Starting a Machine Shop
Thinking of owning a machine shop, and wanting to know what you need to do so? Our guide will give you an idea how much capital you would need to buy one, how much is your expected turnover and profit, your equipment needs, where to look for in buying an existing shop.
A machine shop is a capital intensive business mainly because of its equipment needs.
Machine Shop Equipment Need
The equipment needed in a machine shop will depend on what the machine shop would do. The equipment could come in different sizes for performing work on or producing materials of different sizes and different grades of refinement too. For practical reasons, it is wiser to have tools that are durable and can do a variety of functions. Generally, a machine would need machine and cutting tools; vise benches; tools for refining, measuring and adjusting; marking-off table; electric or manually-driven portable tools; and equipment for lifting and moving heavy work. It would further need a storage room for these tools when they are not in use. Storage and space are the factors that you need to consider when thinking about starting this business at home.
Machine Shop Financial Figures
Machine shops can build large projects such as aircraft; provide support spare parts for aviation and marine industries, among others; provide various services to the semi-conductor or medical fields; or specialize in repairing motor vehicles and trucks, radiator, hydraulic and brake pipes. Generally, their services encompass prototyping, production of parts, assembly and testing. Machine shops can be bought from about $400,000 to millions. It can report turnover of $300,000 to millions. Profit in this kind of business is generally 10 to 20% of turnover or $100,000 to $200,000.
Buying a Machine Shop
BusinessforSale.com has a long list of machine shops for sale in the U.S. and all over the globe. One factor to consider when buying a machine shop is the length of time that the shop is operating. A longer time of operation could mean a solid client base for you. Other features to consider are the shop's accessibility, potential for expansion and profitability record. Sellers usually advertise that a business is earning, if it does. Also look into the reason why the owner is selling, as well as the business' standing with customers, its reputation, and credit record.
Examine the purchase price and determine what is included in your purchase. Does it include inventory and stock value, furniture, fixture, and equipment? Is the owner willing to train you and your men how to operate the machines? As a prospective machine shop owner it would be advantageous at the start, however, that you have a mechanical background or a trained machine operator yourself.
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If you have the skill, experience or training in repairing and maintaining commercial and industrial machines and equipment, you might consider starting a repair shop. Discover the basics of operating a repair shop from our guide.
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