A lot of fabricators have the dream of opening up their own machine shop at some point or another. But starting a machine shop isn’t easy and there are many pitfalls that can hamper your odds of success.
Fortunately, as long as you’re prepared, you should be able to open up a machine shop without too much trouble.
Keep reading and you’ll learn everything you need to know about starting a profitable machine shop. Make use of the tips in this post and it won’t be long before you’re the proud owner of a successful machine shop.
Let’s begin!
Figure out Your Finances
A machine shop business often demands that you invest in some machinery to help you complete your work. This machinery can be quite expensive. If you don’t plan out your finances properly, you might not be able to pay for the other things your business requires.
You want to think about exactly what you need to buy for your machine shop. You also want to put some thought into how much each of these items is going to cost. You’ll then have a rough figure you can work with.
It’s worth mentioning that you can take a variety of approaches when investing in equipment for your machine shop. There’s the obvious option of buying equipment brand new. This is going to be the most expensive, of course.
But there’s also the option of buying second-hand equipment.
This approach can work quite well if you know how to check machinery for faults. As long as you can inspect the machinery ahead of time, you should be able to avoid investing in some low-quality equipment. If you’d like to find some equipment used machining equipment, you can check out this website.
You may even want to look into the option of leasing equipment. If you’re going to lease, make sure you know what the terms and conditions are. This’ll help you avoid any unexpected interest costs, for instance.
You should also consider the cost of renting the premises for your shop. Odds are you’re not going to run the shop out of your garage. You need to take a look at various locations and see if you can find out what the average cost is going to be.
Concentrate on Marketing
Your ability to market your machine shop can mean the difference between success and failure.
If you want to do a really good job with your marketing, you need to develop a strong sense of what potential customers want. You can then mention such ‘wants’ in your promotional efforts.
For instance, it may be the case that customers want a fast turnaround time. You need to do some research and find out what determines a fast turnaround time for a machine shop and whether you can deliver this. If you can, think about mentioning this in your marketing.
You also want to consider what customers of a machine shop might want from such a business. If they need help with high precision tasks, you could mention that you have a CNC machine. You can then describe the benefits of this machine and what it can do for them.
It’s also a good idea to think about what might happen if something goes wrong. This is so that you can provide potential customers with some level of reassurance.
They may have already worked with a past machine shop that has provided them with a bad service. The customer probably lost money because the product was of a low standard. You could reassure potential customers, and tell them you’ll offer a guarantee so they only pay for items they’re happy with.
Keep a Close Eye on Your Accounts
If you’re not closely watching the numbers of your business, you can easily fall into some serious trouble. You need to make sure that there is ample cash in the bank and that cash flow is looking healthy.
If there are customers that are yet to pay their invoices, make sure you chase them up. If you’re doing a lot of this manually, you might want to take a look at how you can set up an automated system to take care of this for you.
You might also want to review the contracts you have with suppliers from time to time. Consider asking them if they’d be able to provide a lower price. Or, think about finding other suppliers that are cheaper.
If you’re thinking about hiring someone, be certain your business can handle this extra employee. Though it can be exciting to hire someone, you don’t want to hire someone before your business is ready. Doing so can mean that you have less money available for aspects parts of your business.
If you need some help assessing the numbers of your business, think about investing in the services of an accountant.
If you can, try to find an accountant that has other machine shop clients. Such an accountant will have a better understanding of your industry and so they’ll be able to provide better advice.
A specialist accountant will likely cost you more than average. But it’s worth it if they can later provide tips on how to cut certain expenses, especially if these tips ensure your business lives to fight another day.
Know Everything You Need to Know About Starting a Machine Shop?
Starting a machine shop can be a great way for a fabricator to strike out on their own. But if you don’t have much business experience, the thought of doing this might intimidate you.
In this post, we’ve taken a look at some of the things you can do to improve your odds of success. You need to focus on your finances so you what your startup costs are. You also want to make sure you’re aware of how to market the machine shop.
Sure, this process can be scary. But if you take action, it won’t be long before you’re opening up your second machine shop.
Thinking about finding investors for your business? Check out this post to learn how you can find angel investors.