Do you have the will to start your own metal fabrication shop? You may know a ton about sheet metal and fabrication, but there’s a lot that you need to learn about running a business.
About 20% of all new businesses don’t make it to the end of their first year. Close to 30% fail in their second year, and half don’t make it through their fifth year.
There’s a lot that you can’t control in your business. You can’t control the economy and your customers. What you can control and the decisions you make will determine the fate of your business.
Read on to learn exactly what you need to do to start a successful metal fabrication business.
1. Write a Plan for Your Business
Every business idea needs to be thoroughly vetted. This is often a major mistake that new business owners make. They have an idea, think that it’s great, and rush to open the doors of the business.
Six months later, the excitement wears off, and the business owner is struggling to keep things afloat.
A business plan is a way to test and validate your business idea. It forces you to ask the tough questions of your business and evaluate the risks of starting your business.
Another reason why you need a business plan is to finance your business. It’s not cheap to invest in the fabrication equipment, and you’re going to need a business loan or investment to get off the ground.
A business plan will detail your competition and your target market. You’ll also have financial projections that show your projected income and expenses.
2. Learn Business Finance
You work with a lot of numbers in metal fabrication. You know that a small fraction can make or break a project.
The business world is a bit similar. You have to understand numbers to be sure that your business is profitable. Any mistakes could be very costly to the long-term health of the business.
If you don’t know much about business finance, take a class to learn the basics. They’re often free online or you can visit your local Small Business Administration office.
You’ll get the confidence you need to project your revenue and get a handle on your outgoing expenses. It will also help you manage your business cash flow, which is a critical part of managing a business.
3. Choose a Good Location
The location of your business is also going to impact the success of your business. You want to have a location that is within your budget and has the room that you need for your equipment.
If you plan to have employees, you should choose a location that’s centrally located and has parking available.
Other considerations will depend on the type of fabrication you do. Welding and grinding require a lot of ventilation. Otherwise, you’re going to inhale fumes.
You should consider working with a commercial real estate agent who can help you find the perfect location for your metal fabrication shop.
4. Find Reasonable Financing
You’re going to need to finance your shop, and putting everything on a credit card isn’t a good idea. You’re going to want to find the right financing for your business.
Before you start shopping for a loan, you want to do your best to show potential lenders that you will pay your loan back. The two factors that lenders will look at are your personal credit score and your business plan.
Pull your credit score and make sure it’s at least above 700. If it’s not, take the time to raise your score. You could wind up with a high-interest loan that does more harm to your business than good.
There are several ways you can finance your business. You can start with your bank. They may offer SBA loans or other business loans at low interest rates.
There are also resources online, such as peer-to-peer lending sites. These are sites that match individual investors who lend money to small businesses with business owners looking for investment.
5. Invest in Equipment
Once you get your business loan, you can start to buy equipment for your business. You should have detailed the equipment you need in your business plan.
A basic shop needs to have a hammer, measuring device, welding machine, safety equipment, and a level.
6. Create a Marketing and Sales Plan
You’re going to need to work hard to get business in the door at first. A good marketing plan needs to detail how you will raise awareness of your metal fabrication shop and generate leads.
A good website will be necessary because most people will look for services online.
Before you start building your site, take a look at other metal fabrication sites to see what they do well and what you’d like to incorporate on your website. Visit this page for a good example of a metal fabrication website.
When the website is built, you’re going to need to learn how to drive traffic to your website. You’ll need to learn search engine optimization (SEO) and pay-per-click marketing.
Your marketing plan can also include offline marketing, such as networking and community engagement.
Marketing should drive leads to your business. Sales will close the leads. You can use a CRM system to manage and follow up with your marketing leads.
Starting a Metal Fabrication Shop the Right Way
Starting a business is risky, there’s no doubt about it. The more you can prepare and plan before you open your metal fabrication shop, the better off you’ll be.
Take the time to develop a strong business plan that shows you’re targeting the right market that’s profitable. You can leverage your business plan to find financing at a reasonable rate.
Are you ready for more startup tips? Head over to the home page of this site for more helpful information.