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A humble request for mentor. Potential new shop.

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.


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Think Snow Eh!
Ox

Could you elaborate on which points you disagree?

I am talking about building a shop... I never said to run a business on the model of subbing out work. It is a very helpful tactic when building a shop that isn't ready to stand on it's own income yet for many reasons. To list a few:

1.) You need to be engaged in business in order to write off the W2 income that was invested in the business. This means that you have to take on jobs that you probably do not have 100% of the capacity to make in house.

2.) You begin learning how to conduct business with a hands on approach right from the beginning. You also gain customers and contacts.

3.) You are forced to develop vendor relationships, this provides a list of opportunities on its own.

4.) You have more $ coming in than just whatever can be spared from your day job. This means that you reach the goal of finishing your facilities and bringing in equipment in less time.

5.) As your shop capacity grows, you can decide what work you keep in house and what work gets subbed out. Profit grows with capacity, capacity grows with profit.

I did it, I still do it. This method played a large role in what I have now. If you want something bad enough, you will figure out a way to make it happen. I do not have to work myself to death because I own everything here. Sure, it isn't much yet but I grow every year and no one can take it away.

The one big mistake that I made was exactly the sort of situation Garwood laid out. Every year, I have to stop making money in order to work on facilities and it totally wrecks my rhythm.

Everything I have posted in this thread today is meant to explain how someone can build the facilities, customer base and entry level experience needed to start a shop while still working a day job (preferably 2nd or 3rd shift) nothing more.

Sure there are other ways and some are probably better, this is just a part of what worked for me. Maybe you could offer an alternative and teach us something rather than simply scoffing?
 
Dis-agree? :scratchchin:
Not sure that I disagree with anything that you or Mr. Wood has laid out.
I just see it as a pipe dream for most.
Or at least for myself...

I started at 22 with nothing in my pockets.
Was not planning on going into business, until the opporntunity came up.

To start a new business and be too busy from day 1 to be able to dink with things as you go - is the best that anyone could hope for, but not likely to experience. Personally, yeah, I have been running balls-out for 35 years it seems. (me personally) And so sure, having a 12,000' building with truck dock and nice restrooms, break room, and a conference room that sorta passes for decent from Day1 would sure have been nice, 'cept there was no way on Gods green Earth that I was gunna pay for that for many years to come. (3ph would have been nice as well)

My point is that to start from nothing and secure all (much of any) of that before you ever make Chip1 means that someone has made some good bucks somewhere else already. So, you are planning this for many years before pulling the plug (starting in your 50's? when the kids are gone and the Mrs. is securing insurance), or maybe you have an investor that has done all of that, and wants to see you thrive and can see that you are nbot only good looking (will help sales) , has a good work ethic, and can at least play a mechanical engineer on TV if he had to. (another place those good looks will come in handy).

But then - once you start making money, does this investor want a cut, or just repaid?
Or maybe you just started life with some real dough, and can have it if you have a reasonable business plan?

I just figger that if someone has made enough bucks to have it all before they even throw up their shingle (sign?) then maybe you should just stay where you was already making real bucks.

Like I said - I did the opposite of your pie-in-the-sky story. I started with nothing.
I did not say that your dream scenario is bad, but I'm sure glad that I didn't pass up the opporntunity that was presented to me 35 yrs ago, in stead of waiting for a more secure start.


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I almost built a new building 25 yrs ago, and I am sure glad that I didn't as I would have been building poor, not been able to invest in the iron that I have since then, and would have had an even harder time surviving The Crash. But who knows (?) a nice building may have helped to bring in more and better work? I am glad that I didn't gamble on that!


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Tomorrow Never Comes!
Ox
 
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I would say go for it, if it doesn't work out, that's what LLC and bankruptcy is for.
I started with a big fatty loan from my home, bought it just after 2008 crash for $180k 3 years later was worth $600k

My employer's business burned down, and at 45 I wasn't starting over in someone else shop, time to start building a retirement.

Started with 2 machines and all the goodies needed, already had a couple customers asking what I was going to do after the fire,
they were ready to give me work already.

I'm only 5 years in, I have 5 machines and a large saw, over a million in my little shop, and all is paid for including that first house loan.
Now zero debt and ready for signing up on a 5 axis as we are getting too many 5 axis parts lately, and see no end to them.

The economy has already started on its road to recession though, you need to keep this in mind, I would not recommend anyone buy a machine from last year for another year or two,
wait for this recession to tame out, unless you have guaranteed work,which nobody does.

I think you doing this venture is a easy, no brainer, I would do it,
but the timing couldn't be worse, at the start of the economic fall after the virus mess. prices and interest rates at highest point, work falling off everywhere, bond yield curve inverted twice, recession historically within 12-18 months after inversion,
multiple banks, went under, bond market tanking.....

You might want to take a few and do some economic research. If you don't know business you may want to start reading, and also get your accountant picked out, he's your savior.

2 cents :cheers:
 
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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.

Yes, exactly. This is what I was referring to. Although the percent of work done in house would very depending on capabilities. Assemblies are particularly good for this. There are multiple ways to make something and a lot of profit to be found from thinking outside of the box; for us and for the customer.

If a retail business orders 100 units of a custom tool kit from me; I can make it using any method I choose. I can source components from wherever I want so long as they meet the customers requirements.

I make what I can and sub out as necessary.




so sure, having a 12,000' building with truck dock and nice restrooms, break room, and a conference room that sorta passes for decent from Day1 would sure have been nice, 'cept there was no way on Gods green Earth that I was gunna pay for that for many years to come.

Yeah, that would be unrealistic to buy out of pocket. The op was talking about buying a used mill and putting it in a garage. The post I quoted with my first reply was:

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

I was advising on how I would go about building a productive and pleasant, home based workspace with very little start up money.

When I started, I thought; "I just need equipment so I can make things, once I have that, the rest will work itself out."

Well, that was stupid. I'm still paying for it everyday because I'm still working out of a poorly lit, unorganized, uninsulated pole building with shit everywhere, half finished wiring and air hoses running across the floor... during winter in Ohio.

So when someone wants to start a garage shop, my first piece of advice is to get the facilities finished before getting their head 100% focused on making chips.
 
My reply was to both you and Mr. Wood.

Moving into an uninsulated building in Ohio is a bad idea. A lot can be done as you go, but insulation is not one of them.

A feller that I know in the UP built a new pole barn for a welding shop, and moved in w/o insulation. Then he's got steel everywhere, projects everywhere and .... So not only would you be freezing your assets off, you would have a terrible machine sweat issue as well.

I don't think that building ever got insulated that I know of.


So, let's flip the scenario a bit...

So you didn't take on work as soon. You didn't start filling it with machines when you found them as soon - all b/c the building wasn't ready. So you didn't take that first job when it was offered to you. You did not make that $8k (?) and the customer found another shop that was able to take the job. Then in stead of running drill press and assembling, you spent more money on lights, shelves, and .... and you took that extra time to get it all ready to roll so that you didn't have to dink with it later....

OK, so how does that play out? You took more time and did not make the bucks, and did not get that job from that customer.... To this day, or even for the next while ... is or was that customer of any consequence to your not having time to get to it since then? If you hadn't taken that job, would you still have been so busy?

Any chance that you could have passed on that job/customer and taken the time to git'cher ducks in order, and then you had more $ spent and maybe not near as much work - that it didn't matter that it was all ready to roll?

There are way too many possible ways that the future could go to think that there is a right and wrong way to go about things. Just one lost opporntunity could have a distinct consequence - be it good or bad - to where we go from here and when.

But I will agree with you on the insulation. THAT is just like procrastination as it needs to be jumped on RIGHT NOW.
You cannot put procrastination off 'till tomorrow, and insulation is almost of the same sort.


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Think Snow Eh!
Ox
 
Brokering without any in house capability doesn't strike me as the ideal option, but one big plus is seeing what the demand actually is. Maybe it is small mill work, or 5 axis, or maybe it's actually turning that would rake in the PO's.

CTFL, can you weld? Welding equipment is a fraction of machine tools, and may open up some doors on the way to getting a shop set up.
 
My reply was to both you and Mr. Wood.

Moving into an uninsulated building in Ohio is a bad idea. A lot can be done as you go, but insulation is not one of them.

A feller that I know in the UP built a new pole barn for a welding shop, and moved in w/o insulation. Then he's got steel everywhere, projects everywhere and .... So not only would you be freezing your assets off, you would have a terrible machine sweat issue as well.

I don't think that building ever got insulated that I know of.


So, let's flip the scenario a bit...

So you didn't take on work as soon. You didn't start filling it with machines when you found them as soon - all b/c the building wasn't ready. So you didn't take that first job when it was offered to you. You did not make that $8k (?) and the customer found another shop that was able to take the job. Then in stead of running drill press and assembling, you spent more money on lights, shelves, and .... and you took that extra time to get it all ready to roll so that you didn't have to dink with it later....

OK, so how does that play out? You took more time and did not make the bucks, and did not get that job from that customer.... To this day, or even for the next while ... is or was that customer of any consequence to your not having time to get to it since then? If you hadn't taken that job, would you still have been so busy?

Any chance that you could have passed on that job/customer and taken the time to git'cher ducks in order, and then you had more $ spent and maybe not near as much work - that it didn't matter that it was all ready to roll?

There are way too many possible ways that the future could go to think that there is a right and wrong way to go about things. Just one lost opporntunity could have a distinct consequence - be it good or bad - to where we go from here and when.

But I will agree with you on the insulation. THAT is just like procrastination as it needs to be jumped on RIGHT NOW.
You cannot put procrastination off 'till tomorrow, and insulation is almost of the same sort.


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Think Snow Eh!
Ox

OX, because of a disease that was hard to figure out I got the opportunity to build my business TWICE. The first time I started at 23 and I did it just like you did. The second time I did it the way you're saying doesn't work.

Yeah, I turned down loads of work. I completely stopped doing some things and I farmed out all of my tube bending/welding fab crap. But I didn't have any employees and I was paying a mortgage that was way smaller than the lease I used to pay. I watched and waited for deals on building materials, machines and tooling. I did jobs that were a good fit for me and I made enough money to carry on. When I got all the pieces mostly put together, everything setup the way I wanted I started back up doing the things me and two other guys were doing, but doing it all without the two other guys.

There's no way I could have done it the second way when I was 23 because I didn't know what I didn't know. I was 5 years in before I knew much and even then I probably couldn't have planned much ahead. But, by my mid 30's I could have planned it out pretty extensively while working for somebody else and made it happen in a few years time.

So, sure, you can plop some machines in a shed and do whatever it takes to make parts or you can try to mitigate some of that "doing whatever it takes" 20 hour days crap and get some of the infrastructure sorted out first.
 
The second time I did it the way you're saying doesn't work.

I said that?

Would you have been able to build it the 2nd time - the way that you did - had you not had the means from the first go?


And also, I take it that you had your own product line selling this whole time as well? Not as if you didn't have any income, just not as much as if you produced it yourself?


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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?

Good advice? Fantasy land stuff. I've had 3 moves to larger spaces in the last 20 years.

The FIRST thing I do is wire up the machines, fill with coolant and start making parts. Before anything is unpacked, before any cabinets are in place, before the posters go up. Before I've had my first no2 in the crapper.

I moved into a 680 sqft shop to begin with. The CNC was wired and running maybe 6 hours from when it was moved in. Toolholders were either on the floor, or on a rickety folding table. Programming PC on a another rickety fold out table. I probably filled 2-3 55's with chips in the same time it would take you to find your first Vidmar/Lista cabinets.
As for upgrading the electrical panel? only if you really have to. If it has adequate slots, and doesn't pose an electrocution hazard it's ok. And if you don't have 3 phase? Use a Phase converter, either rotary or electronic.

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Imagine the convo if you followed Freedoms plan

CTFL " look see these Vidmar cabinets, great price off of ebay!"
Friend "yea they look good, but where are the machines?"
CTFL " see these tool carts, great for organising toolholders"
Friend "Yea for the machines you don't have"
CTFL "look I spent $3k on the panel, and $xxk getting 3-phase to the shop"
Friend "yea looks nice, upto code as well, you know you could use rotary or solid state phase converters if all you had was single phase? For manual and CNC machines."
CTFL "see the rocket fast PC with mastercam and cimatron, latest CAM software"
Friend "Again I see no machines, what good is this all doing if you can't make chips and therefore money?"
Friend "so where did you get the idea to approach this backwards?"
CTFL "off the internet"
Friend "I'd ask for your $.02 back if I were you."


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After 20 years I still have stuff on the floor, piled up in corners, under tables. You can tell coming into my shop I'm not OCD
 
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Moving into an uninsulated building in Ohio is a bad idea. A lot can be done as you go, but insulation is not one of them.

Another two thumbs up for living in SoCal.

Never gets too cold (25% of me is from Finland so immune to the cold) and when it gets to hot, drive the 5 minutes to the house and jump in the pool, swim the sweat off, and go back when it's cooled down some.

A feller that I know in the UP built a new pole barn for a welding shop, and moved in w/o insulation. Then he's got steel everywhere, projects everywhere and .... So not only would you be freezing your assets off, you would have a terrible machine sweat issue as well.

I don't think that building ever got insulated that I know of.
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Think Snow Eh!
Ox

I worked for my dad back in the UK (down South, away from the great unwashed). He was in the insulated shop wiring up panels, doing electronic stuff. I was in the uninsulated shop, doing sheetmetal, at the height of the winter coming into freezing cold machines in the morning was bad.

But nothing like the UP. Guy must have been insane.
 
After 20 years I still have stuff on the floor, piled up in corners, under tables.

Yeah, I'm a fool for not wanting spend my life in an unorganized dingy pack-rat hole. 🙄

You know what I meant. I did not say that someone should buy everything that they will ever own before going into business.

It does not take much extra time or effort to start off on the right foot; it doesn’t matter if the space available is a 450 sqft garage or 4500 sqft shop space. Heat, shop air, good lighting, a fresh coat of paint, somewhere to build and store tooling assemblies, somewhere to box up parts for shipping... these are simple things, they improve work flow and quality of life. They are also much easier to implement before ending up with boxes of random stuff everywhere.

Having somewhere to store all of the related tooling and materials like end mills and inserts in an organized fashion before buying them is not a bad idea.

No need to carry on a dramatic theatrical conversion with yourself about it.
 
Yeah, I'm a fool for not wanting spend my life in an unorganized dingy pack-rat hole. 🙄

that quite adequately describes my shop
I'm more interested in keeping the spindles running then whether the epoxy floors still look good, don't need fancy tool cabinets when Harbor Freight POS toolboxes will provide adequate storage etc etc.
I might be a few things, OCD is not one of them

You know what I meant. I did not say that someone should buy everything that they will ever own before going into business.

It does not take much extra time or effort to start off on the right foot; it doesn’t matter if the space available is a 450 sqft garage or 4500 sqft shop space. Heat, shop air, good lighting, a fresh coat of paint, somewhere to build and store tooling assemblies, somewhere to box up parts for shipping... these are simple things, they improve work flow and quality of life. They are also much easier to implement before ending up with boxes of random stuff everywhere.

Having somewhere to store all of the related tooling and materials like end mills and inserts in an organized fashion before buying them is not a bad idea.

No need to carry on a dramatic theatrical conversion with yourself about it.

I know what you meant. not sure the OP does.

If somebody spent the first week painting floors, running conduit, figuring out where machines were going to go, sure makes sense. But at some point machines have to be installed and running.

Unless your independently wealthy and you want to play at being a machinist.
 
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Aaaannyway, fun stuff aside, I'm only about 2 years in, still smoothing out the feast or famine stuff, but this so far has been helpful for me.

1. Start with no debt. This is for several reasons. First, pulling off a successful shop takes a remarkable amount of work, and if you can pull it off without making it "easier" by financing, it's a good sign you can make it work when things actually get tough. Second, is with any new venture, the goal should be to figure out as fast as possible if it's worth continuing. Debt obscures that. If you cannot continue without taking money from your future self, it's a decent sign that stable profitability is doubtful. If you can make good profit without having to take on debt, bada-boom you've proven pretty reliably that it works.
Third, you have to learn business via the school of hard knocks regardless. If you're dealing with small numbers, you learn to master them before the consequences get so big they can sink you. If I start off my business with a 20k job and lose money on it, I'm SCREEEEEWED. If I lose money on a 1k job, I'm hurt but educated, and know enough to handle the 20k job when it comes along. You don't throw a newbie on your brand new Hermle, don't throw yourself on a super expensive job.
Fourth, just plain risk reduction. I've had great months and I've had slumps so bad I didn't make a profit. But, it's just me, and literally the only overhead is rent. If/when sales dry up, cool I can just go pick up a day job or side work and just wait it out, or work on my sales skills.

2. Learn sales. I'm still in the middle of this. Big big big skill, seems to be one of the things that kills 2nd generation shops (the kid doesn't have the hunger to go pull in work). I started by grabbing overflow from established shops, definitely the easiest way to get in but the work is kind of crappy. Overnight stuff, complex one-offs. You kind of have to charge dirt cheap, but dirt cheap in shop rate terms is still pretty high if you have no overhead (see 1).

3. Learn moneyyyyy. Accounting. Cash flow. I like the Profit First method. All the stuffs on invoicing and payment terms etc.

Books: Personal MBA. Profit 1st. E-Myth. How to Be a Rainmaker.
Thank You for those book advices, actually I was looking to read something along those lines. And in general your advices about starting business are pretty good, I'm definitely taking that into consideration. I'm in an early stage of thinking about opening up a shop. and your advice about a debt definitely makes me rethink how i should be going about it.
 
Thank You for those book advices, actually I was looking to read something along those lines. And in general your advices about starting business are pretty good, I'm definitely taking that into consideration. I'm in an early stage of thinking about opening up a shop. and your advice about a debt definitely makes me rethink how i should be going about it.
Much appreciated.
I'm generally of the opinion at this point that if a person thinks they can't be successful at all without financing (as opposed to just slower without financing) they definitely will fail, but it'll just be either bankruptcy or tied for years to payments as opposed to just selling off equipment and moving on.
 
Much appreciated.
I'm generally of the opinion at this point that if a person thinks they can't be successful at all without financing (as opposed to just slower without financing) they definitely will fail, but it'll just be either bankruptcy or tied for years to payments as opposed to just selling off equipment and moving on.
The more I think about you words, the more I'm agreeing with you.
 
Nah, You can start an LLC, get a loan, buy some toys, do some work, shit falls apart, file business bankruptcy, and back to being an employee you go.
Check out ole Robert Kiyosaki's take on debt. (he wrote Rich dad Poor dad, great book, must read)
 
I think you've posted that elsewhere recently.
I hope that you doo that tongue-in-cheek...


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Think Snow Eh!
Ox
 
I think you've posted that elsewhere recently.
I hope that you doo that tongue-in-cheek...


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Think Snow Eh!
Ox
Yeah :D ,
You could do it, but I wouldn't recommend it.
neither would I follow Kiyosaki unless I was already rich!

If you have a background in macheening, and business, and already have customers waiting for you to getter done, then yeah, that's what I did.
But without all 3 of those, not recommended!
 
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I said that?

Would you have been able to build it the 2nd time - the way that you did - had you not had the means from the first go?


And also, I take it that you had your own product line selling this whole time as well? Not as if you didn't have any income, just not as much as if you produced it yourself?


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Think Snow Eh!
Ox
I missed your reply before.

No, I was worse than no income. About $50k in the hole. I didn't have any products to sell. Just my shop about 10% done and some old CNC's that I couldn't keep running because my brain wasn't working. I didn't pay anyone to make the products I was making. I was broke, I couldn't and if I did they'd have cost more than I sold them for.

I just stopped doing business. I sold some vehicles and machines, wrenched on cars, rigged machines for people, whatever it took to pay off the $50k and get a few bucks in the bank. I decided I didn't want to keep trying to make the old business work so until I could get my health figured out I let it all fade away. I made enough to pay my half of the bills and mortgage easy enough, but not enough to do much more than that.

As my health improved I didn't jump back in to what I was doing. I didn't do the "whatever it takes to make parts and get them out the door" like Triumph406 does. I thought about what I was good at and how I could make the most money doing that stuff. I got rid of all my old shitbox equipment. I started organizing my shop for the best productivity. I came up with a list of machines I needed to do what I wanted to do. I put the word out to friends and watched Craigslist, Marketplace, Ebay and auctions like a hawk. I basically invested all my money, every cent over the cost of living back into my shop for a few years. Some months that was $500, Some months it was $40,000. A few times I borrowed a few grand from my wife to buy machines or pay for concrete or something, but I paid her right back (we have separate money). I was able to scrounge up some pretty good machines for not much money. Rigged them in, fixed them up on the cheap myself. Put a lot of thought into workflow, fixtures and efficiency.

So I do have an amazing supportive wife that has great benefits and makes a ton of money. There is that, but she didn't directly pay for any of my shop. Because of her I didn't have to scramble to make money to pay for everything. I only needed to contribute about $2000 a month to cover half our expenses and our youngest wasn't in school yet for those years so I spent a lot of time doing stuff with him, some days I was just stay at home dad and nothing more. So it wasn't my products that carried me through, it was my wife.

So maybe my advice should be con a great woman with a great job into a marrying you then you can take a few years to plan out the infrastructure and launch of your business.
 
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Guys,

Thank you all for your experience, opinions, and insight. Thanks on behalf of others like me as well. I'm sure they have benefited too!

Between all of these recommendations and thoughts anyone, not just me, should be able to assemble a start-up path that works for them.
Some people are risk-adverse, others, natural gamblers. Some "neat-freaks", others "get her done".

Somewhere in all these words is the balanced path I will follow.
Regretfully, (maybe? blessing?) I have to regroup and it seems slowly build.

But, if at any moment it takes $50k to start and I've got $50,001 in the bank, you can bet your ass I'm going for it.

Thank you, congrats and best wishes for continued success for all y'all owners. (y)
 








 
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