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Thinking about opening a shop!!!

No loans, I own all equipment, no debt. The last thing North America needs is another job shop. Cost of consumables and tooling takes a significant portion of revenue. Revenue that will not be consistent.
I'm not sure you are right about the Another Job Shop in North America! The more job shops there is the more of them will grow into a Manufacturers of products MADE IN USA.
I met a guy last summer during a vacation trip. He worked for a company that did some kind of assemblies, and during the assembly process some kind of a special Brass pin had to be used. They always had a hard time getting those pins, and their quality was crap. So he bought a Table Top lathe, and started making those pins at home when company needed them in a pinch. Then he got a bigger lathe and became a sole supplier of those pins. Unfortunately company got sold, and new owners moved down to Mexico, and he was left Jobless, but had a lathe. He added a small Mill and did bunch of one of jobs, until one day, somehow he got a contract to supply X amount of parts per month to a some company, that wanted to get away from a supplier in china. 3 years later he has 25 lathe and 5 mills 15 employees, and successfully stole roughly 20 different contracts from Chinese suppliers. Of Course I don't know how much of it all true, of what he told me, I don't know him from a hole in a wall. But it's a pretty inspirational story in my opinion of Products Made in USA
 
As a small startup you find it locally. But, that brings up the question, is there work locally? Are there lots of manufacturing and smalls startups in your area?

Cash is tight, that's not a good sign, in fact it's awful.. Think about it, that will likely have a major effect on your ability to borrow or a home equity loan. Lenders will be most concerned about your ability to repay the loans. And a machine shop startup won't give lenders a whole lot of confidence. Go talk with some lenders to see what they have to say about lending you money.

Statistically the odds are way against you.

Save your money, buy a machine or two for cash and operate on the side keeping your day job.
Believe me I know that being short on cash isn't good. In last few years I put in about $40k into the house, all cash, no loans, or CC. Plus My wife started a business last year that took a big bite on our cash Stack, some CCs maxed out, and had to take few Loans out. But it all worth it, Her business is doing very well, and I think in another year it will pay itself off. And that's roughly when I plan to go big about my own business. My odds will be much better then. For now I want to get educated about everything as much as I can.
The more I read on around here, the more I'm leaning towards going No Debt into it. Which will mean starting smaller, but way less risk.
In terms of finding work locally, I don't think it will be much of an issue, there's a ton of manufacturing around me. Not sure about small start ups though.
 
Do it on the side until you can't.

If cash is tight right now just wait until you don't have a steady income. Find a way to not take on debt to make it happen. I think things could get unstable in a hurry and you'll feel pretty dumb if you bet your house on a business that doesn't have any customers.

I haven't had to find a new customer in a long time and I wouldn't want to have to right now, and I'm fully established.
Totally agree, i cant risk it all for a business that has no business!!!
 
If you're running a one man shop you can really get away with a lot less power than you might think.

More is better, of course, but one 30A circuit can run a 7.5HP rpc, that will allow you to run at least one machine at a time. That will even allow for small CNCs, although you have to watch and be careful of your power budget.

If you're in a real pinch you can borrow the drier circuit. I think there are a couple stories here by people who started that way.

At this stage you want to avoid any unnecessary overhead until you line up some steady work. Rent on a building with no customers will get very stressful very fast.
 
I'm not sure you are right about the Another Job Shop in North America! The more job shops there is the more of them will grow into a Manufacturers of products MADE IN USA.
I met a guy last summer during a vacation trip. He worked for a company that did some kind of assemblies, and during the assembly process some kind of a special Brass pin had to be used. They always had a hard time getting those pins, and their quality was crap. So he bought a Table Top lathe, and started making those pins at home when company needed them in a pinch. Then he got a bigger lathe and became a sole supplier of those pins. Unfortunately company got sold, and new owners moved down to Mexico, and he was left Jobless, but had a lathe. He added a small Mill and did bunch of one of jobs, until one day, somehow he got a contract to supply X amount of parts per month to a some company, that wanted to get away from a supplier in china. 3 years later he has 25 lathe and 5 mills 15 employees, and successfully stole roughly 20 different contracts from Chinese suppliers. Of Course I don't know how much of it all true, of what he told me, I don't know him from a hole in a wall. But it's a pretty inspirational story in my opinion of Products Made in USA

No. Listen, I have been making things in the USA for 20 years.

A job shop is a commodity. As a commodity, you compete against other commodities. Commodity pricing is global, minus the cost of oversight and freight. That's just the way it is. So if you open a "job shop" blind, you WILL be competing with shops in India and Vietnam. I'd say China, but the consensus in China is that manufacturing is getting too expensive there, a machinist there is making as much as $5-$10 an hour if they are good, so the laobans are all trying to move operations to lower cost countries.

Now, can you make that equation work? Maybe, but you're living within the envelope of "minus the cost of oversight and freight." So for customers who are too small to provide good oversight of a farther away shop, sure. But they're gonna be pretty small customers. "Minus the cost of freight" is why some things, like refrigerators are still made here. You don't get many fridges in a shipping container, so that gives some breathing room too.

Don't try to be a commodity producer in a place with an incredibly high cost of doing business. You will lose your shirt. Mathematically guaranteed. You have to add enough value to every customer to be worth the extra cost.

Maybe you have some greater market insight. The commodity players can only play the knockoff game, because they don't have the budget or connections to innovate. Plus, why take the risk? Copy what is already selling and so it cheaper.

Maybe you have some greater skill. Don't assume as much, I have seen shops out of this country that do work that would absolutely dazzle you. But you could, or you could develop it.

Maybe you can find a niche that is big enough for one player, but too small for two to survive in. That can be sustainable for quite a while.

Maybe you are connected to a community and can leverage that for products that are what that community actually needs. Developing across cultural barriers for smallish subgroups is hard. It would take me a ton of time to understand the needs of Mongolian weavers. It would take a Mongolian me a ton of time to understand the needs of an American ultrarunner, or whatever. I suspect most products that do well for civil war reenactors or bdsm enthusiasts or preppers come from within those communities, and efforts from outsiders to move in come across as inauthentic. Do you have anything like that you can leverage?

Maybe you have social connections that you can leverage.

Maybe you're willing to do work that other people aren't. Parts for, for example, light aircraft are incredibly tough to get into because of the FAA, but all the parts in a Cessna are pretty simple mechanically. So if you love paperwork, there's probably money in it.

But don't delude yourself that if you build it, they will come. Because if you're a commodity, I hope you can live on $5 an hour, and have the really nice machines that the $5 an hour shops in the rest of the world do.
 
I work at home with a 200 amp service with no issues, but the demand on that service adds up to way more than 200 amps. All in amps, 110 heatpump, 30 dryer, 40 water heater, 30 well pump, 70 to shop for a Brother and Kitamura drill tap mills, 5hp compressor, electric heat, plus normal house needs. I have never thrown a breaker.

I think in general the cheaper you start the slower you start but you have to pay the bills. I started out too cheap and it really hamstrung me. Things didn't start working out until I started making my own products. Keep in mind getting a product ready to sell is less than half the work but it is real nice to have them sell themselves on your website and all you have to do is ship.
 
I'm a one man job shop. All of my customers are small OEM's. They don't buy much in the way of machined parts so none of the bigger shops around here will deal with them.
Their qty's are also in the 1-25 pc range so the bigger shops aren't interested in that either. They would rather have higher qty stuff that can keep operators busy for days at a time.

My value added (if you can call it that) is that when they call or email they reach the guy who can make things happen. I have an order that's not due til beginning of Feb. Engineer emailed and asked how soon I could have a 1pc item because they need it for a project they are working on. I said how about Fri? He was thrilled.

I only run at about 50-60% capacity but my prices are such that I average over $100/hr for every hour I spend in the building. Not just $100/hr on the machines.
 
I work at home with a 200 amp service with no issues, but the demand on that service adds up to way more than 200 amps. All in amps, 110 heatpump, 30 dryer, 40 water heater, 30 well pump, 70 to shop for a Brother and Kitamura drill tap mills, 5hp compressor, electric heat, plus normal house needs. I have never thrown a breaker.

I think in general the cheaper you start the slower you start but you have to pay the bills. I started out too cheap and it really hamstrung me. Things didn't start working out until I started making my own products. Keep in mind getting a product ready to sell is less than half the work but it is real nice to have them sell themselves on your website and all you have to do is ship.
That's what I have a 200 AMP service. Had to switch to it when added a Split system in a house and a HotTub. I think hot tub will be my killer here for available amperage.
 
I think hot tub will be my killer here for available amperage.
Turn it off when you need to. My heat pump uses 90 amps for the strip heaters every time it defrosts, which is every 45 minutes. If I ever need more power that is something I can turn off. I probably have 350 amps of breakers in my 200 amp panel. The two things I love most about working from home is the 20 foot commute and if things get really slow my landlord won't freak out if I can't pay the rent or utilities for a few months.
 
I'm afraid I'll have to go renting a shop space route. I don't think I'll be able to get much power from what I have for electrical in my house, but electrician will tell me. Maybe I'm wrong.

Start in your own place, develop a product and try to sell it. Do not try to think it through from beginning to end; just do this:

Choose a market that you have some knowledge about, or would like to. Identify the customer base and find out where they gather to discuss things on the interwebs. Join in, make yourself somewhat known within that community. Offer advice and assistance, show some of your work - become the guy who people say; "oh, yeah I saw that thing he made, that guy does nice work".

After awhile you begin to see what products fit in the market that you are trying to service and things come more naturally. The name recognition you build for yourself will do a lot to sell your products. Without that, you're just another no-name guy showing up to peddle his wares.

Another option is to market solutions for problems that you've solved for yourself.

For example:
I need a small, table top weld positioner; I go on scAmazon expecting to find what I need but it doesn't exist, now I'm forced to build one.

The plan was to build one for the shop but it's actually turning out to be pretty good - in solidworks at least. The design is simple so I have been modeling it as I go.

If it functions as expected, it would be very easy for me to make hundreds of them with a retail price of $300ish. If I wanted to sub out the machine work and just handle quality, assembly, marketing, sales and customer support; I could find every type of vendor needed, right here on PM.

One man can only do so much work, you've got to delegate if you want to get anything done.

You make less profit per sale by subbing out but the system that you build becomes almost self-sustaining. All you have to do is send a P.O. and wait for the parts to arrive - this means that you have more time to develop more products.

You need product(s) because sales are never guaranteed to last. If you build a business around 2 or 3 products and they quit selling - or China rips off your design - then you're in a bad spot.

If you have 20 products and 3 fall off, you will have time to develop 3 more without running out of money. Everyone who makes their own product has a list of new product ideas; some good, some terrible but if you think it, put it on the list for future review. It may be terrible now, but it could lead to a great idea later.
 
Start in your own place, develop a product and try to sell it. Do not try to think it through from beginning to end; just do this:

Choose a market that you have some knowledge about, or would like to. Identify the customer base and find out where they gather to discuss things on the interwebs. Join in, make yourself somewhat known within that community. Offer advice and assistance, show some of your work - become the guy who people say; "oh, yeah I saw that thing he made, that guy does nice work".

After awhile you begin to see what products fit in the market that you are trying to service and things come more naturally. The name recognition you build for yourself will do a lot to sell your products. Without that, you're just another no-name guy showing up to peddle his wares.

Another option is to market solutions for problems that you've solved for yourself.

For example:
I need a small, table top weld positioner; I go on scAmazon expecting to find what I need but it doesn't exist, now I'm forced to build one.

The plan was to build one for the shop but it's actually turning out to be pretty good - in solidworks at least. The design is simple so I have been modeling it as I go.

If it functions as expected, it would be very easy for me to make hundreds of them with a retail price of $300ish. If I wanted to sub out the machine work and just handle quality, assembly, marketing, sales and customer support; I could find every type of vendor needed, right here on PM.

One man can only do so much work, you've got to delegate if you want to get anything done.

You make less profit per sale by subbing out but the system that you build becomes almost self-sustaining. All you have to do is send a P.O. and wait for the parts to arrive - this means that you have more time to develop more products.

You need product(s) because sales are never guaranteed to last. If you build a business around 2 or 3 products and they quit selling - or China rips off your design - then you're in a bad spot.

If you have 20 products and 3 fall off, you will have time to develop 3 more without running out of money. Everyone who makes their own product has a list of new product ideas; some good, some terrible but if you think it, put it on the list for future review. It may be terrible now, but it could lead to a great idea later.

A friend makes the Roto-Star positioners here in Oregon. They used to be under $300. I think he had to use top shelf motors, controllers and brushes to get them in the industrial markets and those make up the majority of the cost of the product. If you can use a car window motor and a harbor freight grinder motor brush set you can probably do well with it.
 
A friend makes the Roto-Star positioners here in Oregon. They used to be under $300. I think he had to use top shelf motors, controllers and brushes to get them in the industrial markets and those make up the majority of the cost of the product. If you can use a car window motor and a harbor freight grinder motor brush set you can probably do well with it.

I found this nifty little set up.

We'll see how well it works. The whole positioner is fairly small, it is designed for light items under 4" diameter. It is about the size of a hot plate cooker as opposed to the big, gaudy looking positioners that are the size of an indexing head.

I'm not looking to revolutionize the weld positioner industry, but you know how it goes; if I'm going through the process of designing something, I will always entertain the idea of adding it to my inventory.
 
I started my shop in the mid 80's (folded 2010'). I rented a nice little 1K foot shop (in Ca. LA.) for about 600. a month. (I wonder what it would cost now). My thought was always to come up with a product . I came up with a few , never did get anywhere with that . At the time I was racing a formula car (FA SCCA) I was making parts related to that . Not enough volume . Next product was a pulley for a sailboat , a wood shell bolck for a vintage type sailboat . My wife told me don't do it we will get sued . Of course I went ahead with it anyway . Made a catalog and placed ads in mags. I started selling a few but there was basically no profit . One day I was looking through a sailing mag and was reading about a large old wood sailboat , a Gaffer , that I thought I sold blocks to . I turn the page and I'm reading that a block failed and the rig came down . I kept reading , it wasn't me , and yes that person got sued . I folded that operation immediately . That was in the mid 90's and that was the end of me tiring to make a product .
 
This.

As a one man job shop your main jobs are Saleman and Office Admin.
As a one man shop I don't agree with this. I spend more time programming and machining than anything. Doing the "office" side of things, accounting, sending invoices, etc. is very simple and quick if you know what you are doing. I do my own accounting in QB and it's fully automated, I spend maybe 20 - 30 minutes in QB a week, that includes sending invoices and creating PO's. Sales now a day is sending emails, I have never physically door knocked or shown up. I have actually only met one of my customers face to face.

I'm afraid I'll have to go renting a shop space route. I don't think I'll be able to get much power from what I have for electrical in my house, but electrician will tell me. Maybe I'm wrong.
I have 200 amp service at my shop and run a 30 HP Rotary Phase Converter that powers two vertical mills, a horizontal with a 6 station pallet pool with no issues.

Are you good with people?
My two biggest customers that keep me plenty busy, I have never met a single person face to face, everything has been via email, they have never visited my shop nor have I visited their facility.
 
if I'm going through the process of designing something, I will always entertain the idea of adding it to my inventory.
That is where I am at with some vises. I always wanted something that didn't exist so I finally designed it, made some, used them, and made a bunch of little changes. I love them and am now making a 12' bars worth of each size, which gives me some for myself and some to sell. If they sell I will have a few new products in a new sector. If not I will be well stocked in small double station production vises that I will be needing for the next products on my long list.
 
As a one man shop I don't agree with this. I spend more time programming and machining than anything. Doing the "office" side of things, accounting, sending invoices, etc. is very simple and quick if you know what you are doing. I do my own accounting in QB and it's fully automated, I spend maybe 20 - 30 minutes in QB a week, that includes sending invoices and creating PO's. Sales now a day is sending emails, I have never physically door knocked or shown up. I have actually only met one of my customers face to face.


I have 200 amp service at my shop and run a 30 HP Rotary Phase Converter that powers two vertical mills, a horizontal with a 6 station pallet pool with no issues.


My two biggest customers that keep me plenty busy, I have never met a single person face to face, everything has been via email, they have never visited my shop nor have I visited their facility.
Agree,
Everyone is different, some drastically.

I do about the same for office stuff, I run around machines all day like Forust Gump.

I started with a house garage (600sq ft.) with 100 amps service, changed it to 200 amps($3500), threw in 2 Haas MiniMills, off I went.

Depending on your area (not talking out in the boonies) you usually can get up to 400 amp service panel.

I was told if I wanted over 200, they would need to change things down stream, transformer probably, and I would have to pay for that.
They said I could get 3 phase ran from across a 3-4 lane road but it would be a lot of money(underground).
Didn't matter, didn't need it.
 
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here's a ton of manufacturing around me.
If that's true, and you're good with people like you say, you're losing money every day you don't have a couple of machines in your garage.

A 200A 208/240 home system is enough to feed a RPC or Phase-Perfect, and you're off and running.

You can run a VF-1 or Brother, along with a small 6-8" chuck turning center, saw, air compressor. The electrician will tell you that you can't, but that's whey you're here on PM.

Not sure about small start ups though.

In my greater region, I can't remember the last time a new machine shop opened up. A couple opened in the 2000's, but that's been decades.

Regardless, there's plenty of work to go around in the U.S. Prices can be cheap on commodity-level machining work, but that's just how it is. Everything in capitalism is bloody competitive!

All it takes is one or two good customers to get a good start. Especially since you can focus on their work, they will be thrilled to get quick turnarounds.

Make a list of potential customers in your region you will visit and ask for a chance to bid on work. Then as you get close to getting going, go see them, see what kind of help they may need. Don't just ask for work, ask how you can help solve an issue or make something easier for them.

ToolCat
 
That is where I am at with some vises. I always wanted something that didn't exist so I finally designed it, made some, used them, and made a bunch of little changes. I love them and am now making a 12' bars worth of each size, which gives me some for myself and some to sell. If they sell I will have a few new products in a new sector. If not I will be well stocked in small double station production vises that I will be needing for the next products on my long list.

Nice! Shoot me a pm whenever you have them ready. I will be needing 2 double station vises for my vmc in a few months.
 








 
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