HOME MACHINE SHOP TOUR! Demuth Tool & Design: First Year as Self-Employed!

hi folks i had the chance to sit down again with adam demet the first half of the video was chock full of little fixturing tips machining workflows tooling tips uh really enjoyed seeing what he's up to in his shop and then the second is a sit-down chat about what it's like for him he made that leap from working for a company to running his own machine shop and it's always wonderful to hear candid insights so where are folks succeeding where are they struggling what's on their mind how do they think about the present and the future so if you're thinking about manufacturing entrepreneurship or you're thinking about going out on your own i think there's some really good takeaways from this conversation with adam who's done a really good job at something unique which is a relatively low stress year as a solopreneur hi folks recognize where we are we are back here at demyth tool and design welcome back thanks for having me up here come on in what has changed here this went from support equipment to something we actually run quite a lot now we make a lot of customer parts on the surface grinder anytime i have spare money i i'm putting it into new tooling we got a new vacuum system for grit um oh yeah i saw this on instagram this is pretty cool yeah yeah it's actually pretty nice it's got a flip switch so like you can kill it and touch off and then turn it on and you kill it so you can listen yeah if you're touching like a delicate surface uh it's nice just to be able to shut the noise off i've been trying to make this area more efficient but ultimately it'll probably result in a cnc or automatic grinder getting added to the company but uh replacing this or new added augmenting uh oh yeah probably have two um where these are so tell me tell me more about where the cnc grinder's gonna go the grinder's the cheapest thing in the grinding department oh the fixturing yeah i mean the fixturing the metrology yeah so it doesn't really make sense to sell this for the few grand i'd get for it yeah so hang on to it and use it for small jobs while the cnc is running well i remember you had the sony dro and i uh see i remember seeing you had the uh growing the hair grind all right yeah so what else what else is i love your brass yeah yeah that's handy make up a bunch of those and toss them when they get too banged up yeah a lot of little metrology equipment so i can measure stuff on the magnet versus having to pull it and do a gauge setup more fixtures i've made some more fixtures angle dresser i just got that that's cool yeah this is actually an interesting piece of machine history it's the new bolt indexer okay there's a really cool thread on practical machinist from the inventor but it's basically one arc second resolution okay for setting angles and then you can slide on that angle look at that you should produce the the angle into your wheel yeah sure but um yeah just beautiful whenever whenever i need it for a job i'll see what i can get for cheap or maybe uh maybe i buy new is that a like a box way give design or yeah is there an adjustable give in this it's not adjustable when it gets too loose what you do is take this off and just take a little stalk off of this face that's cool huh and then you just shown on instagram a pretty beautiful piece of herman schmidt oh yeah equipment i believe new vice you mind sport it's already so much smaller than i yeah yeah it's uh anticlimactic how small it is but just uh you know just a really high quality grind vise makes squaring stuff pretty quick yeah um so you'll use this in which machine probably both yeah as well more use magnetic work holding so i fixture it like i would a grinder interesting um sort of throw things like this on real quick but uh and you were saying that there's a difference in how this is it how it indexes between the position for folks that don't know the tool maker's advice and you've got to always part with the right groove and keeping it pre-tensioned in there for it to work yeah this one it um the way they have it set up it just kind of locks into position real easy like you don't have to flip it upside down to mess with it you can just keep it on the magnet and then that's it but it also has holes for soft jaws or angled parallels uh interesting i'm looking forward to messing with that cool yeah that was beautiful not much new on the haas um it kind of is what it is um it's really not an efficient machine for me to run but uh it's not an efficient machine well you just not big uh material or removable shirts but um things just take longer in it and i've come to terms with that yeah so i still make a lot of money with it right i'm happy i've been trying to do what i can to make things more efficient in the haas and i think you know the the easiest low-hanging fruit is probably add more holders so whenever i get a job i get a one or two holders just having more tools set up yeah cut a lot of setup time leaving tools set up in holders is the cheapest form of automation and now it's not automation in the sense of a robot or a palletized cell but it solves so many problems which can be stored gauge lengths knowing where the collet is knowing how having a built out you know tool library infusion that you can draw from which makes programming jobs faster not having to touch off not making mistakes on that um not having to look for that 1764 er collet for that certain tap size yeah it's always fun to look at other people's tools so that's the uh 316 yeah sandvik the detachable head screw-on deal you like these they're extremely rigid but what i buy them for this machine for is its low gauge length oh interesting um so you don't have a ton of head height in a mini especially when you're using the fourth axis right so being able to shrink that gauge length um like a three-quarter inch end mill with two inches of reach and like a milling chuck would probably be another inch and a half long right right i've had parts where stood up i've only had like 100 pounds to travel so it's not so much for a rigid tool it's just simply the clearance and that's the ph horn uh is that a thread milling tool or yeah okay uh that's the sandvik one but oh okay but it's the same thing this sandvik is the seller got it um the kaiser digital is that digital yeah yeah the job i went about that for kind of faded um so it uh it doesn't get used as much as it usually does but it's still whenever you get it out and you just nail more with it yeah it's really it's nice right sandvik 390 yeah the allied some of these are the porting tools right yeah so that's like an indexable portion where these are like a porting reamer where this will drill and port at the same time or this one you have to drill and then and so this is just a way more efficient way to do it um but it is quite a bit more expensive got it you know it's interesting because seeing a three-quarter inch end mill like this and the larger drill like this that to me seems like it would be really pushing the limit of a machine of this build class and weight um it's these aren't as lack of rigidity issues aren't as big of a problem on these as people think just because it's it's so small there's not a big flexi mechanical loop everything's pretty tight the issue is when you get into high speed steel large diameter doesn't have very much low end torque like you get below 500 rpms it just kind of falls on its face and you really have to baby things got it but is that the lakeshore engraver oh yeah cool i love it um i use their engravers and those uh helical uh tamper piece yeah the ones i just posted about yeah yeah yeah there there's no equal yeah awesome what's on the uh what's on the mori the phone booth yeah such a cool machine look at this is that all machined by you yeah that's an incredible atom what's the material that is h13 and actually if you look on the top there's there's a hole through it that it's there's a hard pin in there and the gap is to allow air it may not show up on video explain that again so right here okay you can see a pin and their machines match okay and so there's like a two tenths gap between the ten and the four and that allows air through the core insert to help eject the plastic off of it okay so that's a mold yeah that's a mold insert interesting um h13 is pretty much only a molding steel you don't see it much in the die world okay it's um what's the difference high toughness what's h13 sorry even a dumber question what's the difference between a mold and a dye oh mold um closes and plastic in the liquid form or plastic form is injected okay injection molding yeah like stamping metal yep got it so dye steels tend to have more abrasion resistance okay um mold steel you see abilities to polish um they're they're vacuum melted so it's a little cleaner steel so when you're polishing it you don't have all these voids or bad pieces of metal in there kind of leaving the streak um but yeah i don't mess with molds much but this is a project for fellow instagrammer corporate patterns oh sure jonathan no yeah awesome so we got hooked up through instagram and helping him out with this one yeah he's got that well not new anymore but that horizontal i think that matt serra that's pretty pretty beefy so not much new on actually now i say that um added a bloom laser and a bum spindle yeah as you see that giant thing yeah then in the back that really slashed set up times so 2019 was about getting equipment lots of new equipment and 2020 has been more about taking what i have and making it as efficient as possible so we got the blum and then we also added that herman schmidt uh work holding magnet which is very fast like just for even onesie twozy job shop work just be able to throw it in yeah um especially if you have like your zero set in the corner you can just slide stuff into the corner all day um so that's been a nice ad and so that generally lives on the machine yeah i only take it off for one job it's got a it's a custom fixture that bolts to the table and i think i'm gonna stop doing that even though i'll just put that fixture on the magnet for the top of it yeah yeah so and what have you had a problem with um with a magnet doing what it's doing here which is collecting chips uh that certainly happens um but most of the time i'm not cutting down near the face like the end mill isn't plowing around so you don't care about the chips feeding them that specific one is a hard milling magnet meaning the poles are spaced in a way that the the magnetic action is actually where it's strongest is off the chuck completely so i mean air will actually blow them off no kidding yeah if you've seen what we've been doing in our shop is kind of we call it internally we call it nuking the shop that sounds crazy but we've been completely revamping all of our internal processes we've been adding an erp system a new workflow barcodes we're standardizing our quality control standardizing our fixtures and one of the problems that we were having was we buy a pretty decent amount of 4140 for the mod vices and we've realized that we have to run each piece over a demagnetizer because otherwise the magnetism in the material will cause it to sometimes not correctly evacuate chips and i would like to figure out a way to not have to do that whether that's different material or having our supplier do it but for now that's the process yeah um that you do see that when you're hard cutting sometimes if you're in a small pocket or a hole the chips won't stay in there um so i have air nozzles and i can really hammer it with air and evacuate to the best but sometimes it's just a bad scenario this is uh oil as well though yeah they run oil on this one as well but um the oil is just for pretty much one part uh it's everything like in the hard milling or tool and die world is done dry okay so does dry mean air blast or just air blast okay okay um got it but one of the nice things about oil is it might go a month two months before i turn on the coolant on this machine right and so you don't have to worry about going stagnant but it's just yeah cj uh uh we'll throw his instagram in the video description just got a willowman for like a side job and he's been running uh oil in it and it's it's an interesting process yeah it's uh everyone always asks me why i run oil and they like see some of the finishes i get when i do stuff in the oil and it's it's a big difference if somebody wanted to run oil you know in a mini mill i know hospital tells you you're not supposed to and there's a fire risk right but what are any lessons or words of wisdom um high speed tool paths get interesting okay so the the issue is you always want to do like your high speed work first when the parts dry because you're sending these hot chips off and you don't want like a wet part with oil to get hit by these hot chips the problem is there's still oil on the walls of the enclosure so the chips hit the enclosure and you get these little whisk of smoke so we added the mythbuster okay um but uh smoke meaning you think there's you might think there's a fire and there's not no just you can't see no it's just it's just like slightly hazy air like him okay you shine a flashlight and you can see the beam i got it um but uh i don't do a ton of stock removal most of time i saw my parts pretty close to size or buy themselves and i'm just taking a pass around it and smelling it now the current project the rings those were from solid so there was a lot of metal coming off of those yup you mind showing us that fixture oh yeah the the base plate is just a piece of scrap metal i had lying around okay i made 14 of these clamps and so first off it gets clamped on the undercut section of the ring okay it does the perimeter and then the smallest diameter of the bore okay and then the option stop and then the second set of clamps goes in and gets secured and then i take out the original sure sure and so without any clamping distortion i can do both id and od yup really high levels of concentricity man what's the uh where is that the raw material over here yeah that's just hard a2 which it's 60 ish rockwell uh 58 i think that's where those ended up okay yeah they're kind of magnetized a little yeah that is crazy that's like what i was talking about interesting and going going well yeah the uh i don't know you wouldn't think the mini mill would be a ideal hard cutting machine right it doesn't these are the ones that were you know some obnoxiously small amount too big for the mori oh yeah the parts themselves are a quarter inch too big but you also need like a little bit of travel to get around it right so and it's about a half inch too too big yeah classic classic yeah cool that that's really frustrating when you get the part all set up then figure that out no oh it stinks yeah that's happened a few times we've had we had some questions from folks and i i don't have the answer but can you take a fourth axis lay it down and then do like a polar interpolation where you rotate the part in and out and i don't know if that machine is wired or even supported for it but it's a it's an interesting idea it is technically a fourth axis as a fourth servo drive okay that's what runs the atc uh the same drum yeah but got it so you have a um i saw the blum laser for the tool center there's also a spindle probe spindle pro does that look like a renaissance or is it a no no that's a blum i'll call it you gotta turn the air on i had to shut the door yeah yeah look at that guy cool now that's uh i'll never buy a machine without probing again yeah because what i discovered when you have haas add a probe to your machine quote it's not that much when you have to pay the probe installer to come to your facility and then you have to pay fanuc to come in and add memory and add more macro variables it is astronomical yeah so yeah buy them with a probe when you're behind yep so the first video we did with adam was at superb industries cart here absolutely awesome video adam has since moved out we did another video showing his sort of uh what about a year ago yeah you were more getting started in the job shop and it's been about a year uh and we were talking and he said hey you want to have just a talk about what it's like running a job shop some of the small business or entrepreneurship things and i said absolutely so we're gonna have that conversation cheers cheers our coconut lacroix you left your former employer in i think april 2019 yep were you nervous no no um big sense of calm yeah being in control your destiny took a big load of pressure off of me i feel less stressed being an entrepreneur than i do be an employee so that's unusual i feel like i'm not like uh a full-fledged businessman sure you know i'm i'm just kind of hustling in my garage i don't have employees i don't have i don't have big stuffy customers with all kinds of paperwork requirements right and that's by design right um i wanted kind of a low stress self-employment situation but uh i didn't feel at all nervous it just seemed just like the right thing to do so i think this is an important point for folks that are thinking about their future which is uh you weren't upset just you didn't hate your job you didn't work like it was you were in control yeah i just most of the men in my family are entrepreneurs my dad was and it's just kind of a inevitable conclusion that i would uh at some point either own a business with employees or work for myself in some capacity or once it finally happened things just fell into place i felt very comfortable with it all and you started with the mini mill and the grinder mini mill came first the grinder about six months after that maybe um and really for the first two years up until february 2020 uh the griger was not not anything other than relieving in mills or decking a fixture flat it wasn't a big part of the company it was interesting to watch just overnight the grinding become a big part of what we do why just adding a new customer oh is that right then that's all it took and had you asked me in january 2020 i wouldn't be putting any money into a grinder do you actually look for customers or like how do you find i have done a little bit of cold calling and it's never really amounted to anything the few customers i have where there wasn't a relationship prior it's amicable but they don't seem to understand my strengths and weaknesses and i probably haven't done a good job explaining that and so i end up having to say no a lot like i get things to quote that are just way inappropriate for my machine got it where the people who i dealt with their various points my career know what i could do well they know the machines i have and so when they send me something it's almost always an appropriate fit for my machines or i can make it work and so i rely on former contacts almost exclusively i do have that one job which kind of came about through instagram and that's about the only instagram work i've done that's the one on the more you right now yeah and just because it was a good enough match like it was small tool steel work high surface finish it made sense for me and jonathan is pretty savvy like i knew i was going to be in good hands with him design wise right when a customer with whom you have a good relationship when they send you something is it usually yours to just price and do or are you usually actively getting bidding against two or three other most the time i'm not bidding against other job shops two of my tooling customers have internal tool rooms i'm bidding because they need it done and they're out of capacity but if i do bid too high they'll just choose to pull it in house and deal with the overtime so i i don't feel a lot of pressure on price uh timeline's kind of the big one which is difficult for me yeah because i can't that's that's my bottleneck i can't make more of me i don't have any employees i can't fit an employee in there right um so that's when something runs afoul it's usually because i don't have enough time to do it you know there's the entrepreneurs who just hustle bust their butt nights weekends etc i get the sense that you're controlling your destiny and i mean not that you don't work hard but right when covid hit i was very nervous what my the implications for my business would be right i you know i didn't know if i was going to make it through unscathed or if all my work was going to shut off so i took on every work that came my way and yeah for two months i worked enormous hours and it really didn't have to everything worked out okay like all my customers are still giving me steady work but yeah i don't i don't really want to work crazy hours i'm been goofing off last couple weekends and just taking time for us and that's nice so yeah but if i if a a customer comes to me i've known these people for a long time and they say hey we really need help on this i'm going to work nights and weekends or help them out um then i'm going to take a few days for me yeah yeah i mean obviously you've got a very real limitation on size you blew out that wall so you've got the the single car garage yeah i got 200 more square feet you know obviously i need to grow to kind of keep the income level i want but how do i like what type of direction do i grow more tool and die work one of the things that's on my mind is automotive tooling is going to have a big contraction right because with evs everything's going standardized like it's basically the same chassis under a multitude of vehicles so the number of bespoke components that a big car manufacturer orders each year is going way down and on top of that you're also seeing standardization of tooling so a company might have three suppliers of tools or stamped parts and there'd be each one would build their own tool essentially well now you're probably going to start seeing three identical tools being made so the number of stamping tools or molding tools is going to go down as well so i wouldn't mind if i'm going to add new capacity to shop something that doesn't rely solely on tool and diet work got it because your concern is that there's already you know making up a number there's a thousand tool and die shops in the u.s those shops are going to lose auto work so they're going to pick up other work which is going to lead someone's going to be left holding the bag exactly right right um you know i'm small and scrappy so i'd probably be all right but why not you know get into something else um i got to add the car thing kind of blew my mind because i i kept hearing about it um and you know when you hear something and you when you hear from one person you never know if they have an agenda or it's their particular point of view but we heard it from sandvik when they talked about the long-term the long-term decreased use of carbide cutting tools and then we heard it from grob uh who who has manufactured the assembly or the machine manufacturing lines for numerous different engines transmission cases oil all these different car parts and then we heard it from somewhere else i don't oh autodesk had talked about how a super obvious point you know an electric vehicle doesn't have the same number of transmission gears differential gears housing gears pump like the number of discrete parts is i think something like 70 to 80 percent fewer in an ev versus a traditional internal combustion engine car so again most of what i did wasn't in drivetrain okay i used to have one customer who makes torx converters you don't hear much from them right so most of what i did was on the electrical side okay but the tooling i make for the one group it's mostly household electronics which i'm i'm happy with that um but uh i you know i'm thinking about adding capacity that's a little less brain power drawing okay something it's more of a process than it is this well thought out operation with lots of setup like laser engraving or 3d printing or coding something like that not any one of those specifically but something where you basically get the part in apply a process do a little qc and ship it just because a i can spend my time doing what i do and that a little more passively generates income and b it's something my wife can maybe start doing so we've uh we've really enjoyed our time together during covid i wouldn't mind that being a new norm that's awesome so she could come to work for the company that'd be pretty cool in my opinion it seems like you could be you know especially if um you talk about a grinder that would be either an automated or a cnc grinder that would be able to be programmed but then left alone for a while yeah i mean it would definitely take a half hour or whatever to execute on that program uh the benefit to a cnc grinder is there's not a ton of setup you slide it onto the magnet right you know you're not not doing a lot in that regard you might have to change a wheel it'll redress it for you i love that it's so cool you've seen like the self the balancing hubs too like oh man so drool worthy you know it wouldn't be as uh labor intense setting up wise as a cnc mill in my opinion but um i i don't know how much if a dollar spent on a cnc grinder i don't know net me as much money as a dollar spent on some other form of technology which i've yet to figure out what it is well and you made an interesting comment on instagram that um you've uh incorrect me here but you stayed away from edm work because it's just lower billable yeah and a lot of the shops i deal with they they'd charge 45 an hour for edm work and some like brand new now they're they're running an edm like 2400 hours a year yeah so pretty good it's still making them a lot of money but you have to have an enormous amount of work lined up for that machine like it's not something you can run 20 30 hours a week and do well with i mean it might pay for itself but it's not it's not building you new buildings or you know expanding your company on that so there is a like deeper philosophical question and this may not be the direction you want to go in this conversation but um you know it's not like i wholeheartedly believe it's not just about making money i mean you need to make ends meet and you want to have the budget to be able to grow if you want to grow and look at the end of the day it is a business it's you know the degree to which you measure a business success test by things other than profit is arguably wrong because profit needs to be part of it period it doesn't make it happy but it's the part of it um i i understand how made i have it and my little shack like i'm very happy in there and you know i don't want to disrupt that too much but uh i also understand like having lots of cash around is a nice way to go through life yeah and so well you know if i see opportunities to make money i want to push that direction i don't want to just kind of sit on the sidelines with my my two mills right um but uh yeah i mean you are right i don't i don't want to grow for the sake of growing but i think i can get a little more out of the business at the same time have you put a lot of time into uh on the stuff that is higher horsepower brain horsepower have you put a lot of effort into how you organize like we talked about tooling cam templates libraries automation so that when you get a new h13 job in it's less starting from scratch with the mori i do okay hard cutting really isn't tooling intensive in terms of variety you have a couple ball mills you have a couple bull nose radius end mills and so i can i've templated a lot of that stuff um and like you know i cut so much a2 with six millimeter cutters that's you know it's just it's autopilot at this point um the h13 i haven't messed with that all that much so you know i took the template i had to do a little tweaking but um you know that that all goes pretty easily and also i'm getting to the point now where i'm getting more comfortable probing um infusion okay so it's executing the setup oh okay sure sure so i slide it into the corner my mag chuck yeah and it finds the work because it's not in a perfect line there might be like a chip or an oil film keeping it a couple tents off and so i want the probe to pick it up every time um and so yeah i mean literally i don't even have to touch anything on the control the way i have it it dumps into the data server and as long as i'm running my data server call program all i have to do is hit cycle start and it grabs the probe finds the work sets the offsets and then starts cutting but that took a while yeah we use um some of the we used to have to write them by hand from the renishaw inspection plus pdf and now fusion has started to pull them in which makes it easier for quick stuff for the renishaw um i have to change a little for the blum it's a different way program so renishaw uses like five codes to execute a simple routine um on go here do this off whereas the blum handles it with way less typing but i do have to tweak some things got it but the other and gosh i don't know then if this will work on a blum but we did that generatively designed uh long board truck video and we uh it's honestly i think it was a great video because it was a part that just absolutely pushed a lot of different limits of manufacturing technologies right now and we we got the op 2 fixture wrong and it shouldn't have been wrong and that's something i'm going to revisit but we saved it by using the totally unplanned by using that new part alignment feature infusion where you can put a actually an even simpler example is let's say you have a um a lower receiver that has to be engraved after it's been anodized so forging is not perfect exactly you can now drop it into a fixture with very little precision use the fusion part alignment to pick a certain number of points generally speaking the more points the better except obviously you can introduce some noise as well and it will say maintain a perfect 3000 death engraving over a contour or undulating surface okay based on that which is amazing quick timeout i want to make sure i clarify what the fusion 360 part alignment does it is not able to take something that's machined on a flat surface and machine it now on a curb surface what it can do is it can take a part that may be a simple flat shape or it may be a complex shape and if that part is not sitting perfectly flat or perfectly aligned the probing routine can shift your orientation on any three of the work planes to make sure say that flat part is just sitting at a very slight angle across it and it will account for that and make your parts look better and might have better tolerances the first time i ran a cnc mill was actually engraving a lower receiver it came out poorly because of that very reason yeah just you know deep in some spots shallow another and anodizing flaked in one area but uh no that's interesting to know so um yeah i don't know probing learning all that that's been fun the issue though is the haas like when i'm roughing stuff preheat treat that's all templated but i get like some of these hydraulic manifold parts where it's it's just an odd part there's no there's no way to really handle it other than to you know go through it one by one but um i i don't know i i consider if that works worth it it's usually a very big price tag like it's a big job but uh just the the amount of man hours and getting it up and running and everything smoothed out is i mean i get paid for it but uh it creates a bottleneck in the shop again there's only one of me so you know something's gonna take 30 hours of my time to the point where it's running on its own i have to consider is that the smart move yeah but so how much time are you spending on you know what a lot of one-man shops have to deal with which is not the cab the cam the setups the machining that would like the administrative the overhead very very little my wife's picked up a lot of the administrative stuff because uh invoices pos um that's been a big help because just to like stop what you're doing and write a pf sucks uh we haven't automated that but she has you know templates for the various vendors so she just has to update a date and a price yep um so that's not a big deal um but does she know i like keeping my head in the game all day does she know steals and drills and materials now or she learned that um i think she's picked up a little bit of it just you know through me talking about it but uh most time it's not like itemized items i'm asking for it's just you know here's the price goes to this got it okay the other thing is sometimes with lead time and part weight like if it's 110 pounds of parts it makes more sense to drive stuff to my heat treater okay it just first shipping and what i started doing is having my retired father-in-law take him and he puts him in his harley saddle bag and he goes on a three-hour cruise and that's funny the heat treaters are annoyed because they have like a auto gate and his harley won't trip it so one has to like go out and open the gate for him but get him a drone that he can trigger it and so i pay him 50 cents a mile it's cheaper than sending it via ups one of the unexpected benefits is when you send out like a five figure part project via ups you're going to spend a few hours bubble wrapping and double wall cardboard bob's taken in his car you just forget you know so it eliminated a lot of packaging by having him handle it so that's been it i just kind of a nice thing just takes a lot of courier service um one of my customers they're 40 minutes away i used to drive parts to them a lot just because i like the face time with kovid we went to shipping just to minimize any contact and where i live it's 20 minutes to ups or 40 minutes to them so i was like you know it's not a huge time savings but it is you know a little bit quicker and that's been nice but uh i guess the next thing would be set up ups to pick it up here but yeah well the hack there so we're actually having this debate right now if we ship our main parcel carrier and um you know the hack is mcmaster will deliver something you'd be a ups for like five dollars so you're sometimes better off to just buy something from mcmaster which means ups comes the next day yeah when they come and you give them you just give them the box that's out now that's smart oh i like that a lot so but to answer your question i bet you i'm under two hours a week really non-machining that's incredible that's how much i've gotten rid of that stuff um so i didn't own a printer until january like a pink shirt like a blazer when when uh when a uh company sends you like a um uh application for to buy stuff from them yeah even though you're not doing it on credit right uh you'd be like well i can't fill it out i don't have a printer guess what they still take your money oh no that's not i've heard there's some companies don't like that oh they don't but i mean if you have no physical way of filling out their credit application that you don't need to fill out because you're not taking credit um it just gets around the problem yeah but eventually i had to bear down and buy a printer but we we um we have a standard credit you know basically when any time they're asking for your vendor form it's three credit references who you bank with maybe your the date your business started who you are um usually they're not anything more creative or probing than that and so we just standardized it and of all the companies that we've had credit relationships with over the last two years i think i've had one that just sort of said this is unacceptable we needed to be on there for you before and i basically told them take it or leave it not being rude but just sort of a um okay life's too short to fill that stuff out right so yeah what are you not getting out of this yeah but yeah the the non-machining business work i really went out of my way to minimize and i think i've done a good job of that but uh might be also eventually get to a point where my business isn't growing because i don't look at that stuff anymore but yeah for the time being who's handling your bookkeeping uh we have the accounting company okay county starting that so so that's great because that does all your regular bookkeeping as well as invoicing and taxes no we do invoices but we just kind of report to them and then they handle the taxes i feel like for all the more we pay it's not a bad situation so not having payroll is probably the single biggest difference for sure yeah so i just take a draw and that makes things simple so what's on your mind i mean what are you what's uh what stresses you out what are you worried about or thinking about other than like the world that we live in is strange times the one that's always in my head is you know i look at my friends who have these businesses with company or employees trucks fans warehouses and they're going to come out at the end you know when we're all 70. they're going to look a lot rosier than my situation and so i think you know just because there's an operating company that is beyond their they'll either sell the company or the company has so much assets that they'll be able to liquidate all that sell the real estate and they're gonna you know i put money into retirement but other than that i don't you know i'm not going to have a big payout at the end of my career from this company selling the mini mill in the dmg right right and um so that that's always something that's kind of in my head and you know i don't when i'm 70 i probably won't want to stop working completely you know probably just and you know find like one or two projects a month i'd be content but uh i don't know i sometimes think should i grow the company just a little bit more to maybe get me that at the end of my career so i struggle with that one mentally a lot and you know i think that just kind of comes down to what makes you content and right now i'm content being in my little shack but what's gonna you know am i am i setting myself up for failure in 40 years right how old are you 32 okay yeah so you're 30 33 that awkwardness when you forget how old you are i also often give the wrong gear always error on the low side for some reason so there's a couple different ways to tackle this question one is that there's a fear of the unknown which is which is the thought that retirement is some huge change i think for somebody like you it's not like yeah you'll probably continue to have the ability to make work to flex how much you're working to keep you um but the big question is what's your lifestyle and overhead you know it's a great goal would be to make sure you don't have any large outstanding debt by that point including your primary residence in which case you don't necessarily need a lot to make you happy now you might want to travel and enjoy things and be able to do more in life and that's great um and so the you know the absolute single best thing you could ever do right now is start saving as much money as you can period regardless of whether you grow the business or try to acquire you know real estate like so many things people will try to then piggyback into real estate which is a much more liquid asset that has empirical value in every market that is able to you know there's two there's two things you can do with the business it's like a cow you can milk it or you can butcher it you know in real estate you can do both you can milk the rent or you can butcher it and just sell the thing for a lump sum the thing is a question i guess for you would be if you move into a shop that changes your life a lot and then are you going to do so and grow with employees which completely i mean that's a completely different business or or is it just hey i want to have a thousand square feet a little bit more room it's still just going to be me but maybe you've got a five or ten thousand square foot building of some some size where you can have other income or just value in that and that that later scenario is kind of what i have in mind um just me maybe if there is a employee it's more of a helper status like you know comes in a couple hours a day or something that still changes things i'm just telling you as soon as you have to deal with the deliveries are coming there who's going to be there what's this uh you have to start the payroll like it's i just saying it's different right now what i really like is i have at most one or two plates spinning at a time and i that from a stress level that's very manageable yeah and i don't know that i ever want to change that and so i really don't want to grow too much bigger yeah and you know have to worry about all these different jobs and whether they're on time or not and do we have the tooling we need so yeah well it was interesting too uh before we hit record uh adam and i were briefly talking and um i have changed my thoughts on debt and financing a little bit not a ton um i kind of i kind of always chuckle at the analogy of drinking i'm not a doctor and this is not legal advice but like it's actually kind of sort of okay apparently for a pregnant woman to have like a little bit of a glass of wine the problem is you can't tell people that because then they start drinking a lot what's a little right um and and it depends on where you are in your business and why you're doing it but um case in point a um if your long-term goal is is you know to build wealth and also security you could also just consider a form of real estate that may or may not have anything to do with your operating business leave it here go find a building in town that has you know the best you know don't confuse a good building for a good deal but also recognize what you want out as a landlord to have the ability to generate rents are you going to get a broker involved if you need to find new tenants are you going to be able to afford capital improvements as they need to a roof or air conditioning unit um but the thing i like about that that i've found works well is the lenders understand how to land on real estate much more than they do on machine tools the rates tend to be better and favorable longer uh asset life is longer which makes the payments lower and you can still generally negotiate the ability to prepay which i think is important and there's a discipline that i consider myself a pretty disciplined person and i still like having the discipline of knowing that's a forced mechanism to save and if there's one thing that's true about folks that have succeeded in life in the world it's they buy assets that don't depreciate um and you can argue a machine tool doesn't depreciate because it's earnings power outpaces its depreciation but the reality is that still requires you to run it yeah and i just where we met was actually an auction rush and new cost of this equipment was several you know tens of millions of dollars and it was getting sold scrapping our price and it's like oh yeah uh you know that in i'm sure it made that company money but uh you know it's it's you definitely not a asset the way real estate is in that sense but i like your idea of i don't necessarily have to generate my wealth and income security entirely through the business right um that is one way of looking at it so but the the one thing that you have that you won't have right now is time yeah so so just saving money and then finding some way to put it to work you know i'm actually not a huge fan of the stock market um a whole other conversation but yeah um that's you know and unfortunately with the way the government's acting right now our interest rates have dropped you know your lot your online savings banks rates dropped from two percent to one percent so you're you're arguably losing money because inflation is almost certainly going to exceed one percent and again this is a little bit of a longer conversation but um when you're borrowing money i'm borrowing money for a building at three four five percent but inflation is three four five percent there's an argument and again this is where it gets this is the scary thing is that then people just think well then that's great i'm just going to swim in it um but there is a long-term argument that's a very a strong way to build long-term wealth yeah i couldn't understand that but uh i i have done residential or uh household real estate or landlording and i haven't enjoyed that i don't enjoy the tenants um the big problem is in this area houses really aren't that expensive um usually it's about one household incomes annual income is about what a house cost around here okay got it um yep so if you remotely have your act together you can generally afford a house and so the only people renting in this area are people who are coming through like oil and gas workers which is who i started out with i had a couple of oil and gas people right in the room i was like this is great maybe a little rough on the houses oh yeah a little dingy a lot of scrubbing and some repainting when they left but the money was always there they didn't have a lot of stuff you know it wasn't a bad deal um but oil and gas kind of went away and now you're just kind of left with the people who are really bad managing their finances and feels like uh you end up holding the bag on that one yeah and so i i think with that um i think i'm done with uh renting to people and but you'd mention that uh commercial real estate renting is a whole different game and i can see that like there's a lot of scenarios where a company doesn't want to own that business it's much more normal i would caveat that by recognizing and there's nothing wrong with a number of commercial tenants but you know the startup i'll pick on the yoga studio or gym or diet shake shack type of thing is not necessarily the same credit worthiness as if you're able to rent to a uh retail tenant or like a nationally known brand of some kind um that's an instance where i would be much more comfortable paying a little bit more for a property especially there's a tenant in place um then i would again if you go uh try to let a well-intentioned family or person start up a new gym and then that's probably not gonna end well right they do like your idea of my wealth and well-being doesn't have to be tied to this i miss having a shop at home sometimes i mean it has it has its drawbacks but boy could be pretty it could be pretty nice too the biggest drawback is when a chip falls off my clothes and it finds its way into my wife's foot so you've uh you have issues with like delivery material pickup auro just throws it in my lawn so that's cool that works right yeah um at least i'll deliver to you most the time if it's going to be like you know 600 pound bar or something i'm not going to take that job yeah i have that no interest in that um but like 55 gallon drums even that's kind of difficult yeah i have to have them sent to a warehouse and i have to go get it and then try to get it out of the back of the truck by myself and yeah you have a forklift huh no so right just getting a barrel of oil is a half-day project right and so those are the costs you pay by by being in a residential neighborhood with a shop right the upside is you know business doesn't pay any rent and i can roll out and fire up the machine and go back in the house while it runs and right so do you have a camera i like to watch it from inside no no but uh i could tell you can hear it uh sometimes with roughing i can hear it but i could see the mori and what the spindle is doing from my kitchen well hilarious that's awesome i just go peak every once in a while i have a reoccurring production job which it's a 48 minute cycle and i just really enjoy that one it's just kind of a 10 hour day i stay on it and every 48 minutes come out a couple minutes do a quick qc check back in the house yeah and i used to be like well i got to take advantage of this free time and try to make something on the pause while the more he's running but now we're just going to let it do the work so yeah and i'm going to take advantage of the time off so cool but that's you know if i get employees in a big building that goes away i don't get to go watch a movie why the maury runs you know i think about um i think about the risk gap but this all ties into you know what do you want out of life with personal fulfillment and happiness and financial security but then also achieving something and what do you leave behind and what do you what do you do with it i think i think one of the reasons i've also started to rethink things is if i look back when i'm 60 or 70 i probably will look back and say you were a little bit too conservative that doesn't mean you become crazy but it's kind of one of those good grief adam you can afford it you can justify the work why don't you look at adding the skill sets of a cnc grinder yeah you know i'm not saying that's right decision but but you know it it's okay you build a solid foundation of a business as that progresses i think i'll get more comfortable with it but this is my first economic downturn as a business owner and i'm i'm just trucking right along i'm feeling very confident at this point but uh we're not out of the woods there hasn't been a downturn yeah yeah um and so i'm just i i maybe you know that's just the life of business owners you're always waiting for the other shoe to drop right but i i feel that especially right now right so i'm just kind of in like a cash hoard mode it's a good thing i want to spend as little as possible and you know before the kovid and what everybody thought was going to be a huge downturn anytime i had money left over at the end of the month i would put a portion towards something that can make the shop money or you know something like save it time and a lot of that's kind of slowed down and it's just building up in the bank so but once we break into 2021 hopefully the world calms down and take what i have and see what i can do to make the company bigger or more money with it but uh yeah well how about this we'll be back in 2021 for part two yeah in six to 12 months that sound fair yeah that no honestly that'd probably keep me honest so yeah it's good conversation um you know kind of keep me from resting on my laurels too much one of the things i do worry about is a lot of my clients are nearing retirement age like they're small time operators like myself and i don't think they have a second generation tapeworm plan and so when they're done they'll probably just pack it up and so i want to have a diverse amount of machines so i can attract new clients when that time comes right um but i mean everybody says oh lay the mill you can get just about any job but um you know i don't know if that's the right answer for any right well that's an interesting point of view whether it's what what machine tools you kind of continue to acquire and grow but then also what sort of services and solutions you provide because i mean i'll take the make the risk of an assumption that you're selling your customers not just a machined part but the experience of working your work is superb and i know you are very humble about it but um folks would reach out to you because they know it's going to be very accurate they're not going to muck around with hey this part doesn't meet spec or tolerance or finish etc and that's a huge part of being a successful person in your field well sometimes it's brought to me because they don't want to bother going through the blueprint like okay to communicate as an engineer to a shop is actually kind of an undertaking to get the parts the way you want them is going to require a lot of documentation but if you have a guy who knows how you want it because you've worked with them for so long and you could just hand them some cad models right it saves them a lot of time so i deal with a lot of people on that basis of i could just take it and run with it you want to think about to think about kind of moving upstream then over time as as the folks that you source work from want to move on figure out some way that makes them whole which could be variety different ways to to move upstream and pick up some of that work direct which they will probably be pressured to find a solution as well so it could be a win-win that's not a bad idea i mean the company name is demuth tool and design and 2019 about 30 of our revenue was designed okay you know we do do a fair amount of that my concern is when i'm designing something i have to kind of have tunnel vision on it um i kind of get in a flow and i really don't like any distractions so when i'm doing a design day the shop's more shut down right and so it wasn't what i was seeing is i couldn't multitask i couldn't run the machines and then the side designed yeah and so it felt like it was holding it back i could run two mills at once um and so it seemed like the solution was more machining less designing yeah but uh as part of a total package maybe maybe bringing design back into the fold is the answer well the other thing i think is um is solves could potentially solve a lot of problems is partnering with other folks in the form of consulting where you could offer them a strong earnings package there's going to be more and more work from home and disruption in this world and it solves all the problems of payroll and in-house employees and i find um it's whether regardless of the work nature drawings prints cam financial savings your skill sets could be focused on reviewing and tweaking rather than full-blown creation and so it will make up a number seventy eighty percent of the legwork could be done by a partner that you build a relationship with trust pay well then you're able to participate in the design stuff but on a much i essentially run the job yeah and my concern i had thought of that is you know find somebody else like me who's in his garage has some machinery maybe a different set of machines than i do yeah like he'd bring something up um i feel like that would be cash flow intense like if you're you know yeah but you know if you go into it with a large enough nut i think you'd be okay but you know as it stands now i really don't have any cash flow problems right my vendor or customers pay for material most of time and so i just have to keep some cutters in inventory and uh i think i've gotten a little spoiled with that and all of a sudden if i'm you know showing out five figures for material at the front of a job right um i think that'll be a steep learning curve well the other um point uh and i'll share an insight which is i've often said the time to negotiate credit is when you don't need it and again i generally don't believe in debt that being said that doesn't mean it isn't a tool that you should have in your toolbox so we actually just this year started the conversation with our bank to negotiate a business line of credit i don't have and my wife was kind of like why are you doing this well it cost me in the hundreds of dollars a year is a fixed fee so i lose x hundred dollars a year because i pay the bank the right but what it does is it gives us access to what i will call a significant i was shocked at how much they were willing to allocate on the line and it's literally an online banking click as soon as i click i can transfer any amount of money subject to that limit um into my account i have that cash within an hour and the interest rate on it is is i'll put this way i wouldn't want to be in banking yeah shockingly low and i'm not saying that you should do it but the time option value back to me spending so much time machining so little time running the business i i don't see stuff like that like it doesn't it doesn't enter my thought stream and i think that is like i get a lot of machining done in a week but you know that is the what's sacrificed is i don't see ways of hyping up and improving the business or um and yeah you know i don't currently need a line of credit but you know i wouldn't know that option existed exactly but right and i don't either but again for the price of you know a couple of marital holders you have access to uh you know six figures and capital on good terms and it's it's honestly is good to you know kind of let the banker do their job build a relationship with them because um as a business matures um and you have stable cash flow i think that is where it can be appropriate to use the banking rule as a tool not to overextend yourself but rather to recognize hey that's this is you know uh no manufacturing company larger doesn't doesn't pursue that route and that doesn't mean that you have to as a small shop but it's a tool yeah i i don't have a negative opinion of dead either it's just it's a tool i don't use it a lot but uh you know i'm not i don't hiss at it the way some people do right so yeah i enjoy the talk yeah it was fun we will not shake hands well we will not hey folks hope you enjoy i really want to thank adam it's it's uh conversations like this that are are just enriching and kind of what life's all about um adam is incredibly humble uh and and so i hope it comes off just how phenomenal of a shop he has and the equipment and parts that he makes and um he has very much intentionally chosen to not promote his new podcast which you absolutely should do um josh hakko whom you've toured his shop and i have a podcast where we just talk about precision whether it's the history of something precise like the lead screw how this is the first lead screw made or we we pick out a obscure unknown machine and we deep dive it and uh it airs twice a month-ish and uh yeah we have a corresponding instagram page to show what we're talking about but it's uh the precision microcast precision micros we will include a okay we'll do a card here to the nyccnc page on this video which will have a link but then we'll also have a link to the podcast as well as adam's instagram and his website for dean of tool design in the video description otherwise folks hope you enjoyed take care see you soon yeah you just reminded me of a website

Channel: NYC CNC

Views: 81,780

Rating: 4.9282823 out of 5

Keywords: cnc, machine shop, nyc cnc, DIY, machining, milling, CAD, cnc machining, cnc milling, learn cnc, john saunders, provencut, chip rag, CAM toolpaths, workholding techniques, fixturing, CNC Shop Tour | Adam Started His Own CNC Machining Business!, garage machine shop tours, how to start a manufacturing business, solopreneurship, entrepreneurship, small business help, manufacturing, great cnc machinists, adam demuth, josh hacko, precision microcast, demuth tooling & design

Id: IgJJt-VIVWk

Length: 61min 52sec (3712 seconds)

Published: Wed Sep 09 2020