Economics of Shopbot Ownership

[jemelby]

As I continue my march towards Shopbot ownership, I am faced with the reality of economics. I wouldn’t say I’m ready to prepare a comprehensive business plan, but I do need to face the harsh reality that a Shopbot is too expensive to only be a toy. It will have to “earn its keep” as it were. So, here’s what I believe to be reality:

Fast, simple cuts likely offer the best time-return model. Cutting where the SB can quickly reduce a raw sheet of plywood into cabinet components as opposed to detailed, complex cutting where the SB may routinely take 4-5 hours to do a single piece (not including finish sanding). Conversely, since the SB can run independent of human attention, that 4-5 hours could be spent working other actions with out having to worry about feeding the machine a couple times an hour.

Realistically, I’d be spending 20-25 hours a week with the SB. Obviously, to start, my expertise would be limited. I’m a quick study with mechanical things as well as software, so I should be able to expand my portfolio quickly. I have a large and diverse imagination that has already contrived dozens of [what I believe to be] marketable products, mostly aimed at niche and cottage recreational and decorative markets.

So the hard questions are:

1) How much side income are casual users realizing with 20-25 hours a week, and what are you making/doing?

2) Has anyone had to face the hard reality of not finding enough markets to maintain their SB?

3) Does anyone out there have a story of unrealized fiscal expectations, or fiscal success beyond their expectations?

As always, thanks for playing along with me, and my inane questions.

[jemelby]

I need to refine my question a little bit:

When you are billing a client, labor is typically the biggest part of the bill. You have to figure how much time a job takes, how much your time is worth, expendables, overhead, wear and tear, etc... It occurs to me that the shopbot could very much be considered an "employee." You tell it what to do, and it executes while you go do something else. I've also seen people here in the forums relate that they bill based on the time the machine runs. A "hourly rate of use" where they figure the theoretical life of the machine, and how much of that life a particular job consumes. The other model is time-to-return where an individual may figure how long it should take the SB to pay for itself. If he runs the SB for 10 hours a week, and charges $50/hour, the machine will gross $26,000 a year...

By now I am sure you have figured out that I'm no businessman. But I am a realist. What is working for you? Is there a "right" way to go about figuring this?

[elcruisr]

Check out what other CNC operations are charging per hour, it's a whole lot more than $50/hr I bet!

The advice I got from a gent who's been in the CNC router business pretty much from the beginning is that you should have plans to keep it running at least 30 hours a week or you need to look hard at the difference between ownership and outsourcing and profitability. The answer is going to be different for each business but he had seen many people overbuy machines over the years and go under because of it. Since buying a 'bot 6 years ago I've watched three businesses in my area do exactly that! Sorry but a two man shop does not need a 100,000 dollar machine for most applications!

One of the keys in the equation is going to be you! The more you learn about running and programming your machine. The more you learn about tooling and fixturing, etc. The more varied the work you will be able to take on. The more you market your talents the more work will come in.

I've actually been able to out produce a few shops with "big iron" on certain types of jobs because they are lazy about learning their machines and I've learned how to maximize my cycle times. This has won me some very nice contracts and customers. I've also learned where NOT to compete against them to avoid unhappy customers.

While Shopbots are considered an "entry" level CNC machine it's amazing what you can do if you take the time to maximize yourself in relation to the machine. That, to me, is the key to making them profitable. They can be anything from a hobby to a full on production machine, within their limits, depending on the owner/operator.

My advice is to carefully define what you need it to do and make sure the machine and software can do it for you. Then learn all you can about everything mentioned and you'll see farther opportunities. Just make sure that it is profitable up front before you depend on outside income unless you know where you can chase some down up front. That can make the learning curve much less painful and there IS a learning curve on any machine/software application.

Good luck!

[bcammack]

Nonetheless, is if you eschew toys like the tool changer, it's hard to spend more than the cost of a mid-sized economy sedan or a modestly accessorized Harley on a Shopbot.

I guess I'm trying to say that the price point of a Shopbot gives you considerably more opportunity to be profitable than other units out there and that people often spend as much or more on discretionary items that don't have much, if any, profit potential.

[rcnewcomb]

>Has anyone had to face the hard reality of not finding enough markets to maintain their SB?

If you already have a marketing problem then the Shopbot is not the solution to that -- at least until someone develops some code so the Shopbot can call on your customers.

[jemelby]

I think you all have the gist of what I'm after. Let me emphasize, though... I don't own a business. I have only done small, isolated "for profit" woodworking when pressed very hard. I will be retiring from the military soon, and need something fun (but potencially profitable) to do in my old age.

I want to have a SB to play with. I may dedicate 20-25 hours a week to "work", but I expect to "play" almost as much. Of course, the line between work and play can get pretty blurry. When I set out to play, I am sure that will contribute to my overall understanding and proficiency with the SB. What I am playing with today will become tomarrow's profit.

I don't expect this to be immediatly profitable. I just can't afford to buy one with zero expectation of return. If that were the case, I'd get a horse (or three).

This is sort of like my mid-life red sports car :-)

[Brady Watson]

James,
As great as ShopBot ownership is, there is no gaurantee that you are going to get a ROI in any specific timeframe. The most influential factor in this is YOU & how you choose to use the tool...and quite frankly, nothing more than that when you boil it all down!

Business plan, schumisness plan...the conventional rules of business only apply if you believe they do (I know that sounds outlandish, but...) Everyone has a unique set of talents and abilities, and some of them - as in my case, were not fully developed or realized until I bought a ShopBot. If you want to be successful with a ShopBot or a hand chisel, you have to have the DESIRE, the hunger and the excitement that will keep you moving. If you HEART is not in it, then even the most iron clad 'business plan' is doomed.

I completely get the child-like enthusiasm about ShopBot ownership...and that is a good thing. Not because you'll be buying a tool, but because the enthusiasm is there...and that goes a long way towards being successful. There are of course some realities that you will have to deal with and work out. My advice would be to dream big...you gotta see it, feel it, taste it, be it in your dreams to make things happen. Imagine what it would be like to own the tool & the types of things that you would make, the new business contacts you would have and most importantly, the satisfaction you will get when they hand you a check for doing what you love doing. You gotta 'try things on' and see if ownership feels right. Make sure you visit a local SB owner and talk to them about the realities of SB ownership and how their particular setup is working for them. Visit a few.

Not every Bot owner has a specific product. Many of us are job shops that cut whatever comes through the door. If you are confident, and make good business contacts & do what you say you are going to do on time...then you'll pay for that tool in no time.

Unlike a Harley, the Bot doesn't leak oil and tatoos are not required


-B

[ljdm]

Ahem............... they are not leaking oil, they are marking their spot! And you never know, the tatoos might help convince a customer to make a decision(hopefully to do business, not run)

[elcruisr]

"Unlike a Harley, the Bot doesn't leak oil and tatoos are not required :-) "

Uh oh, you mean I didn't need to get a Shopbot tattoo?

[hindocarina]

James,

Since you are retiring and the router is going to be your "toy," I'd say go for it. You're gonna spend money on recreation no matter what you do in your retirement, so what better way to "retire" than to take on a new intellectual challenge. A CNC router will at least give you the potential for income. How much money you make with it will depend on your own creativity and how many ideas you can come up with. Believe me, once you have the machine and start playing with it, new creative juices will start flowing. You won't fully grasp it's potential in your life until you start using it.

I didn't get a ShopBot. I decided on another brand, because I needed to carry it upstairs in my shop. After speaking with the ShopBot people I decided that getting their benchtop model upstairs was going to be a problem (I have a bad back to boot). The brand I got is lighter weight and dimensionally more suitable to my particular needs.

I make my living from woodworking and my machine fulfills a unique purpose in my shop. Even so, I was very worried about spending the money. I spent an entire month studying G-code and CNC basics before deciding to purchase. I knew nothing about CNC and I wanted to be sure I would be able to figure out how to use it.

Buying the CNC turned out to be the best business decision I ever made. Even though it sits idle much of the time, it paid for itself in the first 3 months. Funny thing is...I don't even think about that red sports car anymore ;o)

Go for it! Every man needs his toys...and this one can make money for you. What better reason to buy.

Charlie

[Brady Watson]

"Funny thing is...I don't even think about that red sports car anymore ;o)"

Yep! I had 3 Mustangs in my shop with enough room to drive one around the other two before I bought my 1st Bot...Now I don't think about my car hobby AT ALL because they were nothing but money pits!!! The Bot makes me money & is LOTS of fun! I even got rid of my street bike to make more room in the shop for more Bots! Ha!

-B

[dray]

Hi.. Chiming in late..

I can not see a shopbot making a hobbyist $

Maybe break even, but I cant see them making $.

no matter what you make people dont come banging down doors to buy anything. In my humble opinion I think that you would need to make it a reg 8 hour workday in order to make $$ at it.

If I were you I would go with the bare unit with router , no bells and whistles and buy extras from that point.

Its not a question of being able to live without one, because we all know its impossible to live without a shopbot, but the bells and whistles can be bought at a later time for around the same price.

[dewey_dog]

James,
I would suggest buying a used Bot and get the feel for it. This is what I did an do not regret it. I made enough in the first 6 months,after working my fulltime job to pay for it. I then sold it and bought a new PRSAlpha. I am starting my business slowly being that my job will evaporate around next June. Whatever you do take the time to research machines and software and go see a shop bot in person, most guys will be happy to lend a little time to a newbe. my2c

[thewoodcrafter]

I think Timothy has made a good suggestion. You can buy a used older machine for half of a new PRS. Learn how to use it. Older machines will do everything a new one will do, maybe not as fast but you may find that it is all that you need. I own a cabinet shop and would love to have a new PRS but the old machine is making me money just fine.

[jsfrost]

Danny,

I don't know if I agree or disagree. It depends on what you mean by make $$ and over what timeframe you are evaluating. In my first year of part time, I was mostly learning. Toolpath creation took too long, and scrapage was significant. I was giving $ with every job.

Now I am making a fair hourly rate for the time I am filling orders in the shop, plus enough to pay for mainintenance, bits, materials, and to slowly recover my Shopbot investnent. Every month I do more work.

I dabble in 3D for my own enjoyment and presently do not sell enough to return my investment in Artcam Pro. Pro is a toy that I never expect to make money on. I am learning and having fun, and every 3D sale is a bonus.

With the time I am presently investing, I could not earn a living. That said, I think the potential for profit, in either full or part time depends on the individual. Making a Shopbot purchase does not guarantee sucess.