New Business Idea...HELP!!!

[nick]

Hey guys...I have 13 years with CNC plasma/oxyfuel cutting systems. I'm looking to buy a shopbot and start my own business. My current day job, I'm a manufacturing engineer. Long term thats not for me...I kinda like drawing / cutting stuff. What kind of learning curve do you think I will have cutting wood for the first time..and how much success with the business for start up's do you see..home based.

I wanna start out with household 3d signs / pictures, custom tables, help out local contractors, woodworking shops, sign makers.

I look forward to your responses.

[paco]

Hi Nick!

Considering the above, I'd say cutting force and hold down. You sound familiar with computers and CNC machines so you'll have a soft start.
Plasma and oxyfuel does not push on the material but a tool bit is a different game... The rule to get a good cut with thermal process with metals are quite different than the milling action of a router bit on woods, plastics, foams, composites and so on.
The process you mentioned involve 2D only while the CNC router can "carve" 3D (or 2-1/2D if you prefer); get familiar with the milling/routing CAM software in advance if you can.

Looking forward to see you around!

[nick]

Hi Paco...

Thanks so much...good to know. For software...I will be using the PW coming from shopbot but also...I would like V carve, cut3d and photo carve...the whole package...what are you thoughts??

Also I've been reading the onsrud guide for cutting speeds, depths and so on....can you recommend anything else...

Thanks and talk to you soon.

[ed_lang]

Hi Nick,

June 19th of this year marked my one year in the shop full time. I have not looked back and wondered how it would have if I stayed at the "job".

I also have a 50w laser engraver and Paco is right on target about the forces while cutting..... With the laser, I am just laying parts down and the parts sit still while being cut or engraved.... With the CNC, I have to make sure they stay put while pushing a cutter around on and in them.

You will find all kinds of information in this forum about how to hold parts. Try to find a ShopBot Camp or Users Group near you and go and talk to the guys first hand and see what is working for them. Maybe even find a ShopBot close to you that you can visit for a time or two.

I use Corel Draw X3, Part Wizard (but not much anymore), V-Carve PRO(3.1) and Photo V-Carve. Since I do everything for the laser in Corel, I find it easy for me to draw there and export a .eps file into V-Carve PRO for tool path.

Keep us posted, sounds exciting.

ed

[paco]

Nick,

PW will be a good start and Vectric V Carve PRO would be the upgrade of my choice. Cut 3D is for 3D CAM (toolpathing 3D model) which sooner or later you might want to try yourself at. If you can afford it why the whole package; if by any chance you decide to "etch" or engrave images and photos you'll save yourself $ome dollarS. If you need to make a choice, go with VCP first.

Lots of good stuff on Onsrud Web site but some apply to large cutter working under high production mode... sometime you just prefer a little more wear on you cutter and a better cut... still it depends on many factors; spindle or router motor, toolpath programming, holdown... I'd say start with not so expensive tool bits. Keep the exotic tools for later. Practice with insulation foams, MDF, woods leftover lying around...
Whenever you question about something, use the search tool to see if the question haven't already been discussed before... you may need to figure more than one keyword... There are benefit to browse the old archives... if you don't find it, Botters will be from every where trying to help you.

Bot on!

[nick]

Thanks Guys...I think I've definitely made my mind up...shopbot it is...but most importantly...it's comforting to know that there is a forum like this with people out to help...Thank you all for your input. Someday I hope to help you all out as well.

Some day’s I am positive...about new business, other days negative...which is good I guess. But having feedback like this when I am having doubts makes me feel like I can get the information I need.

Great advise...Thanks Paco / Ed

Ed....just curious....why Corel and not something native to CNC routing like Rhino, Art cam...Is this something you selected for your work or do you have pre4vious knowledge...Reason for me asking is that I use Solid works day to day...

[jhicks]

Hi Nick, Looks like you've made a good decision. For what its worth your target business areas are certainly viable so the questions are now more related to
"how do you go to market?"
And "How quickly will you become proficient in your chosen areas of interest? and
"How much time will you spend developing skills and a reputation"
So here's my top 10 list for your consideration.
1) Get your shop, and tools up and running.
2) Become familiar with commonly used materials and suppliers in your area.
3) Get as many material samples as you can and try to make samples for your showcase, friends, and potential clients.
4) Figure out how much if any finishing you want to do, how you are planning to do it, and how much time/cost things really take to complete them.(not just machine time, hours from sales call through design, material costs, handling, and manufacture completion)
5) When you have all that ready and photographs of things,(Take pictures of EVERYTHING you make) and start showing off your work either via printed materials or web site or both.
6) Then determine where potential customers are and go see them for input, price points, interest, competition, new ideas, and feedback.
7)Then try to understand the value of your work and market pricing in your area so as not to undersell your work.
8) Start to take orders whenever you feel you can actually do the work and use those opportunities to "figure it out" with someone paying for your materials and training. At least then you will cover your costs if you need to redo something or run into something unexpected. (and you will).
9) When you have an order, things start to happen. So do your research here and elsewhere on how to best accomplish a project, ask for help,(you'll get plenty from the generous & experienced consultants on the forum)
10) Then its all up to you but given lots of nights & Week ends, a few broken bits, and scrap materials, you will find it rewarding and move your way up the food chain in proportion to your investment in time, trial & error, and ability to satisfy customers and leverage the "WOW" factor every opportunity you get.

Keep in Mind every potential customer can get what they want elsewhere or already do. So what will differentiate you, your company, and your work from the rest?
Folks buy from folks they like, trust, and who perform by providing value and quality in their products and service.
The answer is mostly YOU my friend.
Best of Luck

[ed_lang]

Ed....just curious....why Corel and not something native to CNC routing like Rhino, Art cam...Is this something you selected for your work or do you have pre4vious knowledge...Reason for me asking is that I use Solid works day to day...

Nick,
When I bought the ShopBot I had a son at home who told me that he could draw anything in a CAD package that I needed. I saw the value of the CNC machine and left the drawing up to him. Short story is he is now married and has no time for helping me with CAD/CAM stuff. I also bought a laser engraver about the same time. All of this was getting ready to go out on my own. (See #'s 1,2 and 3 in the above post). The laser was the tool I had to get going on right away and Corel is the standard package most every laser owner uses so that got the most attention. Part Wizard came with the CNC so I was working with it at the same time. I bought V-carve wizard when it was first available and later upgraded to V-Carve PRO. One day the light came on that I could use Corel to draw with and export to V-Carve PRO to tool path. That is what I am doing now because I can run Corel and feel good about it. Comfort factor only. I also bought Turbo CAD Deluxe V12 and it sits on the shelf behind me as I cannot learn but so much at one time. So the bottom line is use what you are comfortable with to get the job done.

Work on getting samples out to folks and getting practice holding things tight to the CNC. The rest will fall into place in time.

Ed

[nick]

OK...Guys...you've all be so forth coming with information...Im like a sponge...I'm taking it all in...

One last thing...would it benefit me this early in the game to head to Las Vegas to attend the 2007 AWFS Fair....or will this be a waste due to my current involvement...

Anyway...Thank you all so much....really glad to be a soon to be bot owner...

[ed_lang]

AWFS show..... Las Vegas........ and you are asking IF you should go?

I have not been to Vegas for many years but I would use the AWFS show as a way to get there if I could!

Spend the money on CAD/CAM software for your ShopBot and some materials to cut up and test with.

Stay home!

[myxpykalix]

One thing touched on earlier is to find a shopbot owner close to you. If you call shopbot they have a list of owners who are willing to give a demo to prospective buyers and if that buyer orders a bot from shopbot the guy who gives the demo gets a fee (unless they have discontinued doing that) so don't feel shy about asking or taking up someones time. Also post a request in "looking for shopbot owner". The guy that gave me a demo spent 6 hours with me, and i was sold, so he earned his commission!

[beacon14]

If you are looking for info specific to CNC machining especially using a ShopBot I think you would be better off finding a "camp" that is coming up soon and reasonably close to you. You'll get more out of your time and money than going to the AWFS.

If you still have lots of tools to buy or want to spend a few days just looking at all the software packages that are available the AWFS might be a good venue for that.

[ckurak]

Nick,

Depending on how close you are to Las Vegas (and what it would cost to get there), AWFS would certainly allow you to see LOTS of woodworking machinery of all sizes. If you go, you would see a lot of CNC machines in operation. And, you would learn how much you would have to spend to do the same routing a shopbot can do. (I own a PRT120x60, 2004 vintage and use it for custom cabinetry and woodworking.)

You can also find lots of suppliers/manufacturers at AWFS. However, you might also want to check out the AWFS website and look at the list of exhibitors first. You may learn a lot there that may help you even if you don't get to go.

If you do attend AWFS, be sure to check out the list of seminars to see if there are any that may be helpful to you. And, while at the seminar (or immediately before and after the session), talk to the people sitting next to , in front of, and behind you. Introduce yourself and ask what they do. Woodworkers tend to be very sharing with their knowledge, as are shopbotters.

If you decide not to go to AWFS this year (it is held every two years), consider IWF next year in Atlanta, or one of the regional industrial woodworking shows.

You mentioned the possibility of making signs. I would also suggest you consider attending a sign trade show or two. I have attended a number of these and have learned a lot each time.

Whatever you do, be sure not to underprice your work. That hurts everyone, but especially you.

Side note: If you get interested in making cabinetry, check out the CMA (Cabinet Makers Association). They will have a booth at AWFS, and they are just as helpful as the extremely talented group you have found here. (It is because of these two groups, shopbotters and the CMA, that my business exists and continues to grow.)

Good luck on your new venture and welcome to our neighborhood!

Charles

[nick]

Hi Ed...gonna take your advice and stay home...Thanks...but I would love to attend your camp in September 8th.

How do you go about joining.

Thanks and talk to you soon.

[ed_lang]

Nick,

"How do you go about joining."

If you are asking about the camp..... You do not have to join, just let me know that you are going to be here and the rest is taken care of except for your lodging. I will be posting here, and sending out emails to those who have let me know they plan to attend.

If you do attend, there will be an PRTalpha 96 upgraded to PRS motors with a 4HP HSD spindle in my shop and a PRTalpha 60X120" across the road from me. There will also be a cutting tool maker here as well... Centurion Tools. They are located about 30mins away and there is a chance that last thing in the day those interested could make a field trip to see their location. I am working all of this out now.

Stay tuned as they say!

Looking forward to shaking your hand.

ed

[nick]

Sounds great Ed...count me in

[kimo]

Gentlemen,
How does everyone set their price range when providing services to their customers? I have no idea where to start! Does anyone have a basic breakdown of service pricing?
Any help will be well appreciated. Mahalo

[richards]

Bob,
I charge $75 - $100 per hour for normal work plus tooling and material. The lower figure is for particle board, MDF, and Melamine. The higher figure is for plywood and lumber. The price is for cutting only. All extra operations are billed as additional services. Design time is billed at $75 per hour for simple designs and $150 per hour for more complex designs. In addition, I charge a shop fee of $30 to $50 per hour.

Here's the way it works: I note the time when I start a project and I note the time when I finish the project. Lets say that the total time is four hours. Then I subtract the actual machine time (which are obtained from the log files generated by SB3). Lets say that the machine time is three hours. Then I multiply the machine time by the machine rate (3 X 100 = 300) and I multiply the shop time by the shop rate (1 X 50 = 50). Then I add those two figures together (50 + 300 = 350). So, in this example, the customer gets billed $350 plus tooling plus material plus extra services.

When I charge by the part instead of by the hour, I use a Break-Even Analysis spread sheet to determine a fair price based on the number of parts per hour. The spread sheet allows me to factor in all of the relevant costs associated with running the business. Charging by the part works well for repeat customers who want X number of parts periodically. They know the price in advance (adjusted for fluctuations in material prices).

[Brady Watson]

Price your jobs per hour. Pick a rate competitive with your locale & get cutting. Depending on where you live, shops charge between $50-120/hr. The higher end if you are in demand and the lower end if you want to attract business. The busier you get, the more you charge etc.

-B

[paco]

Holly &*#@! I need to raise my rate!?
112


113

Two things still get me confused:

-How fast a Bot be financially damped (not sure about this translation); should I charge enough so that the machine pay for itself (from the rate calculation I made) within a year, two years, five years more?... I hope I'm making myself clear enough on that one.

-How much profit should I make over material; the very few readings I made really confused me. So far, I cover the shipping and make a small profit but... are there any good reading about this somewhere... Google keywords for a Frenchy?!

Okay, one more; what method do you use to quote; software, scratching papers, guess, else...
I use a custom built spread sheets for one off and the alike and parts production. It render my quote, order, invoice, packing slip and even a detailed resume for the accounting department...
I'd like to have this "all I need software package" but nothing really has it all (or even close). I believe many use Quickbook, do you? Does it does all you need from estimate to invoicing? Did you create your spread sheets or database or code something in say something like FileMaker?

[Gary Campbell]

Paco..
Over the years I have used many estimating and accounting packages that say they can do it all. Of course none of them can. The database programs all work on canned unit prices... /sqft, /linft, yd..etc. you still need to put in a local price multiplier. As a specialty contractor I may never do the same project twice. I have not been able to find any estimating software that is anywhere reasonably priced that will work as we need it in non production based manufacturing. I use a spreadsheet for estimating that will allow me to enter all my material costs, labor hours, freight, profit and overhead. I have reference cells that allow me to enter different rates, markups and P & O percentages, so that I can vary the estimate price with current conditions. To succeed, you MUST mark up all materials, you MUST make a profit against your labor costs AND you MUST have a charge for your overhead costs. And if you want to be here next year you MUST include a profit figure. Figuring out what these charges and percentages are is the hard part. Overhead is a product of time. A job that takes 6 months needs to cover 1/2 of your total years fixed costs. One that takes a week should be 1/50th etc. I like to enter all items in an estimate as my real cost. Just what they cost me. Shipping etc is cost. Labor is more complicated to develop a cost when you are self employed. Lets say your prevailing rate is $50/hr and you are shooting for a 25% profit margin. Your building, utilities etc. (overhead) is $12,000/yr. Your labor "cost" for estimating purposes would be $50/1.25 =$40 less overhead. Which if you are a one man show would be..$12,000/12 mo =$1,000/mo, by 20 working days = $50 per day /8hrs=$6.25/hr Which gives you a bare cost of $33.75 for estimating purposes. Here would be how I do it: (no details)

Plywood, lumber (itemized on bid) $350.00
Required Tooling $80.00
Fasteners $12.00
Refinish Mtls $65.00
Sub Tot Mtls $507.00
Labor Setup,cut assemble etc(itemized)
24hrs @ $33.75/hr $810.00
ShopBot 1.75 hrs @ $85.00/hr $148.75

Shipping, postage etc $8.00
Misc Shop mtls, rags etc (not itemized) $4.50

ESTIMATE COST $1,985.25
Overhead 24@ $6.25 $150.00
SUBTOTAL $2,235.25
Profit @ 25% $533.81
Estimate total $2,769.06

Because all of the rates and percentages are in cells that can be modified, you can make changes depending on how busy you are. Or give a discount to a favored client. There ya go! thats just my opinion, and I could be wrong. Just remember one thing.... It is much better to be sorry that you didn't get the job, than to be sorry that you did!!!!
Gary

[harryball]

OK, this got a little long and rambly and I started to just delete it, but as I read over it I thought someone might find something useful and maybe avoid some of the holes I managed to find.


My least favorite part of business, pricing. I try to keep things simple.

For custom work I charge $75/hr for bot time, $35/hr for shop time which includes me and overhead. I add $15/hr (so $50/hr) for any finish work like sanding and painting. I add $20/hr if I have extra labor working. I add a markup for materials and add it all up in a spreadsheet. Once I see the number I adjust it based on local knowledge and that's my estimate.

With Habitat For Bats doing better and better I've been taking less and less custom work and liking it more and more. As a result my prices for custom work have been going up. I don't look at them the same way anymore. Now I think about it this way "what do I have to charge to do this the way I WANT to do it?" instead of "what should I charge so I can get the job and pay the bills?"

I've worked hard to simplify my life lately and one thing I've come up with is "if I don't like doing it, if it causes stress... don't do it because I won't do my best" I HATE custom pricing, I hate delivering quotes, I hate valuing my work so I do better in a "price once sell many" model. Realizing that and making adjustments toward that end have really improved my outlook on things in the last two years.

However, I like to be creative and feel a sense of accomplishment and purpose. This is more difficult to do in production than one off customs... what was I to do? I first tried creating "custom - production" products. These are similar products customized for each buyer. This was working but then I was able to combine my passion for bats with my passion for woodworking. It had just never occurred to me before and it was NICHE time! Habitat For Bats has been growing for coming up on 2 years now, where has the time gone! I was able to buy the bot a year ago and I keep making more bat houses and bat products than the month before.

The point I guess is this... find something you love, do it for passion and let the money follow. Finding something that you can make money at figuring you'll learn to love it is a hard row to hoe (southern for "makes for a hard life").

I see threads on business ideas where it seems everything is so focused on the dollars it seems some people have forgotten you should enjoy what you do. Worse yet... some people may never have realized you CAN enjoy what you do but rather thought work was something you endured at the hope of living better later. That was me just over 2 years ago when I was laid off from a very good paying job. Something clicked as I started job hunting... I was asked "So, why do you want to come to work for us?" I gave the guy a blank stare and suddenly realized the truth... I told him "you know, I really don't". I don't think he expected that answer. :-)

But I realized I was miserable and the happiest time of my life was walking out of corporate america. My wife and I discussed it, it meant HUGE life changes. I sold practically everything I thought meant success... the 6 digit $$ boat, the toys, the 5 cars were sold. You know... when the Porsche Twin Turbo drove away with its new owner I realized that car had owned me. It was liberating.

I remember quite clearly when I asked my wife "what am I going to do now, what is my passion, what would I do if I had no fear?" She took me to my workshop and said "You were building furniture when I met you and I don't know why you ever stopped... you want to find your passion... look around." There it was all the time, sitting in my workshop. Why had I felt it so important to spend so much money on a workshop full of tools that I spent all day at work wishing I could come home and use? It was a passion I'd wanted to follow but never did for reasons too lengthy to discuss here. Let's just say I thought I was following the money which as we all know is what is expected of us if we are to be all we can be.

Think about what zaps your energy, what brings you down, what destroys your drive and build your plan to avoid those things. The first step to making a good choice is realizing you HAVE a choice. If, like for me, the choice between pricing custom jobs or being shot in the foot leaves you wondering which to choose... you'll never be happy if your business plan requires you to be constantly making estimates. If you don't like finishing, don't build a plan that requires you to do finish work.

Wake up each day and live your passion... oh, and bot on!

Robert

[nick]

Excellent Robert...Excellent

[ed_lang]

Robert!

You said exactly what I have been trying to do for the last year!

I sure am glad you didn't delete the post.

ed

[myxpykalix]

Robert,
You should be a motivational speaker or a preacher...just don't ask us to "drink the kool-aid"! lol

[edp]

Great post Robert - Many thanks for sharing.

[harryball]

I must have struck a nerve here. Thanks for the kind words, I've received emails as well as a few phone calls. I must say, however, I find it disturbing that many of you guys think I have it all together! I assure you, I'm just like you guys struggling with the same issues. Perhaps I found a way to express myself where others have not but expression doesn't mean solved.

I wouldn't want anyone to think you solve the problem once with a "magic bullet" to quote Ed. I solve these challenges daily, over and over. I've been through the fire of a kiln that some of you are trying to enter. After going through this fire I can simply tell you from the otherside what I learned and maybe keep you from following me or changing your direction sooner than I did. I wouldn't want anyone else to work 22 years following the money in a profession that didn't fit them. After 22 years all the degrees and training mean very little for me now in what I REALLY enjoy doing. That is a high price to pay to learn my lesson. Don't base your career on what can make money and forget about what brings you fulfilment.

Bringing that a step closer to business ideas, don't entertain business ideas that entail you doing things that drain you or you find unfulfilling. Focus on what builds you up and fulfils your sense of life, it can be done. This does not mean you won't have to do things you don't want to do, it does mean you can have hope as you focus on your plan that these things are a means to a fulfilling end, not just a daily drudgery to earn cash.

Key words for me are PASSION and FOCUS. Find your passions and then focus on them. Take a minute and think about those you think are successful either and infuriatingly happy. Then ask yourself two questions. Do they seem to do it just for the money or is there some mysterious force that seems to drive them? Do they do 100 different things and anything they can grab at or do you wonder how they can make a living only doing that one or two things they do? These people have Passion and Focus. Then the question becomes... How can I get that?

There are a couple of books I'd suggest everyone read, "Who Moved My Cheese" and "Do What You Are". The first book is a quick simply read, you may think it childish at first but I encourage you to read and reflect on it. The second book seems thick and daunting, but it is really not that bad. You end up reading about 1/3 of the book if you follow it from the beginning. It has an IF/THEN reading format. IF this THEN only read this.

Finding your Passion can be tricky, took me 22 years and it was hiding in front of me and still continues to change shape a bit. As for focus... I say to myself daily "It's about the Bats". I'm drawing, cutting, building, painting, teaching, hauling and so on, but it's all about the Bats. When I have to take a job that is not about the bats I must have a good reason... "It's about paying the bills so it can be about the Bats until it is ALL about the bats" and it's getting there.

To illustrate how passions may not be so straight forward. My core passions upon which my business plan is based are Project/Process Design and Accomplishment, Environment/Nature and Teaching. Be clear here, Woodworking fulfils my first passion, it is not the passion itself. I love to design, problem solve and create real tangible objects that express me. I suppose if I'd been exposed to metal working instead of wood working things may be different. But I found wood working and it fulfilled that first passion so well it never left me. I built a shop and filled it with tools. Environment and Nature is fulfilled by working with Bats and their conservation. I do love bats but again... maybe if snakes had infested our house instead of bats those many years ago the story would be different. Lastly there is teaching. I found myself teaching engineers at my previous job even though it technically wasn't my job. I enjoyed it, conveying knowledge is a passion. Our workshops fulfil that passion.

Maybe Jack is right, wonder if Shopbot could use a motivational speaker or motivational news column? LOL.

Robert

[harryball]

I must have struck a nerve here. Thanks for the kind words, I've received emails as well as a few phone calls. I must say, however, I find it disturbing that many of you guys think I have it all together! I assure you, I'm just like you guys struggling with the same issues. Perhaps I found a way to express myself where others have not but expression doesn't mean solved.

I wouldn't want anyone to think you solve the problem once with a "magic bullet" to quote Ed. I solve these challenges daily, over and over. I've been through the fire of a kiln that some of you are trying to enter. After going through this fire I can simply tell you from the otherside what I learned and maybe keep you from following me or changing your direction sooner than I did. I wouldn't want anyone else to work 22 years following the money in a profession that didn't fit them. After 22 years all the degrees and training mean very little for me now in what I REALLY enjoy doing. That is a high price to pay to learn my lesson. Don't base your career on what can make money and forget about what brings you fulfilment.

Bringing that a step closer to business ideas, don't entertain business ideas that entail you doing things that drain you or you find unfulfilling. Focus on what builds you up and fulfils your sense of life, it can be done. This does not mean you won't have to do things you don't want to do, it does mean you can have hope as you focus on your plan that these things are a means to a fulfilling end, not just a daily drudgery to earn cash.

Key words for me are PASSION and FOCUS. Find your passions and then focus on them. Take a minute and think about those you think are successful and infuriatingly happy. Then ask yourself two questions. Do they seem to do it just for the money or is there some mysterious force that seems to drive them? Do they do 100 different things and anything they can grab at or do you wonder how they can make a living only doing that one or two things they do? These people have Passion and Focus. Then the question becomes... How can I get that?

There are a couple of books I'd suggest everyone read, "Who Moved My Cheese" and "Do What You Are". The first book is a quick simply read, you may think it childish at first but I encourage you to read and reflect on it. The second book seems thick and daunting, but it is really not that bad. You end up reading about 1/3 of the book if you follow it from the beginning. It has an IF/THEN reading format. IF this THEN only read this.

Finding your Passion can be tricky, took me 22 years and it was hiding in front of me and still continues to change shape a bit. As for focus... I say to myself daily "It's about the Bats". I'm drawing, cutting, building, painting, teaching, hauling and so on, but it's all about the Bats. When I have to take a job that is not about the bats I must have a good reason... "It's about paying the bills so it can be about the Bats until it is ALL about the bats" and it's getting there.

To illustrate how passions may not be so straight forward. My core passions upon which my business plan is based are Project/Process Design and Accomplishment, Environment/Nature and Teaching. Be clear here, Woodworking fulfils my first passion, it is not the passion itself. I love to design, problem solve and create real tangible objects that express me. I suppose if I'd been exposed to metal working instead of wood working things may be different. But I found wood working and it fulfilled that first passion so well it never left me. I built a shop and filled it with tools. Environment and Nature is fulfilled by working with Bats and their conservation. I do love bats but again... maybe if snakes had infested our house instead of bats those many years ago the story would be different. Lastly there is teaching. I found myself teaching engineers at my previous job even though it technically wasn't my job. I enjoyed it, conveying knowledge is a passion. Our workshops fulfil that passion.

Maybe Jack is right, wonder if Shopbot could use a motivational speaker or motivational news column? LOL.

Robert

[Brady Watson]

Robert,
I meant to chime in earlier, to say that it's nice to see a fellow craftsman riding the wave and enjoying his work. This is the way life is supposed to be guys...You know...getting paid to do what you love?

I'll add a couple little tid bits:

Add CONFIDENCE to your list of words. NOTHING makes you more money than confidence. Customers smell it, and respond accordingly. You'd better be able to back up your words, live & be your word, and do what you say you are going to do ON TIME if you want them to come back.

Book list & pretty much required reading for anyone getting out of the Empire Slavery & Salt Mine paradigm...a new paradigm calls for new information:

* Think & Grow Rich by Napoleon Hill <-- One of the best books for this subject BAR NONE! (I must have given away 4 copies already. It's that good.)

* Dynamic Laws of Prosperity by Catherine Ponder <-- Uplifting and inspiring about money & how to change your thinking to attract more of it to yourself.

* The Four Agreements by Don Miguel Ruiz <-- Get yourself straight and live your word

* Creative Visualization by Shakti Gawain <-- Helpful in creating what you want to 'step into' in the near future. Visualization costs nothing & gives you EVERYTHING.

-B

[harryball]

Brady, you are right, I would do nothing to down play Confidence... I personally find if my passion and focus are on track I have no problem with confidence pouring in and spilling out everywhere. I should not assume this is the same for everyone. Thanks for bringing that in, I now have 3 words... :-)

A sales rep with passion for his product, focus on what he wants and confidence to step forward rarely finds it difficult to connect with the customer and sell... loose any one of those three things and the customer can smell you a mile a way.

I've read two of the four books, haven't heard of the Four Agreements or Creative Visualization... will get and read.

If I knew then what I know now... I wonder where I'd be and if I would still know now what I know now or would I know what I knew then and make the same mistakes and end up now just a little later? :-)

Robert

[kimo]

Mike, Brady, Paco, Gary, Robert, and everyone else that supported my question, thank you-all very much for your professional inputs and opinions. For a minute it seemed that I opened a big can of worms! My reasons for seeking help from all you professionals are due to the fact that it was only just a few months ago that I become acquainted with ShopBot equipment and the magic it can do! Since retiring from the U.S. Navy, I have found myself kind of lost looking for hobbies to keep myself busy and to avoid a heart attack from slowing down in life too fast!
I am impressed and have also became obsessed with purchasing ShopBot(s) to start-up a custom design and manufacturing interrior/exterrior business here in my home state Hawaii. I am currently putting together a Business Plan and my stopper right now is the service pricing.
I have a lot to learn but I feel the venture will be awesome and well worth my time. Does anyone have a ShopBot Business Plan Sample???
Once again, thanks a lot guys, your thoughts and professional advice will be very helpful and well appreciated.
Mahalo,
Bob.

[jhicks]

All great input as usual. I strongly agree about "following your passion" and with that said, its very tough to do if you can't put food on the table so the practical issue is how does one do that so you can afford to "follow your passion?"
Well I see all the calculations and understand machine rates, shop time, overhead etc BUT I must say that is the VERY LAST way I would price our work.
WHY? Because when one begins to understand their market, competition, and true value in the "customers mind" those numbers have ALWAYS been way too low for what the market will bear and basically says you are simply selling time.
Why place a value on your time vs the projects worth?
Would you sell a unique patented item for what it cost to make it plus a small profit? NOT!!
We'll you doing custom/unique designed work or service aren't you?
So we generally use a multifaceted approach.
Yep material, labor, OH are one calculation.
Another is What do competitors sell it for on the WEB or elsewhere(or something similar).
Are they providing local service, custom design and what would it cost to ship that from say California or India to NY if they bought it on the web?
What is the market price per foot for example on dimensional signs. $100.00 to $150.00... Compare that to labor, material, shop rate etc.
What do we believe our "value added" services or uniqueness is worth on this project? What is our design collaboration and personal contact with the customer worth?
And finally (most important) what do we feel the customers situation is with respect to their time, personal investment, emotional investment, and budget to find someone they trust and collaborate with to achieve their unique vision.
Ok all that now in a spreadsheet we compare all those angles.
In the end, Labor, machine time, materials, OH, design time etc all added up ALWAYS comes way short of what the true value is.
One simple example... A recent job based on strict time(at $75.00/hr) materials, mark up, etc came out around $7,500.00. Yes that would have met all logical criteria and technically we probably would have been happy at that. Upon further review of all the above we proposed $15,000.00 plus some added options.
The customer was thrilled and thought that was very reasonable perhaps a bit low and wondered if we had lowballed it??
So if you're happy with selling time, I certainly will wish you well BUT if you want to maximize your return on investment and sell at market rates and percieved value, I think you'll find "following your passion" might be much more rewarding. Just my 2 cents

[harryball]

Following your passion does not preclude common sense or doing what is neccessary. If you read back through my posts you'll see that I'm not talking about throwing caution to the wind with a be danged attitude and doing what you want. I'm talking about finding something that energizes you and building your business plan to pursue it so you don't sit in the same old life draining job/work for the rest of your life.

I'm sorry Jerry I disagree, figuring your machine rates, shop time and overhead is the VERY FIRST way you should price your work. Don't forget my comment... "Once I see the number I adjust it based on local knowledge"

Believe me, I sell for as much as possible but a good way to loose your shirt is to wing it without knowing what it's really costing you to do the job. I always know my cost to operate and my "selling by time" calculation is my floor price to keep the lights on. If I can get more, believe me I do but I NEVER take less. I find many people are willing to provide the "same thing I do" for less money. I also find they don't stay around long and if I based my prices on theirs I'd go right out with them.

I recently finished a small contract job, one of the electricians used (not picked by me) wings it. He walked through the job and quoted $3500... I asked him to reconsider but I did not tell him his next closest competition was $7,500. He re-did the quote in about 5 minutes and came up with $3800. The owner gave the guy got the job... then both wished he handn't. I later asked him how he did his quote. He told me he figured in his head about how long it would take him, added for material and came up with a number and it always worked in the past (right). He never did calculations. It was also no surprise to learn the guy was going under. If he'd taken time to do the math he would have added the cost of all the concrete drilling bits for one.

In a nut shell, get what you can get but know your minimum sales price to stay profitable. Know your competition but don't blindly follow their prices.

Robert

[jhicks]

Robert, I wasn't addressing you specifically so pardon any offense. In fact it sounds like we agree but I must not have made it clear when I said.
"I see all the calculations and understand machine rates, shop time, overhead etc BUT I must say that is the VERY LAST way I would price our work."
Guess I should have differentiated SELL PRICE vs Cost. and

"So we generally use a multifaceted approach.
Yep material, labor, OH are one calculation." and

"those numbers have ALWAYS been way too low for what the market will bear and basically says you are simply selling time."

The key is multifaceted, and that Matl,OH, GP are JUST ONE base line calculation.
Guess I should have said a base line from which to adjust. Regardless, I think many have experienced situations like the one you describe either with their work, or someone else who got in trouble.
At the end of the day, its whatever works in your area,shop, and wallet.

I just hate to see folks (especialy those starting out)try to set standard formulas for custom work to determine their SELL price and leave money on the table and I've met and spoken with many who do.

Obviously one needs to know their costs.

BUT if all one wants to do is sell time and that makes one happy, more power to them.
Just my 4 cents

[Gary Campbell]

Jerry, Robert & Brady...
Thank you all for the insight... sometimes we overlook even the most obvious facts. I must have forgotten that I was one of those 6 figure mgmt types rushing thru the traffic in West Palm getting to the Island every morning. I had a couple weeks off for my sons graduation, and while I was in MI I worked a few days with a former partner. That was it..til then I hadnt realized how much I enjoyed actually doing the work... not directing it. I never went back. Back to being self employed. My son joined me a few years later. And we are loving life..(best explained by Robert above). Thanks for the reminder.
By the way... in reference to the mythical job I quoted above... it was real. A small media cabinet for a yacht. The listed coasts are real... but as Brady states above, the value of the work, considering the boat had to be taken to a yard 250 miles to get it done, was much higher than our costs. We sold the job for $4,900 and the customer never even flinched. Thanks again to you all for the reality check.
Gary