Today we’re going to go over the 10 tips that you need to know when starting a CNC router based business.
I’ve been doing it for about six years now. As you can see below picture.
I get asked a lot on “You know I’m going to start a CNC-based business,wat are some tips that you can give me that may help me out along the way?” or “may save me CNC time and energy?”
That’s what I want to do to help you either make more money or save a lot of time. So with that being said, let’s go
Tip No.1
Your CNC’s Competitive Advantage
So whether you have a small or a large CNC router like this, or plan on buying a large CNC router or a small CNC router, Whatever it may be.You really need to understand your competitive advantage of that particular CNC router. If you’re like me, when I was first starting out, I had a small hobbyist type CNC like this.
At first, I was trying to compete with the big boys that had machines like this, and so I was trying to cut out product. Actually like just cut Out different shapes and stuff like that.
Well, these guys that own these types of CNC machine they’re going to beat you 10 to 1 because they can cut faster than you can And then i soon figured out having a small CNC router like this is a lot better for maybe engravings.
But if you use this CNC to do all your engravings you’re going to be able to beat those people that have this big CNC and vice versa, Let’s say you start with a giant CNC like this and you’re doing engravings. Well, the people with the small CNC router are going to be much more cost efficient at doing engravings or little trinkets than you are.
Because you have such a big CNC router that takes up a larger footprint costs, more money, etc. So with tip No.1, I just want to let you know to make sure that you understand your machine, whether it’s large or small, and understand its competitive advantage.
Tip No.2
Under Who Your Competition is?
So, if you’re going into any business you’re going to have competition.Whether you like it or not, whether you think you have the most ingenious product, that’s ever been invented.You’re going to have competitors and if you’re going into Woodworking, there’s definitely going to be competitors Because you’re not inventing anything new with wood’s been around for hundreds of years, thousands of years you’re not inventing anything new.
I’Ve been in the industry, there’s nothing new, there’s some new technology, but not new with wood. So you’re gonna have to understand who your competitors are.And whether that be other etsy shops, other small shops, maybe you’re competing with manufacturing shops.
So if you’re going to make cutting boards and then engrave them with the CNC and you’re making these cutting boards, and it’s may costing you 50 to make a cutting board. And you have some other company out there that can spit these out for ten Dollars of cutting board. Why don’t you just buy the cutting boards from them and then engrave them with your CNC?
Now, if you’re say you know what i’m gonna cut out parts with my CNC , I‘m gonna cut out these these parts on a big CNC machine, and I’m gonna do that well there might be a competitor out there. That has the auto loader, auto feeder CNC machine, that’s running 24 hours a day. It can cut five times as fast as yours and you’re going to try to compete with that same product. That’s not going to work out in your favor.
If you go to walmart or amazon and see this really cool product. Just know that those companies, probably making that product have a 24 hour shift, have waste more money,waste more sophistication than you are way more sophisticated machines.So you’re going to have to find a way to kind of get around your competitors and maybe do something that they can’t do now.
If you’re starting off small here’s a huge tip, that’s going to help out a lot. So if you’re starting off small, like i did and now i’m kind of getting bigger, I can tell you that, as you get bigger, it gets very difficult to provide really good customer service and do little tweaks to products.
You can’t really cater to that customer as much, but when you’re small, you can do that so just a tip as you’re going against competition in the in the business of woodworking just know, small has its advantages and lars large companies have their advantages so just play To your advantages with that and really understand your competition.
Tip No.3
Understand That Your CNC is Only a Tool
Just like a planer or a chop saw or a miter saw or a joiner. It’ only a tool in the wood shop or maybe you’re messing with plastic right. So it’s only a tool.Don’t think of it as anything more than that. So if it, it will make a process more efficient and save you money.Make a process more efficient and save you time and money.
So if you’re cutting out product that you can maybe cut with the table saw or the miter saw, then don’t use your CNC for it. Because your CNC router is going to be much more expensive than those and it needs to be doing more sophisticated type work.A lot of people just get the notion that they get a CNC and and now it makes their work miraculous, and maybe this carving they’re doing is worth a lot of money.
But sometimes it’s not because the CNC is just a tool to help you make that product more efficient or save time. So you have to understand that, just because you have a CNC does not mean that you’re now going to make a lot of money in the woodworking industry or selling wood products, it’s just a means to an end.
Tip No.4
How much Programming Do I Need to Know?
How much programming do I need to actually know right and I get that question a lot and my tip to them is know as much as you need to know and don’t know any more than that. I’ve built my CNC based business up quite a bit CNC’s and I still to this day do not know how to do any kind of 3d modeling. I am very basic on what I know and what I can design on a CNC program, like aspire or vcarve pro or autocad.
I’m not very good at it, but I know what I need to know and I’m efficient at doing just that. There’s some people out there that are absolutely magnificent at doing all kind of 3d modeling and doing all this cad cam work and fusion 360.
All this crazy stuff. I am absolutely horrible at that I’ve still grown the business this much and I am the guy that programs all the CNC’s now. Maybe when I get a little bit bigger I’ll probably hire the guy. That is extremely good at doing all the CNC programming, CNC design work, but to me don’t have to know as much as you think .You just need to know what you really need to know and don’t worry about everything else.
So to this day, I still don’t know how to do a lot of 3d modeling. Because my business does not rely on that now. If you’re doing a business that you have to do a lot of 3d modeling on, you probably need to learn that and you don’t need to learn as how to nest products. How much programming do you need to know forget about the rest.
Tip No.5
Know What kind of Product You’re Selling
Are you cutting out the same thing with a couple different variations? Maybe you’re cutting out, let’s just say a square block .And the square block either has trimmed corners,not trim corners has a name on it. No name initials a heart. So that’s a modular product with different variations, or are you selling a totally customizable product where you have to be there from start to finish during that whole process? Want to know more about CNC machine price,you can contact Winmax here.
So you really need to understand which product you’re going to be selling and be able to differentiate the two. So in my business I sell a modular product with lots of variations.
I’ve tried it the other way and once again, I’m not very good at designing. I’m not super efficient at it. So it didn’t work for me building all this doing all this custom work.
Personally I couldn’t find the clientele that were willing to pay for the product I was making, because I wouldn’t have been able to make enough money doing that, so I went the modular product with multiple variation ways where I’m making. Let’s say a hundred or ten or a thousand of this same product, and I’m varying it a little bit and and that’s kind of what route I went so with tip number five. Just know what route you’re wanting to go with your product differentiation and go that route and stick to it.
Tip No.6
Know What You’re Getting Into
If you are actually deciding what I’m gonna run CNC based business and try to make a living doing this, then you need to really treat it as a business and do not treat it as a hobby. Now, if you’re saying you know what I’m just going to work on saturdays and sundays, do this as a side hustle and make a little bit of side income, maybe 5 000 a year 10 000 a year whatever it may be.
Then you need to treat it as that, but i always see the mistake of people saying they’re going to start a business um and then not pursuing it as a business and still pursuing it as a hobby. This kind of goes full circle around the board. Any business you get into, but with a CNC , it’s a it’s a it could be a big investment for you and, if you’re going to wing it then know that you’re going to wing it right and if you’re going to go full full on into it. Well, then, you need to dive into it. Do not make the mistake of thinking you’re running a bit or trying to be more of a hobbyist and then charging business price numbers.
It’s not going to work out for you, because in the world of business that i’ve gotten into in woodworking, there are a lot of competitors out there. There are a lot of people that have a lot of funds and they’re going to try to beat you every single day, it’s just as competitive as real estate, just as competitive as accounting, lawyers attorneys, whatever it’s still a business and it’s still an industry, and it’s Very competitive so be sure if you’re diving into it and actually want to start a business know what you’re getting into. If you want to do it as a hobby and still have fun, that’s fine! If you want to go into a business, just know you’re going to have a little less fun on the woodworking side of it, but you will make more money eventually, if you do it right.
Tip No.7
Barriers To Entry
Now, what I mean by barriers to entry is, if it’s cheap for you, it’s probably going to be cheap for somebody else. So if you go man this uh, let’s say this glowforge or this shapoko or this DIY CNC build kit is so cheap. It only cost me a thousand dollars. Well, there’s a lot of other people, thinking that exact same thing and then they have the exact same machine as you, so as you’re going to be competing with them, you’re going to be competing with those people that bought the exact same machine as you. Let’s say you bought a machine like this and or an industrial type CNC , and it cost you sixty seventy thousand dollars or a hundred thousand dollars.
Well, there’s going to be less people trying to play that game, there’s not going to be a whole bunch of people going out there and getting into their get taking their stimulus, check right and buying a sixty thousand machine. That doesn’t happen so understand your barriers to entry and if you have a cheap CNC , there’s probably going to be a lot of competitors with that route. Now it’s not a bad thing. That’S nothing! There’S nothing wrong with that, but just know who your competitors are and who your barriers to entry or what your barriers to entry are on the machine that you are getting.
Tip No.8
Know How Much to Charge an Hour?
Now, there’s a thousand different ways to cut a cake to cut a pie and there’s a thousand different ways to calculate your cost of per hour on your CNC router. So, whatever way you do that, you need to make sure that you understand the way you calculate those costs, whether your salary is included in those costs, whether the bit wear and tear is included in those costs, or is that a separate cost fixed repairs are in That cost right, your machine, will break down eventually, so you really need to understand and first and foremost try to derive that cost. You know something i do is i have a five percent or three to five percent: fixed repairs um in my machines every year and that i actually tack into what i charge per hour. So even this little guy has you know i put five percent fixed repairs in there.
So say the machine is a thousand dollars. So i dedicate fifty dollars a year into that machine for repairs that a belt may break uh. I i may break this spindle eventually. Maybe after three years you don’t know so, when you’re doing your cost breakdown on how much to charge per hour for your CNC router , you need to look at maybe run time. How, often are you going to be running it?
How often you should be running it? There’s 168 hours in a week, but maybe you’re only running it 20 hours a week, maybe you’re only running at 40, maybe you’re gonna run at 80. When you’re looking at that, just be sure you know how much to charge an hour um look at your fixed cost, your fixed repairs and then know that bits do get expensive. Um so definitely have a cost associated for wear and tear on your bits that also gets overlooked quite a bit.
Tip No.9
Know Your Feeds and Speeds
So if i look back at tip number eight and know your cost per hour in your CNC , well, if you’re running your CNC twice as slow as it needs to go, you’re gon na have to charge two times as much for that product. And let’s say you have a competitor once again know your competitors. If you have a competitor that is actually going the right feed in the right speed. Well then, they’re probably two times as cheap as you right, because they’re running the product correctly so definitely know your feeds and speeds. I actually made a video on how to calculate feeds and speeds, and i have another video that i kind of went more advanced into feeds and speeds, and if you want to look at that, just look through my channel you’ll see it i’ll, provide a link in The description and it’s very important that you understand your feeds and speeds.
When i first got this, i was going 10 times slower than I should have so my products cost 10 times as much to my customers, not necessarily 10 times as much it costs 10 times. As much to mill my products so be sure you know your feeds and speeds, because that’s very important be sure you understand how they work, how they integrate to your c CNC . What bits need to be running because that’s a big deal and that’s going to save you or cost you a lot in the long term, and that leads me to the last and final tip.
Tip No.10
Know That It’s Very Long Process
It’s a very long process and you’re constantly going to be tweaking your designs tweaking your feeds and speeds tweaking your programs, all of that good stuff. I have spent at least two years on every single program that I finally thinkt that I’m good on. I’ve at least spent two years tweaking it and is just tweaking it a little bit.
Maybe the first step you fix,maybe it increases it by 25 and the next one is 10 percent, the next one’s three percent , and then you get it 99 persent correct. But you’re still gonna constantly be tweaking it to try to get it 100 correct and Just to let you know you will never get it 100 correct, but you will try to get it close as possible.
So, as you go along, this business journey just know, there’s a lot of things to think about you’re, going into a c with a lot of competitors. There’S a lot of CNC’s out there because they are getting cheaper nowadays, you’re going to have a lot more competition, but I do think the CNC and woodworking technology is kind of the the next big thing that nobody’s talking about. So I’m very excited about it.
That’s why I started my channel and I hope this helped please give this channel a like subscribe. Do all that good stuff, and if you have any recommendations, please leave them in below comment.