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Small shop startup. / FIRST TIME POSTING :)

jacobkussery

Plastic
Joined
Jan 11, 2023
This is my first post here, but I am a long-time reader of the forum.
To cut to the chase, I am thinking of starting a small shop in my garage and taking work as it comes. Maybe I make some extra cash, maybe it turns into something bigger, or maybe it completely fails, who knows. I have a degree from a 2-year technical college in machine tool technology, 8 years industrial machining experience, and 2 years in machine tool sales (which is where I'm currently working)
My question to yall is
1. What is it like starting a new job shop in today's economy
2. What equipment would you choose to start with? (mill/lathe)
3. What are some of the things that are necessary to have when starting out.

Thanks Guys,
-Jacob
 
If you enjoy making things and you want to dabble in customer work, build the shop you want for your own purposes and have fun with it.

Make cool stuff, meet new people and work will head your way. There is an endless supply of work out there.

For example: repair parts for farmers, pins and bushings for hoes and skid steers, parts for some contraption the retired neighbor is building, lawn mower decks to weld up, U joints and hub bearings to replace, one time use custom tools, lots of stuff drawn on the back of a napkin, pulling tractor guys, experimental aircraft guys, golf courses, snow plowers, local winery, butcher, pizza shop and an endless supply of broken bolts stuck in a hole.

Once word gets around that you're the guy who can and will repair and replicate stuff, you will have as much as you want. Everything is one-off and all of your customers will want it done yesterday and cheap.

If you are looking to build and grow a successful and prosperous business, you need to know what type of customer and industry you plan to target and then build accordingly.

If you want to build a little machine shop to do whatever work comes through the door; there is nothing wrong with that. Honestly we need more job shops around who can and will support local economies.

You will work hard and you won't likely end up super wealthy. However, you will end up knowing A LOT of people and that brings a chance for new opportunities.

Little job shops that take on community work are also extremely resilient if the owner is half decent at managing finances, has no debt and owns their building.

In a worsening economy businesses tend to repair things rather than replace them. Even in a total economic collapse, the small job shop wins out as people look to repurpose items to meet their needs.

It all starts with defining an articulable vision for your future. Remove the "maybe"s from your post and you will have a target to aim at. Insert a few "I'm going to"s and you will have the beginning of a plan.
 
If you enjoy making things and you want to dabble in customer work, build the shop you want for your own purposes and have fun with it.

Make cool stuff, meet new people and work will head your way. There is an endless supply of work out there.

For example: repair parts for farmers, pins and bushings for hoes and skid steers, parts for some contraption the retired neighbor is building, lawn mower decks to weld up, U joints and hub bearings to replace, one time use custom tools, lots of stuff drawn on the back of a napkin, pulling tractor guys, experimental aircraft guys, golf courses, snow plowers, local winery, butcher, pizza shop and an endless supply of broken bolts stuck in a hole.

Once word gets around that you're the guy who can and will repair and replicate stuff, you will have as much as you want. Everything is one-off and all of your customers will want it done yesterday and cheap.

If you are looking to build and grow a successful and prosperous business, you need to know what type of customer and industry you plan to target and then build accordingly.

If you want to build a little machine shop to do whatever work comes through the door; there is nothing wrong with that. Honestly we need more job shops around who can and will support local economies.

You will work hard and you won't likely end up super wealthy. However, you will end up knowing A LOT of people and that brings a chance for new opportunities.

Little job shops that take on community work are also extremely resilient if the owner is half decent at managing finances, has no debt and owns their building.

In a worsening economy businesses tend to repair things rather than replace them. Even in a total economic collapse, the small job shop wins out as people look to repurpose items to meet their needs.

It all starts with defining an articulable vision for your future. Remove the "maybe"s from your post and you will have a target to aim at. Insert a few "I'm going to"s and you will have the beginning of a plan.
Thank you so much for your insight!
 
Sounds like you have a solid background to be able to own and run a shop.

Being in machine tool sales, you should already know who is busy in your region, and where all the work is at!

You can buy a brand-new VMC or turning center for what the nicer SUV's and pickup trucks are selling for these days.

Haas, Mazak, Doosan...lots of companies will lease you a brand new machine or two, with just good credit and a couple payments down. Use credit cards if you have to for tooling, supplies, and materials. Keep a cot at the shop, probably gonna need it every now and then...but that's fine.

Always under-promise, stand your ground with begging customers.

Don't work for individuals, everybody is too cheap and wants shit done for free. Unless you make and sell your own products, then you collect credit/debit card payment at the time of sale.

Work for companies, they understand what stuff costs and have money to pay. All will expect at least Net 30 (or longer) payment terms with you, it's standard business practice...

Larger machine shops can be good places to get work when starting out. Yes, they will offer you their "shit" jobs for "little" money, but after a few successful deliveries they will realize your capabilities, and you should be able to make a decent shop rate working for them over time. If not, fire them and try other big shops. Never burn bridges!

If you want the dream, you have two choices: make it happen, or keep dreaming.

ToolCat
 
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Don't work for individuals, everybody is too cheap and wants shit done for free. Unless you make and sell your own products, then you collect credit/debit card payment at the time of sale.

Work for companies, they understand what stuff costs and have money to pay. All will expect at least Net 30 (or longer) payment terms with you, it's standard business practice...

Larger machine shops can be good places to get work when starting out. Yes, they will offer you their "shit" jobs for "little" money, but after a few successful deliveries they will realize your capabilities, and you should be able to make a decent shop rate working for them over time. If not, fire them and try other big shops. Never burn bridges!

Tool cat,

The "buy machines and get work from larger shops" method is often given here on PM but rarely does anyone explain  how to do it.

For example; How does one actually approach a large company in a manner that will convince them to give you their work and enough work to cover your machine payments, buy tooling, stay alive ect?

If you need work to pay for new machines, tooling and support equipment but you do not know what that work is yet, how can you justify hitting up doosan for a $100k machining center?

Let's say we lease the machine and drain our savings on installation, tool holders, all of the oils and coolant, an air compressor, a bench, a PC for card/cam and all of the other things needed to run the job.

Now, we find a large shop that says; "Yes, Please take some of this 4 axis milling off our hands!"

But we don't have a 4th axis and this machine isn't set up for it. Call Doosan and they say $10k and 4 weeks out but the machine payment is due in 3 weeks and we're broke.

What then?

You have been at this much longer than I have and you've been successful doing it. I assume that I am just not seeing the whole picture here.

To me, skimming work from large shops is akin to water skiing. If everything goes just right; the rope you're holding and the boat pulling it will bring you right up on the waters surface. You feel on top of the world as you haul ass across the rippled surface but you are always one wrong move away from taking a 40mph faceplant and having that rope ripped right outta your hands.

Buying cheaper machines with cash is much safer. Starting with a plethora of small customers who are not necessarily in manufacturing is also safer and brings rewards that otherwise wouldn't happen.

For example; let's say a guy spends a few years collecting a customer base of local businesses and buying equipment from auctions with cash.

One day a customer comes in with a broken part off his 'ditch digger 200' and says; "Can you make me a new one? The manufacturer discontinued support for this machine, no one in the country has this part and it's already broken or missing from every parts donor machine. There is a used one on eBay for $2k but even then, it's only a matter of time until that one would also break."

You agree to make the part and you make it from steel instead of cast, thus solving the problem for good. Now you make 10 more @ 4 hours per piece and throw them on eBay for $1500 each with free 3-day shipping and a money back guarantee. When you run low, just make more and keep restocking. 😎

Next example; the local bakery brings you their 'dough squeezer 3000' with a cracked frame, bent shaft and shattered sintered metal gears and asks you to repair it.

Come to find out, dough squeezers are stupid expensive and only made by a handful of companies. One of which (the dough squeezer 3000) is newer to the market and 40% cheaper than the big brand names so everyone begins buying them.

You repair the machine and "bulletproof" it to prevent it from grenading itself again. After seeing the crap quality of the parts, you decide to advertise a repair service for this machine.

6 months go by and you get a call from John Doe, the owner of dough squeezer international. Turns out, he is just a salesman who broke out on his own selling cheap imported machines, which are now all failing the exact same way. Hearing about your work, he asks if you would be interested in becoming the official warranty center for all dough squeezer products.

Things like this happen all of the time. Many people just leave the money on the table and move onto the next job. Why? I really don't know. It is easier to advertise and sell today than ever before in the history of mankind.

Dirt work contractors and bakers don't know anything about what we do. They won't try to undercut you or take your customers and they aren't trying to make a profit off your direct labor.

Deliver a pallet of parts to "the large shop" and they reward you with an email from accounting letting you know that they are now net 60 with you and your $38,000 check won't be arriving on time.

Weld up some garbage for the local farmer and he'll spend the next 3 McDonald's morning meetings telling everyone how great you are.

Make name placards for the bank, weld repair sewer flange gasket surfaces for the town and a water pump block-off plate for the mayor's race car... Your name will be everywhere in a week.

To make a very long story short, trying to jump on and ride the coat tails of a single 'someone bigger' means they decide if you win or lose. Building your own ground-up network, customer base and revenue streams will get you rooted so deep that not even the IRS could prevent you from earning income.
 
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Ditto on the big shop stuff. Big orders, consistent stuff often, yeah technically less gross dollars per hour but if you have no machine payments, relatively low rent, are only buying tools as you need them, and no employees, you can take 70%+ of the money flowing through the business.

Small thing as an aside: I started with a Haas toolroom mill. No toolchanger, 4k rpm max speed. Billed it out at $50/hr. Once I got comfortable and could estimate how long jobs took me pretty reliably, I bumped it to $65. At $70, my main customers started saying "no too expensive".

$65 is not a lot. Except, I have a great deal paying only $450/mo rent for a little corner in a warehouse, no employees, no machine payments (paid $10k cash), buying only material and tooling as I needed them. That mean that often only 10% of gross income had to go to expenses. Add in a steady stream of emergency "we need these yesterday" jobs with a 30% markup and that gets cushy quick. 200 hours maximum of billable time and that $10k was made back. I was "undercutting", but only really because the machine was slow and so was I, both at getting new work and completing it.

It's all relative: previous to buying that dinky machine, I was making $21.50 at a local job shop. $50 is nicer.
Now I've bought a second machine that I'm running at about $100, experimenting with bumping it up more. Same customers mostly, but as they like me more and send me more, now I can take on more. And I can do it on the new machine in about half the time as the old one so therefore the shop rate is better on my end but they don't see a price jump in quotes.

I'm well insulated in case of customer loss, no new business, machine breakdown, whatever. If you don't do debt early on, the "crappy" jobs bring in a lot more money.
 
I do this right now. I bought a Brother Speedio 700X2 last year brand new. I have one mill and probably make enough to support myself, but I also have a day job. So a lot of it gravy, but I invest a lot of that back into my shop. Tooling, support equipment, storage, etc. I have no problem making the machine payment, but it's taken a few years to get to this point. I live in SoCal, so some things are a little skewed compared to where a lot of other people may be. I ship quite a bit of my work and have customers all over the US, but I also do a fair amount of local stuff. Work typically comes to me. I started on a cheap, old drill/tap similar to my Brother, but then bought a Fadal 3016 in between. I've never work in a shop, was never around machine tools and knew zero CAD/CAM when I started.

If I knew all that then, I would 100% buy a new or newer machine. Contrary to what gets posted/shown off/etc, the vast majority of parts that people need made are not that complicated. Can you make way better money doing high end work or specific things? Of course. But there's a running joke on Instagram of 'blocks with holes'. The majority of crap people want made are some version of a block with holes. I do all mill work right now. I do have a Monarch 10EE that I do some small stuff on, but it's mainly because I love it. I don't love standing at it to run production. I just use it for things here and there.

Get out. Talk to people. Make friends. Be the guy where you name comes up that anyone that knows you will say "I know a guy". You will get a lot of stupid requests about making stuff people can buy off the shelf for $10. You can't dwell on it or get pissed, it comes with the territory. But you will also start to get some gems the longer you do it. I started small, just making stupid stuff of my own and learning how everything worked. I got better and faster and learned more and keep trying to learn more. Word spreads. Do good work, trying to hold your word and deliver on time and you will be ok.

You can also make your own things. There are quite a few guys, a lot I know personally, that make things like knives, prybars, tools, golf stuff, etc. Anything you can think of. Point is, there's lots of markets and it doesn't take a lot of resources to put out a good amount of volume and carve out a niche for yourself. New machines, controls, automation, etc, are making it even easier for small shops to compete.

If it's something you do and enjoy, you can make it work. Sometimes it's a grind. You have to get a lot of shit done that you don't want to do, especially starting out. But if you just go for it and don't quit, you can make your own way. The beauty of the internet is you can basically advertise for mostly free and people from Australia can find you and buy your stuff if they want to.
 
I started with one off maintenance type work.......every factory has a maintenance mechanic ...this is the person to see .......no use appointments with purchasing officers ......look for the maintenance guy with his own order book.
 
Start selling machine Tooling to guys in here and you will open a lot of doors you didn't know existed .. good tool guys are hard to find and you will see what others are doing and get even more ideas.
 
For sure....buy and sell machines ,fix them when you have no work.........if you are a CNC repair whiz ,there is always a big opportunity in this field .....and you dont need anything like the initial outlay that an eqipped machine shop requires.....And finally,be versatile .......if you have no work over christmas /new year break ,as is common,take an hourly rate job on a maintenance team for the holidays......you can often get $100 /hr on these kinds of jobs.,often a cash bonus at the end ,too.
 
When I started out I had a Colchester lathe and a mill along with various support equipment, DP, etc. Never worked as a machinist, only self taught on my own equipment. I had my best luck going where the work was, that was smallish machine shops who had nuisance jobs they didn't want to do themselves.

Most of the shops were still run by their founders. They were sympathetic to me as a start up like they'd been years before. Over time I got better work. One shop gave me a couple direct customers who kickstarted me with enough work I could afford CNC's to pursue the type work I wanted. Once I had the CNC's that opened the floodgates to work since in 1985 not many one man shops had CNC.

Never had any luck with larger companies at the start because I didn't have work experience in the field or references to fall back on.
 
Possibly a risk of being fired,but most salespeople can find super good deals in used machines and tooling ...however ,if all the trade ins start being junk ,your bosses will notice there have been no gimme's in a while ,and start wondering why............actually they will know why,and be trying to 'catch you at it'
 








 
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