Growing up, you’ve been around various tools, from drilling equipment to woodcutters to lathe machines. Your father works at a machine shop, and you used to visit him there. He would ask you to hand you a small wrench. And you will claim that you helped. This inspired you to enter the mechanical engineering program at the University of Tulsa in Oklahoma, which you completed a year ago.
Now, you’re about to finish your M.A. in business. You plan to get two or three year’s experience, utilize the knowledge, and then start your own business. That’s why you’re pursuing a graduate program in the industry. If all goes to plan, you would like to catch the tail end of your father’s working years and to work with him. You’re looking at setting up your CNC machining business. Here’s what you need to know:
CNC Machining Overview
The industry hasn’t seen significant growth in the past few years, registering a -0.1% annual growth. Still, the economy is engaged with nearly 19,700 businesses delivering a total revenue of $44 billion as of August 2019.
The size of the market is stable, but new and small businesses will face fierce competition from older, larger, and more established ones.
How to Get It Done
Your educational background is an excellent tool for pursuing this business venture. But that wouldn’t be enough. Before starting, here are some key areas that you need to pay attention to:
- Draw your business plan. Here’s where your business degree will be helpful. Start it right by planning the critical aspects of your business: the scope of your operation, your target market, your start-up cost, and your financial projections. Look at how your business will perform amidst the competition. Work out the formal legal structure of your business, e.g., LLC or sole proprietorship.
- Start small and build up. You want to avoid over-extending yourself financially at the initial stages of your business. Start small, expand your customer reach based on this limited operation, and then gradually build up by adding more services. Consider acquiring pre-owned units that could give you two or three years of service, e.g., a manual mill or lathe machine. But plan for a CNC machine in a much shorter amount of time if not at the very beginning.
- Customer service as a differentiator. Remember stagnant growth and the competitive market? To survive, you need to offer something different. Make your customer service the big differentiator vs. your competitors. Create an area in your shop where you can professionally entertain customers. Offer drinks and listen intently to what they will ask and then set reasonable and realistic expectations about what you can deliver.
- Build a network. Nurture your relationship with existing clients. Maintain contact even if there isn’t any business from them. Automate SMS that informs them about your promos and discounts. Tap into your sphere of influence (SOI) to ask for referrals.
- Keep abreast of new technologies. Anything that runs on a computer or is run by a network would always be changing. Keep yourself informed about training, conferences, and other events that provide the latest news and information about the industry.
- Marketing. Yep! It’s inevitable, and when resources allow it, it’s best to do the whole nine yards: your website, social media presence, digital marketing using SEO and other tools.
This is not a blueprint for success but mere guideposts to help you deal with bumps on the road. You’re going to need a lot of patience, too!
