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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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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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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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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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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. :)

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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Discussion Starter · #28 ·
Copyrights, trademarks, patents are irrelevant if you are making something with a protected image or slogan for the holder. You just can't reproduce and sell it to others. Your permission is the written order with attached drawings. You can and should keep some samples of projects to show off, and photographs for your website, email newsletters and social media. The pictures and objects also let prospects know that you work with top tier clients. Call them clients, not customers. Whole different mind set.
 

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@MEBCWD you decline to do work like that, no point. Maybe lose the client? What you do is replace a lousy client or one who asks you to do poor work with a good one who understands that ou are protecting their interest. If you are doing the sort of marketing I described, you will gradually reach the good guys and gals. Mike is absolutely correct about the loser when you compromise or accept work that is lousy; it will be you.

@Gaffboat Oliver was right about how "making a good living" is very subjective. It does take some time to put this kind of marketing program in place, but there is also a learning curve so you don't necessarily want to explode on the scene. My doctor clients usually take 4-6 months to put our approach in place, sometimes longer. But that is about the interval it takes to train to a basic skill level.

For example, you'd want to take the classes and visit the experts mentioned in this string. When I started my business, I cut my expenses to the bone and spent a couple of years building my knowledge, reading and studying and working with just a few clients so even if my performance was spotty, it wouldn't put a hex on my reputation forever.

You can get help from Small Business Administration consultants, usually retired business people who want to contribute to younger peoples' success. We had some help this last year from one of these volunteers to get my daughter up to speed, and to update our brand and paper presentation.
 

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Discussion Starter · #35 ·
And to take it a step further, the moment you create your special design it is yours and yours alone.
David
I believe you can reinforce ownership of the material by putting it in a self-addressed, registered envelope, sending it to yourself and leaving it sealed. You must also put a copyright mark on those pages, and on all copies, on the back of products, as well.

I have nearly a thousand pages of maerial and every page has a copyright mark, my name and the year created. And I call attention to the copyright with each client.
 

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Discussion Starter · #37 ·
I like the idea of putting a copyright mark on each of my canes and banks. I'm not going to be making 1,000s of them, or probably even 100s, but still, I really like the idea. Now to make a stamp.
A hot stamp (wood burning) is a nice way to put it on a product. Rockler has this, but I'm sure you can find one elsewhere.
 

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Discussion Starter · #50 · (Edited)
Hey @RainMan 2.0, sorry to hear about the layoff. However, not many things get you going faster than that kind of event. But resources get scarce pretty fast if you delay your start up. You have to give it all you've got, and it is rare that a business starts producing much at the very first. Start the marketing effort NOW by identifying some of the same potential clients that the folks have been talking about. Get your CNC while you're able to finance it. Spend daytime hours marketing (research, making contacts, etc), and evenings and nights learning the program and producing samples. Photo the samples and put up a facebook page. Survey the members to work on a company name (ask Oliver for his opinion).

Work on a way to say what you do, what you have to offer, in less than 45 seconds. It takes some thought and effort. Don't rely on low prices to sell, or you won't make it through long enough to be successful. Keep records, all your miles, all your costs are deductable busieness expenses and you want to offset as much income with expense as the tax code allows.

I'm always willing to put in my thoughts and I'm cheering for you. Just give it all you've got, starting right NOW! You'll find a lot of leads in the ads in local and regional publications, Look for interesting logos you can use to make samples, and then take that sample with you when you go there. Don't buy a starter machine that won't let you cut something a little larger. In the USA, we have something called the Small Business Administration mentor programs, retired business people who volunteer to help folks start their businesses--but don't get too hung up on making a business plan and setting up accounting. You're going into a pretty simple business with a well defined market. You'll need to set up some simple contracts and forms for working up the visuals (They sign to indicate their approval). Don't make your contract long and complex. If someone wants to stiff you, they will regardless of the complexity of the contract. Too many CYAs in a contract cause people to shy away.

Stay in phone contact, fax or email materials, start an email list as outlined in the little book (Your First 1,000 copies) on Amazon https://www.amazon.ca/Your-First-Co...505043&sr=8-1&keywords=your+first+1000+copies

Set up your facebook page right away (By Saturday after choosing your company name. You will need to get a DBA (ficticious company name) to open a bank account. Set up with a credit card processing account with the settlement going direct to your bank account. You'll probably only need the card reading capability if you do shows or fairs (which would be a very low priority for me).

Set up with Constant Contact to manage your email list. You can have a small list free. They only let you add people who consent to receive emails. I think you can add a sign up box to your facebook page (I can't remember) Our signup is on every page of our website (which is very simple).

But most of your effor needs to go to getting marketing going (days) and gaining skill with the CNC (nights). No vacations for awhile Rick. You'll probably find that your costs will be low for some time. You should have business cards, but even better, a little pocket notebook so you can collect information about your potential customers. Handing out cards is almost entirely non productive, but they expect you to at least have one.

Start collecting pictures of your production so you can show them off on a website. At first, you can make a few signs on speculation or even for free for a few very local companies so you can put up a recognizable name or logo. The effort you put in now pays off, but if you don't give it all you've got, then you don't really have much chance, because delay will eat up your money. Sometimes you can get a little part time job, but only on the weekend if you do that, so your weekdays are open for marketing, sales calls, design and deliveries.

Go man, Go!
 

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Discussion Starter · #61 ·
@bgriggs Good advice about listening to inspiring material. It is easy to get down while going through the initial stages of a startup. But nothing will work better than a persistent effort.
@RainMan 2.0 OK Rick, time to get going. I suggest you start by going through this thread and writing a list of possible clients and actions. Look them up on the web and Facebook. Write down their locations. Start looking at ads in some of the regional publications. Look for business members of local chambers of commerce, some of them may be good prospects.

There's some pricing information on this string so you can figure out what to ask. Get your machine and set it up. Learn the software at night. Make some sample signs with the company logos you find in your research. Run your designs by us one the Forum and ask for suggestions. Just get moving now, Rick. Nothing will haul your butt out of shock and depression faster than getting into action on your new future.

At one point very early in my business, money was very tight and I was tempted to go get a job. But instead, my wife took me to a car dealership and we bought a car! Having a car payment to make shook me into action and so I seriously started executing our plan--got into action contacting all our prospects and started making money. I suggested you get your machine and software ASAP. You'll have a payment to make and will probably have the same experience I did. You aren't going to do hard sell with anyone, just showing a sample and asking whether the potential customer wants to order some customized signs or other items. They will or they won't. And if they don't take the sample to someone else in the same busienss, even a competitor.

Tell us what you're doing as you go along. Take pictures, you'll use them later for marketing on Facebook. We'll cheer you on! --Tom
 

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Discussion Starter · #62 · (Edited)
I just re-read this string. It is full of great input. Read it if you have any thoughts about making money with woodworking and/or CNC.

I got to thinking about hooking up with a CNC owner and doing marketing for them. The missing person in failing businesses is the marketing person. An appropriate percentage would probably work and would keep me off the streets and out of trouble. Just thinkin'.

I'm going to revive this post from time to time to keep it visible.
@RainMan 2.0 How are you doing on this? Easy to get off track, isn't it. :wink:
 

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Discussion Starter · #75 ·
@RainMan 2.0 Hey Rick, go back to the first post and re-read it. It's a fairly well laid out approach that can keep you OUT of the lowball price competition. Go for the high end! Sketch out in writing a direction you might take this. You have at least 7 months to go, so I suggest you start executing your plan NOW. Of course, you can always do the employee thing again. It is easier that way, but you are not in charge of your own fate. When I started my business almost 37 years ago, the most important thing to me was to have my own busienss. To never have to work for someone else again. Even though the first few years were lean, I persisted. And I can tell you, persisting is everything. Everyone can be stopped from time to time. The trick is to always keep restarting. If you run up against something that stalls you, look at it until you understand what it is, and then find the solution and way out.

The biggest problem most people have in starting a business is that they don't do the work, or worse, they do what they want to do and don't do the rest. Making contacts, visiting potential clients and asking them to buy your stuff is something many people don't want to do, and when they don't, their business fails. I only know one thing that overcomes that, and that is finding someone you can make commitments to and who will ask about what specifically you have actually done. You must consider this person to be your most important contact, especially when they catch you breaking your word.
 

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Discussion Starter · #79 ·
For as many years as I've been writing as a big part of my work, I still have my daughter look at and edit everything I write. Hassan, suggest with your new language that you have all designs with words checked by someone with good English ability. Spelling errors or using the wrong word can get your work rejected. But with all your experience behind you, you should do pretty well.
 

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Discussion Starter · #81 ·
Merchandising. Once interviewed a gadget making company's president. He made up stories about the origin of every one of his thingies and put them on a tag attached to each item. Sold tons of Chinese made things that had amaricanized labels.
 

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Discussion Starter · #87 ·
What did you do for a career?

Did you own and operate a cnc as a ful time business?
If you directed that question to me, I spent 38 years teaching marketing to eye doctors. Before that I was a journalist, and spent the last five years of that as a business writer and editor and interviews two business leaders per week on how they built their businesses. I have read marketing, business and even sales materials and applied them to the operating marketing/sales in a full system that I provided and taught to clients as a consultant and trainer.

I am also always seeing opportunities to make money in all kinds of disciplines. I've been a serious woodworker for about 15 years, but did DIY and home repairs and enhancements pretty much all my life. In writing the original post, and subsequent posts, I presented how I would make a more serious business with a CNC. It was offered in response to a number of posts by people who were thinking of starting a full time or even part time business with their machine.

As it turns out, reading here and on a facebook page for CNC, what I suggested is pretty much what the successful CNC owners were doing.

I am not the most skilled woodworker here by any means, but I try to post as a teacher, on topics about which I have experience. I also like to think through alternative ways to do things. I have a wonderfully complete shop, lots of tools and accessories, and that allows me to think of and try different ways of skinning that proverbial feline.

BTW Rebel, no offense taken with your question. It provided me with the opportunity to state why I've been an official contributor (before the software change) and why I pipe up so often. I am a teacher at heart, and I think from your posts that you are as well.
 
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