How to Pay for a CNC Machine

[@TheWidgetWorks]

Great explanation. I run a very odd machining business as I concentrate on high value, fast turn around type work (the we needed it yesterday) mostly for power generation and refinery. I started with a tormach in my garage I bought to teach myself CNC milling, I was already doing CNC lathe. Then after a while I realized that if these guys that I work for can do it I surely can, so I bought a lathe and started up in my garage evenings and weekends with the intent that my day job can make the payments on the lathe until I can get enough work to make a go of it. That lasted 2 weeks then I had so much work because I was taking on overnight stuff that my customers just could get through there shop, that I quite my job. Now ten years on that's still my focus, not fast but immediate service, most of the time I already have the job done before the big shops even have responded to the RFQ (request for quote). Now the down side is this does not scale, I'm a one man band and it's very likely I remain so but I'm okay with that. That's the other thing I see is some people think they need to keep growing or they are failing, I disagree, you need to get to a place where you are comfortable and happy.

[@spencerstromberg]

Exactly! And once you start growing and hiring people, communication gets lost and quality goes down. Then you’re no longer in control of your company and reputation. That happened to my first boss. I was his first employee and I was ocd about everything, then he hired a bunch of high schooler idiots that messed every part up and crashed his machines. You don’t have to grow

[@owievisie]

Honestly one of the worst ways to make money (and I want it) is by CNC machining. I mean in no other trade do you have to invest 150K in a machine and pay 1-3K a month on tooling just to get 70 dollars an hour. A plumber has 10K in tooling and makes more an hour. A car tire shop had 30K in machines and makes more an hour. This trade is kinda f-d up in therms of how much money you have to invest and howlittle compared to your investment you can earn. It is definately one of the most epic and cool trades there is, I freaking love this trade. But to start my own business, i don’t know about that man. I love your channel Jason and here and there you teach me some cool stuff. That is also a small reason why I love this trade, because of people like you making sure my work is still fun to watch even though I’m at home chilling. Thank you

[@frankgrabasse4642]

This is the most honest statement on youtube.

[@xx_death_xx-de9eq]

Try farming

[@airgunningyup]

depends. When you create a product in a niche market, the pricing no longer is tied to labor cost. Im betting Jason charges whatever he wants for many products ( within reason) In my business theres no competition for certain parts, so im setting the price based on demand .

[@support2587]

@@xx_death_xx-de9eqya like when the packing house sends you a bill for your apples. Anyone like some seasoned applewood?

[@guitarchitectural]

The problem is you're thinking of it as an hourly rate. It's not. your revenue is in your production volume, which is defined by the products you're making and their market value, combined with your ability to make them efficiently. A toilet replacement may always get you $400 in wages for half a day but a manufacturing tweak may double or triple your yield - so don't underestimate your ability to fully utilitize the power of those big fancy tools.

[@CharlesBallowe]

Grimsmo knives are fantastic, but if you watch his videos getting started, it was a long path to where he's at.

[@paintballopensession7596]

I really appreciate you taking the time to make this video. I've been learning CAD, and manufacturing for years while active duty. Ran a few side business and developed a few products. I've outsourced and kept overhead limited and flexible while I learn and find niche. Definitely needed to hear what you had to say. Thank you.

[@GrImReApPeR99]

I absolutely agree with you and it so nice to see a business owner actually talking straight.

[@wachtmanknifeandtool]

Just discovered your channel. I've accidentally found myself on the quintessential "garage machine shop" journey recently myself and this certainly rings true from my experience. It's HARD to make a product well! Thanks for the video and insight!

[@yamahaeleven]

A video of your plastic injection and forming operations would be awesome! I’ve been following your journey almost since day one, love what you are doing!

[@artmckay6704]

Thank you! Very useful information that few share with the rest of us. Very concise and eye opening. Few videos, out there, give us the kind of leg up that you're giving us. Thank you again for such an honest and inciteful presentation of entrepreneurship. You totally hit that head bang on the nail! :)

[@scotttravis9313]

I started as a hobby milling business. I then moved up to doing offload for machine shops. Usually the easy low pay stuff shops don't want to mess with. My area (wichita ks) is saturated with machine shops so it's very competitive. That also drives down profits. So now I concentrate on support items for the industry. Deburr machines, vibratory tumblers and sheetmetal tools such as brakes and shears. It's a slow transition, but I feel it will be better in the end. You then can sell locally and nationally.

[@Squintz45]

Stepping up from a router to a (Cheap) mill soon in my little (RC soon to be job shop/RC) endevor. Can only go up or bust from here! Everything goes back into growing my capabilities in manufacturing for now. Doing as much myself as possible. Thanks for these videos!

[@willeykev]

Hey Jason, absolutely LOVE this type of content for sure!! I've been retired for four years now and have been thinking about the VERY things you just pointed out here in this video. I'm doing a lot of product development at the moment and love it to death but have also wanted to start learning how to machine my own products (just as you have described) but with no delusions either! It would simply be something new to jump into but jumping very thoughtfully and calculated; hence, why I would very much look forward to more content of this nature so I can learn from someone seasoned in the business! Thanks again for bringing great content to those of us who are willing and have a burning desire to make high quality things!! Kevin

[@EdgePrecision]

Jason I get questions relating to this subject and the pricing of work quite a bit. This is a difficult thing to describe. I have had people that worked for me start their own shops. Very few of them sucede. I think many people have the idea this will be easy. Just buy a machine and work will come to you. They really don’t understand the commitment involved. Not to discourage anyone but to do it you and your family have to be all in. And there will have to be sacrifices made to do it. You first have to build a reputation. If you work as a machinist for someone else you start there. If you can’t do a good job for them that excels above the norm. Don’t expect you can go out on your own. Then at the same time start small with your thing. I started in my garage. I worked a full time job that I had to drive an hour to get to. Then worked every other hour (I’m serios about that) in the garage. There is no time to do anything else. If you and your family can’t make that commitment. I would advise you not to even try. Sorry.

[@DF-zb3yk]

Don't forget about not being paid on time. just another level of stress to throw into the equation.

[@EdgePrecision]

@@DF-zb3yk Yes this can be a problem. If you are a small shop. You would of course like to get a big job. But this can be risky depending on the customer. Don’t be to eager about excepting a large purchase order unless you can afford not getting paid. You buy material tooling and spend time. Then let’s say the company without your knowledge goes into bankruptcy or is getting sold. You could be in trouble. Of these two scenarios. I have had one happen to me and the other to a friend of mine. My friend had to close his shop. My self I survived but it took me almost six months to get paid. So the bottom line. Check out your customer before excepting a large PO that could be a problem if you don’t get paid!

[@wzhaicthtaarkyer]

Lessons from the master!!!

[@ChrisMurrayEWC]

Great video as someone just getting into machining. Similar to what you suggested, we started making some products of our design, first with 3d printing then outsourcing to a local machine shop and recently bought our own Tormach to start trying to make things in house. I had no experience machining prior so the learning curve has been rough but finally 6 months in or so and I am starting to feel relatively comfortable running parts. If anyone is reading this looking to do similar, give yourself more time than you think to figure out machining unless you are being guided by someone experienced. It's be a really fun ride so far though and I am excited to see if we can grow this thing.

[@bobabbott8370]

Nerdly, this should be a very helpful video for everyone. I started out with a known needed product that wasn't being made with 3d printers. I am retired and make $40,000 + a year and every year this grows. I added a CNC mill and CNC lathe along with my manual machines over the past 2 years. LIke you I have put every penny back into the business. I have my own product line for those.

[@MaDuceRules]

Zip tying the air blast to a coolant line is an AWESOME idea Jason! Will be doing that for sure. Thanks!

[@agnstthegrain]

thanks for the honest and informative explanation of the "business". sometimes reality isn't what we want to hear, but its great to have this type of knowledge from an expert before making a leap into the unknown. Thanks for taking the time to put this together!!! gave me a lot to think about

[@HuskyMachining]

I love these videos with tips from a machining small business. I started my buisness about 5 years ago more as a hobby on the weekends and after work to help fund my expensive hobby of metal cutting but I do it full time now as I liked it more than my day job and it pays pretty good in my opinion. I absolutely love my job now so to me it ridiculous that people pay me for stuff I would almost do for free (if I was a rich man). And im 100% with you, I have taken every penny of profit so far and reinvested it into more machines and tooling. Half because I want to play with the new tooling/machines and half becasue I want to be the best damn job shop on Xometry.

[@FragoutDesign]

first time seeing your videos but as someone in a parallel type industry and have folks looking to me to help lay out a lath, I know it's not easy to elaborate, the sacrifice you mentioned especially. that's the hidden part most folks don't understand. I didn't getting into my work. but I do now. good stuff man

[@boazm.2110]

Thank you for sharing. I would like to see more videos like this, especially about starting a product based manf. Business. What it takes, the steps. MARKETING etc. thanks again!

[@michaelpunaro5594]

Thank you for your time and insight! Keep up the good work.

[@killingmon]

Very well done. Also very helpful. Happy New Years!!

[@jeffwombold9167]

Your discussion is spot on. I owned a machine shop for several years and unless you have a proven product, or can provide a service possibly for multiple customers, investing in a large machine isn't a good idea. Our specialty was building molds, somewhat profitable, but our moneymaker was in prototype work and work that was much more demanding than average. My biggest suggestion from MHO is don't be one of those who think just poking a button or turning a handle is what success is, it takes a lot of knowledge, and realize that in business, asking the competition for insight isn't always the best idea. And simply servicing and installation of a large machine is expensive, and that's not the price of the machine included.

[@michaelbaldridge3637]

thanks for the video, i own an engine shop, completely understand buying machines. yes it's a long road!! keep up the hard work.

[@austinlemaster1150]

Great informational video, really appreciate it. Best to you and your business!

[@Arthur-ue5vz]

Thanks for the talk! Good points! 😊

[@RoboCNCnl]

Great video, and this is the real story of small business! Keep up the great work

[@bluegroovemodelsports9650]

Thanks for this video. Keep up the great RC products

[@thomasalison6188]

Great feedback, @a reality check for those interested in the business. Thanks!

[@circuitsyndicate4150]

Great perspective. If you did a series on launching a manufacturing product and showed the journey, that would definitely take off

[@colonialroofingofnorthcaro441]

This is just as important as the work itself. I mean it's one thing to get out there and do the work it's another thing to actually get the work to actually know how to run the office side of you no business I mean that's one been one of my biggest downfalls I haven't made money all my life I'm a Craftsman you know anything I touch I pretty much can do sometimes a little more effort but sooner or later I'll have it down and I'll be knocking it out but the biggest thing is if two parts to business there's the actual work part and then there is that school money and wore these people have to go to school or at least they used to go to college and get an education on how to financially run businesses so none of these things are very important and I hope you continue to give this kind of information along with the shopping formation

[@Fandangilo]

This was great. Thanks for sharing the knowledge

[@EZ_shop]

Excellent video in my opinion. I wish you made a few more on the logistic of starting a business. Ciao, Marco.

[@TAWPTool]

Yes please! Keep the videos coming!

[@wzhaicthtaarkyer]

Since Jason brought up John Grimsmo I have been a subscriber long enough to remember he started in his garage on a hobby machine.

[@clodbusted1776]

Great video. Good info. I just ordered a vf2ss it should be here in a few weeks

[@Inventorsquare]

Thanks for the video. I’m a machinist, manual and CNC. I’m saving up for a machine of my own, but also a place to put it 😅. I’m waiting to find some more contract work, so that the machine actually starts out as an asset, not a liability.

[@matthewstec5279]

Good tips guy. I have been in manufacturing ( providing a service) large mill cnc machining for 15 years+ now and want to get out on my own but would like to some day. Like all your videos and would like to see some more on the okumas I-MAP feature if you have one or know of one let me know if you could.

[@JayVon_Ro]

Please re upload your Tormach review video of the 1100mx. People that bought one like myself who absolutely hate it would greatly appreciate the realism of that video.

[@HuskyMachining]

lol, that was the first video of his I watched. It was the day after I ordered my Tormach 770 and It scared me a bit but thankfully I didn't have any issues with my little Mill although I definitely heard some bad stories

[@justinwalker8364]

@@HuskyMachining I hate when that happens - just got my 440 delivered - not really for business but just for myself to tinker with. But glad I don't need a fast machine lol.

[@sidanx7887]

Thanks for this - I am just out of the military and am getting finished learning from mr marvel about making 1911s and am looking where small machine can help me speed up some processes (the vast majority is hand fit) - newbie but learning

[@bluehandsvideo]

Great video Jason! Thanks :)

[@edupuertasfruns]

Completely agree, all depends on the quality of product or service you give and your reputation due to that work that allows you to grow. And time investment is huge.

[@DEATHTRAPHOTRODS]

I think the biggest thing is knowing how to use one. I've helped out so many shops that have no clue on machining.

[@juansalgado6212]

Start as a hobby, small scale and see how it goes. It starts from curiosity as a past time and grows from there. No need to jump into the large machines. Desktop machines are the reason why they exist. Taig, Sherline, etc. Great machines to starts.

[@Zen_Modeling]

Exactly the way I entered 2 years ago, purchased all Sherline equipment Mill/Lathe + Tools all attachments …💯

[@uncharted4076]

I need a product line because items sell in seasons. Thank you for this tip

[@terrymoorecnc2500]

Most machine shops make more money by accident than they do on purpose. Having a plan is key to your success. Knowing your limitations and how to overcome that is an acquired skill.

[@seimela]

I worked for a boss in South Africa who is Multimillionaire...he is purpose driven than a chancer ..he had Goals

[@repalmore]

Buying tools depending on business needs. I've taken jobs that required a tool that I didn't have and I used the job to pay for the new tool and sometimes I made no profit after paying for the tool but now I have the tool to go out and make more money with that tool. I call it "will work for tools". ;o)

[@AATopFuel]

You are exactly right! I never been able to get traction on anything that I do. I am able to get within 0.001" on my machine. Which is good for anything but aerospace. It would have been good if I could have done better. If I could have stayed busy all the time and kept my machine working. Maybe I could have got a real machine. Like you say why would I spend a million dollars on a machine if I can't keep it busy?

[@shareNenjoy]

Excellent video Jason! Could you give a link or manufacturer name for the injection molding machine? I'm looking for a fully-automatic reciprocating screw machine for my prototyping services/proprietary product business of the past 25 years. Thanks for this video and confirming what it takes!!

[@kempoxp2]

best cnc buying advices on the net. simple make a new product or be a service

[@airgunningyup]

I started my business 7 yrs ago , it pays the bills and so on , but i havent invested in large machines just yet. I could finance a large machine, but i get by fine without it soo far. I also outsource smaller parts to large companies .They end up being as cheap as the material when you buy by the 100

[@markdamron3161]

Do you have info on the prototype injection mold press? Thanks!

[@automan1223]

You can eat the elephant... but in small bites.... A master mechanic does not start with a chest full of tools. He builds his set over time. The barrier to entry is part of the journey. It is what makes it worthwhile.

[@dejanvanevski4399]

I started my own cnc shop with one milltronics rh20. Now I have 3 hurcos, lathe, edm.... I understand that other jobs are much less demanding in investing in equipment and machines, but what should we do? I'm planning to purchase horizontal machining center😅

[@zakariakhamees]

Very very useful thanks.

[@dustinwalden7091]

Two man job shop with my dad. With the ups and downs of business I can’t ever feel comfortable buying anything. When I first got out of college I wanted dad to buy stuff. He told me pretty much what I said. I’ve seen the bad times and the good. Can I afford a $3,000 payment, sure. Problem is that $3,000 payment is either 10% of the monthly gross or 33%.

[@justin9605]

Thank you.

[@ACMEracer]

Interested in the proto injection molder you have. I have an old Morgan Industries machine that gets quite a bit of use.

[@spencerstromberg]

xpm-17. it says about $8,000 but once you get it through customs and the boat from China, it ends up being about $11,000 all said and done. Great machine though, all-electric so no leaky and energy consuming hydraulics. Ollital says they're the manufacturer, but robotdigg told me they're not, so I don't know who makes it.

[@mahakal_ke_ladle21]

can you help me for MLC 49 spindle driver alarm solution please ...?

[@deanmoser5907]

Yeah not just cnc these points you make fit many other businesses.

[@k53847]

There was a knifemaker that had a channel that covered the business side of CNC. It was pretty interesting, but then he deleted it. His core suggestion on the business model was that you making your products is the way to go. Unless you already are in the business, have expertise and know people who will want you to do work for them, job ships are really hard.

[@vanguard6937]

Pretty much, but you have to have a product that people want, and the ability to get that product Infront of their eyes

[@austinconnell1967]

what are your thoughts on making parts for a company like Xometry as a way to get started? The goal being to end up with product and not doing service work

[@cskovach]

At the end of the day work is work and experience is experience when you’re starting. Being able to make some money while you develop your product line in parallel is certainly preferable to earning nothing. Just my opinion.

[@mitchellsand826]

Well Said, the dream is only achieved on your own back.

[@davidchavez81]

It's not about what you can make, it's about what you can sell.

[@hosemorelas2439]

All the best for 2023! 😉

[@TonyRios]

Nothing is easy, you'll have to do the hard work now or later. There's no getting around it.

[@masoncnc]

I made an upper on a mill turn. Lose money on everyone but make up for it and quantity. 🤣

[@sheepman6291]

I would like to add that its best to have 4 to 5 ideas already drawn out and ready to go before you buy the machine. My wife and I are also making sure we pay off the home before we acquire the $300k machine.

[@HuskyMachining]

dang, $300k, what machine do you and the misses want?

[@sheepman6291]

@@HuskyMachining 5 axis HAAS with robot, and a German Boy 35E Injection molding machine.

[@sheepman6291]

@@HuskyMachining Most mori, Mazak, and Doosan CNC machines cost over $300k. HAAS is known as the cheaper machine.

[@sheepman6291]

@@HuskyMachining Also when you buy a CNC mill you need to count for the building you're going to put the machine in and the 3 phase power that needs to be installed. 3 phase power installation is around $15k. If you get a 3 phase rotary converter and do most of the installing yourself its a lot cheaper. The garage needs to be around 10 to 14 feet tall. UMC mills are not short.

[@HuskyMachining]

@@sheepman6291 I get that. One of the reasons my overhead is so low is I built my shop in my backyard. I got quoted $27k from my power company to run 3 phase to my house/shop so I instead paid $4k to run a 200amp single phase to my shop and then another $4kish for a 30hp rotary phase converter.... Things definitely add up

[@andre1987eph]

I thought title said “pray”😂

[@MF175mp]

I have done that and it worked well. Got probably the cheapest Japanese VMC in the northern hemisphere shortly after

[@patobanion]

So, do you have a day job then in addition to your CNC business?

[@masoncnc]

I do.

[@patobanion]

@@masoncnc Nice.. Me too. I am trying to grow a business outside of full time work hours as well. You are correct in that it is a long process... What is your regular job? Is it related to machining at all?

[@masoncnc]

@@patobanion I do applications support for a machine tool OEM. Travel makes the side thing HARD.

[@epilotdk]

Sometimes you do all the right things and then circumstance screws you over. Brexit and Covid was the perfect storm that stuffed my business. I had to go out and find a job and I have a brand new X7 that hast been sitting around for over a year and not been plugged in yet. I'm hanging on to it though and paying the installments out of my paycheck. I offered a service (laser cutting) and it was going well. I wanted to move towards creating a product and therefore took out a minimum of pay for myself and invested my earnings in buying a CNC lathe and CNC mill. It required a lot of graft. The main market for the product I wanted to manufacture was in UK and Brexit screwed that completely. The other major market would be US, but product liability insurance costs make it unviable. Covid affected the customers I provided a service for quite a lot and the amount of orders dwindled. I had hoped things would pick up in 2022 but then the economy tanked due to the war (sorry, "special operation") in Ukraine happened. I used to run a small but succesful business in the model hobby area and sold worldwide from a webshop. Some products were of own design/manufacture. The global financial crisis in 2008 killed that off. I find it very hard to bolster myself against world events that are outside of my control. I was lucky to find a job but it's detrimental to my health so I hope one day to be able to go back to being self-employed.

[@DanielDeArco]

Jason, I really like your videos, but one thing that’s always bugged me is how you rarely go into detail about the products you make, and your actual business. It’s always a vague mystery as if you signed an NDA with yourself lol. Don’t you think sharing more about your specific products or services would help inspire people, or even generate more customers via KZbin? Maybe I missed the videos where you did go in depth (never mind if that’s the case), but it’s just a thought. We don’t expect you to show proprietary designs of anything, though it is hard to relate to entrepreneurs when you don’t understand what exactly they do for revenue.

[@NerdlyCNC]

i understand. thanks for the feedback. Several companies that compete with me have told me that they learned how to compete with me from my content and couldnt /wouldnt have done it without my content. This leaves me in a difficult position. The reality in manufacturing is that many times simply showing a product even when its incomplete leaves clues to how its made...and how its made is in our case the only way we can compete with china. For this reason i do my best to provide entertainment / insight and sometimes education in the ways that i'm able to without injuring my business and my family. I have a video coming soon on information / research for business building. Hope this help, Jason

[@spencerstromberg]

Hey I have that same molder XPM-17! It's so awesome and beefy. got it from robotdigg. I can turn it on, walk away, and come back after 1,000 cycles and have a pile of parts. Automation should be the goal for everyone, and it's awesome

[@itsnotlevel2]

Eh, I disagree and think this is definitely a video of how NOT to go about it.