Re: Shop Rate

ofohique wrote:
Geez, thanks guys. Like Uncle George said, "terse and to the
point." I did look into some of those things, but there are some that
I had not considered. But, please, don't be so negative. I expect
that some of you are successfully competing with the Chinese, some
started from scratch, some started with an established customer base,
and most of you are getting good profits from your shops.
Yes, I thought of foreign competitors, business plans and my
competitive advantage. Yes, we have possible customers, and we are
picking the equipment we'll try to use to make burning chips. But I
don't have all the money, so we'll have to be very careful with our
cash flow because we cannot buy a shop with lots of customer
contracts, tons of paid-for material in-house, multi-spindle
machines, CNC CMMs, A/C for the whole shop, own truck for deliveries,
and all the goodies. No, I am not trusting on the shop rate to give
me a black and white picture of whether we'll be successful, but it
can't hurt to know where you stand with respect to experienced and
knowledgeable shops.

OK man but you are going about this backwards.
Start out by determining what your ideal customer looks like and then design
a facility that will serve that customer. When you are done, add it all up
and create a working business model in a computer. Even Quick Books will do
the job. You can then adjust the inputs to see what you will need to do to
deliver value which is a combination of quality and service not price. If
the hourly rate is to big, don't go forward until you make the necessary
adjustments. Tinker with your definition of Ideal and change your cost
inputs. Once you do all of that and are satisfied, you might well find your
better off investing in something else. You certainly don't want to end up
running a business that you hate. Seen that happen before and it's pretty
ugly. One goal of your bussiness plan needs to be your level of
satisfaction/happiness. It may be the most important consideration.



--
John R. Carroll
Machining Solution Software, Inc.
Los Angeles San Francisco
www.machiningsolution.com


.

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