breakdown with good advice.

I appreciate your time in writing and sharing that.

To clarify, you would build building and use money from subbing out work to save up for machine? Did I understand that correctly?
 
Personally - I did everything the opposite of Freedom's pie-in-the-sky scenario.

If I was able to doo what Freedom puts out there, I would likely have just stayed wherever I had been previously - b/c that obviously had been working out purty good.


-----------------

Think Snow Eh!
Ox
 
A nice and thorough breakdown with good advice.

I appreciate your time in writing and sharing that.

To clarify, you would build building and use money from subbing out work to save up for machine? Did I understand that correctly?

You're welcome. Yes sir, that is correct. However, the first thing you will need is that "boomerang money" as the tool for getting jobs done. A little capital and a smartphone can do a lot these days.

For example; about 6 years ago, I did not have a mill of any kind. I took on a customer job that cost me $16k in vendor services to produce. I had to pay for laser cutting, milling, turning, heat treat, black oxide finishing, hardware and freight shipping out of pocket.

I had an old southbend lathe and a drill press. I made custom length studs from all thread on the lathe and used the drill press to ream, chamfer, tap and cross drill pin holes for component assembly - which was also done in-house.

I was able to deliver the job 4 weeks sooner and 30% cheaper than the customers previous vendor while still making $8600 profit on it.

The profit won't always be great on jobs that you sub out but as your capacity for in-house work grows, so does your profit.
 
You're welcome. Yes sir, that is correct. However, the first thing you will need is that "boomerang money" as the tool for getting jobs done. A little capital and a smartphone can do a lot these days.

For example; about 6 years ago, I did not have a mill of any kind. I took on a customer job that cost me $16k in vendor services to produce. I had to pay for laser cutting, milling, turning, heat treat, black oxide finishing, hardware and freight shipping out of pocket.

I had an old southbend lathe and a drill press. I made custom length studs from all thread on the lathe and used the drill press to ream, chamfer, tap and cross drill pin holes for component assembly - which was also done in-house.

I was able to deliver the job 4 weeks sooner and 30% cheaper than the customers previous vendor while still making $8600 profit on it.

The profit won't always be great on jobs that you sub out but as your capacity for in-house work grows, so does your profit.
Interesting. The thought of brokering had briefly occured to me.

Ill have to revisit that idea as an option for just getting started.

Thank you Sir.
 
Interesting. The thought of brokering had briefly occured to me.

Ill have to revisit that idea as an option for just getting started.

Thank you Sir.
I could be mid-interpreting the post you are quoting, but I see a distinction between pure brokering and subbing out 50% of something. For example, someone wanted to buy a widget from me years ago and I realized a local waterjet place could source and profile cut the material cheaper than I could source and mill it, and that’s before the cost of running the mill. I still did the threading, blasting, paint, and install. I wouldn’t call that brokering as I still did 50% of the value add.
 
I could be mid-interpreting the post you are quoting, but I see a distinction between pure brokering and subbing out 50% of something. For example, someone wanted to buy a widget from me years ago and I realized a local waterjet place could source and profile cut the material cheaper than I could source and mill it, and that’s before the cost of running the mill. I still did the threading, blasting, paint, and install. I wouldn’t call that brokering as I still did 50% of the value add.
Sure. In my case, I only have some general garage power hand tools so any precision operation would be subbed out.

I might have misunderstood freedom but in my case it would have to be the widgetiest of widgets for me to be able to make in house. 😕
 
The part that I agree with Mr. Freedom the most on is getting your building and support shit squared away up front. It takes a lot of time to do this stuff. You can't do it while you're running machines. A lot of guys on here pay for that work to be done. I'm too cheap so I DIY that stuff.

When I really kicked the ball going I rented a house with a 1800 sq ft pole barn. It was really, really inefficient. I had two fulltime guys running machines, packing, shipping, installing parts. We froze in the winter, cooked in the summer, fought to get materials in and products out. Air compressors always dying, inventory getting lost or even ruined.

I'm thankful for the 5 years I spent working from that place because it taught me just how crippling it was to be so busy making parts you can't make time to improve the process.

When I bought a place and built a shop I took my time. Formed a plan and did my best to make the space ideal for what I do. From a driveway that delivery drivers like, a bridge crane, a bulletproof air system, heating and AC, insulation, bathrooms, inventory room, packing and shipping area, finger racks, auto bandsaw, etc, etc.
 








 
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