Five Tips that will help new CNC shops

Starting any new business can be challenging, especially if you are entering a competitive market with established players. New CNC shops are just like any other new business because they too will face obstacles along the way. By following these tips, your CNC shop will be much better positioned to deal with the problems you may face.

Utilize your connections:

open-for-businessMost new businesses experience some form of “growing pains” when they first start out. These difficulties may include being unable to meet volume expectations or struggling to develop a client list. When faced with concerns like these, it is important to have friendships or business relationships you can rely on. You can use these connections to help ease you through the early days of your operation. Prior connections can steer clients your way, enter into partnerships with you, or simply provide helpful advice. Having these connections is crucial to surviving in a competitive market.


Target your segment of the marketplace:

It is generally believed to be good business sense to focus on the customers that will buy at the best volume rate. If you make gear shafts for example, you would probably want to build relationships with companies that purchase this part at a rate that’s in line with your production cycle. Targeting your market niche allows you to get the most out of your specialty.

Do not expand your operation too quickly:

If you are a new business, be careful not to make the mistake of trying to do too much too soon. You do not want to purchase machines that are not cost-effective or expand your facility without having the staff to fully utilize it. This is not to say that you should not eventually expand your operation, but it is better to be conservative. This is especially true if you are faced with adversity in times of economic turmoil. If you rushed to expand, you will not have the savings to survive the slowdown in demand. Not spending all of your revenue on new equipment and upgrades too soon will allow you to continue your business even in hard times.

Diversify according to demand:

Although you should rarely take on a job that is beyond your shop’s capabilities, new work that seems within7000Series reason is a good way to diversity your operation.  For example, if you are a lathing shop, but have the equipment and expertise to successfully complete a plastic fabrication contract it might be beneficial to accept the job. Diversifying your operation protects your shop against poor economic times. If demand for lathing takes a hit, you can fall back on your ability to complete plastic fabrication jobs instead.

Stay open to new technology:

Newer technologies might be costly to purchase, but they can prove to be cost-effective in the long-term. A new machine with a high price tag may be able to reduce cutting time for example, leading to quicker turnover and the ability to serve more customers. It is also sometimes the case that adopting a new technology is necessary to stay relevant in a competitive market.

Most new businesses typically go through some type of growing pains when they first start out. Knowing these helpful tips will allow you to overcome some of the obstacles you may face and stop you from making common mistakes of new CNC shops.


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