How To Start A CNC Machining Business

Where do your business ideas come from? Do you research the latest market trends or do you suddenly find inspiration in the most unlikely places? Have you ever thought of searching for  CNC (Computer Numerical Control) or CNC machining in Pinterest? A manufacturing machine is not something that immediately comes to mind when thinking of the hobby-oriented and craftsy Pinterest site. But for robotic-sounding words that would fit right in within a Transformers movie, it’s surprising to find CNC-related Pinterest pins ranging from the types of CNC machines to business ideas and even patterns and templates that you can use with a CNC machine.

This goes to show that CNC machining is not just for the large manufacturing companies anymore. Thanks to advancements in technology and the rise of the internet, CNC machining has become accessible enough that entrepreneurs or even hobbyists can easily find information about it and give it a try.

According to a report published by Grand View Research, Inc., the global CNC machine market is expected to generate $117 billion by 2027. Although most manufacturing companies have their CNC machines, there is also a growing trend for businesses to outsource their CNC machining needs. Since more businesses find CNC machining’s computerized process and ability to produce high precision and high-quality products to be cost-efficient and beneficial for them, there is a potential opportunity in opening CNC machining shops that can cater to this market.

Is CNC machining the right business for you? Before anything else, you should have a better understanding of what CNC machining is. Keep in mind also that starting any type of business is going to be tough. You should take stock of your capabilities and think if you are willing to go through the many ups and downs of building your CNC machining business. If you still want to pursue it, then you need to know the steps that you need to take to start a CNC machining business.

How to start a CNC machining business

1. Know the kind of CNC machining business you want to have.

In simple terms, CNC machining is a manufacturing process wherein computers control machines to manufacture products. The more detailed explanation is that it is a subtractive manufacturing process wherein computer-programmed machines remove layers from materials such as wood, metals, plastics, glass, foam, etc. to produce a product or machine part based on a given design.

Among the products that can be produced from CNC machines are auto parts, aviation parts or specific parts used in big machines. CNC machines can also create and customize wooden furniture, metal plaques, plastic pieces and many other things.

If you are serious about getting into the CNC machining business, you should understand what a CNC machine is capable of and decide the kind of business you want to have. Do you want to have a job shop where you are offering Manufacturing as a Service (MaAs) to other businesses or do you want to have a product shop where you will be the one to create the product that you want to sell?

Both types of CNC machining shops come with their own set of pros and cons. A job shop requires few customers but note that you will have a lot of competitors offering similar services so you might have to lower your price to remain competitive.

On the other hand, if you have a unique idea for a product and decide to produce it yourself through your product shop, you can cater to a specific niche where you will not have many competitors but you will need to sell a lot of your products to be profitable.

2. Come up with a business plan and get down to business.

Once you know what kind of CNC machining business you want to enter, you need to tackle the practicalities of starting your business.

First off, you need to come up with a business plan. Think about the investment you will need to put in, how many customers you need to have and how long it will take you to make a profit. You will have to sit down and write this business plan. Thankfully, there are templates and how-to articles you can find on the internet to get you on track.

Secondly, you need to take care of the business practicalities such as creating a business name, forming a legal entity for your business and deciding on your business structure if it’s going to be a Corporation or an LLC. You will also need to register for taxes and obtain the necessary business permits and licenses.

Thirdly, you need to choose the right CNC machine for your business. Most if not all of your investment is for the purchase of metal lathes, drills or other CNC machines and the recurring cost of the raw materials and tools that you will be using.

As a start-up, you can begin with CNC milling and lathe machines which are the most commonly used. You will have many competitors with the same equipment, but at least, you will be able to minimize your costs. Once your business grows, you can expand and invest in the more expensive CNC machines that will give your shop a competitive advantage.                                                                                    

3. Build your business through networking and marketing.

Having your CNC machine is one thing. Letting the right people know about your CNC machining business is the next crucial step to making your business a success.

If you have a job shop, you need to do a lot of networking just to get your foot in the door so that you can explain to businesses your CNC machining capabilities and how you can help them. You can start with your friends and business acquaintances to get you those introductions or go around your community and see which small businesses might need your services. Once you build a client base, your customers will refer you to others; and you will be able to reach more people through word of mouth.

On the other hand, if you have a product shop, you need to be able to reach a wide range of potential customers. Depending on your product and the type of customers that you are targeting, you will need to find the right channels for you to promote your product. For example, if you are offering customized wood ornaments or metal plaques, maybe you can try promoting through Facebook, Instagram, Etsy or Pinterest.

Whether you have a CNC machining job shop or product shot, establishing an online presence through your website or even social media will help get your name out there. Your website is an important tool to provide people with the information that they are looking for.

Whatever you decide on doing, you need to be consistent. Expect that there will be hits and misses along the way. Your marketing and business strategies should evolve along with changes in the market. What matters is that you can embrace new technologies and new methods of engaging customers so that you can showcase what your CNC machining business has to offer.