Modern Business Logistics for Today’s Machine Shops



If you’re looking for business ideas in this economy, you might not initially be thinking “machine shop.” But, opening a modern machine shop, and doing it cheaply, can open up almost infinite possibilities for you. Here’s how to get it done and grow your business steadily.


Buy Used Equipment

If you’ve got no equipment, you’ll need some. This is where companies like Retro Systems can help you find affordable systems and machines that you’ll need as a startup. You can also look for used equipment that may be in perfect working order from a company that’s selling or closing down.

Believe it or not, there are a lot of these types of companies out there. And, there are plenty of used computer sources too, like CapAsset, where you can buy used computer systems for your shop at half or less the price of a new system.

As long as the equipment is in good working order, you should be good to go. If in doubt, pass. And, always inspect the machinery, or have it professionally inspected, before you buy.

Use Big Data To Drive Production Decisions

Big data refers to analytics – tools that you use to monitor sales, marketing, production, and other metrics. Most small businesses don’t need “big data” because it’s very involved and tracks a lot of things you won’t have. But, if you’re thinking of growing your business to any significant size, you should start looking at big data now.

The types of analytics are simply amazing. For example, you can calculate future orders based on current buying behavior of your customers, modifications you’ll need to make based on past buying behavior and current market and industry trends.

Innovations in manufacturing may be fed into your analytics so that you can “keep up” with the industry and avoid becoming stale.

At first, you’ll want to concern yourself with basic analytics and data, tracking sales, marketing, and inventory. You’ll want to track web visitors too, if this is a source of leads for you. If not, you’ll want to have some way to track incoming leads, like a lead management system.

Work Out Of A Garage To Get Started

If you’re really small, and struggling to raise money for your shop, you could always start out of your garage. This is a space that’s made for tinkering and, if you have electricity piped out there, you can build almost anything.

Tools can be set up, even CNC machinery, and you can work as you would in an industrial shop.

Keep in mind that some companies may not initially respect you if your shop is in a garage, and you’ll have to focus on producing quality work. But, there’s no reason why a small startup needs to have an industrial warehouse. They cost money – money you don’t have.

Focus more on getting contracts for parts. The warehouse will come when you really need it.

Operate as A Sole Proprietorship and Buy Business Liability Insurance

You probably don’t need to be incorporated unless you’re planning on hiring employees or you have customers coming into your shop. This is something almost every startup thinks they need (incorporation). The reality is that corporations provide some tax benefits and some legal benefits for companies that are big enough to have assets to worry about.

If you have no assets, you may be able to get buy with basic business liability insurance. This type of insurance covers you if there are any claims that arise in the normal course of doing business.

It’s a sort of stop-gap for incorporating. But, it can also be used in conjunction with incorporation to prevent a frivolous lawsuit from ruining you.

Use Existing Equipment You Already Own

Lastly, if you’re on a shoestring budget, and you already have some machinery, use that. It might seem obvious, but a lot of startups believe that they need to spend a lot of money to look like they’re in business.

You don’t. All you need are machines that work. If you have them, even if they’re not the newest, shiniest, and fastest, use them.

Now, if your machines need repair, or they’re so out of date that they can’t perform the tasks you need them to, then by all means replace them with more modern ones.

But, don’t underestimate what you’ve got. Reinvest in the business when the profits are there. There will be plenty of opportunities to do that once you’ve established a few solid clients.

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