David's great video post on the Hope, Faith and Love plaque is great, and it got me thinking we should start a thread on how to make a CNC pay for itself.
If you knew how to make the machine pay for itself, you might prefer to invest (loan) in a much better machine, software, support and accessories. I think a lot of CNC buyers compromise in their purchase, then if they get better at using it stepping up to a bigger, better, more capable machine. What a waste of effort and money. And I bet there are a huge number of people who get a machine, get frustrated because of lack of support, bargain software and a machine with very limited capabilities.
I have been intrigued, but no longer in good enough shape to follow my own suggestions, which are outlined here and in the attached pdf.
Remember, the idea of this string is to make a top notch machine pay for itself and maybe a little profit, not to build an large industrial enterprise.
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CNC marketing suggestions from DesertRatTom
If you are planning to make money 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 italics, special fonts, or with logos or other branding features are needed in fair numbers. For example, a small inn that needs 24 room number tags with logos.
As machines go, that means something pretty fast with easy setup and software that makes such things as using special fonts or inserting logo images easy to set up and produce in limited runs.
Once your skills improve, 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 their logo and unique fonts are all possible premium niche items.
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. In marketing, you'd probably have to locate, contact and work with art directors, architects and interior designers -- the real buyers. Some I knew were kind of sloppy and odd ducks.
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. 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, hire 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. 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.
In other words, make no assumptions, don’t skip a mid-project client review because deadlines are tight. Email proofs of 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. Charge more for exotic materials and make the estimate known early.
Consider having someone else run the machine, spend your time marketing and taking wonderful, thorough care of your customers so they want to do repeat business. Making stuff sounds like fun, but it IS a business first, and the dollars and cents, fostering client relations 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 and sign up for the newsletter. Constant Contact supplies the sign-up code. Publish articles 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. Eventually set up a PayPal account. Publish a checklist of steps from design to ordering to final production runs that emphasizes review and proofing. CYA!
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, very high end business.
I know free advice is easily dismissed, but I've been doing and teaching marketing for almost 4 decades, and charge clients a LOT for my recommendations and made a lot of millionaires in the process.
If I were starting in CNC, I’d do exactly what I suggested. I'd research and search the area for potential clients. I’d develop a list of 30-50 high-potential multiple signs per year customers. And I’d do it before I put a penny down on a machine. My buying choice would be far different if I knew it would pay for itself. I might make 6 months of payments as I learned and attended training classes, and then set out seeking customers and identifying places to sell my stuff.
If you’re not willing to do that, think long and hard about starting with CNC for money. If you do what’s suggested here, you could wind up having a couple of machines, or maybe be willing to hire some of your cutting work out. Growth happens to people who support the heck out of their commercial customers.
Now, there are alternatives. Some CNC users never intend to turn their machine into a business. An occasional sale is fine. One member has a great little business by focusing on Polish folks at festivals and expanding from there. He sells plaques with the distinctive Polish Eagle on them, including special orders with family names on them. Gradually earns back the cost of his machine. Others buy the machines for hobby use only.
Wherever you are on this spectrum of users, I hope this paper is helpful. I will accumulate the responses into a new, more comprehensive document and post that later in pdf form, so attach your name and Forum nickname so I can give proper credit. Let the fun begin.
