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1954
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7/21/2011
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Galesburg, IL
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mxtech1
5/25/2018 5:56am
5/25/2018 5:56am
Edited Date/Time
6/11/2018 5:55am
I have been working as a manufacturing engineer for almost 10 years now. Started out in a small fabrication shop that "did it all" and had the opportunity to learn aspects of sheet metal fab, welding, machining, paint (powder/wet), and light assembly. I have spent the last 6 years working for a premier Ag manufacturer. Spent several years as a lead for sheet metal fab business unit, managed multiple multi-million dollar projects, and really honed my craft. I recently switched roles and now serve as a lead engineer for combine header assembly where I have learned a ton about assembly processes, line balances, ergonomics, torque tooling, etc. The company I work for is World Class rated and I really feel like I have learned the correct ways to run a business.
Anyways - the midwest is currently facing supply base challenges. It is a daily struggle for our part suppliers to meet our demands, further challenged by increasing forecasts for these markets.
I feel that I have the knowledge and experience to start my own business. I would like to get back into fabrication and have really been thinking hard the last few years about starting a shop. I would like to buy a few lasers, press brakes, punch press, shears, etc to make sheet metal/plate component parts. I also think it would be wise to have a few welders to take on weldment jobs and of course a few machinists and machines would also be needed. Eventually expanding into a paint line and possible light assembly work of sub-assemblies.
I have been doing some rough calculation and I feel that I need +$500K to get a decent shop up and running. Most of this cost will immediately be sunk into machine tools and equipment. I would likely lease a building in the early years.
My question is where do I start? Is it even practical to put together a business plan and present to a bank? How often do these startups actually secure funding? Am I thinking too aggressively?
I am very confident on the manufacturing side of the business, but anytime I start thinking about the debt that would come with the way I want to start it out, it scares the shit out of me. I would need to secure work right off the bat in order to be able to pay that. Probably normal to most business ventures, but its stressful to think about.
For those of you that have started a business, do you have any guidance?
Anyways - the midwest is currently facing supply base challenges. It is a daily struggle for our part suppliers to meet our demands, further challenged by increasing forecasts for these markets.
I feel that I have the knowledge and experience to start my own business. I would like to get back into fabrication and have really been thinking hard the last few years about starting a shop. I would like to buy a few lasers, press brakes, punch press, shears, etc to make sheet metal/plate component parts. I also think it would be wise to have a few welders to take on weldment jobs and of course a few machinists and machines would also be needed. Eventually expanding into a paint line and possible light assembly work of sub-assemblies.
I have been doing some rough calculation and I feel that I need +$500K to get a decent shop up and running. Most of this cost will immediately be sunk into machine tools and equipment. I would likely lease a building in the early years.
My question is where do I start? Is it even practical to put together a business plan and present to a bank? How often do these startups actually secure funding? Am I thinking too aggressively?
I am very confident on the manufacturing side of the business, but anytime I start thinking about the debt that would come with the way I want to start it out, it scares the shit out of me. I would need to secure work right off the bat in order to be able to pay that. Probably normal to most business ventures, but its stressful to think about.
For those of you that have started a business, do you have any guidance?
So before you go and rent a building, consider buying or building something that will allow for expansion as necessary. I ended up with roughly a $750.00 monthly note to own something versus pissing away a minimum of $60,000.00 in the first year to build out and rent.
I'm so far away from your startup costs that it isn't going to answer any of your questions. Fortunately I've invested pretty heavy in good tools over the last 10 years that I don't need any tooling to start up. I have always wanted to do my own thing and the sales part is where I always get the most doubt or stress. Having someone willing to carry my stuff makes it a bit of a no brainer just to do a pilot run. And I'm not giving up my day to day gig until I can see its worth it. If not, I'll make a few extra bucks and not out any money.
If anyone is going to lend you capital, the first question they will ask is what's your sales and marketing plan?
The Shop
They front the money. You pay them back quarterly dividends....
15 years ago, our 1 waterjet and just stuff was the better part of 200k. Rule of thumb used to be 2k per month for every 100k equipment purchase.
They call it a lease that you buy out for minimal amout when paid off. Then you'll need $$s to make payroll.
On the other end, starting small, I could see buying a single production style laser and focusing on laser flat work only. The main challenge I see there is I am not 100% confident I could generate enough revenue off one machine to justify leaving my day job. I am consistently "out of the house" for about 60 hours a week for my day job so I would have to hire a CNC operator. I guess this is where it starts though....if one machine can make enough profit to buy another, 2-3 additional laser later I probably have enough security to walk away from the day job.
I am blessed with making a pretty good salary as an engineer now, working for one of the most reputable companies in the country, so it really makes me think hard about giving that up to do a startup.
One of my good friends just spent $3/4M on just a new laser and press for their shop. Just a nice air compressor for that size shop is over $10K and that's not delivered or wired.
You have a huge advantage in that you have contacts with potential buyers already. You know the price points they are paying and that's huge. Not trying to scare you off but many businesses fail from under cap. not realizing how much they will really need. Maybe start off with a smaller wish list and grow? That much equip needs what 4-10k sq ft? That's another dilema. Too big a building, too much rent right off the bat, too small and you'll be looking to move soon, expensive.
Like I said not trying to scare you off. just commenting on your wish list.
TM
It's quite a bit to wrap my head around and it's one of those deals where the costs just continue to compound when I start putting the pencil to paper.
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