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Discussion Starter · #1 · (Edited)
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.
 

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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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Discussion Starter · #3 · (Edited)
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. :smile:
 

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Theo
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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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Doug
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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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Discussion Starter · #6 ·
@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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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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Rick
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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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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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One of my friends - the first I knew to have a CNC, was retired from being a general contractor for commercial buildings. Bought a $13,000 Legacy Arty with a 24 x 54 cut area, just to do hobby woodworking. As word spread that he had the machine, work found him. One job was 4 carved panels for a set of double doors - not the whole doors - just the carved panels. $1000 per carving. Paid for the machine in less than 18 months. Upgraded last May to a $16,000 Legacy Maverick with 36" x 60" cut area (Legacy offers 100% trade credit when upgrading). This year he has already ordered Legacy's newly announced $26,000 4' x 8' machine. One way he has made money is hosting weekend training seminars for Legacy at $200 - $300 a head, and he also gets a commission when people buy after seeing his machine. He does not seek work at all - does not advertise, and has as much work as he cares to do. He is obviously very fortunate - I didn't even mention that he lives less than 2 miles from Precise Bits and Ron Reed likes to come over and gives him new bit designs to test.

Some lucky hobbyists make money. Many of the people in the CNC group I am part of are similarly retired and making at least some money using their machines, none have approached it as a full time job.

I built my machine in hopes of making some money, but am not quitting my day job just yet. I appreciate the advice that building a CNC business is usually about selling more than making. I enjoy both.


Sent from my iPad using Tapatalk
 

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Theo
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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.
Hi Tom. Yeah, I realize that. But, went thru this thread again anyway. And I think I will buy that $10 book you recommended. I don't have a CNC, don't plan on getting one, but I do plan on selling a few canes and banks, and I'm thinking I can get more than $10 worth of information out of that book. Way I see it, even the little guy can use some help in selling. I don't figure on getting rich, but a few bucks extra every once in awhile will be me some warm fuzzies. Cane making for me is a hobby, as you said, but it's nice to be able to make something a bit different that will help someone, and put a couple of $ in my pocket at the same time. So, Thanks.
 

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One of my friends - the first I knew to have a CNC, was retired from being a general contractor for commercial buildings. Bought a $13,000 Legacy Arty with a 24 x 54 cut area, just to do hobby woodworking. As word spread that he had the machine, work found him. One job was 4 carved panels for a set of double doors - not the whole doors - just the carved panels. $1000 per carving. Paid for the machine in less than 18 months. Upgraded last May to a $16,000 Legacy Maverick with 36" x 60" cut area (Legacy offers 100% trade credit when upgrading). This year he has already ordered Legacy's newly announced $26,000 4' x 8' machine. One way he has made money is hosting weekend training seminars for Legacy at $200 - $300 a head, and he also gets a commission when people buy after seeing his machine. He does not seek work at all - does not advertise, and has as much work as he cares to do. He is obviously very fortunate - I didn't even mention that he lives less than 2 miles from Precise Bits and Ron Reed likes to come over and gives him new bit designs to test.

Some lucky hobbyists make money. Many of the people in the CNC group I am part of are similarly retired and making at least some money using their machines, none have approached it as a full time job.

I built my machine in hopes of making some money, but am not quitting my day job just yet. I appreciate the advice that building a CNC business is usually about selling more than making. I enjoy both.


Sent from my iPad using Tapatalk
Ha! I know who that is.. Say hello to Doug from Dave in MN. I stopped in to see both Doug and Ron when in CO a couple of years ago. Two very knowledgeable people and not afraid to share it.

Doug helped me with my very first 3d project for my daughter's wedding.

Dave
 

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Building a Woodworking Business

Love this thread.

I'm weeks away from buying my first CNC. Yes, I'm going to sell stuff. More stuff.

I'm currently making cutting boards for the craft fair circuit, and I'm at capacity. I think. And then I got a job to make 84 pieces for a country club. And then another job with 8 pieces for a start-up food company. Last night, I quoted 2 jobs for 26 pieces for a restaurant. I got 3 orders from my sole brick & mortar boutique retailer that carries my stuff. And, I scheduled a meeting for next week to finalize 12 pieces for a realtor.

The first 2 jobs were both referred to me by my engraver, who is now actively selling my services as a complement to her own. When I get the CNC, she'll offer those capabilities as well.

Is it a living? Nope. But I can see that idea from here, truly. I'm not committing to anything other than driving my production as far as I can while having fun. That's key: I'm selling stuff. I'm making stuff. But I am SO having fun. As I frequently say, it's all about finding the pretty, and that's my goal in everything I make.

My wife and I recently completed our 100th event in our 3+ year run as Mrs M's Handmade. I summarized a lot of what we've learned in a blog post, which is humbly submitted. Read that post, here.

I also review every craft event that we do, and talk about our experiences as vendors under the series title, "The Board Chronicles." Our latest event, the California Strawberry Festival, is reviewed here.

Here's my current, favorite, prettiest end grain cutting board offered for sale. It's $325. I've carried it to about 10 events so far without selling it. It'll sell ... eventually. Also shown are a pair of the signs made for the country club ... that order was almost $4 grand, and I only carried the sign to the client. The leverage is to do fewer events and more business to business sales, I know. Getting out and selling those B to B projects is the thing I must do to grow revenue, I know.

But will I do what I know I must do? That's the question.

As a wise man once said, nothing happens until somebody sells something.
 

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Figured some here might recognize him. He is one of the featured owners on Legacy's site . http://legacycnc.wpengine.com/galleries/customer-spotlight/doug-pinney/
The carved door panels are the middle photo in the top row. Super friendly and helpful guy, and as you say, very talented as well.
He was one of the original 3 founders of the cnc user group (Colorado CNC User Group) I am part of. Great way to learn from a bunch of talented, helpful people. Networking online is great. Much of what I have learned about CNC is from online forums, having people you can see and talk to in person is better.

While I personally think Legacy's machines are overpriced for their build quality, their level of support is first rate. What Vectric does in support of its software is what Legacy does in support of its machines. Most of the members of the CNC group own Legacy machines. Almost all know John and the other principals at Legacy on a first name basis from personal contact. I have my own take on the fact that they all do.
 

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This is just one old guy's slant on the subject; now retired but spent the last 35 years with either my own sign shop or employed in one. Originally acquired/built a CNC (2011) to add to the capabilities of sign production. With that being said, I have to go with Desert Rat Tom's philosophy. If you have hopes of making a living selling your craft, you have to market it. Every successful business I've observed has done so. At this point in my life I really enjoy making and creating only what I want to, instead of what someone has sketched out on a napkin and expect you to create it for the same cost they have into their napkin sketch, (you'da had to been there, lol ). I do take in 2 or 3 jobs a week on my CNC making parts for items that other people sell. It helps supplement my income, is really easy and keeps me in tune with operating a CNC. It is NOT creative by any stretch of the imagination. I do sell the occasional 'created' item but rarely realize a profit. Okay, I know, enough with the boring post! The point is, IMHO, if you go into business with a CNC, one needs to market and be prepared to make and sell anything and everything that justifies your being in business. Just my $.02 and your mileage may, very well vary.
 

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Oliver (Prof. Henry)
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This has been a great thread with a lot of information and views from both sides. Tom said he wrote his original marketing piece for a couple who wanted to make a living with one machine. Some feel that it isn’t possible to make a living with such a small set-up.

Having worked in the marketing arena for many years I fully agree with Tom’s views. And, at the same time, I’m aware of how challenging it can be with just a two person operation. For 13 years I was the creative part of a two person graphic design and marketing studio. The only way a small company like that can succeed is if one person is constantly doing the selling while the other is busy with production. Someone needs to be out drumming up business and meeting with clients every day to keep jobs in the pipeline and the other needs to be meeting the production deadlines.

Can you make a living that way? Yes you can if you go after the right clients and develop relationships with them. Our little two person operation had some Fortune 500 clients as well as smaller regional businesses. In Tom’s example, since it is a couple, they can probably make a living doing something they enjoy. Will it be a “good living”? That is very subjective because we all have different needs and goals.

As always, one of the secrets is to avoid making commodity products that have a lot of competition. If you can focus of creative solutions that are a cut above the others you can demand more for what you produce. For example when I look at Etsy for carved wood signs I’m astounded at cheaply some are being sold. But when you take Tom’s example and create signage for hotels where every sign includes the hotel logo you have moved beyond simple signage and into the world of branding which is easier to sell and produces more revenue.

As for me, I don’t want to be in business again either. I do think it can be done on a small scale if you keep things in perspective and are willing to work at it full time. It’s tough to take vacations in a two person company.
 

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Discussion Starter · #19 ·
This is great, I need to re-read and take notes. This applies to other business ventures, not just CNC.

"Do not make the mistake of competing on price." This paragraph is GOLD!
Thanks for getting the point. My consultation costs $24,000, every time I raise my price, sales go up. I think the problem is lack of imagination and fixed thinking. What most people think of as marketing is hard sell. But that doesn't really work very well. And yes, my suggestions apply to many businesses. Here's the link to the best online marketing approach I've ever read: https://www.amazon.com/Your-First-Copies-Step-Step/dp/0615796796/ref=mt_paperback?_encoding=UTF8&me= Although it is about book publishing, it works for nearly any business, and certainly does for mine.
 

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Discussion Starter · #20 · (Edited)
This has been a great thread with a lot of information and views from both sides.... It’s tough to take vacations in a two person company.
Hi Oliver, If you love what you do, its like being on a vacation, and that's why I suggested centering the business on the laptop, you can even do work on vacation.

You and I have led some pretty interesting lives. :smile:

My email list just hit 617, small, but every one is a serious prospect, generated mostly from facebook posts and shares. I use the method in that little book and we gererate a client about every other mailing. Never do cold calling, never do hard sell, just give out informaiton and invite people to take action. We are in the top 10 percent of open rates on Constant Contact. We chose that service because they do everything possible to avoid spamming, and people know that ethical businesses use that service.

What that means is that our business marketing is mostly done on laptops. My daughter and I share information via dropbox, so it hardly matters which laptop we use. We don't even have to be in the same state, any her daughter (my granddaughter) who lives across the country, is now becoming part of our family business so I may be able to retire before I'm 80 LOL.

As a retired person, making an extra $2K per month would be nice, as a working couple, think $6-12K per month. Very doable if you actually work, not just nap and goof off. Take your vacations around the holidays. Mast of the clients I'd pursue for CNC are inactive at those times.
 
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