Want to start new Shopbot-based business, but would like advice/ guidance...

[bking1836]

Brian/Don

Don't think you're alone when it comes to the time-consuming task of creating a viable product. Few truly understand that the end product has actually been created at least several times before it was given the stamp of approval.

I have thought a lot about the business side of CNC and woodworking. Best I can tell, the traditional woodworkers who seem to do well financially either make cabinets, remodel houses or have managed to carve out a niche in the high-end furniture or art market. Or their businesses are diversified to include teaching, consulting, YouTube, milling/kiln drying, etc. in addition to shop work.

The CNC is just another tool -- albeit an expensive, powerful and unique one. Its value proposition is a combination of precision, easy repeatability, and the ability to do complicated tasks that are either too time consuming or downright impossible by hand. If you plan to make things for a living and use a CNC in the process, it had better leverage one of those value propositions. Otherwise you're just prolonging your ROI unless you already have an established woodworking business in which the addition of a CNC will create efficiencies and drive margins higher.

I don't have an existing woodworking business, and I decided to turn my hobby into (hopefully) a profitable business by leveraging the power of digital fabrication. I realize it's a steep hill to climb. So from the beginning my plan has been to go after the high/higher end market, in part because my previous professions have helped me create a significant network of people in my area who fit that demographic; but mostly because that's where the margins are. But even without access to a wealthier crowd, I just can't see myself producing and selling $79 items unless they literally cost $5 in materials and take less than 20 minutes total to produce. The question, then, becomes this: where's the sweet spot of market price vs. design time + production time + materials cost + overhead? I have some ideas, but I would love others to share their experiences.

[dlcw]

You're right. The CNC machine is just a tool, like other tools in your shop. I think basing a business around a CNC might not be a good business plan. There are a lot of things that other machines do better and more efficiently, like flattening a board with a jointer, or thickness planing with a planer or ripping pieces on a tablesaw. Yes, these can all be done with a CNC, but why would you? I use ALL my shop tools on a daily basis. Once I get done cutting anywhere from 60 to 90 sheets of plywood for a cabinet job, the CNC sits there. I use my other tools to build faceframes, doors, drawer faces, trim, etc.

As far as the "sweet spot", I know, I for one, do not have an answer for this. I guess it would come down to a LOT of market research to determine if your product is viable at a price you can make a decent living at. Each person, who wants to undertake this vocation, will have to determine that. In my area, a $30-$40 cutting board made from any wood (exotic or domestic) will not sell well. High end cabinets with all the trimmings would not sell well, art furniture won't sell. My cabinet work is not low end. They are medium-high end. I've stayed out of the low-end cabinet market. To many other cabinet makers in the area servicing that market.

I've had to go outside my area (about 50 to 100 miles) to find builders I can work with to build cabinetry (I've been quite successful at this). I would much rather be making high-end - but functional (not art) - furniture, but there just isn't a "make a decent living at it" market for it here. So I pay the bills with cabinet work and dally in furniture and other stuff. Combine that with the fact that I'm approaching retirement, I'm not all that motivated in spending my retirement years beating the bushes trying to build my business any further then I have. I certainly wouldn't entertain trying to develop a "product" and bring it to market at this point in my life. That proposition can take years. I'd rather be out kayaking, 4-wheeling, camping, traveling or hiking. LOL

So, each person needs to determine if they have the time and energy to undertake the daunting task of creating a product that they can make a decent living at and convince people that the sign on the door does not say "Santa's Workshop". It's a tough proposition and I wish anyone undertaking this venture the best of luck!

[bking1836]

You're right. The CNC machine is just a tool, like other tools in your shop. I think basing a business around a CNC might not be a good business plan. There are a lot of things that other machines do better and more efficiently, like flattening a board with a jointer, or thickness planing with a planer or ripping pieces on a tablesaw.

I guess it depends on what you mean by basing a business around a CNC. If you mean setting up shop with a CNC and a dust collector, then I agree that could be a tough business model. My shop has most of the other traditional tools you'd find in a woodshop, including a 13" planer and a 6" benchtop jointer (I bit the bullet...). BUT I did make a conscious decision not to invest in a large format jointer, planer or belt sander -- tools that all together can cost as much as some CNCs.

My point is that if you intend to use the CNC as part of an income-producing venture -- not just as a hobby -- then you have to capitalize on what's uniquely useful about it if you expect any decent ROI. To my mind, its value proposition is its ability to cut precisely, especially complicated cuts, in a way that is totally repeatable -- signs, 3d carvings, inlays, flat pack plywood furniture, artistic joinery and whatever else people can dream up. Meanwhile, when the CNC isn't at work in its highest and best use, it can flatten a walnut slab that I will make into a table (which, incidentally, it is doing as I type, and it is a SLOW process; but still a helluva lot faster than my belt sander .

All that being said, and quite humbly, I fully admit that I am a CNC newbie. And if this ends up being an expensive hobby, I will have to adjust!

[joe]

Well, well,

I think B. Watson put his finger on it. "The reality today is, it is hard to make a living with a CNC.

However this fellow may have no need to fortify his income with a CNC. If he does, there's going to be a need for a marketing. I've found, in my business, people don't flock to you because you're offering carving services or box chairs. It's all about selling a product.

www.normansignco.com

[genek]

First where do you live. I allow new shop bot owners or those of thinking of buying a shop bot to come to My shop and see My operation. We make wooden Kitchen products, military products and other items. We do quite good with our line. I generally get wholesale orders any where from $500.00 to $4,000.00 per order. We average around $2,500.00 per week of orders going out. I am running about 2 weeks behind on getting orders out. We are currently doing $125,000.00 per year. We do mostly wholesale so our volume is higher than those that do retail. My shop bot runs 6 to 7 days a week. We have customers in 38 states and 9 military bases. A good product line makes or breaks one. Most companies fail in my opinion in their marketing. Most do not know how to sale their product or their self. We do very little advertisement, our product and quality sales itself with our marketing strategy.

[woodshop]

Ok... How does retirement work again? We retire and try to turn our hobbies into cash.
For men: Buy wood working equipment and start making sawdust.
For women: Hock the house and 401k and go open up a gift shop.

According to my SBA friend, most retirees fail trying to turn hobbies into cash within the first year. They simply do not know marketing well enough or at all.

Most craft shows around the country are chock full of retirees with wood or metal crafts.

Also, many retirees don't want to work that hard. They find running a "Production Shop" is a bunch of work. (We run two CNC's everyday and our shop is NEVER clean. Sawdust everywhere. Cans of paint or sealer everywhere. Big scrap pile of wood sits outside the shop waiting to be burned or thrown away. And here comes a new load of lumber that needs to be stacked somewhere.)

I run my complete business on my IPhone. Pictures galore. Accept credit cards - YES! Communication with the customer is a serious thing and we use phone-email-text-pony express like Mad People. Never want to leave a customer hanging or waiting... Big mistake.

We make and sell original art in wood. We never buy any ready-made vectors to cut. We make our own vectors.

We have a serious background in CAD. Been making vectors since 1985. Huge advantage.

If all of that wasn't enough, we now have to contend with the "Maker Revolution" spreading across the nation. Many younger artists and wood workers can find MAKER SHOPS to rent by the hour. We see many kids showing up at craft shows selling their "Maker Art."

So... Against all that, why do we continue to work so darn hard here? I love wood. I love art. I love making customers happy. I love being busy every day, with purpose. I am in my late 60's. Gotta be busy!

[bleeth]

You nailed it Dave. Tough enough to make it as a well trained pro. At least 50% of time and money invested in a business goes to marketing or the business flops.
Nobody is gonna buy your mousetrap if they don't know you have it!!

[woodshop]

Thanks, bleeth. Yes, marketing!!!

As a side note and possibly pertinent to this thread, we took our web site down. Why? The Chinese were snooping around too much. (We watch the hits and where those hits come from carefully.)
People steal ideas.
I am usually a target for "Idea Thiefs" at the craft shows around here.