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  • Thoughts on starting a business

    I saw another auction the otherday someones hopes and dreams going on the block the result of poor planning/instant gratification.

    It's no wonder 5 out of 6 small businesses fail in the first five years.These folks went in naked,they leased a building,bought all new equipment,hired employees and found out thier overhead was way over the're head.

    I can't imagine doing that,I would need Maylox by the gallon to sleep at night.I was thinking of my boss.He went in business 31 years ago,started out with a belt drive Logan and a B-port M head,both were worn out.Over the years slowly he accumilated more modern bigger equipment and expanded the business one building and one customer at a time.People today don't have the self control to do that.

    In the 14 years I have worked out of his shop we have seen 40-50 companies fold,machine and fab shops that is often times buying up thier equipment for .10 on the dollar,the law of the jungle.

    My friends ask me all the time when am I going to start my own shop and then ask why I don't borrow money to do it.My answer is simple,If I go in business not owing anybody or anything if it doesn't work out all I have to do is turn the lights off and go work for someone else,I don't have to start over buying another house to replace the one the bank foreclosed on.

    Am I thinking right by doing it this way,one machine at a time,or do I need to go the Maylox route?
    I just need one more tool,just one!

  • #2
    depends on how fast you want to get rich

    nobody ever got rich on nickel slots

    lots of people have lost their ass gambling though

    i think that with two years of hard work and rarely taking a paycheck (while working a regular day job), i can set myself up pretty good....after that, it's mostly profit

    -Jacob

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    • #3
      Hi
      My thinking is the lower the overhead the better the chance of survival.
      Develop a product that people with certain interests like shooting think they can't live without. Then test the market to see if there is enough interest in it.
      If there is then decide to invest just enough to fill the need. Better yet develop several products but only build enough to fill the imediate demand. The sales of these products will tell you if you should invest more in their development or not.
      Sometimes talking to people about their equipment to find out what they think will improve it will generate ideas on products.
      If you buy too much on credit the interest will defeat you. Thats my thinking.
      Chuck

      Comment


      • #4
        I like to use the chinese restaurant example.

        If you watch what they do when they open a restaurant, its interesting.

        Now, lots of folks open up by first getting a space that has maybe been a restaurant, then re-modeling it to fit their needs, buying tables and equipment, etc. Then they hire help, and start waiting for customers, whle they pay the bank, etc.

        The typical chinese restaurant opens in a space that already has a kitchen of some kind. They may have card tables and cheap chairs, not much on the walls, No changes to the space that are not absolutely required. They probably didn't go to the bank for anything.

        It is REALLY rare for a chinese restaurant to fail, unless they just cannot cook. Usually, after a while, the tables are replaced, stuff goes up on the walls, etc, etc. Pretty soon, its a nice restaurant, and all from what the business earned.

        Seems that 3/4 of the normal ones fail. Probably they go broke.

        I'd say there is a lesson there, and you already know what it is.



        [This message has been edited by J Tiers (edited 06-22-2005).]
        1601

        Keep eye on ball.
        Hashim Khan

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        • #5
          When I had my machine shop I owned all of the equipment outright. It started out as a hobby shop and ended up as a business. Bought additional equipment as needed and paid cash for them. Never had any debt on the business ever. Had a line of credit at the bank that I never used. This was a side job for me but made good money with the shop. I think your initial idea is correct if it doesn't work out turn out the lights. With your skill and knowledge that won't happen.

          Joe

          Comment


          • #6
            J, that is true about Chinese restaurants around here too. Which is slightly annoying as I wish they would fail, cuz I get sick of seeing so many Chinese restaurants !

            Latest example was a nice place that opened up in Yemassee, SC. Built a brand new building, nice fixtures, etc. Trouble is, not many "nice" customers in Yemassee, SC. Plus they were slow as molassess...even a cold sandwich with no customers but me would take 15 minutes...never could figure that out..maybe back in kitchen slaughtering live animals to get the meat first....

            Anyhoo, SIX MONTHS later they are history. Guess what it is now ? Yep, Chinese

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            • #7
              my brother started a shop in 1994 with a few machines and welders renting a shop for $800 a month.

              now he owns a 6,000 sf. shop and has more work than he can do at times.

              doing work for the right folks will make or break you.

              you want the city,county,state, dod, the farmers,loggers, garbage trucks,dump trucks, back hoes, rock crushers,well drillers,electrical motor shops, auto shops, crop dusters,motor cycle shops, farm repair shops,whinerys,,,,

              if you can do it all the work will pile up and you may not get rich but will make a good living and be known as "the best shop around"

              Good Luck, mike.

              Comment


              • #8
                You have to do things others won't, many years ago I worked for a ford dealer, part of my compensation was use of the garage weekends and after hours ( I was single and had no life outside of engines). The only stipulation was that if I sold a part after hours it had to be full list. I ended up making a good buck from people who could drop off their cars during reuglar hours
                and weekend break downs. The funny thing
                was that I was using the garage to work on
                my car and bike not seeking other work, I figured that if these people came around and bothered me at 9:30 on a saturday night they should pay, I was charging them $2 more an hour than the regular shop rate, they paid
                no problem.
                One cold,rainy night I fixed a guy's pontiac
                he had driven 1500 miles to see the birth of his grandchild and was only about 20 minutes
                away when his coil quit (I didn't charge him)
                Later his son-in-law became a regular customer.
                Non, je ne regrette rien.

                Comment


                • #9
                  that is what i did worked a full time job and built up my shop. everything is paid for. now the other roblem i have is the last 3 years it seems like i have gotten evry yahoo that was run out of every other shop around

                  Comment


                  • #10
                    After telling the Engineering Manager he was a complete a$$hole in a production meeting I had no choice but to set up on my own
                    .

                    Sir John , Earl of Bligeport & Sudspumpwater. MBE [ Motor Bike Engineer ] Nottingham England.



                    Comment


                    • #11
                      Failure! Finally a topic I know something about! I quit my job about the time Regan became President. I wanted bo engrave firearms full time! You remember the tv commericals, "don't be a pig! save you money" We were fighting a recession at the time! Gun engraving is what you do with your money when you're tired of burning it and just watching blow in the wind. In other words, it ain't anything any one really needs.

                      My downfall besides a really soft economy was having no clue about the gawd almighty New York State Taxe business and not being able to afford an account. It was pure hell. We survived for two year before getting back into my old trade. I have no problem working for someone else now and looing in my mail slot at work on paydays!

                      I do feel good about getting it out of my system though. I would have always wondered what might have been. I encourage all those with some modicum of business savvy to give it a shot. Someone else put it best when they said you don't get rich on nickle slots. That's right, but you won't likely go hungry either on nickle slots!!

                      One last thought. I loved engraving when I was playing at it. When I had to get a gun done to collect the booty for food it became work. To this day I don't look at engraving iin the same way I did when it was just recreation.

                      Good luck to all those with the cajones to try it on their on!!



                      [This message has been edited by Your Old Dog (edited 06-23-2005).]
                      - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                      Thank you to our families of soldiers, many of whom have given so much more then the rest of us for the Freedom we enjoy.

                      It is true, there is nothing free about freedom, don't be so quick to give it away.

                      Comment


                      • #12
                        Great thread! Kinda what I am in the process of doing now. I need an income for retirement - don't ask. I have been buying equipment and trying to develop some products to sell. It is a long process but so far I don't owe anyone a single cent and the machines are mine, paid for. I can't see doing it any other way. And I figure my money is better invested in equipment than in a bank account (2-3% interest while inflation is 5%+ is a loosing proposition).

                        I guess I am a "Chinese Restaurant" shop.

                        Paul A.
                        Paul A.

                        Make it fit.
                        You can't win and there is a penalty for trying!

                        Comment


                        • #13
                          Wierd,
                          Look at it this way. If you were going to do it the way your friends are asking about; getting a loan from the bank, you are just replacing your current boss with the bank. The whole point is to get rid of the boss all together isn't it?


                          Jack

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                          • #14
                            The question is, is it still possible to start a small business with old equipment in today’s high tech environment. 27 years ago when my wife and I started our business we had no trouble starting out this way, although, in the last years of our business (before we sold the place and retired) we were faced with making substantial investment just to keep up with the competition and with substantially reduced profit margins.

                            Comment


                            • #15
                              Tattoomike,
                              There really are whinerys? I have long suspected it when watching television news or reading the newspaper. They seem to be big business.
                              John

                              ------------------
                              Mike
                              Mike

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