Business plan and executive summary

[Scott M Smith]

Some of the investment opportunities that I am looking at or have been contacted by require a business plan and executive summary. Have any of you done this to start your business? Some of the information it requires is estimated start up costs (I have this done), expenses(done), estimated sales for the first year and three years. What items to you guys sell on a regular basis that makes money? I am looking at pens and photo frames that I think would be top sellers. Part of what I would like to do is asset management tags, but it is hard to predict how much of that I could do. Any insight would be helpful. Thank you all.

[Steve Clarkson]

asset management tags?

[Casey Wigginton]

I think they're talking about businesses that put tags on all of their assets, such as business computers, copy machines, etc.

[Rodne Gold]

I cant see how you can predict sales when you dont know what you are going to do or what demand there is for what you intend to do.
Without seeming "nasty" , In essence you are asking folk here to tell you what pays their salary and wages , and albeit this is a giving community , I don't know whether anyone will give that much , as most of us had to learn the hard way what works and doesnt work and whats the most profitable. Even if they did impart the info , it might not work for you or your area ...
I can give you this advice , lasering pens and photoframes is not going to make you any money

Asset managment tags are labels applied to equipment etc - like in a hospital to beds and so on , normally barcoded and then scanned , so its easy to see whats where and whats missing...mostly these are printed and not lasered. We use large format printers to do these , along with barcoding programs and overlaminated them (they are printed on 10 yr cast vinyl)

[Mike Null]

What is it that you want to do?

[Scott M Smith]

By no means do I want that. I just want some input from experienced people. I dont want you guys to say i sell x many of this at Y price with a profit of z per item. just some basics on general business from an engraving standpoint. I have looked on the forums here and seen the work that can be done and I have asked people around here for ideas also, but I am just not sure how to project profits and expenses with a new business like this. I am sure I can make it profitable, I am just looking for a reference point for a piece of paper. I have also looked on laser sketch and laserbits for costs and recommended selling price. Why do you say pens and frames will not make a profit?

Yes, asset management tags are tags that normally say Property of XYZ Corp and have a barcode. I have read that this can be a profitable venture using the engravers because companies always will need more tags later.

[Michael Hunter]

I've done a deal with my local photo shop. It is in an excellent location and gets plenty of customers and passing people who see two engraved frames (one wood, one glass) in the window and a big sign saying "We engrave and personalise picture frames".

We sell three or four frames each year, mainly to a Mrs Tribble, who is an engraved frame fanatic.

I bet I could sell three or four pens a year there too!

(I have been doing this for nearly five years now. I keep it up, because I occasionally get requests for industrial engraving from people who see the frames and I don't have my own shop front).

[Rodne Gold]

I can print an exceptionally durable asset tag for about 1/10th of the cost it can be lasered, I have never lasered one of these , never done a photo frame , done a lot of pens , tho have given this up cos the only way to make money is brand volumes and all the other laser guys in town are fighting over the promo marking segment and cutting prices to levels where no one can make a profit - I don't like losing money.
One vital question you have to ask is :why would anyone want to use me?

[Rodne Gold]

Is Mrs tribble real or is it just a name you made up ...Mrs Tribble sounds close to Mrs Trouble?
Is she an old lady with 17 cats and crotched anti-macassars on her red velour lounge chairs?
LOL.......

[Michael Simpson Virgina]

In this economy I'm not sure a new cold started Engraving business is that viable. I looked into this several years ago and each year it seemed to get worse.

In my area two of the companies I have been watching have since closed their doors. The only ones that seem to be holding on are the sign shops that do engraving on the side as well.

Also watch out for banks n such that ask you for all kinds of information. They will get you to jump through hoops but in the end many just will not lend the money. I think they do it to justify their jobs but right now loans are very hard to come by unless its for a car.

This is not so say that there are not locations where an engraving shop might prosper. Im just saying its not like it was 5 or 6 years ago. Both ULS and Epilog would have you believe this is not true but an honast dealer will try and diswade you from this kind of venture. My Epilog dealer did. Which is why I purchsed my laser from him.

There are buisness plan templates on the web. I downloaded a couple when I was doing my research. Also some of the Microsoft products have some buisness plan templates and wizzards. I think I even saw an online buisness plan wizzard.

Here is a link to the SBA
http://www.sba.gov/smallbusinessplanner/index.html

One last thing I have worked for quite a few large companies. Most of them use special stickers for their asset tags. No special equipment is needed. It almost sounds like you have been given the Laser/Engraver/Cutter hype from a dealer or possible one of the online manufacture sites.

If you already had an established company and had the cash on hand to purchase say $15,000 - $20,000 laser and needed a tax write-off I would say go for it. That's what I did.

[Mike Pond]

You may want to contact SCORE (www.score.org). Can't beat the price of free business advice.

[Dan Hintz]

Years back when I was first interested in starting a business, I did all of the things you're told to do, like creating a business plan. Half an inch thick, plenty of color charts showing were I expected my revenues to grow and how, yadda yadda yadda. I spent weeks doing nothing but researching my market area, making up reasonable facts/figures when there was no data available (if you can't dazzle 'em with brilliance, baffle 'em with BS), on and on and on.

After nothing more than initial conversations with several banks, I realized the business plan was never going to be looked at. Even though my startup costs were extremely low, unless I had a major asset (like a house) I was willing to put down as collateral, the banks wanted nothing to do with me, no matter how great the business was. Weeks worth of work, all for naught. Know what I did? Put everything I needed on 0% interest credit cards and did it my own damn self. If the banks didn't want my business (and interest), they're not going to get it. I had a $10k line of credit from BoA for a few years, insured through the SBA, but that's all I could get.

Here it is nearly 7 years later and I'm doing fine, the cards have been paid off, and now I have banks requesting my business. Sure, I'll give it another shot, so I asked about a quick loan for my laser... back to square one. So the laser was purchased on a credit card for buyer protection and I paid it all off in 3 months.

All of that aside, you simply will not make enough money to even make your laser lease payment by doing pens and frames unless you're doing some major traffic (and that most likely won't happen for several years or more). I know it's a bummer to hear people squash your dreams (I've heard my fair share), but you really need to think about this in more depth. Putting it in a business plan helps guide those thoughts, but unless you've done this before or have someone at your side who has, you're going to miss a lot of the small stuff that adds up very quickly to kill a business.

[Michael Hunter]

Hi Rodne

Yes - Mrs Tribble is real and works at the Social Services Ofice, just across the road from the photo shop.

Judging by the frames she has had over the last 18 months -
She has a son (name withheld), who likes motorbikes and dogs.
A husband (name withheld) who turned 50 last November
A granddaughter (name forgotten) who "bought" her grand-nany (name not known) a frame for her 80th
The granddaughter must be about 2 yrs old, as I remember doing a frame to celebrate her birth!


By an amazing coincedence, there is a second Mrs Tribble (no relation) who also works nearby and did, one day, order an engraved frame. You can imagine the confusion this caused -
"When will my frame be ready?"
"Soon - I'll ring you when it's done"
"Your frame is now ready and you can pick it up from the shop this afternoon"
"What frame - I didn't order a frame"
and so on ....

This other Mrs Tribble has a friend called Olav, who also turned 50 recently.

Amazing what you learn about personalisation customers!

[Dave Johnson29]

Guys,

It amazes me that this sort of question brings out the nay-sayers in droves making assumptions based on too little information when suggesting now is not a good time to start an engraving business.

Scott, like me may have the only laser for 150 miles around with 9 jewelery stores and 5 carpet and tile stores in 5 towns in a 30 mile radius. A good time to set up a laser business regardless of the economy. Or, maybe not. ;)

Scott was asking for some other things to add to his business plan to pad it out a little. My guess is so it doesn't look like he has all his eggs in just two baskets when going to the bank.

In my experience most people contemplating a new business venture do a lot of homework and Scott appears to be doing that by asking here. Perhaps staying a little closer to his request might be more helpful to him.

OK, having said all that, Scott, I have never seen a business plan worth doodly-squat. I have to agree with Dan and say in my distant past, I too have spent countless hours preparing them for the banks. When you get there they don't even look at them. They ask if you have a business plan and you answer, "yes". :D:D

So to answer your request, I am having good success with tiles. Everything from Religious offerings to outdoor scenes on tiles ranging from 4-1/2" to 8" and nmultiple tile arrays. Do a search here for Onur and check out some of his stuff on tiles. He is my tile-hero.

[Dee Gallo]

Dave,

I agree with you but I also think that if Scott had given a bit more info he might have gotten better/more relevant suggestions.

Scott,

Nobody could possibly answer your question very well as it was asked, other than commenting on their experience with business plans and banks.

I found that you must have a solid plan, but not necessary write a book - but do research your market, what the market needs now and what you can offer that they don't have (but will want) which is unique and affordable. Affordable is relative to your target market - I like to aim for the high end, as they are less likely to fluctuate money-wise. If you plan to do less expensive pens and frames, you've got to have a huge market.

But who is your target customer?

For instance, your location is important - some people here live near military bases and have a good business making things for them. Others live in busy cities, or like me on the outskirts of nowhere. I make my money using my website but mostly word of mouth from established customers in a very small niche market, at home. Some people here deal only with corporate clients, others have storefronts and others do craft fairs. In each of these few areas, there are hundreds of products you could make. There are as many venues as people out there running lasers. It's not the tool, it's the craftsman who makes the merchandise.

I think these issues are much more important to nail down than finding out what other people are selling all over the world. You must also know what your skill level is with computer graphics, material handling, marketing and machine maintenance. If you are weak in any of these areas, you will pay later, so get to a professional level ASAP. If you start out selling poor quality work, you will not build a strong rep or following.

This forum is FULL of people with GREAT experience and knowledge. And they are willing to share easily. Any nay-saying is actually their way of caring about you not getting into something you aren't ready for. Get ready and keep coming back!

cheers, dee

[Scott M Smith]

There is another business about 70 miles from here and that is it for the area. Funny because the Epilog dist is about the same distance from me. That I feel is a key point. I have not seen any lasered items nearby and also, the school districts have an influx of our money and why not try to get some of it back? Savannah River Site is also nearby so that could be huge government backing if I could get some business with them.

As for financing and loans, I do not want to incur ANY debt to get a laser. I am planning to go through Angel networks and set up an LLC. When I get funded and it does not work out, my business can go belly up and I will still be ok. this does not mean I have no intentions of paying my investors because I do.

For everyone here, I hope you realize that I am not going to get a laser, move nearby to you and try to steal your business. I am trying to get something that is not your mcdonalds or any other big franchise, but something new and exciting that I feel can thrive in this area. All of you have shown me just by looking on this site how supportive you are and how willing you are to show ideas to help. This is one reason I want to do this. I for one can say that when I do something new, you will be the second (customer being the first) ones to see it. I also plan to make templates like laserbits sells for their products for laptops, ipods and other similar items to share with you all so you can spend less time doing setup and more time prepping the next job.

[Rodne Gold]

Amen Dee!!
I really think a "build it and they will come" attitude to this business is foolhardy.

[David Fairfield]

Business Plan: trial and error, lots of both, and some luck and some connections to get to your sweet spot. The stuff I make that sells best, isn't remotely related to the stuff I intended to make when I got this thing. :)

Dave

[Scott M Smith]

i dont believe the build it and they will come, but if there is an empty space in a market, it is almost stupid not to fill it.

[Mike Null]

How do you propose to let the market know you are there? And what you can do?

I don't know of anybody who makes a living with just a laser engraver. Of course you may be able to do it.

[Scott Shepherd]

I don't know of anybody who makes a living with just a laser engraver.

Scott, pay very close attention to that statement. I don't know anyone either, and I'd be willing to bet few people here do.

From what you have said so far, I think you're in for a learning experience. 95% of what the sales reps and factory websites tell you is a load of crap. Can you cut fun foam objects out? Sure, that's great. Now try and sell them. Just because you can do it with a laser doesn't mean it's the right tool for the job. You can buy fun foam letters for $1 each at any craft store. I can't turn my machine on for $1. 95% of what they "sell" you on are things you'll go broke trying to do.

Photographs on granite are a perfect example. Everyone loves it, everyone with a laser tries it, and few people sell them. You might sell a few, but I don't know anyone on this forum who's selling 100's of laser engraved tiles a month, or even a year.

When we got our laser, we thought we could engrave keychains, pens, and photographs on glass and granite. Going on 2 1/2 years with a laser and I have yet to sell any of the 3, especially to a level I could say I'm making good money on them.

It's not easy, it's very doable, but you'll have to flush all that crap down the toilet that's fed to you from the manufacturers.

Just my opinion.

[Steve Clarkson]

First of all......and don't shoot me......I was one of those bankers who didn't read those business plans.....it's really true....they generally don't get read. It's a way to weed people out. They are a complete waste of time to prepare them FOR OTHER PEOPLE. But they ARE good for the preparer and they are a necessary evil if you ever want to get financing.

Second, I'm still looking for my niche and have yet to find it after more than 8 months. I made a list of a THOUSAND things that you can make with a laser......but most can be made better, fast or cheaper some other way. There are very few things that the laser does better than something else.

I would never recommend that someone buy a laser to start a business.

[Mark Winlund]

Note my sig.... all of the equipment is used in one way or another, quite often in combinations. We do more awards with sublimation than any other process... by a factor of 20 to 1. It used to be rotary.... drag, burnished, and engraved with rotary cutters. No more, those days are almost gone.

Coming up? CNC routing, especially in 3D. Same old story, expensive equipment, software was hard to get until Vectrix. Time consuming, and an up hill battle to sell the customer.

You have to be able to do it all to be able to even survive in this economy. Not a good time to be starting out with just a laser.

I am reminded of those ads you used to see in the back pages of comic books..... "Make BIG money repairing televisions... we show you how!" Well, the TV repairman is long gone, consigned to history. It never did make "big" money.. I oughta know, I was one.

Mark

[Tim Bateson]

I agree with a lot of these posts.
However I believe the Business Plan is VERY important. Granted, I too am not in the market I planned for in my Plan. What this Plan has done for me is make it real. I'm not fooling myself when I produce a fantastic product that everyone Oo's and Ahh's over. My Plan is my reality check. Just because friends & family and even customers rave over your work, in reality that does not equate to sales.
When I'm so busy & think of hiring help (I've been there) my Plan reminds me it's only temporary. When I can't get a sale in weeks (current situation), my Plan reminds me it's only temporary.
The biggest one is my Plan reminds me that I'm not likely to ever make a full-time living with just my laser. I still believe it's remotely possible, but very unlikely.
Also, I'm not fool hearty enough to make a massive sale of something I haven't produced or haven't produced enough to know know it's of the highest quality. Given this advice (also in my Plan):
1. Pay cash - Owe nobody
2. Learn your craft - hands on
3. Grow your hobby into a business over time (this IS a hobby on start-up)
4. Expand from a hobby to a PART-TIME business over time - Not on day #1
5. Expand your hobby/business over time from the laser to other things.
6. Have a backup source of primary income.
6.a. Don't quit your Day-Job - Supplement it.
7. Respect those that have learned this craft to a point of making a living.

[Scott M Smith]

I already have a business. I build and repair computers. I just want to add to it. Either way, if i do not get investors, I will dip into my 401k later on and get it anyway and there will be no pressure to pay the money back. I have a full time job that makes good money, I just want more from life and I think the laser will be fun as well as useful.

[Scott M Smith]

It's not easy, it's very doable, but you'll have to flush all that crap down the toilet that's fed to you from the manufacturers.


Actually, the only thing I have got from the manufacturer and distributor is specs and price. Most everything else has come from here in the form of ideas and tutorials.

[Steve Clarkson]

I agree with a lot of these posts.
However I believe the Business Plan is VERY important. Granted, I too am not in the market I planned for in my Plan. What this Plan has done for me is make it real. I'm not fooling myself when I produce a fantastic product that everyone Oo's and Ahh's over. My Plan is my reality check. Just because friends & family and even customers rave over your work, in reality that does not equate to sales.
When I'm so busy & think of hiring help (I've been there) my Plan reminds me it's only temporary. When I can't get a sale in weeks (current situation), my Plan reminds me it's only temporary.
The biggest one is my Plan reminds me that I'm not likely to ever make a full-time living with just my laser. I still believe it's remotely possible, but very unlikely.
Also, I'm not fool hearty enough to make a massive sale of something I haven't produced or haven't produced enough to know know it's of the highest quality. Given this advice (also in my Plan):
1. Pay cash - Owe nobody
2. Learn your craft - hands on
3. Grow your hobby into a business over time (this IS a hobby on start-up)
4. Expand from a hobby to a PART-TIME business over time - Not on day #1
5. Expand your hobby/business over time from the laser to other things.
6. Have a backup source of primary income.
6.a. Don't quit your Day-Job - Supplement it.
7. Respect those that have learned this craft to a point of making a living.

Excellent advice Tim.

[David Fairfield]

Yeah! Worth reading a third time :)

Dave


I agree with a lot of these posts.
However I believe the Business Plan is VERY important. Granted, I too am not in the market I planned for in my Plan. What this Plan has done for me is make it real. I'm not fooling myself when I produce a fantastic product that everyone Oo's and Ahh's over. My Plan is my reality check. Just because friends & family and even customers rave over your work, in reality that does not equate to sales.
When I'm so busy & think of hiring help (I've been there) my Plan reminds me it's only temporary. When I can't get a sale in weeks (current situation), my Plan reminds me it's only temporary.
The biggest one is my Plan reminds me that I'm not likely to ever make a full-time living with just my laser. I still believe it's remotely possible, but very unlikely.
Also, I'm not fool hearty enough to make a massive sale of something I haven't produced or haven't produced enough to know know it's of the highest quality. Given this advice (also in my Plan):
1. Pay cash - Owe nobody
2. Learn your craft - hands on
3. Grow your hobby into a business over time (this IS a hobby on start-up)
4. Expand from a hobby to a PART-TIME business over time - Not on day #1
5. Expand your hobby/business over time from the laser to other things.
6. Have a backup source of primary income.
6.a. Don't quit your Day-Job - Supplement it.
7. Respect those that have learned this craft to a point of making a living.

[Rodne Gold]

Scott , if you want a toy to dabble about with while you conduct your other business , by all means , but don't waste your time on a business plan then , view it as a toy that might pay back a little of what you spent or might not.
At least you cant lose all your money on it , it has a residual value if you got to sell it.
I have 6 lasers and they work all of the time all day long, I also have large format printers , large format laminators , about 6 or 7 computerised engravers , overhead CnC routers , doming machinery and a 700sq m workshop stuffed with other equipment and 20 ppl to work it all.
I can tell you that having a laser only is just not good enough ....
I already had a captive audience and was in an allied business whan I got my first laser - trophys and industrial engraving. In both computerised engraving and lasers , I was the first on the block to adopt the machinery and thus scored as being the only game in town (didnt last long)
However the machinery didn't guarantee my success..heavy duty marketing , ads in the paper , networking , self promotion , cold calling , spending a ton on a sample range, employing a rep and 15 hr days did. A lot more work than I thought it might be. I can tell you this tho , the addition of a laser in those days (a long while back) allowed my business to grow big time , but then I had big advantages at that time , namely 1st one in town and some serious knowledge of cad packages , pricing strategies , business sense , machine maintence and problem shooting, the ability to see where the machine would save me time and where i could go with it , a huge database of designs , a very good knowledge of materials and how they process , a great supply chain and so on and on.

I suppose it depends what you want out of this type of business...Yeh , it's cool to be creative and a "craftsman" but its a lot cooler to make a good living.
I also don't fool myself that im a craftsman or a creator ..Im a guy that uses "printers" to do stuff to make a living with. I still have an advantage in that to set up in opposition to me , the barriers to entry in terms of machinery , customer base and experience are huge. Not to mention my stockholding - I can supply most items in big qtys off the shelf and import about 4 containers of goods a year. Would cost anyone a small fortune to do what I do. I'm not self promoting here , this has cost me 25 years of very very hard work to get to this level and for the the first 15 , I can say I was just merely "existing". There were many times I thought I would make more money a lot easier by buying and selling bananas or any other commodity!!!

If you want an idea of what I do , visit my website.
I am in South Africa , I sell locally , so my website is in no way advertising , but it might give you an idea of the diversity of products I offer.
http://www.tokerbros.co.za

[Scott Shepherd]

If you are looking for a deal, Lisa Burger has a machine for sale that's just like new. It's a large machine with a steal of a price for a machine that large.

http://www.sawmillcreek.org/showthread.php?t=108934

If you are set on getting a laser, that would be a good place to start.

[Scott M Smith]

Nice site, Rodne. We will just see how things go. Like I said before, I just would like to get the startup costs funded through an angel investor and pay the money back and keep on going from there. I am sure that I can atleast do that. Eventually, I would like to make the business where I am just the owner, not the owner, employee, maintenance, mechanic, etc... I am working on a survey to pass out to judge what can sell in this area. From what you all said about you got a laser to make item x, but sell item z, is that driven from customers or is it because you found out that is what the market demands?

[Scott Shepherd]

Scott, I think a major issue is that the average Joe doesn't need 500 pens engraved. They may need 1. You can't make a living engraving 1 pen at a time, every one different. You can't take the order, layout the pen, engrave it, type the invoice out, take payment, etc. for $15.

If you do find the person who needs 500 pens, there are avenues that are far cheaper to handle them. That's considered promotional products and promotional products go for pennies, not dollars. Search promotional products and look at the pricing. You can buy the entire pen, marked, for less than we can buy the pens for, in most cases.

That's not to say you won't stumble upon someone who wants something very specific, but those cases will be few and far between.

You won't make a living engraving photos on granite. It takes well over 1 hour to take the photo, work with it, and engrave it. People won't pay $100 for a tile. Maybe every once in a while, but not as a rule. You can do them all day, but you'll be doing them for $35.

There are many ways to make money with a laser and they are all over this forum, but 90% of what people post are items they did for their personal enjoyment, not for money. Personal enjoyment projects don't pay the rent.

You have to find a niche and run with it. It's no secret to it all, it takes hard work, a lot of networking, and a lot of time.

[David Fairfield]

From what you all said about you got a laser to make item x, but sell item z, is that driven from customers or is it because you found out that is what the market demands?

I'm not quite sure what you mean, customer drive and market demand seem like the same thing to me.

Customers don't really do any "driving." A lot of customers say if you make X you will sell a ton of X. I take that with a grain of salt because usually they're just hoping to get a break on some one-off piece they want you to cut for them and/or they are generally clueless about the laser engraving biz.

You will start to get an idea of what sells and what doesn't by experimenting. If you keep at it, you should be able to narrow it down to a speciality or branch out into a full service op, like Rodne did.

Just be prepared for a long haul. We'll help! :)

Dave

[Mike Null]

Scott

The concept of making something with the laser and selling it is one I've argued with from day one.

99% of the people don't have the skills to market such a product if there was such a product. Making something is easy--selling it is something else. Most of the many used lasers on the market are there because people had the same idea as you.

Most of us who make our living as engravers recognize that our product in reality is a service. We sell our service and in the course of doing so we make what the customer wants.

For those who want to do business with the general public (I don't) it is also an occasion based business---holidays, anniversaries, birthdays, graduations, etc.

[David Fairfield]

I agree, with Mike N, the "making something on a laser and selling it" sales pitch is in reality a problem with no easy solution. Go to eBay and type in "laser cut" and you'll see tons of "somethings" that are priced at peanuts and not selling well.

However, it can be done. I actually started with an idea, which evolved into several other ideas, which were tried and eventually sorted into a couple that work well enough to pay bills. Like Mike, most of my biz is not dealing with the general public. My little niche is in an area where my design and manual skills are what creates the value, and the laser just works for me like a robot employee.

Basically, I just rolled with a lot of punches before I got to be friends with my laser.

Dave

[Tim Bateson]

... I am working on a survey to pass out to judge what can sell in this area...
Don't count on getting a lot of feedback and don't put too much trust in the results. What people say they want and what they're willing to actually pay for are very different.
I too started out with Craft Shows and personalized items. Great practice, but little profit. Still do personalized items and one-offs - Anniversaries, Christmas, etc.., but am now trying hard to sell bulk orders - commercial stuff. Yes, this means my Business Plan is under re-write... again.
What I find is people and businesses are not out looking for laser engraving. You have to find someone and sell them on the need and on your services.
One-offs and personalized items do have profit, but only if you don't properly value your own time - Can we say "Hobby" again :p.

Also note, my Business Plan is not the traditional Plan. It's more of a personal Mission Statement and guidelines that reminds me of where I'm going and keeps me on that path.

[Rodne Gold]

The money is in speciality work or highly creative and different consumbles. We manufacture most of our awards from scratch , using various processes and offer the customer something that fits in with their corporate culture and the spirit of the award at a win win price , but most importantly we deliver , never break a promise and are anal about the quality.
It takes a long time to build up a clientelle for this.

The market for awards in my country is different to USA..we dont have a zillion ppl selling pdu at cost + 10% , importing from the USA is exceedingly expensive so neccesity , in South Africa , is the mother of invention. We have honed it now to a fine art....
As to speciality work , one has to think right out the box ...the first thing I do when getting a new machine is to attempt what others have said is impossible and work my way from there. One needs to take established processes and products and convince a customer that lasering it or making it with a laser is a better or cheaper or quicker way.
An example is stainless steel etching. The conventional way is to make a screen of acid resist and screenprint the plate and then etch it in an acid or ferric. So how can you do it better with a laser ?...well you can clad the plate with a polyester vinyl , laser the vinyl away and sandblast to clear residues and then etch.
Why is it better? - well the laser can do extreme detail and its a direct from puter to plate process , no messy screens and easy changes and way quicker for small qtys or changing info.
The downside is that its far slower to laser the resist away than screen it , and multiple plates of the same are a disaster - so you need to concentrate on the one offs dor difficult jobs at very high profit margins. Apart from this , you have to have as good a knowledge , if not better , as your client has about the materials you need to work on. Not knowing what phenolics are when meeting an industrial client who wants em lasered is bad ...not knowing the properties is worse.
The really hig profit jobs are the ones no one else wants to touch...you need to be a "can do" and you need the knowledge to be so.
The trap a lot of newbie laser owners get into is them seeing the laser as a hammer and everything as a nail. But whatever you do , requires a major marketing efforts. As others have said , inventing some trinket and trying to sell it is a schlep...just take market share from established stuff and processes and go for industrial and quantity...the onesies are never profitable.
The question you didnt answer is "why would someone use me?"
What are you offering ...cheaper prices? better service? shorter delivery? better quality? more technical knowledge? ...if you cant answer that , you need to go to square one and rethink the project. Even if you can answer it .it's not a given the client would move from an established supplier to you...
I know nothing about angels and financing , but can tell you that in these times if I were investing in anything , I would be very very cautious and would want a big return on my money.
Initially , with a laser , you need to be a salesman , a graphic designer , an engineer , a maintence mechanic , a dog worker , an accountant and marketing guru.

I bought my first laser because I saw what it could do for me that my computerised engravers and mini routers couldnt and I already KNEW what i was going to make that it would be profitable from day 1 ,
Other products came as spin offs of our existing client base - a school that buys awards needs badges , needs some signage , needs give away gifts , a corporate that needs badges needs awards , needs parking bay signs and banners ...a plant that needs labels needs safety stickers and safety signage and an awrds scheme for absenteeism and badges for the safety reps.

I dont like to be thought of as someone that rains on others parade and mean spirited , but I really think that some of the laser marketing as "make a billion $ in your spare time" is totally unrealistic. You dont see the makers of serious woodworking machinery or tyre balancing machines or welding machines costing the same market like that...

[John W. Love]

It's more of a personal Mission Statement and guidelines that reminds me of where I'm going and keeps me on that path.
That really is what a business plan is. The business plan is really a reality check for yourself. It allows you the oportunity to delve deeply into all of the business aspects and understand what is going to be required. If after writing your business plan you sit down and read it objectively and really look at it like your are seeing it for the first time, and can still justify starting the business, then do it. But be forewarned that you have received some golden advice in the posts above. I do think you are doing the right thing by investigating what you are getting into first.
Alicia and I wrote out not one but two business plans for two different ventures. The first venture would have really worked well, but we had a near impossible time getting the right location with the right size limits etc, at a near right price. When we found a place that had the right height then there were restrictions on the type of business that could go there. We eventually gave it up as it was just too much of a drain on us and it was a strike while the iron is hot before the franchises moved in, an established business could have staved them off. Our second business plan is what we are doing now. I too would advice that you contact your local SCORE office and make some appointments, sit down with retired professionals that have been there and done that, Take some of their seminars, it will be well worth your time and effort.
And they are right, its not going to be easy, there is a massive learning curve that continues on well after you are established.

You are not going to make what you originally thought you would.

I do sell picture frames, but maybe 15-20 per month. Word of mouth.

I do sell granite. More than what others may, but its not enough to pay the bills.

Business to business (aka b2b) is where you make a living, and both Alicia and I still have day jobs and we have very little independent competition here, but every computer company and their uncle has a laser engraver for in house use.

Not to be negative, but pens and pencils will drive ya nuts trying to make a living with them.

Best advice I could give ya is to learn the software, do mock-ups for a year or so, that will tell you if this is what you really want to do. Most of your time will be on the computer, you have to spend the time to make it perfect on the computer before you push the button on the laser and let it do its thing.

I will give you encouragement out the whazoo, but to be honest that and a $5 bill will get you a cup of coffee at starbucks. I don't think anyone here is trying to be mean to you or worry about you stealing part of a market, What they are doing is being honest with you, its tough to make a living this way. Yeah, its fun, its exciting when you create something and it comes out just the way you pictured it, but its tough. And especially now, with the economy the way it is, a lot of people are looking at ways to suppliment their income with a home based business. This is a bad time to invest that kind of money into something that has a long turnaround. I know that it looks easy, and I know that the salesman will make it look even easier and tell you there are a billion ways to make a fortune with a laser engraver, but once again I will tell you.... IT's TOUGH!

Last piece of advice, study that business plan real hard and look it over real close. Then, if you still think you need a laser, BUY A USED ONE!

Good Luck and don't hesitate to ask for advice, just be precise in what you are asking for and don't get upset if the answer isn't the one you were hoping for.

~John

[Michael Simpson Virgina]

If you find an Angel investor I would be interested in hearing about that. I did not know what they were till I read it on Wikipedia.

Angel Investor = Crazy Rich Person.

I can identify with that as in my area there are a lot of them. I have done some pretty expensive photography projects for a few of them angels.

I purchased my laser for my robotics business to prototype and play around. (Read and expensive toy) However I do a lot of things on the artsy side of the tracks as well. I suspect over time the creative side will probably pay for my laser (over several years).

On the other hand I find it extremely unlikely that you will get Angel Investors for such a enterprise. This type of investor is looking for a high rate of return and I just do see it in the engraving business.

The three things that you will need in any business venture are the following:

Equipment
Experience
Marketing/Sales

Equipment
-----------
As Rodne has stated you will need more than just a laser. You will need the space and utilites to handle all that equipment.

Experiience
-----------
You will need experienced operators for all that equipment. You will need knoledge of the trade. Have you ever worked in this buisness?

Marketing/Sales
----------------
This is probably the most difficult part of any business venture. How do you get your services/products to the customers that want them. For retail sales you have walk-ins and web-sites. You have fliers and adds. For whole sale some of the same but you also will need to do some foot work and cold calling. While you are doing that who is doing your retail work?.

When I first started my robotics company robotics were booming. But I still had to get the word out. I started taking adds out in electronic magazines. This cost me over $1000 a month for a small add. Later I learned that I got just as many sales by running the adds every other month. That little bit of experience saved me $6000 a year. Its those little things that are going to cost you.


Now all this aside you said you have a PC-Repair/Building business. One thing you could do is take this to the next level. Building specialized high end machines for those "Crazy Rich People" With a laser you can do some really cool case mods by doing colored acrylic inserts. I think you have more of a chance making this work than an Engraving business. Your only outlay of cash would be the initial laser and some basic materials. Then you just have to get the word out to those "Crazy Rich People" (Again the hardest part)

[David Fairfield]

I like that idea, combining the current computer repair biz with lasered case modifications. Even if you don't have the artistic talent, you can likely find some young people who do, but lack the equipment, and make a good arrangement trading parts for designs.

Bottom line, in a business context buying a laser is like hiring an employee. Its best to have a pre-existing purpose.

Dave

[Scott M Smith]

Thank you for all of the advice. I will follow it and do what I can. I do not expect to turn a profit right away. I have already thought of the PC parts biz. I frequently visit an UK PC mod site and have seen some really cool acrylic pieces added to the cases. I could take that niche to the next level by letting them know that I could make that same piece they made by hand more accurately and with less time. In all of my research that I have done, I have noticed how much this and that costs and I have seen where I can cut corners without cutting quality. I am somewhat experienced with graphics and can handle my own. A friend of mine has a vinyl cutting machine and makes stuff that mainly goes on boats and cars. I have shown him what the laser can do and now he wishes we could have started the business together. Who knows, we still might end up putting the PC, vinyl, and laser biz together.

I hear everyone loud and clear that pens and pencils will not make a good profit. I do plan to get into the industrial side of the business because there is no one else in the area that could. Where I work buys industrial tools and they pay the company a lot of money to laser etch the tools with a tool box number. I bet I could charge half as much and still do really well and do it for other companies. Like I have mentioned before, I also would look into asset management tags, electrical panel labels, Lockout point identification (Done lots of that with a rotating engraver, whew!), I plan to talk to local businesses for name tags (not mcdonalds or other chains, but local small businesses), laptops for business and schools to cut down on theft. I read an article in a trade magazine on how a school in CA bought a laser just for that and it costs them about seven laptops, but i think it said that before they did it, 75% of the laptops would go missing or be stolen. I live near Aiken, SC and the big thing here is horses. You can make anything dealing with horses here and sell it. Also, in April in the Masters, I bet every April would be good for business selling engraved golf stuff.

So you see, I have done some research. I understand it is a lot of work. My PC business as been a PITA and has made it where I dont like it as much. That and so many people ask me PC questions and ask me to do this or that for free and I do it. I will not do that for the laser. If a buddy brings me something to be engraved occasionally, sure I'll do it, but not for everyone all the time. That is a mistake that I have already learned.

I ways, I wish I did not start this thread because some people seem to have something against me for asking the questions I asked in the beginning, but despite all that, I have learned as much from some of you as I have from reading every single thread (I really did) in this forum, and I really am grateful for the honesty and information that I am getting. I just hope that one day, I can be as helpful to you all.

I also have thought of a name for the business and come up with a logo. Tell me what you guys think..
http://surrealisticsystems.com/images/site/CSRA_LASER_GIFTS_LOGO.png

[David Fairfield]

I'd remove the word "gifts" from the logo, if you want to do industrial commercial stuff as you say. "Gift" implies trinkets, wrong message.

Dave

[Scott Shepherd]

I ways, I wish I did not start this thread because some people seem to have something against me for asking the questions I asked in the beginning, but despite all that, I have learned as much from some of you as I have from reading every single thread (I really did) in this forum, and I really am grateful for the honesty and information that I am getting. I just hope that one day, I can be as helpful to you all.



Scott, don't misinterpret what anyone's said in this thread to be against you or you asking questions. On the contrary, there have been a lot of people with many years experience in the field you're trying to enter, giving rock solid advice. Advice we probably all wish we had gotten before buying the laser. No one's against you at all. In fact, I bet all of us who have participated in this thread wish you nothing but the best of luck, and I also bet that when you do get a machine, those very same people will be first to help you.

[Dee Gallo]

Scott, don't misinterpret what anyone's said in this thread to be against you or you asking questions. On the contrary, there have been a lot of people with many years experience in the field you're trying to enter, giving rock solid advice. Advice we probably all wish we had gotten before buying the laser. No one's against you at all. In fact, I bet all of us who have participated in this thread wish you nothing but the best of luck, and I also bet that when you do get a machine, those very same people will be first to help you.

Right on, brother!

[Steve Clarkson]

Great logo.....but agree about the gifts.

And I'm glad that you started this thread......it's the most interesting one I've read all week.

[Scott M Smith]

Scott, don't misinterpret what anyone's said in this thread to be against you or you asking questions. On the contrary, there have been a lot of people with many years experience in the field you're trying to enter, giving rock solid advice. Advice we probably all wish we had gotten before buying the laser. No one's against you at all. In fact, I bet all of us who have participated in this thread wish you nothing but the best of luck, and I also bet that when you do get a machine, those very same people will be first to help you.

That is not what I meant. I was talking about the first few posts where some thought that I wanted them to give detailed info about their own business. SMC is great and even if I do not get the laser yet, I will still come here!

[John W. Love]

Scott, I understand where you are at. Just two short/long years ago I was sitting in your chair. I love my laser, but it has been a hardship on us at times. Every month there is a $550 loan payment (just 15 months till it is paid off) and of course there is a monthly insurance payment, taxes, etc. And I am not the only one, all of these folks here have been right where you are at. I wish I had found the Creek before I purchased. I probably would have been a bit more cautious and I am certain I would have purchased a used laser. But I didn't. My sales guy fed me such a full line of BullS... well, you know what I mean. I would have "one of only two in the Austin, Texas area". Ok, what that means is I would have one of the two that HE sold to someone in the Austin area, but that doesn't include other salespersons from his company and all the other companies out there. He also explained to me and showed me all the wonderful things that could be made on a laser that I could make money faster than I could spend it. Unfortunately, all those nice things have to have a buyer and although they look awesome, they all are not things people will buy.
So, like others, I am not selling the things I originally went into business to make.
I'm not implying that I, or you for that matter are jumping into something that you haven't checked out first. I am normally very cautious and level headed, especially when it comes to money. I only had to get burned once to not make that mistake again. And the thing is, it is extremely hard to know exactly how many people in your area have lasers as many are not listed as a laser engraving business. They may be listed as something totally different and the laser is just one of the tools they use.

Don't be disheartened, but be cautious and remember that there is no greater bunch of folks than right here at The Creek. I know it seems like your dream is being trampled, but its not, your dream is just coming out of the clouds and down to earth, where it needs to be when you start toiling.

And remember, a wise man learns from his mistakes, but a wealthy man learns from the mistakes of others. Pay attn to what these wise men are telling you and you have the oportunity to be wealthy.

[Scott M Smith]

We all need to keep out of the clouds and our feet on the ground!

[Michael Simpson Virgina]

Scott one other thing and this is important. Any investor is going to want to know what you bring to the table. This can be in the form of Cash, Experience, or Assets. This should be covered in your business plan.

If you don't have any of these your just not going to get the money. It does not sound like you have any experience in the engraving business or with the equipment. I don't think you plan on contributing much cash to the venture as you talked about walking way if it did not work out. And as for assets you don't own any of the equipment.

Supplying the Passion and Time wont get you a dime.

[Dan Hintz]

Where I work buys industrial tools and they pay the company a lot of money to laser etch the tools with a tool box number. I bet I could charge half as much and still do really well and do it for other companies.
As long as you realize that etching is most likely done with a YAG laser, not a CO2 laser as you're intending to purchase. YAG lasers start around $50k and go up form there quite fast. CO2 lasers can mark metal (not etch), but that requires a separate step of coating the metal with a marking material like Cermark, which adds in another step in the process with a not-so-cheap marking material.

You seem to be making a classic mistake of most new business owners... you think you can make a process cheaper / faster / better, if given the chance. What you may fail to realize is what's truly involved in the process, as well as not including business expenses. Sure, I can charge half of what the guy down the street is charging to make a stainless steel sign, but after a few months I won't be making enough of an hourly rate to do any more than pay the rent/utilities. The idea is to make a profit, and thinking you can underbid current businesses out there without understanding what's involved shows a high chance of failure. When they charge $3/tool to mark, you can surely do that for $2/tool, right? Well, by the time you buy the Cermark, spray the tools, set them into the jig, laser them, clean them up, and pack/ship them, you'll be making maybe $30/hr. Sounds great when you're used to making $15/hr at the shop, but then you need to think about the time lost talking to the customer for 45 minutes over multiple phone calls BSing and having them try to get your price lower after they accepted the PO, unpacking the items and finding out they're not what was promised and also have a bit of rust, writing up the invoices 3 times because the customer didn't like what they had originally spec'd, chasing the customer down after their receiving dept claims the shipment was lost, biting your fingernails when the accounts dept thought "30 net" was merely a suggestion and they like "90 net" better, etc., etc. Suddenly that $15/hr you used to make at the shop working for someone else is starting to look pretty darn good 'cause now you're down to $10/hr and you no longer like your clients.

[Scott M Smith]

good point about the tools. I forgot about that.

[Tom Delaney]

Scott - Dee hit the nail on the head. A business plan is a development process which will, when done correctly assure the reader that you have a firm grasp of your market, your expenses and the potential opportunities which may present themselves within the next 3 to 7 years.

That having been said - a business plan can be grouped into two separate (and very distinct) categories. Start up's and Established organizations. An established business has a history to base their future forecasts on and will present the history as a basis of their future estimates. Start Up's are much more 'pie in the sky' with plans and aspirations. In this economic climate, with banks taking reality shots daily - start up business plans have little credibility and you should be extremely conservative on your potential sales and very liberal on your costs -- banks HATE suprises, especially bad ones.

Analyze your market, potential customers and competition. Guesstimate what your customers will buy and cut it in half (or by two thirds) the first year and go from there. Figure out what your competition can't do (and what precludes them from eating your lunch) and remember cash flow is where the rubber hits the road. If you don't have deep pockets you will be in trouble because the banks (or investors) will not fund your operating losses for more than a few months before they expect a positive cash flow. Make the business plan CREDIBLE AND HONEST otherwise your investors will lose faith and you will lose your integrity.

There is a book that I love - "The Goal" by Goldblatt that is one of the best business operational manuals that, IMHO, is 'user friendly'. You can read it over a couple of glasses and will learn more about what a real business is about (I'll cheat here - CASH is KING!).

Good luck - business plans are about credible goals and hopes.

[Scott M Smith]

I had a meeting with a local SCORE counselor. It went very well and she gave me some good advice. The ARA also gave me some financial numbers also. This should help me complete the plan.