Minimizing shop overhead as a business strategy?

[William Payne]

I knew this was going to be controversial to have such an unorthodox approach.
For the guy who doesn't like the idea of old scrap in the shop, my rambling is about thinking different aspects why this might actually work out. I've put some numbers, explained sample parts and the time involved in this time of endeauvor. I've done my own bookkeeping in past for four years and my two previous shops made a fair profit every year, so there's my experience to back it up. And if my text is hard to read or find the point, i have to remind you this is not my native language. I would prefer arguing in fennougric gibberish with a lot of perkele thrown between the words

It is very likely that later on i'll buy a smaller toolroom lathe to work around the clumsiness of the old conehead. A hungarian Kart (10x30") would be optimal, i'm not going to pay premium for a Weiler if the same features are to be fount without the price. But i'll have things running with what i have and work it up from there (if necessary at all!)

I'll make a shop thread and post some better pictures when i get some shelfing on the walls and get all the random tools and stuff on the floor sorted up. Last winter was just trying to protect the machines from the elements while taking them apart and overhauling them, and building the shop around them at the same time.

I don't think anyone is trashing what you are doing. It is more that any of us in other countries just trying to have a decent quality of life would go broke in 5 minutes doing what you want to do.

 

[Ries]

I think what you are describing, while possible in Finland, is just science fiction to many US residents. 800 euros a month rent? in a city? I live near Seattle. Suitable machine shop space, with enough electricity to run a VMC, is in the range of 3000 to 10,000 dollars a month. Usually in the range of 40 dollars per square foot per year. So a very small shop, big enough for two machines, say, 1000 sq ft / 100sq mt, would be around 4000 dollars a month.
And monthly payments on machines- a midsized Haas would be running you more like 2500 to 3000 a month. Add a lathe.
My health insurance bill, PER MONTH, before I got old enough to go on medicare, was around $1400, with a 3000 dollar deductible.
Utilities- my minimum for water, power, gas, garbage, and phone, is easy $400, and in the city, more.
I would say your estimates of a monthly cost of running a machine shop in Finland are maybe a quarter, probably closer to 1/8, of what it would cost me to run a very humble cnc shop in the cheaper suburbs.
Yes, there are places in the USA where land is cheap, where you can buy old industrial buildings for very little.
But often, those places are 500, or 800, miles from where your customers would be. I know people who have amazing cheap buildings in rural eastern washington, or Idaho, but they are a day drive each way from viable customers for anything but machinery repair.

I know a few people who run lineshaft machine shops-
One built the shop while making his living as a pilot, guiding 500 foot ships thru tricky waters, a very good paying union job.
One runs a shop for a multimillionaire, who built his own private museum of obsolete technology in the middle of nowhere, because he wanted to.
One, who posts here sometimes, is more like you, although more a blacksmith than a machinist. he does paying commercial work with the shop. But its obvious he spent an enormous amount of time and money to build this shop. And he doesnt do job shop work there- he can afford the shop because he does high end, value added, ornamental work.
I think your strategy is viable for a few dozen shops in Europe and the USA, but as a widespread model for business, I sure dont see most people being able to make it work.

 

[LOTT]

JH, I think your income/expense examples are a bit off.

1. 50€ for CNC vs 38€ on the old stuff- I don't think you're going to be 74% as productive as modern machinery.

2. Billable hours. You aren't going to get as many billable hours on manual, because you can't hit cycle start and walk away, or keep multiple machines running at a time. The maintenance/ admin stuff still has to get done either way.

In some regards we have a similar approach, in that I also live out in the country with lower overhead because that suits our family lifestyle. I also don't like debt. But my goal is get the best machines I can, and keep upgrading as we go.

 

[john.k]

Well ,yes and no........part takes 10 minutes on a CNC,2 hours on manual machines .........however ,the CNC shop charges a $100 flat fee for a one off ,PLUS machine time and material cost ,and if you dont supply your own machine ready files ,there another $100-$500 programming charge.......and a CNC shop will not consider making modifications to an existing part.

 

[Garwood]

Well ,yes and no........part takes 10 minutes on a CNC,2 hours on manual machines .........however ,the CNC shop charges a $100 flat fee for a one off ,PLUS machine time and material cost ,and if you dont supply your own machine ready files ,there another $100-$500 programming charge.......and a CNC shop will not consider making modifications to an existing part.

That's not reality.

 

[alek95]

^never heard of a single CNC shop that would touch a customer's NC program.

 

[LOTT]

^never heard of a single CNC shop that would touch a customer's NC program.

I'm thinking he means part drawings? As in otherwise you have to reverse engineer the part? @john.k would you actually run a customers program? That seems suicidal on a good day.

 

[pgmrmike]

There is a happy medium somewhere in between brand new all the time, and oil lamps. I know a guy that started a shop about 5yrs ago or so and is still struggling. He did everything as cheap as possible and is paying for it. Cheap old ( relatively ) cnc lathes and mill, cheapest tooling he could find etc. I cant tell you how many times they have broken down ( mostly haas ) and left him screwed. Low pay brings him the bottom of the barrel employees.

I buy used but excellent condition machines, sometimes used boring bars etc, but good tooling otherwise. No cheap carbide, no outdated tooling etc. We both serve the oil and gas industry primarily and my sales and profit ( excluding 1 yr during covid ) have increased every year. Not saying I dont have issues ( employees mostly ), but the difference is stark.

 

[M.B. Naegle]

....

I'll make a shop thread and post some better pictures when i get some shelfing on the walls and get all the random tools and stuff on the floor sorted up.....

Please do! I'm in the group that enjoys using old machines and tries to find excuses to keep them productive, but on my side of our modern world, I also see their drawbacks. I think someone making money with a line-shaft shop is fantastic!... but fantasy to most, so more pictures and documentation as your shop comes together will help.

I think the idea of living a comfortable life with less is of worth. Too often people equate more money with more comfort and better living. That IS how the world works today, but IMO it needs to change. That in no way means we need to go back to the stone age, but I don't agree with the mindset that throwing money at problems fixes them. With healthcare for example, I'm not 100% on board with government control and "free" healthcare because nothing is free in my experience, but I think the pricing for affordable AND modern health care needs work. I don't see the value in expensive cloths and cars for the sake of having them, but should those things vanish? No, but I don't see the logic in someone becoming a millionaire for designing fashionable shirts. IMO it's less of an economic or gvernment problem, and more of a moral/philosophical problem, and unfortinatly that makes it harder to change.

If you can honestly make this work, you are a minority, but I for one want to know how because I'm sure there's something for us to learn.

 

[Garwood]

Please do! I'm in the group that enjoys using old machines and tries to find excuses to keep them productive, but on my side of our modern world, I also see their drawbacks. I think someone making money with a line-shaft shop is fantastic!... but fantasy to most, so more pictures and documentation as your shop comes together will help.

I think the idea of living a comfortable life with less is of worth. Too often people equate more money with more comfort and better living. That IS how the world works today, but IMO it needs to change. That in no way means we need to go back to the stone age, but I don't agree with the mindset that throwing money at problems fixes them. With healthcare for example, I'm not 100% on board with government control and "free" healthcare because nothing is free in my experience, but I think the pricing for affordable AND modern health care needs work. I don't see the value in expensive cloths and cars for the sake of having them, but should those things vanish? No, but I don't see the logic in someone becoming a millionaire for designing fashionable shirts. IMO it's less of an economic or gvernment problem, and more of a moral/philosophical problem, and unfortinatly that makes it harder to change.

If you can honestly make this work, you are a minority, but I for one want to know how because I'm sure there's something for us to learn.

It would be interesting to see how the next 1000 years of human evolution (or regression?) goes. See if we can master automation and transition into a society focused on solving problems and happiness and if that causes us to devolve into WALL-E style Jello molds or if Idiocrasy takes hold.

Building a lineshaft shop seems destined to fail unless you have a trust fund or something to prop it up. That Sanderson video sure is neat. That looks like a decade of fulltime work to get that all setup and running like that. It doesn't add up to me that you could build that from what the business makes even if you are building $20,000 foot stools. It's neat to see, but it doesn't seem like it could be self supporting in any way.

I buy machines and tooling right and haven't financed anything to build my shop. I have some pretty nice stuff in a nice building with a bridge crane on my dirt and I bet I spent less building all of it than was spent to build that little Sanderson shop with lineshaft stuff.

I know a business that pays good wages for several employees and is entirely built around a 1980 Amada turret punch that isn't worth $500.

Stamping shops, screw machine shops, grinding shops- There are all kinds of ways you can make a really good living with low cost of entry machines including CNC's.

That's why I say there's tons of machines out there you can buy affordably to make a much better living than you ever could with lineshaft stuff. It makes zero sense.

 

[CarbideBob]

All depends on the work to be done.
Sometimes a manual is faster than a cnc from start to finish.
Simple face a small block. On a B-port I am done before you power up, zero return and set zeros on the cnc.
Sharpen a endmill or two on a Cinc 2 vs setting up the Walters? For sure at 20-50 endmills of the same size the Walter cnc wins.
When I got my first 3+2 we had a disagreement between me and the hot shot B-port guy making turn broach tooling blocks.
Complicated, over 80 different machining positions involved. Dad said "let's see what you both can do".
With computer, cad/cam and machine $180,000 vs $12,000 for the two pieces on the floor. (1980s dollars)
With cad time and all he smoked me on part number one and I was oh-poop, I smoked him when we got to 3 parts.
Lesson learned.
Cncs are great, manual machines have their place at the top of the totem pole also.
Bob

 

[LOTT]

All depends on the work to be done.
............
Lesson learned.
Cncs are great, manual machines have their place at the top of the totem pole also.
Bob

I think this discussion is not just manual vs CNC, I'd guess most all of us have and use at least some manual machines. It's using 100 year old manual machines that I think will gum up the works.

For instance- my knee mill has a variable speed head, so the speed get set appropriately. Our radial arm drill press has step pulleys, so it pretty much lives at low speed. Even if it's a small bit that could use more speed, for a couple holes no one bothers changing it. I know perfectly well that costs us time, we just ignore it because it doesn't see much use. Now multiply those little inconveniences across every machine, and it would be crushing.

In my opinion, of course.

 

[Garwood]

All depends on the work to be done.
Sometimes a manual is faster than a cnc from start to finish.
Simple face a small block. On a B-port I am done before you power up, zero return and set zeros on the cnc.
Sharpen a endmill or two on a Cinc 2 vs setting up the Walters? For sure at 20-50 endmills of the same size the Walter cnc wins.
When I got my first 3+2 we had a disagreement between me and the hot shot B-port guy making turn broach tooling blocks.
Complicated, over 80 different machining positions involved. Dad said "let's see what you both can do".
With computer, cad/cam and machine $180,000 vs $12,000 for the two pieces on the floor. (1980s dollars)
With cad time and all he smoked me on part number one and I was oh-poop, I smoked him when we got to 3 parts.
Lesson learned.
Cncs are great, manual machines have their place at the top of the totem pole also.
Bob

Bob, your $12k figure for the low cost method is still like 10x what the op is wanting to invest.

Could your go getter employee make the same part on a lineshaft shaper? Cuz that's what this guys planning to base his livelihood on.

 

[Freedommachine]

Last winter was just trying to protect the machines from the elements while taking them apart and overhauling them, and building the shop around them at the same time.

^^^ This would be YouTube gold. If you document your unconventional shop journey, you might have the rest of us paying for your new machines (and retirement) with ad revenue.

It sounds like the machine shop version of building an off grid cabin in the woods. I'd love to see how you get it done.

 

[EmGo]

For instance- my knee mill has a variable speed head, so the speed get set appropriately.

Oh good, something to argue about

I hate those things, will take the step pulley version any day. Faster to change speeds, faster to sweep the table, less weight when you swing the head over, lower to the ground (I'm not 7' tall), lower to change tools (ditto), quieter, better in almost every way since I very seldom care about the difference between 1200 rpm and 1250.

Step drives all the way !

(And the vfd crowd can go jump too :-))

 

[john.k]

You could also use the Mursk method.....fire half the workforce ,and make the rest work twice as hard ,for twice the hours ,save them money on their rent by chaining them to their desks ..........and if the are ungrateful ,replace them with computer brained monkeys ......ooops,thats supposed to be a secret for now.

 

[DDoug]

Bob, your $12k figure for the low cost method is still like 10x what the op is wanting to invest.

Could your go getter employee make the same part on a lineshaft shaper? Cuz that's what this guys planning to base his livelihood on.

You've got to chop the tree's down, haul them to the shop, split them, and fire the boiler as well.....
And we've got a few machines down for re-bababbiting, so pick up the pace.

 

[CarbideBob]

Bob, your $12k figure for the low cost method is still like 10x what the op is wanting to invest.

Could your go getter employee make the same part on a lineshaft shaper? Cuz that's what this guys planning to base his livelihood on.

It was just a comparison.
12K machine was an all brand new B-port, power feeds, power draw, .0001 readouts, six inch riser. rotary table and tri-vise.
So new manual vs new fancy cnc thing.
Shapers seem so old. There are many things they can do very well. I had no respect for these when younger.
I am a cnc guy. Computer nuttso perhaps too much at times.
Bob

 

[LOTT]

Oh good, something to argue about

I hate those things, will take the step pulley version any day. Faster to change speeds, faster to sweep the table, less weight when you swing the head over, lower to the ground (I'm not 7' tall), lower to change tools (ditto), quieter, better in almost every way since I very seldom care about the difference between 1200 rpm and 1250.

Step drives all the way !

(And the vfd crowd can go jump too :-))

It's an Ex-Cell-O, and apparently made for dwarves. Your complaints have no bearing here (babbit or otherwise).

 

[JH-Q]

I think what you are describing, while possible in Finland, is just science fiction to many US residents. 800 euros a month rent? in a city? I live near Seattle. Suitable machine shop space, with enough electricity to run a VMC, is in the range of 3000 to 10,000 dollars a month. Usually in the range of 40 dollars per square foot per year. So a very small shop, big enough for two machines, say, 1000 sq ft / 100sq mt, would be around 4000 dollars a month.
And monthly payments on machines- a midsized Haas would be running you more like 2500 to 3000 a month. Add a lathe.
My health insurance bill, PER MONTH, before I got old enough to go on medicare, was around $1400, with a 3000 dollar deductible.
Utilities- my minimum for water, power, gas, garbage, and phone, is easy $400, and in the city, more.
I would say your estimates of a monthly cost of running a machine shop in Finland are maybe a quarter, probably closer to 1/8, of what it would cost me to run a very humble cnc shop in the cheaper suburbs.
Yes, there are places in the USA where land is cheap, where you can buy old industrial buildings for very little.
But often, those places are 500, or 800, miles from where your customers would be. I know people who have amazing cheap buildings in rural eastern washington, or Idaho, but they are a day drive each way from viable customers for anything but machinery repair.

I know a few people who run lineshaft machine shops-
One built the shop while making his living as a pilot, guiding 500 foot ships thru tricky waters, a very good paying union job.
One runs a shop for a multimillionaire, who built his own private museum of obsolete technology in the middle of nowhere, because he wanted to.
One, who posts here sometimes, is more like you, although more a blacksmith than a machinist. he does paying commercial work with the shop. But its obvious he spent an enormous amount of time and money to build this shop. And he doesnt do job shop work there- he can afford the shop because he does high end, value added, ornamental work.
I think your strategy is viable for a few dozen shops in Europe and the USA, but as a widespread model for business, I sure dont see most people being able to make it work.

Whoah, those numbers sound extreme to me!
I did just check the current rental rates of workshop places around. ~880€ for 60m2, 15km from Helsinki downtown, next to a busy ring road. Or 445€ for a 83m2 space, 40km from Tampere (the manufacturing capital here)
All rental places have at least 16A 400v 3-phase wall sockets, but most have one 32A, which is enough to run a decent machining center and a turning center.

Bulletproof 90's japanese machining centers and turning centers (like Kitamura, Takamaz, Okuma, Nakamura etc.) can be had in the 10-15k€ price range.
Taiwanese are even cheaper, but as they age they have a lot of reliability issues. I have had one Argo and one Femco, and i was pulling my hair with them all the time. Changed to older japanese iron, and all my problems were solved.

Thanks for all the replies, i do read through them carefully this evening, now i have to hurry to fix a firewood conveyor for the farmer next door i promised to have a look at today. Likely to need some hammering, angle grinding an stick welding. Not exactly machining work, but he figured out i can make broken machines work and dull tools sharp.