# Considering a CNC business?



## DesertRatTom (Jul 3, 2012)

Just found this link in my Constant Contact email. It is a treasure trove of articles on starting a business. Some very practical information for anyone considering starting a CNC or any other kind of busines. Attached is a version of my marketing article, just updated this a.m. Let me know if it needs something else. I am also thinking of downloading some of your CNC project pictures to illustrate it. 

@Gaffboat Oliver, maybe we could jointly work on doing the business side addition to your book that we talked about. Ask the professor if that's of interest. :wink:


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## Gaffboat (Mar 11, 2012)

DesertRatTom said:


> Just found this link in my Constant Contact email. It is a treasure trove of articles on starting a business. Some very practical information for anyone considering starting a CNC or any other kind of busines. Attached is a version of my marketing article, just updated this a.m. Let me know if it needs something else. I am also thinking of downloading some of your CNC project pictures to illustrate it.
> 
> @Gaffboat Oliver, maybe we could jointly work on doing the business side addition to your book that we talked about. Ask the professor if that's of interest. :wink:


Marketing info is definitely needed for a lot folks interested in using a CNC. I've read many (conflicting) ideas on pricing your work, but most miss the key point that you don't need a price if you don't have a customer. Marketing (not advertising) is the way get and keep customers, and ultimately make money with a CNC machine.


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## DesertRatTom (Jul 3, 2012)

That's so @Gaffboat. What do you think about adding a chapter or two to your book? A lot of it is right here already. Lots of stories and ideas, and I bet a few of the guys would volunteer pictures. The social media/email approach is one way, and we could likely work on exact methods for generating commercial customers.


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## TinmanCarving (Mar 8, 2015)

Good read Tom, and thanks for putting that out there.

Some areas that you touched on ring loud with me. Especially after having owned 3 fabrication companies in the last 30 years.

First is setting your price high enough. I see too many people with the garage shop mentality setting their hourly rate to low in the beginning because they either have a day job or don't depend on the extra income. This is the time to practice with what might feel is murderous pricing. Easier to absorb the cost of not getting a job you spent time quoting on when you don't need the money. You can lower your price point down until you start getting jobs again.

Speaking of spending time on quoting. Get good at "from the hip" quoting. Detailed quotes to the penny might make you feel good, but you will spend all of your time quoting....which is non-billable for the most part. If you are setting your price high enough you won't need to worry about if you are going to make money.
Do not get yourself in the position that you are under bidding everyone else on jobs to get them. That is not a sustainable business model.

You mentioned getting someone to run the machine. No truer words have ever been said. If you are going to make a decision to turn this hobby into a business that will support a family, you have to make it your job to find work and maintain customers. There is not enough time to handle the business side and do all of the work yourself. Well at least not if you like making a profit and growing your company.
Once you get your employee, be ruthless about setting your quality standard with them. Once that is established, trust but verify every time. 

Be honest with yourself about something being a worthy business opportunity or not. If you plan on selling the same products that Etsy is littered with you will fail. That one is harsh but true. You will notice Tom described business-to-business opportunities. If you don't know what that is you need to research it. 

Their is no bigger cheapskate than the average Joe Public Walk In customer. They want Museum quality work at Chinese prices. Stay out of that market.

I hope this helps someone.

Rob

Sent from my SAMSUNG-SM-G900A using Tapatalk


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## DesertRatTom (Jul 3, 2012)

TinmanCarving said:


> ...You will notice Tom described business-to-business opportunities. If you don't know what that is you need to research it.
> 
> Their is no bigger cheapskate than the average Joe Public Walk In customer. They want Museum quality work at Chinese prices. Stay out of that market.
> 
> ...


I think there are lots of people who have pretty good skills at CNC, and decent machines. They just don't know about what's required to make it pay. Earning back the cost of a $5,000 to $15,000 machine should not take much more than a year if marketing gets handled, much sooner if you take the trouble to get good at it. Modern marketing has NOTHING to do with selling. Right on Rob, the "museum quality at Chinese prices" crowd is not worth pursuing.

Calculating prices should start with a profit margin 4-5 times more than ALL costs, including wear and tear and machine maintenance and eventual replacement. Consider for example, the cost of power to run it when you're talking running a 12 amp machine 12-18 hours per day. You're going to have to replace bearings and other parts, you have to get rid of sawdust and have excellent sawdust collection, and you'll need a few really good conventional tools and saws with premium blades. Don't forget a properly set up finishing area, and if you have an employee, you're subject to OSHA rules, and you'll WANT an accountant to make sure you comply with tax regulations. 

Those are costs of doing business that will add up pretty quick, and your price has to pay for all that. Otherwise, it's a hobby. 

Which is not to say there's anything wrong with a hobby with maybe 6-8 really good customers per year. Which won't produce much of a living, but a nice second income. Just keep those prices UP!

Hope we're not just talking with the already converted here. I know that I won't buy a CNC unless I decide to make some decent money from it. Making money isn't all that hard. Beside that, it would take up the space remaining in the garage, and my wife would not go along with parking the car outside. I'd have to have a workshop built or plan to be single again. Lots of factors come into play for me, and for anyone considering a CNC move.


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## UglySign (Nov 17, 2015)

Thoughts of this being a stickie? Maybe a sub-forum?
DrT's recent Makin a nice living post went way down the list.
Not everyone goes that far back reading nor bother to search.
Just a thought.


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## DesertRatTom (Jul 3, 2012)

UglySign said:


> Thoughts of this being a stickie? Maybe a sub-forum?
> DrT's recent Makin a nice living post went way down the list.
> Not everyone goes that far back reading nor bother to search.
> Just a thought.


 @Cricket I think this is a good idea. Questions on this issue keep popping up. The 9 pages contain a wealth of information for anyone that wants a CNC to at least pay for itself.


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## Scottart (Jan 8, 2015)

A great article... that Polish eagle guy has a great story....


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## Admin (Feb 13, 2012)

UglySign said:


> Thoughts of this being a stickie? Maybe a sub-forum?
> DrT's recent Makin a nice living post went way down the list.
> Not everyone goes that far back reading nor bother to search.
> Just a thought.


I made it a sticky.


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## DesertRatTom (Jul 3, 2012)

@Cricket What is a sticky and where is it kept?


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## Admin (Feb 13, 2012)

It keeps a thread at the top of the forum section where it was posted.


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## Newanton (Apr 6, 2021)

Great points and I think marketing can be applied to everything including tutoring and schools nowadays. I think with the COVID-19 situation a lot of tutors like myself who find homeschooling an amazing feature would like to continue doing that even after everything comes back to normal. I mean I would rather be at home as a diabetic doing private lessons and make more than what the government is paying me at this point. If you feel the same way then this article Starting a Tutoring Business in 2021 [Definitive Guide] will be extremely helpful.


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## Bentley (Mar 22, 2021)

Hi guys. I guess I’m one of the lucky ones. I retired 4 years ago and just before I did I purchased a good entry level CNC machine for the purpose of keeping my brain active. i make pretty good money at it and since it’s my favourite hobby and I’m retired it’s a bonus.
I would say starting up an actual business would be pretty hard nowadays due to the fact that there are so many entry level good machines out there. Lots of guys trying to make a quick buck but don’t care about quality stuff. 
You’d really have to figure out your target market. Cabinets, crafts, machine parts? Then see if there is anyone out there that is in need locally or do you have to ship everything? Every customer is looking for good quality and low prices. Then do you hire an employee(s)? Do you buy a better smaller machine ? Bigger machine ? The list goes on. I just wish I would have started the CNC stuff years ago. 
Just my 2 cents worth.


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## old55 (Aug 11, 2013)

Welcome to the forum @Newanton


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## DesertRatTom (Jul 3, 2012)

chloerampl said:


> Great article! Thanks


Glad you enjoyed it,


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## old55 (Aug 11, 2013)

Welcome to the forum @chloerampl


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## jw2170 (Jan 24, 2008)

Welcome to the forum, @chloerampl


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## Ryan_Cao (Aug 19, 2021)

Excellent article! Thank you.
And Our company offer CNC Service too.

(link removed by moderator)


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## jw2170 (Jan 24, 2008)

Ryan_Cao said:


> Excellent article! Thank you.
> And Our company offer CNC Service too.


Hy Ryan, I see you used the Aussie flag! Do you have an office in Australia?


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## Ryan_Cao (Aug 19, 2021)

jw2170 said:


> Hy Ryan, I see you used the Aussie flag! Do you have an office in Australia?


Hi, jw2170, I live in Australia, but currently office and facilities are in China..


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## MirkoCorsl (Oct 6, 2021)

I have encountered the opinion that marketing only brings costs, and that if the marketing budget is reallocated to the needs of the sales department, the company will benefit more. However, this department creates a constant flow of customers. Investing in marketing is vital. Marketing is a must, it shouldn`t be excluded in any way. In general, the development of a company must concern all sides and aspects of production. [advertising link removed by moderator] has very good reviews.


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## Lightmanjake (Oct 14, 2021)

Thank you for sharing, there are lots of folks that will find this really helpful.


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## DesertRatTom (Jul 3, 2012)

MirkoCorsl said:


> I have encountered the opinion that marketing only brings costs, and that if the marketing budget is reallocated to the needs of the sales department, the company will benefit more.


Marketing and sales are distinct disciplines. One purpose of marketing is to drive sales. Fortunately there are many ways of getting the message out at little or no cost, other than time and effort. The point is to move potential customers into a sales "funnel", and ultimately to keep the best customers coming back for more. Think of the customer relationship as operating in their best interest at all times, while keeping a profitable relationship.

What so many people think of as sales is really ineffective compared to learning and providing exactly what the customer wants. The best customers pay promptly, and fairly, and keep returning because you always take great care of them. Remember, you get what you pay for.


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## jw2170 (Jan 24, 2008)

Welcome to the forum, Mirko.


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## old55 (Aug 11, 2013)

Welcome to the forum Mirko.


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