I would like some opinions please

[wsuwrhr]

Advise, ideas, help, criticism needed.
I know some of you operate your own businesses, or run them for other people. I would like your help.
As most of you know I operate a small machine shop of my own as a side business. I machine proprietary parts for businesses, my own parts for sale, and custom parts on occasion. I have been operating at this scale for a few years now.
I am getting behinder by the day, and more jobs are piling in. I have been in this business long enough to know that it is feast or famine. When it rains it pours. I am getting to the point where I am finally dreaming of making a living out of my side business.
I am employed as a toolmaker and I make a decent wage, which is part of the problem. It is so hard to walk away from a good job for me. I am sure I don't have as many liabilities as some of you out there, but I am worried about what will happen if it doesn't pay enough to stay afloat. Good paying manufacturing jobs are hard to find. What I am getting at is I doubt they will hire me back. It is pretty much sink or swim.
So I was wondering if anyone wants to share their stories of how their business started up. Big/small whatever. Maybe even a few of you that do machining/manufacturing.
Post here if you would, or PM me with any help or advise you have.
I would really apprieciate it.
Brian

[TCHB]

I have a good friend that just closed up a large machine shop becuase of cash flow. He was doing aerospace work here in Orange County. If you would like to talk to him PM me and I will give you his email.

[Moneypitt]

Brian, I know all too well what you're talking about. That regular paycheck from a regular job is real hard to walk away from. I don't have the answers, nor any educated advise, other than to say that most of us, myself included, are too busy earning a living to make any money. It's a tough step to take, ask about burning your bridges at work, they may not have a problem with the re hire deal if the grass turns out to be painted green........Ray

[Lake Pirate]

Dreams don't come without risk. I have pursued every dream I have had. Some have failed. Some were very successful. All were worth it because with failure came experience and even more ambition. Only you can answer the question you pose. There is value in it for you whether you fail or succeed. The question is... can you handle failure?

[wsuwrhr]

Originally posted by Moneypitt
Brian, I know all too well what you're talking about. That regular paycheck from a regular job is real hard to walk away from. I don't have the answers, nor any educated advise, other than to say that most of us, myself included, are too busy earning a living to make any money. It's a tough step to take, ask about burning your bridges at work, they may not have a problem with the re hire deal if the grass turns out to be painted green........Ray
I know they won't hire me back.
Brian

[Mandelon]

I would talk with your boss or the owner and see what they say. If you are as good as you indicate they would more than likely hire you back in a heartbeat. Good employees are hard to find. I have had a few guys try it on their own, a couple are still doing business and I send them referrals that don't fit my business. A couple of others I have hired back happily when their plans did not go as well as they had hoped.
The first months, years even, are filled with stressful days and nights......will there be enough work, or how can I do all this work??!!
It is hard, but satisfying. It costs a lot too, if you will be hiring employees.....
When I first started, my biggest customer was my old boss......he was sad to see me quit, but understood my need to go on my own. He was happy to have someone he could trust to complete the work needed.

[Infomaniac]

I was told by a pretty wise man recently that those decisons are generally made by themselves. Something will happen that will make the decision for you or will make the decison much easier or obvious.
Keep going as is until that happens.
I am in the same position as you.

[lovemyultra]

Brian
Well I have this to say you have the ethic and quality to go on your own the work you did for me was simple yet second to none and done when you said it wouls be ,those two items are very important and I hope you do excellent which ever way you decide to go
GOOD LUCK DJ

[Mandelon]

Maybe you should go into business with RD.....just don't let him have a computer...LOL :D

[clownpuncher]

Lot's of things to consider. LP has some good points too
I have a friend that worked for a tree trimming/removal compnay years ago. Made good money too. He always wanted to have his own landscape company, but, like you, he was always a little hesitant at losing the "regular paycheck".
What he did was very simple and you can apply some of these principles to your situation.
My friend decided to go into business for himself, but, only part time. Keeping his bread and butter job, he worked side jobs as often as he could, eventually building a pretty solid clientele. There were times when he wanted to quit his original job but he didn't make the same money on side jobs and couldn't afford to go out on his own without serious financial risk.
He made a decision. That decision was very simple once he had a plan. His plan was to keep working his side jobs as often as possible. Once his income from his side job business equaled his regular job, he knew he was close to realizing his dream.
At the point that his regular job was hindering his side business, money-wise and time-wise, he chose to quit his job and go full time into his own business in which he already had a great name and solid business. No brainer at that point and his business flourished.
He retired years later a happy, healthy and wealthy man.
Maybe you can continue to do side jobs and build some clientele. Work on getting some small contracts and go from there.
As said earlier, you gotta take risks to make it big. Just be sure they;re "calculated" risks. Look around on the boards. Many of us decided to go for it. Not a bad way to be, just use your noodle.
Good luck in your ventures.
Now go get 'em :D

[Dr. Eagle]

Owning your own business is a lot more grief than most people realize. All the business stuff... dealing with the banks, suppliers, purchasing agents, government red tape etc. are a real chore.
I would suggest that you look at templates for business plans and create one. If you do it should help you make your decision. Remember that cash flow is key. You need to be able to cover all your business expenses and pay yourself while you are processing your work, and awaiting payment. Sometimes payments for jobs will lag 90 or 120 days... it can be a real challenge.
Food for thought anyway

[Dimarco21]

I've been a Machinist for 16 years in the Silicon Valley. Alot of things have changed in the machining trade in that time (job security,wage,retirement). My wife and I have talked about opening up our own shop for years, it's hard to take that jump. I think if you do it has to be 100% dedication. Just my .02.

[C-2]

Originally posted by Dr. Eagle
Remember that cash flow is key. You need to be able to cover all your business expenses and pay yourself while you are processing your work, and awaiting payment. Sometimes payments for jobs will lag 90 or 120 days... it can be a real challenge.
Food for thought anyway
The absolute golden rule to live by. Clients come and go for various reasons, contracts come and go. And with them, goes the cash flow. A cash flow problem can sink you in as little as a few months.

[FREIND OF AA AND TA]

Get the book" The E myth " by Michael Gerber. It will change your life.:)

[SoCalOffshore]

WHy dont you think about hiring someone to help you in your side business. If the business keeps growing, it could let you leave your other job and continue with your side business full time.

[OutCole'd]

Originally posted by FREIND OF AA AND TA
Get the book" The E myth " by Michael Gerber. It will change your life.:)
It is funny, I was just going to post the same message. There is no way I would think of going into business today without reading that book. Great tip.
Then, go for it. I went into business 6 years ago, and there is no way I could go back.

[spute]

there is also the element of "taking one step back to take two steps forward". i quit my job where i was making six figs to open my own biz. my first child was 6 months old and i had just bought a new house. but i had enough faith and confidence in myself to make this happen that those stresses (house, kid, etc) motivated me to get my ass to work and get things done better than the other guy. i started in my home with very little cash. damn near blew all of my savings doing it, but now i have 7 employees and can spend more time on the water then i ever could before!
it isn't easy, but man, it's sooooo worth it in the long run.

[Dr. Eagle]

Well said Rio...

[Fiat48]

You have hit very close to home. 1981 is the last time I had a job.
1st question: Do you have liability insurance to cover anything and everything you are making? If not..better price it out. And if you own anything..better have at least 1 million in coverage.
I suspect currently you take the jobs you want. Send the assholes and prospective "not happy no matter what you did" out the door. If you quit your job...well, you might have to take those jobs you used to turn down.
Health insurance, vacations all go to the wayside. You get to worry about making the rent. You'll be stessed a lot more. Price that health insurance.
Are you the type that can handle employees or are you so picky about your work that only you can do it? And are you ready for the phone call from your employee long distance collect from Fisherman's Wharf that he won't be in today?
Leaving the nest is the hardest part. Tough to decide. Good luck.

[C-2]

C2 <------- stopped babysitting, I mean got rid of my 5 employees 4 years ago and started working for myself. Now I'm much happier.
And oh yeah - taxes, taxes, taxes. They come before food if you're smart.

[Ziggy]

Obviously there are great points made by everyone that there is little left to say..
Condensed version:
Pros=You control your own destiny, you have the final word.
.
Cons=you can be a prisoner of your own dream, extra stress.
.
There are many rewards being your own boss but the stresses of every worry can take its toll. Having the steady, reliable job is within the comfort bubble.
Good luck with your choice, not something to take lightly
:)

[Danhercules]

I own my own biz, so I know that end. I am slow right now so I am working part time for a buddy of mine that owns a machine shop.
He has been around for 20 years in the industry. Many times he was a week or so away from shutting the doors. One was bout 2 months ago, now he is sooo buisy, he is having a hard time catchin up. Its all in the Cash FLow. Yea, he had the work commin from being slow, but almost could not do it cause he could not buy tooling or matirals. He has done this number of times in the years in the industry. Like you said, feast or famine.
I say try to hire someone if you get behind, stay with the bread and butter.
9 of 10 small buisness fail in the 1st 5 years, of the ones that survive, 9 out of 10 fail in the next 5. Very depressing odds. I am hangin on a thread, and its been 6 years.

[78Eliminator]

Originally posted by Infomaniac
I was told by a pretty wise man recently that those decisons are generally made by themselves. Something will happen that will make the decision for you or will make the decison much easier or obvious.
Keep going as is until that happens.
I am in the same position as you.
That is excellent advise.......

[wsuwrhr]

Originally posted by Mandelon
I would talk with your boss or the owner and see what they say. When I first started, my biggest customer was my old boss......he was sad to see me quit, but understood my need to go on my own. He was happy to have someone he could trust to complete the work needed.
Funny you mention it, I am in pretty good with the owner, in fact I sold my first lathe and I bought one of his lathes he had in storage. He doesn't know the extent of my work at home, but he knows I got something going on.
He asked me to do a short run job for the company last week.
I quit in 2000 to take on a management job at an aerospace company. Hated the babysitting. They called me back when I was at my wits end, they were having a hard time getting anything done, they fired my old boss, promoted one of my guys to my former job. He couldn't do it. Worked out for the better for both of us. I got the money I had asked for(my reason for leaving), I took the leadman job back.
Anyway, four years later, the big manufacturing sector is taking a dive, they layed off 4 guys, left me and two others in the toolroom. Work is shit now, mold maintainance, a few other repair jobs, some protoype and shop projects, but the department is going to shit basically.
I think it is just time for a change for me, you know?
Brian

[HCS]

I'm with you. There are so many of us that know how to produce
a product.
Getting started on your own is the hard part. It's a gamble.
I have your product in my garage.:cool:

[wsuwrhr]

Originally posted by clownpuncher
Maybe you can continue to do side jobs and build some clientele. Work on getting some small contracts and go from there.
As said earlier, you gotta take risks to make it big. Just be sure they;re "calculated" risks. Look around on the boards. Many of us decided to go for it. Not a bad way to be, just use your noodle.
Good luck in your ventures.
Now go get 'em :D
I do have a clientele, the big guys pay and ontime, others i give terms to. Just depends.
Calculated risks, that is the problem. I am too calculated, until now this has been somewhat of a profit hobby. I used to laugh at myself owning CNC machines and not running them full time. I bought them used and cheap.
I am just worried that I don't have anything to fall back on.
Brian

[wsuwrhr]

Originally posted by lovemyultra
Brian
Well I have this to say you have the ethic and quality to go on your own the work you did for me was simple yet second to none and done when you said it wouls be ,those two items are very important and I hope you do excellent which ever way you decide to go
GOOD LUCK DJ
Thanks for the compliments, your part was somewhat of a challenge. Thin parts on a lathe are always fun to make. I still would like to see pictures of it installed.
Brian

[wsuwrhr]

Originally posted by riodog
Before even thinking about this course of action you should have at least 6 months worth of living $'s in the bank not including the money it'll take to get the business going. Do not borrow to get started cuz then you're already behind the curve.
Rio aka Michael
6 months ey?
We are talking $10,000. Damn. That is a hurdle.
I already own the equipment I need, but tools, and parts for the machines are always an expense.
Brian

[wsuwrhr]

Originally posted by HARDCORE-SKI
I'm with you. There are so many of us that know how to produce
a product.
Getting started on your own is the hard part. It's a gamble.
I have your product in my garage.:cool:
Thanks, it is people like you guys making me think I should be doing this full time.
Brian

[Jrocket]

Originally posted by FREIND OF AA AND TA
Get the book" The E myth " by Michael Gerber. It will change your life.:)
When I was going to turn my side buisness,into my full time income.Somebody reommended that same book.I think it was Charley that told me to read it.
Right after I thought of doing the change I got a great job offer and quit the side buisness all together.Just good luck and right timing for me is all.

[Just Tool'n]

Allways have a back-up plan. I am glad to see that you have a CNC machine, this can make your work easier.
If you go at your dream, face it head on, do not be afraid to go knocking on doors, if work slows down.
I am in a really great postion at what I do, I ride around with other salesmen selling Snap-On , I meet alot of great people.
I Get to know alot of shop owners, from all diffrent aspects & types of businesses, from repair to manufacturing.
What I see out there is do not be afraid of asking for help or advise, & remember good quality of work & service is the key to successful business.
Also if times get tough go sell your self to other types of business, sell yourself.
Best of luck.

[MagicMtnDan]

Perhaps some of these thoughts will help you:
* Having your own business and depending on it for survival is much tougher than people who haven't done it realize.
* Having your own business is extremely gratifying but it can (will) make you doubt your commitment to it. You need to realize that before you do it 100% because you'll need to stick to your plan (you'll need a plan) and persevere.
* Having your own business means you'll have to do things that you aren't necessarily good at. You may be the world's best machinist but you'll need to be good at things like relationship building, selling, collecting (A/R), paying bills on time, managing your cash, etc. You won't be able to spend as much time on the one thing you're most passionate about (in your case it sounds like that's machining/making things) which is one of the things that sucks with having your own business.
* As has been mentioned, cash flow is perhaps the biggest challenge you'll face. You may be profitable (even very profitable) but that won't necessarily mean you'll have a cash flow that will sustain the business and you/your family. When things are tight (and they will be), you will be the one who suffers - you probably won't be able to take any money out of the business.
I do have a suggestion for you that might make a lot of sense. You might want to keep doing what you're doing - working your day job and doing your own business on the side. And you might also want to consider outsourcing the overflow work you're getting. One of the best businesses to be in is to be a "fabless" company that doesn't have the overhead of manufacturing.
If you outsource the extra work you have (the work you can't handle or don't want to handle) you can spread it around to other reliable quality shops. You'll get to negotiate with them, monitor their work and drive them to deliver quality products to you on a timely basis at a price you dictate to them. It can be a very effective way to grow your business and it may allow you to grow rapidly without having to spend buckets of money on new (or used) equipment, operators, and associated business costs.
Of course this idea depends on there being unused capacity at a reasonable price (and that may just be out of state). Don't hesitate to shop around at shops outside of CA or the state you're in. Other states have a lot lower cost of living and can provide you with lower costs meaning higher profits for you.
I hope this helps. Good luck!

[cdog]

Originally posted by wsuwrhr
Advise, ideas, help, criticism needed.
I know some of you operate your own businesses, or run them for other people. I would like your help.
As most of you know I operate a small machine shop of my own as a side business. I machine proprietary parts for businesses, my own parts for sale, and custom parts on occasion. I have been operating at this scale for a few years now.
I am getting behinder by the day, and more jobs are piling in. I have been in this business long enough to know that it is feast or famine. When it rains it pours. I am getting to the point where I am finally dreaming of making a living out of my side business.
I am employed as a toolmaker and I make a decent wage, which is part of the problem. It is so hard to walk away from a good job for me. I am sure I don't have as many liabilities as some of you out there, but I am worried about what will happen if it doesn't pay enough to stay afloat. Good paying manufacturing jobs are hard to find. What I am getting at is I doubt they will hire me back. It is pretty much sink or swim.
So I was wondering if anyone wants to share their stories of how their business started up. Big/small whatever. Maybe even a few of you that do machining/manufacturing.
Post here if you would, or PM me with any help or advise you have.
I would really apprieciate it.
Brian
Do yourself a favor and read The E Myth by Michael Gerber. You will be inspired. Go and get it today. Everyday you waist you'll regret. I hate to read and could not put it down.
Good Luck

[HighRoller]

Brian, as a former and future business owner I'd like to add a few things to the great advice you've already gotten. Rio mentioned cash flow and savings. Take it from someone who had a high cash flow/high expense business, having six months' money in the bank is VERY good advice. The only better advice is not borrowing to start your business.
The #1 killer of small businesses is cash flow-this does not mean low revenue in most cases, it means excessive debt. Sit back and imagine your options; option 1 you borrow to the hilt with no savings and sweat every day thinking what will happen if something goes wrong. By the way, something WILL go wrong!
Option 2: You have no major debts and a large savings account. your mind is free to concentrate on growing the business because you have no worries. You CANNOT make good business decisions when your emotions are distracting you because fear will make you either too impulsive or too indecisive.
Option 2 lets you operate from a position of power rather than out of fear. I know gathering up 10K seems like a lot, but it's really not if you want it bad enough. It's amazing what you can accomplish when you concentrate. If I were you I wouldn't hesitate to take this chance because owning a business is a wonderful experience. I hate working for someone else now, and will own another business someday.
One final thought-seperate your self identity from your business situation. This means if you have a bad week, or a bad month or you fail completely at something in your business, it doesn't make you a bad person as long as you get up and try again! Good luck, and I'll be hunting you down for my own custom billet stuff one day soon!

[Danhercules]

Originally posted by wsuwrhr
6 months ey?
We are talking $10,000. Damn. That is a hurdle.
I already own the equipment I need, but tools, and parts for the machines are always an expense.
Brian
6 months MIN!!!!!! If I did not have that, I would be through. I do have lots of work comming up.
Its not getting the work done. Thats the easy part. Its thr running of a buisness, and doing it right.

[Essex502]

Originally posted by wsuwrhr
Advise, ideas, help, criticism needed.
I know some of you operate your own businesses, or run them for other people. I would like your help.
As most of you know I operate a small machine shop of my own as a side business. I machine proprietary parts for businesses, my own parts for sale, and custom parts on occasion. I have been operating at this scale for a few years now.
I am getting behinder by the day, and more jobs are piling in. I have been in this business long enough to know that it is feast or famine. When it rains it pours. I am getting to the point where I am finally dreaming of making a living out of my side business.
I am employed as a toolmaker and I make a decent wage, which is part of the problem. It is so hard to walk away from a good job for me. I am sure I don't have as many liabilities as some of you out there, but I am worried about what will happen if it doesn't pay enough to stay afloat. Good paying manufacturing jobs are hard to find. What I am getting at is I doubt they will hire me back. It is pretty much sink or swim.
So I was wondering if anyone wants to share their stories of how their business started up. Big/small whatever. Maybe even a few of you that do machining/manufacturing.
Post here if you would, or PM me with any help or advise you have.
I would really apprieciate it.
Brian
While I haven't done whay you want to do - personally - my best friend did exactly the same thing...small machine shop on the side and went into business for himself. His move was precipitated by a lay-off so he was forced into it you can say. He used every bit of his bank accounts and credit cards to live on for the first year and practically had to eat cat food but now he owns 3 businesses and a 4500 sq. ft. home in Anthems (Henderson, NV) + a triplex in Los Angeles. HE'd tell you it is tough but worth it. You will work harder for yourself than you ever did/do for anyone else.
Now, some advice...get a customer stream built up with repeat business if possible. Let your customers know you're planning on doing this so that if you are in good graces with them, then they will possibly help you out by steering some more business your way. Make sure you have enough cash on hand to last at least 6 months with no income. Watch out for health insurance - if your spouse works you might be able to secure it through their business but check it out. You'll need business insurance as well. Write up a business plan - see the internet for ideas on this. Once all is in place - go for it.

[OutCole'd]

Originally posted by wsuwrhr
6 months ey?
We are talking $10,000. Damn. That is a hurdle.
I already own the equipment I need, but tools, and parts for the machines are always an expense.
Brian
Brian, better plan on longer than 6 months. When I started my business, I went 11 months before I took a dime from the company. We lived off savings, credit cards, & my wife's part time job.
Now 6 years later, things are very good.
Go for it,

[superdave013]

This will be some good reading later when I get some more time.
I'm in the same boat as Brian.
But I'm am COMMITTED to make my full time move. I plan to do it after the first of the year if I can hold out that long. That's looking iffy at this point.
Anyway as soon as I get done with my Brian Tracy tapes it looks like my next book is picked out.
Brian, Get COMMITTED man! You can do it.

[RiverDave]

Brian you live in the mold making capital of the world. Finding a mold maker job out there is about as hard as walking down the street. When I was out there alot of the mold makers would joke about how you get a raise "Quit and go down the street and demand a dollar per hour more."
Live your dreams Brian, there's other tool shops to work for if it doesn't work out. Hell I can give you a list of names & #'s if you want.
RD