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Old Mon 09 December 2013, 07:08
Just call me: DB #118
United States of America
Starting a business using a mechmate

I know some people use a mechmate as part of their established business and others do side jobs using the mechmate.

I am curious if anyone has transitioned from doing side jobs to running a fulltime business providing cnc services using their mechmate.

While I am building a mechmate just because I want to, I can't help but consider having the investment pay for itself and then some.
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Old Mon 09 December 2013, 09:00
Just call me: Mike
South Jordan, UT
United States of America
I tell every business owner to run a "break-even analysis" spreadsheet to see how many "widgits" they have to sell to make a profit. A "break-even analysis" enables them to easily modify the cost of each "widgit" by playing with the number of widgits per hour, the cost of labor per widgit, the amount of space and utilities required per widgit. (Free programs like OpenOffice and LibreOffice have excellent spreadsheets which can be used to create a "break-even-analysis spreadsheet.)

A MechMate, when properly constructed and properly operated will produce "widgits" very efficiently, IF those "widgits" are designed to be cut on a CNC machine.

If the "widgit" can be mass-produced, design costs per "widgit" will be very small. Labor costs will be minimal because the machine will do the work.

If the "widgit" is one-of-a-kind, then labor (design) costs will be the primary factor. The MechMate will still be valuable, but design skills will determine profitability.

In my business (process control computer design and manufacture), I always tried to find ten customers so that the cost of designing specialized process control computers could be spread across at least ten customers. When I owned a CNC machine, the goal became to find at least 100 customers for each product. In the market that I was trying to enter (mass produced cabinets), the small shops were fearful that I would take away their business. They preferred to make their own cabinets, even though the cost per unit was much higher than it would have been if I cut their parts. The large cabinet shops already had CNC machines. When I tried to make "toys", I found that the stores would only pay me 40% to 50% of the selling price. The margin was too small to allow me to make a profit.

On the bright side, another CNC operator, who is a close friend, is running a very profitable business with his CNC machine. He makes a specialty item for a single customer. He often asked me to handle his overflow. He's been cutting that single item for over ten years. He found his "niche". I never found my "niche".
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Old Mon 09 December 2013, 14:46
Just call me: Fox
One can also create their Niche (maybe even should?). Think of a product you or other people need, ask/look around, make some free samples, get your name out there, test the market.. And be realistic.

Although a CNC machine can take away a lot of manual labor, it does not sell the items it makes, that's up to you the entrepreneur. Good things is the machine will 'create' the time for you to do so ( instead of manual slaving in your shop you can make calls send newsletters etc, invite/talk to customers ). But it's still work, those who expect a CNC to be an item which you push the button 'and voila' work goes in - money comes out.... are in need of a reality check.
If that would be the case the whole world would run a CNC shop.
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Old Wed 11 December 2013, 15:59
Just call me: Jack
Nashville (Tennessee)
United States of America
In the archives somewhere I did a quick analysis for someone else about this came up before about deciding when you should or should not build your own. It is basically taking advantage of opportunity costs.

There are several types of businesses that MechMate (or similar) would be useful in. Basically it turns out that it is NOT a CNC business, it is a business that sell what customers want to purchase. CNC is a tool to helpfully help accomplish the task of making money!

That could be a product, contract services, or to support current business. (To cost justify it, in a business sense it boils down to $$. To justify it as an amateur, IMHO 'I want' is sufficient, given you can get it past your SWMBO (or equivalent)).

To get good advice, in the US, go talk to the and SCORE volunteers (who are retired business professionals). The SBA site has lots of good information, online and publications for small business entrepreneurs. At one time I took a SBA class at a local Jr College (and a continuing education class) but they were also available for college credit at the time.

I found it was great information about both the mechanics of running a business (bean counting is not hard, but it isn't easy or obvious to me). The help in generating a business plan (finance plans, marketing plan, advertising plan) was very helpful.

It may be cold, but deciding to NOT to go into business is always an option, but please, make it not just out of the passion of wanting to go into business, but out of the planning and financial forecasts too.

Last edited by servant74; Wed 11 December 2013 at 16:02.. Reason: I fubared some information.
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Old Thu 12 December 2013, 14:33
Just call me: Danilo #64
Novi Sad
I based my business mainly on a Mechmate, routing service is all I do.
I have no saw, hand router or any other woodworking tools except a small orbital sander.

I do services, mass production or one-offs to woodworkers or anyone trying to prototype something. Besides some CNC machines maintenance and repair this is my main source of income.
Word of an advice, I you are doing services a good webpage is essential as knowing a lot of woodworkers in your area.
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