Would appreciate input from self employed welders / fabricators

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I am on the verge of making the decision to start my own business, and would love to hear from some of you that have already done so - hopefully as a form of encouragement.I am planning on starting a fabrication shop that focuses on tube bending and prototype work.  I already have rotary draw bending equipment, and my business plan includes buying a CNC mandrel tube bender capable of bending up to 3" od x .065 wall stainless on a 4.5" clr.  The cost of the bender would be covered by selling a collector car I have been sitting on for an investment.  I intend to start this business with ZERO equipment overhead - don't want to worry about having to make equipment payments at first!I have a very strong background in prototype design and fabrication - mostly automotive with a lot of work with tubing (safety cages, exhaust, intercooler and cooling system plumbing, brake lines, etc).  And, I would love to focus on the performance automotive side of things - but to pay the bills I would not limit myself to those areas.I think there is a niche in the industrial world for prototype fabrication along with low volume and pre-production runs.  I see that as a good filler in between the performance automotive stuff.  I have no problem working with 3d cad models and figuring out ways to turn them into accurate parts.A list of my current (paid for!) equipment would be as follows: 13x48 lathe, benchtop mill, all the tooling you could imagine for both, 175 amp mig welder, Lincoln Tig 300/300, Powcon 375 amp DC tig, Miller XM304 multiprocess welder, Esab Powercut 1500 90amp plasma, hydraulic rotary draw bender, small heat treat oven, large belt/disc sander, bead blast cabinet, 5hp Champion industrial compressor, 14" metal cutting band saw, small craftsman vertical band saw, abrasive chop saw, plenty of welding tables and one good sized jig plate, and of course all the normal pneumatic hand tools, etc.  I plan to buy or build a 4' x 8' cnc table to use with the esab plasma.  I also am looking out for a good deal on an older Bridgeport vertical mill.Initially I plan to continue working my current job, and do this stuff on the side.  But, I would like to quickly become part time where I work now and increase my time at the shop as business (hopefully!) picks up.  I am just nervous about the initial plunge, since I have to commit to a year of rent on a shop - but that and utilities will be the only real overhead.So, does anyone see any flaws in my plan?  Any constructive suggestions or criticism?  Oh, and just for grins - how about posting your shop rates?Thanks,Jason
Reply:You have an impressive list of equipment already, and I'm assuming it's stored somewhere you can use it?     If so, why not forego the rent on a shop and try to make do in the space you currently have?     Get a few paid projects finished and you'll have a better feel for just how much space you need (not want, but need).   The advice I was given before starting out on my own in the store fixture design business was "Create Demand and Grow to Meet It"    The demand was created by me getting out there and hustling more opportunities.    It was 18 months before I finally moved the prototyping work out of my garage and into a rented space.   Sure, during that time, I was tripping over myself and was unwilling to invite clients in, but I saved major $$$ and learned in what areas of the business I was most profitable.      I was also able to write off a large portion of my mortgage and utilities by using the garage, basement and 1 bedroom (for an office) for the business.There are no small projects
Reply:Well, I honestly don't have much space in the garage/basement with all that stuff crammed in there.  I have it set up to somewhat use it, but it is way too tight to get much done.  And, to be honest - the fire hazzard scares me silly to do much mig welding or plasma cutting in there since it is so tight.  Add to that a newborn and a wife upstairs that can detect even the slightest hint of burning steel...I had thought of building a small shop out back, but my lot isn't very conducive to that, and it is in a neighborhood.  Can't really get away with steel trucks delivering, etc.The shop space I found is in a new butler building, has 3 phase power, a bathroom, large roll up door, very high ceilings, 2000sqft for $850 a month.I really would like to try to start doing it at home, but I just don't think it's an option...Thanks for the input!!!Jason
Reply:I would suggest considering a 3 roll section bender- like one of these from EAGLE, in addition to your rotary and mandrel benders. This would give you the ability to roll big curves in pipe and tube (and all kinds of solid shapes as well)This would be a very good complement to your other benders- you could do all sorts of pipe and tube jobs that way, not just ones with sharp bends. I have a CP 40 in my shop, and we use it all the time for big radius curves in all kinds of stuff.http://www.eaglebendingmachines.com/
Reply:panozeng We are in Australia so a lot of what we have gone through might not apply but a few point to look into might be. Insurance and lots of it, we have public and product liability, fire, goods in custody insurance, Vandalism etc etc.How secure your shop will be, We live and work from home in a small country village of about 300 people in New south wales and have had a lot of steel go missing through the night. And that really cuts into your profit margin.How big will your customer base be, can you run some sort of survey to see how much work is out there for you. Are there any competitors in your area?Will you starting in your own business create a conflict with you current employer, Can you work together to complement each others services?Starting out in own business was the best thing we have ever done, we also already had a lot of equipment and no real overheads we are growing every year and diversifying in what we do to keep up with customer needs.We quote just about every job we do so there are no surprises and no upset customers, We also get 50% up front for every job we do and that way we can operate without any big accounts coming in at the end of the month. Really helped when we started out.Just remember for each good job you do one or two people hear about it, but for every bad job you do ten people hear about that one, your fault or not!.Hope some of this helpsSimonhttp://members.optusnet.com.au/~abba/index.html
Reply:PanozengSound like you have a good plan.  I wish you well. From what I have seen you have great skills.   I also like the fact that you are doing everything without debt.  I have been in business for 6 years and full time for 4 years.  We (my wife and I) have built our business without debt also, it feels good.Why not save one years rent prior to securing a shop.  Also, check Large warehouses that may have space they are not using, unlisted places.  I have an associate renting from a welding/salvage company for 800/mo utilities included and all the space he could desire and also access to 50 ton press and large shears and bandsaws.  The owner is just glad to share the rent.  Don't forget about the most important resource, personnel.  We are at a point where I am the limiting factor.  When I taught math, I would tell my students no matter how large the problem you can only do one step at a time. Likewise no matter how much equipment I have or how efficient I am I can only operate one machine at a time and no process takes zero time.  Even automated equipment takes set up time.  Hence, our business has seen steady growth, as yours will also,  yet our new challenge in extra hands to do the simple stuff and free me up for the original stuff.It appears (I may be wrong) you have machines that do the same process.  I'd lighten my load  to free up some money. I'd use the money elsewhere perhaps rent or the bridgeport mill.  I have been told in business you don't need  a lot of equipment just what get the job done (professionally, hammers don't count when you need a press).  Don't forget taxes, here we have Personalty tax, essentially tax on everything I own for the business.  I thought it was a joke when the sent it to me.Again your plan sounds good.  I wish you well.  You have the skills. Show(exercise) love to your wife and newborn much more than your new venture, sounds crazy, however the venture will take much time which is where the exercise your love come to play.  Not counseling just sharing from experience.  Later,   Anthony
Reply:Sounds like you've put a lot of thought into this, and it sounds like a good plan!A couple of thought's for you, try really hard not to end up with dead stock, one day you look around the workshop and relize that you've got $80,000 worth of steel lying around the place    The same goes for plant to.  You don't need to many toy's, they can cost a lot of money.Keep your finger on the pulse when it comes to knowing where you can get your hands on some GOOD part time or casual worker's, if you end up doing 12 hour's a day most day's then you need some help - so get it. Don't try to do it all on your own, it's ok for short burst's but no good for longer term.Bad payer's can be a major problem, especially if you've done a lot of work exclusively for them for a month or two then they don't pay anywhere near on time.  Best to come to an aggreement before you start work for them on when and how you will be paid.Try and keep working where you are as long as possible until you think your work can keep you going.Have fun with your new business, it sounds to me like you'll do very well with have such a good starting plan in place.And GOOD LUCK Stephen
Reply:I  work for myself, and yes there are a lot of positives, but for this post I will fill you in on just one negative. Payment!I do not do high-end fancy type work, just high quality repairs and railing work. The dollar amounts are not the issue, (they won't make or break anyone,) it's just the point of how some people go about there business, very frustrating.A customer who had brought in three previous jobs, (+ or -- $1,000.00,paid for at the time of pick-up) Brings in a CAT loader type snowplow. Says "Put on new edges and fix the broken welds" After getting the run around at CAT researching parts, and waiting on the loading dock, (two hours), I disassemble plow, remove failed welds, prep, re-weld, paint repairs, re-assemble. $277.58 for parts, $547.42 for labor, total = $825.00.  His men pick up the plow, as there is a storm coming we are all in a big hurry, so I let it go without payment, later, he calls (on my ans. mach.) to say he is "Short on funds, and will be by sometime next week."  five days later, calls for a total. Argues that he shouldn't pay me the full hourly rate for me to deal with CAT, questions "how much work can there be for 4 or so welds"  etc... etc... Now comes the fun part, he called CAT, the edges are only $80.20 @ x 3 = $240.60. He tells me he doesn't have ALL the money, and will bring me by a partial payment. Brings by $250.00, no he did not price new bolts, nuts or figure tax. says he will bring more next week, I am forced to "be nice" to a guy who reached into my pocket and took my money. Yes, I "allowed" it to happen, but he set me up by his previous payments and the close proximity of the storm. Oh well, once burned.... twice shy!! I know this is a bit lengthy, but you will have (as I do), dozens of these stories after a few years in business.Last edited by tessdad; 02-16-2006 at 08:31 AM.Just my  opinion, not from a book, just from the road.Howes Welding Inc.www.howesweldinginc.com
Reply:Thanks to everyone that answered!  That thread was full of helpful information!  As an update I am currently trying to settle on a name and plan to have LLC organization paperwork submitted this week.  I have been doing a lot of local potential customer contact, and am quite pleased with the prospects so far.  Luckily I am centered in a good area for a lot of motorsports type work.Thanks again everyone,Jason