Do you love working with your hands? Then perhaps owning your own small machine shop is right for you. You can be your boss and do something you are passionate about.
Read this article for five key steps you can’t overlook when starting your own small machine shop business.
Small Machine Shop Business Plan
Congrats! You’ve decided to go into business for yourself and run a mini machine shop. If you are wondering how to start a machine shop, don’t worry because we’ve got you covered.
First, you are going to need a business plan. I know this may sound like something that can be skipped or a waste of time but it is very important. If you are going to look for outside investment, say a business loan from a bank, then you will need to show them your business plan. Even if you are not going to need outside cash a business plan will help you set goals for your machine shop.
It can help you get to know your customers, your competitors, and lay the groundwork for your marketing. Your business plan can also assess the feasibility of your small machine shop business.
What Do I Put in a Business Plan?
You can make your business plan as simple or detailed as you like. Most business plans include a mission, a description of products or services, a bit of information on the customer base, and the competition. You can list out the machine shop tools and equipment you will need to get started.
They can also lay out how the business will be funded and the projected income of the business. You can look at small machine shops that are for sale and ask about their average income. This will give you some figures to base your projections on.
Network With Likeminded People
If you don’t like networking, you’re not alone. Most people dislike networking; however, the success of your small machinery shop is depending on you getting out and meeting people in the community. People like to do business with people they like and trust. So get out there and show your community you are trustworthy.
Finding Networking Events
You don’t have to look too far these days to find great networking events in your area. Look online on Meetup or your local Business Chamber of Commerce’s website for some events and meetings. Ask your friends and family which events they attend and if you can tag along.
Once you are at a networking event, now you have to start a conversation. It doesn’t do any good to go to a networking event and not talk to anyone. People generally love talking about themselves so ask some questions to get the conversation rolling. Here are a few ideas.
- What brought you here today?
- How’s your week going?
- What did you think of the speaker?
- Have you been to this event before?
Once you get the conversation flowing it will get easier. Networking also gets easier with time and a little bit of practice so don’t be too hard on yourself if you’re not great at it right away.
Always be sure to carry business cards to pass out with your contact information on them. Ask for their card as well and follow up if you told them you would follow up.
It’s Okay to Start Small
It’s a good idea to start small and work your way up. Find a building for your small machine shop in an area of town that is affordable. You can always relocate once you have more revenue coming in. Many machine shops are a one-man operation.
You don’t need to get all of the tools from the machine shop tool list that you listed out in the business plan. If you can do almost everything with two machines start there. Some machines such as machine presses can be rented or bought used.
With the right plan in place, your small machine shop will grow gradually over time. Gradual growth is always better than a boom and bust. Set your mind to grow your business gradually and you will succeed.
Know Your Competitors and Customers
In your business plan, you should have already laid out some information about your competition and your customer base. It’s a good idea to keep this information updated regularly. New competition can move into the neighborhood or a competitor can go out of business. Perhaps you find a segment of the population is buying from you that you didn’t expect would make a purchase.
How to Define the Competition?
There are two types of competitors to your small machine shop: direct and indirect competitors. Direct competitors are probably the ones that first come to mind when you are thinking about your competition. They sell products or services that are pretty much the same as yours.
Indirect competitors are harder to spot. They address the same needs as your small machine shop but they will do it differently. You want to keep an eye on indirect competitors because they have the potential to move into your niche and directly compete with you even if they are not at the moment.
How to Get Customers?
Ask for referrals from your current customers. The best advertising is word of mouth but remember, you have to ask for the business. Hit those networking events we talked about earlier and let everyone know your small machine shop is up and running. You can even offer grand opening price discounts or incentives.
Now that you have our small machine shop up and running stay focused on the business. Keep regular hours so that people will be able to count on you when you are open. Take pride in the fact that you are keeping manufacturing going right here in the United States and enjoy the work.
Be Your Own Boss
Who wants a desk job when you can be creating with your hands? Being your boss and owning a small machine shop has many perks.
Implement these five key steps to start your small machine shop. If you liked this article, share it with your friends and read some of our other business articles.