Making a nice living with CNC - Router Forums
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post #1 of 82 (permalink) Old 05-25-2017, 12:46 PM Thread Starter
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Default Making a nice living with CNC

With the surge in interest in CNC on the Forum, I thought it was time to post some information on how to make serious money with one, other than craft shows and sharing profits online and in consignment shops. This orignially was posted in response to a couple just about to take the plunge, but with added information. This is long.

CNC marketing methods to make CNC pay.

If you are planning to make a living from a CNC, you will have to become very good at marketing your services. Translated, that means being very good at identifying and effectively contacting people and businesses that are likely to make good use of your services. Everyone and their uncle Tom is making occasional signs, or signs with clever sayings or even images they hope to sell in consignment shops or weekend craft gatherings. But to really make any money, you have to identify markets that need lots of what you have to sell, but not so many that they go to a completely automated shop, or one that markets and jobs out the work to Mexico or Asia.

One example would be a small chain of regional hotels with a homey feel where signs, plaques and things of that sort , in script or with logos or other identity setting features are needed in fair numbers.

As machines go, that means something pretty fast with easy setup and software that makes such things as using special fonts or logo images easy to set up and produce in limited runs. In marketing, you'd probably have to locate, contact and work with art directors, architects and interior designers -- the real buyers.

With really good software, you could locate individual property owners for inns or mountain cabin owners, whose orders would be small, but beyond hand made sign quantities. Entrance, exit, mens, family and womens' bathrooms, room number, breakfast, meeting room and other signs with logos and unique fonts are all possible products.

I teach marketing to eye doctors, and know how important it is to any business. The internet and social media are good places to search, and 150 to 300 searches will turn up a good number of customers. You don't want to just have one big customer, they apply intense pressure to cut prices and profits. A good mix of lots of medium sized repeat customers is essential.

Deliver as fast as you can. Get all art approved by several people. If you see something odd or off in the design, check it with the customer before you make it and try to provide a proof run before you produce in quantity. Learn to proof read. Check the spelling of every word and if any problem shows up, check with the customer before starting design or production. These kinds of projects seldom get full attention and you backing up the person who orders this way will save their fanny if you catch a problem before their boss does.

Check out all kinds of materials to use for projects. See if you can find sources of cutoffs that are consistently available. For example, my son in law gets large quantities of 2x6 asian hardwood from pallets used for forklifts. For outdoor signs, you might try using weather resistant composite or engineered lumber. Can you cut aluminum for small signs, room numbers, etc?

Make your laptop the center of your business rather than the CNC. Being able to sit in your car on vacation while handling a design shows up as exceptional service, and pays for the vacation at the same time. Plan for rush orders. Designers are notorious for pushing deadlines and giving the producer precious little time to finish. That is a formula for a designer who makes an error to blame the producer for errors and delays, and to cut you off. Make this attention to detail and possible "inconsistencies" a feature of your service. You've got your customer's back. If necessary, run everything by a skilled proof reader before submitting the final design to the customer for approval. It's no fun eating a $2,000 order because of a missed comma or wrong font. In other words, make no assumptions, don’t skip a check because deadlines are tight. Email proofs on copy, layout drawings, printouts of drawings made in the software, and photos of the first test piece, lit by side light so the carving shows up well. Be VERY fussy about approvals for logos and special images. If there is any concern about size and proportion, you want them handled on paper, not on some exotic or expensive hardwood. Make sure your contact’s boss reviews anything more than a run of, say, 3 pieces.

Do not make the mistake of competing on price. Start as high as you can stand it, then go up another 10 percent. If you slash prices to below market rates, you can be dismissed by competitors merely by their saying, "you get what you pay for." When I raise prices, I have to practice saying the amount in front of a mirror until I can do so without making a face or showing uncertainty.

Consider having someone else run the machine, spend your time marketing and taking wonderful, thorough care of your customers so they do repeat business. Making stuff sounds like fun, but it IS a business first, and the dollars and cents, relationships and posting examples of your fine work rank higher than running the CNC.

Social media and developing a great newsletter mailing list is VERY important. (I use Constant Contact because they just don’t allow practices that appear as spam.) Social media drives people to your website, where they see your work, read your information about how to design, order, avoid errors, plus all kinds of pictures of finished work (not all of which has to be yours, by the way. These photos become an idea bank. If you have some pre-made standard items, show those on a separate page. Publish a checklist of steps from design to ordering to final production runs that emphasizes review and proofing.

There is a great little book titled “Your First 1000 copies,” which was written for self publishing and other authors on how to use social media, website and email to generate business. It translates to any business and isn’t full of fluff. It’s one of those little books with a huge load of practical information, and it’s $10 bucks on Amazon. Really upped my business results and lowered my marketing costs. Low cost social media and email are now our primary source of new business.

I know free advice is easily dismissed, but I've been doing and teaching marketing for 35 years, and charge a lot for my recommendations. If I were in your situation, what I suggested is what I'd do, and I'd have a list of 30-50 high-potential 50-signs-or-more per year customers in hand before I put a penny down on a machine.

The more I do, the less I accomplish.

Last edited by DesertRatTom; 05-25-2017 at 12:47 PM. Reason: spelling
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post #2 of 82 (permalink) Old 05-25-2017, 01:40 PM
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Tom,

I don't want to, or have to, make a living with my CNC. I already built one company - sold it off - and got out of the rat race. I'm very content doing the things you say I shouldn't do. One machine will not make a good living, or, in my opinion, a mediocre one. Multiple machines must be run constantly making product that is saleable.

You are right in that the serious money is in good volume, but not real high volume. Gotta find that "niche". Doing a bunch of personal stuff is just a hobby - hence the term starving artist. But keep in mind, not all want to churn out carloads of product. I make enough to buy more materials, and supplement my other income. Basically it keeps me as busy as I want to be. I don't want to rent a shop, pay all the insurances, buy more equipment and vehicles, have (god forbid) employees again. We are debt free and I'm now enjoying those 6 Saturdays in a week, but I still run a successful business, if only in my eyes.

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Last edited by honesttjohn; 05-25-2017 at 01:53 PM.
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post #3 of 82 (permalink) Old 05-25-2017, 02:03 PM Thread Starter
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Originally Posted by honesttjohn View Post
Tom,

I don't want to, or have to, make a living with my CNC. I already built one company - sold it off - and got out of the rat race. I'm very content doing the things you say I shouldn't do. One machine will not make a good living, or, in my opinion, a mediocre one. Multiple machines must be run constantly making product that is saleable.

You are right in that the serious money is in good volume, but not real high volume. Gotta find that "niche". Doing a bunch of personal stuff is just a hobby - hence the term starving artist. But keep in mind, not all want to churn out carloads of product. I make enough to buy more materials, and supplement my other income. Basically it keeps me as busy as I want to be. I don't want to rent a shop, pay all the insurances, buy more equipment and vehicles, have (god forbid) employees again. We are debt free and I'm now enjoying those 6 Saturdays in a week, but I still run a successful business, if only in my eyes.
@honesttjohn I wrote this for a couple that wants to make a living with one machine, doing more specialized work. I agree with you that doing high volume work is not the way to go, but you have to work with people with some money to spend and who want special made stuff in moderate volume. That is essential custom work, for which you get paid fairly wel, IF the customer has a budget. This is definitely a niche, but multi customer approach--there are many potential regional customers in any given area. They are businesses that need moderate runs of special items. Make the standard stuff in between the special projects. Not making any suggestions intended to mass manufacture anything. Notice that I put the laptop at the center of the busienss, not the CNC unit.

I'm with you on not wanting to build a business that owns you, but as a marketing oriented person, I can see making an OK living doing what I wrote about. But I wouldn't plan on getting rich doing so. What you're doing is really a hobby that (usually)supports itself.
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Last edited by DesertRatTom; 05-25-2017 at 03:10 PM.
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post #4 of 82 (permalink) Old 05-25-2017, 02:58 PM
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Honestjohn pretty much says it all. Anyway, a catch22, I don't like salespeople much, and don't want to be one. But I'll get it figured out - one day. In the meantime my income is enough to clothe, house, and feed me, so I'm not worried about it.

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.....Call me a craftsman, artisan, or artistic, and I will accept that. Call me an artist and you will likely get a quite rude comment in return. I am not a @#$%ing artist.
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post #5 of 82 (permalink) Old 05-25-2017, 03:18 PM
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Great points to keep in mind, Tom. I struggle when pricing work, I always like hearing how others do it.

Fortunately I don't have to make a living off of the hobby, that way it is still fun, and I can take a break when it feels like work. I do like making the tools pay for themselves, so I guess that makes me a hybrid hobbyist. Making $100 in sales every so often while having fun and making others happy is my goal these days.
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post #6 of 82 (permalink) Old 05-25-2017, 03:32 PM Thread Starter
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@JOAT I promise I won't show up in your shop and force you to sell a thing. But there are people who want to make some money with their $5,000 and up CNC mills. This post is for them. I have made a good living for decades simply by putting my good work up where potential clients can see and read about it. That's about what I'm suggesting here. Cold calling, overcoming objections, hard sell, arm twisting, sales techniques don't work very well anymore anyway. Business people aren't sold, they choose to buy. I get it what Honest John means, it's why I don't sell frames. It's a hobby. But my suggestions are for the few that want to do this kind of thing for income. Relax.
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post #7 of 82 (permalink) Old 05-25-2017, 03:51 PM
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Tom I think this is a great subject . I would love to be able to supplement my old age income with a cnc at some point , so I'm paying attention.
I'm terrible at such things , so in my case it's wishful thinking for the most part
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post #8 of 82 (permalink) Old 05-25-2017, 05:50 PM
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A $5000 machine is a hobby machine, pure and simple. I have more than that in my setup - call it an almost serious hobby machine. You only get professional rates when you use professional equipment. My wife's place has either 3 or 4 of these pro machines, the cheapest is $80K, and runs past $150K. They run 2 - 10 hour shifts, and it's still only a part of the whole business. They've offered me a job a few different times doing various things, because of my background and experience. I was willing to work 11-2 with Oct, Nov, and Dec off for hunting season. Guess that wasn't good nuff.

Anybody operating in that class of the CNC world ain't hanging around our Forum.

What has been suggested is way beyond what most here will, can afford, or want to do.

I think you have the wrong impression on just how much (or little) one of these hobby machines will put out - no matter how much of a sales program you put together.

Tom, you're just way above our level with all this corporate mentality stuff. And you should charge by the word - I'd be your bookkeeper.

In a nutshell, one machine is not going to make even a decent living - let alone a good one. It can be a supplement, though.
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Now I know why old guys wear suspenders.
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post #9 of 82 (permalink) Old 05-25-2017, 06:18 PM
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Good point John . I would just like to make enough to pay the machine off , but seeing as I'll have between 15 to 20K for what I want , and I doubt very much that it could be a accomplished for a hobby machine sideline business .
I'll be quite happy to have it as a hobby though , as I've always wanted one .

Never mind the wear and tear , but I'm curious as to how much power would be consumed over a 12 hour cut with dust extraction going the whole time . Imagine a vacuum table going too ?
I doubt I could even recover that in the sale
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post #10 of 82 (permalink) Old 05-25-2017, 07:41 PM
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Rick,

The actual juice usage is basically not really noticeable from the time when I was running the office from here. The spindle is 220 so that doesn't take much, and then whatever your vacuum and power tools consume. And remember, it's not running all the time, either. It's nothing worth worrying about, at least not here in the USA. I ran her almost 2 weeks non stop during Xmas last year and it was nothing worth worrying about.
Any $$ I get out of it I consider a "bonus". More bits and accessories. Oh, and more bullets and an occasional new firearm. And it helps pay a big part of our deer hunting lease.
I get a lot of the text sign material free from the wife's work place. They use 4 x 8 sheets for everything and the maintenance guy there saves me the big cut offs. You would have a fit if you saw what they throw out. The carving wood or Corafoam I gotta make or buy. But if you ever saw my wood piles......... And I still end up buying a lot of the thicker pine panels already glued up. I can't do it that cheap.

There's a buck (Loonie) here and there once you get started. You just gotta find it.
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I took the tests and retirement is the best job I'm suited for.

Now I know why old guys wear suspenders.

Last edited by honesttjohn; 05-25-2017 at 07:44 PM.
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