Time to Start a New Laser Business?

[Bill Korn]

Good morning all.

For the last couple years I've been considering laser engraving & cutting as a challenging part time effort that could be turned into a full time business that could be made diverse enough to stay interesting when I retired or decided I'd had enough of corporate engineering.

I was laid off this time last year when the huge foreign company that owns the company I worked for decided to spend their money in Europe instead of here, and I've spent quite a bit of time since looking more closely at the ways lasers can be used.

I see three areas: 1) Industrial - UID tags, equipment plates, regulatory compliance when combined with barcode scanners, etc.; 2) Commercial - Signage, awards, giveaways and for-sale items like pens and flashlights, etc; and 3) Personal - Business cards, monogramming, laptop art, etc. Obviously the experienced and clever laser machine owners will come up with an unlimited number of new and unique things - that's why they're entrepreneurs!

I've visited engraving shops, been to demos and hands-on sessions with Universal and Epilog (both very helpful), gotten equipment lease and purchase quotes, and scoured the internet to find out what people are willing to pay for, but I still have more questions before I commit - engineering conservatism is stll strong. I've lurked on the forum for a couple days and I'm hoping someone who has had similar questions resolved for them can help. Here goes:

First off, has the laser business shown itself to be fairly recession-proof? How have those of you who do this work for a living made out over the last year? How are you finding new customers? Is this a good time to starta new one?

Is it really feasible to consider any kind of serious laser business based in your house, whether you take over part of the garage or the whole basement? I felt it was possible working part-time, but full-time? Without having an shop that you can bring visitors to, don't you eliminate the Personal type of customer? Utilities aren't an issue but what about exhaust blower noise, dirt, the risk of fire I've seen mentioned, and the kind of problems all work-at-home people have?

I'm sure the range goes from one extreme to the other, but what kind of Industrial/Commercial/Personal mix is most common? The cool one-of-a kind job looks like fun, but how often do they come along?

I have many more but I think I'll stop before everyone falls asleep. I appreciate your help. I hope I can find a way to repay.

Bill

[Mitchell Andrus]

Welcome to the Creek.

I don't know of anyone running a 'laser business'. Most here, if running their lasers for profit, don't use their laser as the basis of their income stream. A few do and we may hear from them, most don't.

I use my laser to augment the pieces of furniture that I make. If I'd have had to fill my day with the laser alone I wouldn't have bought it. It often sits for a week or two without being touched - I run stuff through it in batches. But... even at $20K it paid for itself in about 26 months.

Identify a need in the marketplace and see if buying this tool is feasible first, then build a business around the fulfillment of this need. If a laser is needed, you'll know it and what model/size to buy too.

Cool, one-of-a-kind job.... last one was for Disney. $17K worth of laser/shop work. Those are very few and far between though.

Buying a hammer doesn't turn every screw into a nail and sometimes hammering nails doesn't pay the rent anyway. Don't buy your hammer just yet.


One other important thing.... budget gobs of time and lots of money prototyping goods to market. Products in hand sell better than talk and sketches. I spent 8 months designing and prototyping before I showed anything in public, but when I did I had a variety to pick/redesign from and it looked like I had been doing this for a decade.
.

[Gary Hair]

I don't know of anyone running a 'laser business'. Most here, if running their lasers for profit, don't use their laser as the basis of their income stream. A few do and we may hear from them, most don't.

I guess it all depends on who you ask... I started with a laser and would have been quite successful with just a laser. I know that there are quite a few folks on an engraving forum I belong to that have just a laser, and they are doing well also. I do have other equipment that I have purchased along the way, dye sublimation, sandcarving, cnc router, etc., but the laser is my main source of revenue - although the others are catching up fast.

I wouldn't advise spending 8 months creating samples and prototypes, get right out there and make some money! I had my first job a week before the laser even arrived! The only reason I have samples in my "showroom" is to give people an idea of the scope of projects I can accomplish. 75% of my business is conducted without people ever having seen my showroom or any samples of my work.

Determine the market you will target and what 3 or 4 other markets you will target when the first one fails miserably. You'd be surprised how many times the primary market someone thinks they are going to target becomes a dud and something they find along the way turns out to be more lucrative.

Watch the advice you get and consider the source. Hobbyists have a different take on things compare to somone running a business, a business that they rely on for their sole source of income, like me. There are a lot of both here, and both have valuable advice, just make sure the advice you are following makes sense for a business.

Gary

[Todd Suire]

I agree with the previous posts in that you need to do some serious research.

I use my laser to compliment my awards and promotional products business. I'm a part-timer, so sometimes it's more beneficial for me to order goods from a supplier than to do them myself if the job will take up too much of my time. My goal is to get a store-front and operate outside of my house, then work it into a full-time job.

I've had my laser for about 7 months now and am really starting to feel comfortable with producing items on different materials. It's taken a while to build a sample set, but I didn't wait to go out and find business before I had samples either.

In my area times are tough. People and businesses don't like to spend much as it is, but these days they're spending less. My word-of-mouth advertising and sponsorships of events is getting me more and more business.

I hope all this rambling helps. Good luck to you. There are many folks here on the Creek who are willing to help.

[Scott Shepherd]

Dye Sub or a vinyl plotter will make you much more money much quicker, in my opinion, for a LOT less money. You can be in either for less than $3000.

[doug king]

Let me give you my very limited Laser experience with a lot of business experience. For the past 15 years I have worked in IT as a research and development director for some very very large companies. Interestingly enough the last three have been privately held companies. The owners were making millions off my hard work and at each company when they decided they were done with me they cast me aside and laid me off. Fortunately for me 10 years ago I started a hobby website and it has grown into it's own animal. I have managed 10 million dollar budgets so business is just something I have learned to be good at. When I started looking at a laser I was still employed and was going to do just like most and make this my new hobby and hopefully make a few dollars on the side. I was let go about 3 months ago and I can't even get an interview right now, the economy is still in a crazy state and companies are not going to open new positions while it is like this. I refuse to be a victim so I jumped in and pulled the money out of my savings and purchased my laser. I don't need a lot of income to meet my financial obligation since my wife still works and we have other consulting income.

As I was researching the very same issues you are I came to this conclusion. If you already have a customer base and you are wanting to expand your product line then a laser sounds like a good investment you could enhance your product line. If you were wanting to start a small business doing this and did not have an existing customer base you would need to ask yourself how you are going to get people to come to you. There are thousands of small businesses that can't cover their current cost and are working very cheap these days, a lot of the niche market is gone because of the Internet. If I had not had 26,000 members on my site there is no way that I would have started with the laser.

Because I don't have a job right now I am spending 20 hours a day learning what I can do and getting better each hour. My plan is simple, I know I have good equipment, I have free wood and granite so I need to simply read, practice and take honest criticism to make my work better. Hopefully it will support me until either A) A job comes along B) I can get a decent job and do this part time C) No job comes and I make it work with my site.....

In the end because of my situation I feel that I have to make my own way because I don't expect the government to do it for me. If I had a job, there is no way in this economy that I would quit to start a new business...

That is simply my opinion and mine alone, in your area there might be a special deal you can get ahold of. Maybe there are no businesses in your area that provide the services you intend to offer but it takes a lot of 30.00 plaques to make 50,000 a year net.....

Doug ....

[Gary Hair]

Maybe there are no businesses in your area that provide the services you intend to offer but it takes a lot of 30.00 plaques to make 50,000 a year net.....

Exactly why I don't do many plaques and trophies. My big jobs are cermarking stainless steel and sandcarving pavers - between the two I have grossed over 50k and netted about 90% of that - and that's just two jobs...

Gary

P.S. As of Sept. 9th, I was equal to what I did last year. I should finish this year between 28% and 32% over last year.

[Joe Pelonio]

I added the laser to supplement my sign business. When the economy tanked I took a full-time job and now do mostly laser, plus some signs "on the side."

My customer base was reduced by many of them going under, others just stopped spending money. Waiting for a recovery was not an option. Also, I lost a few customers who decided that they could save money by buying their own machines as prices fell due to competition from more US and foreign laser manufacturers.

Around here several sign shops have gone out of business, others are struggling and have had big layoffs. I guess part of it is where you are located and how bad it is there. Here the biggest employers are Microsoft and Boeing, with both of them laying off in large numbers it's more of a waterfall than a trickle-down effect.

Most of what I do now is production wholesale work. Currently I'm doing 1,050 laser cut ABS parts for a local manufacturer. There just not enough of that out there for all of us in the area that have lasers. At least it's profitable, the laser's paid off and most supply their own material so it's
just my time.

[art baylor]

Look at the old threads. Start up has been discussed a lot. Look for Rodney Gold. He has a lot of very good advice.

[art baylor]

Correction, search threads for Rodne Gold.

[Tim Baude]

As for myself, I stumbled upon getting a laser. I had a friend who decided to sell his awards business that had a laser plus sublimation and vinyl cutter. As it turned out, I did not end up buying it, but decided it might be something I enjoy doing on the side. I have been in recreation and education for 20+ years, so had some contacts there. As the side business, I told myself if I had enough to pay for the machine each month plus do a few things for my family it would be worth it. That being said, it worked out great. If I had bought the other business which was grossing around 49k, I would have had to hit the ground running with all the customers and work, plus it was still a part time business. This way I could grow at my rate and learn as I go. Also, I was able to put in my garage so just the cost of renovating...no overhead cost of a renting, plus much less than buying the business with all the inventory.

With all this, I am now in my 2nd full year of doing this on the side. Last year I grossed a little over 4k, this year my sales have jumped 500% and look to be growing in the coming year. No, I am not getting rich, but I do this with just the laser and it is on the side. I have met my goal of paying for the machine and being able to do some things with the family and buying some stuff that I otherwise would not been able to do. I am now adding a heat press due to the many people asking for t shirts and such.

I ventured in only because of the contacts I had, I knew I could afford to do it on the side. Someday, I would like to think it might be more full time and work another job part time to supplement. My advice as others have said, check your market, see who you have around you. With all the sales they have been word of mouth or people I know. I give good service, quality work and I save people money. I am not out to make a million and low overhead and at times undersell myself, but I enjoy doing it.

Guess this was a bit more than 2 cents, but my final thougthts....know what your final goal is going in. If it is to make a million...this aint it, and as the others have said, probably not going to survive on just the laser, but a great addtion, or in my case a great start.
Tim

[Scott Shepherd]

Are you looking at a laser because you think it's cool? Or because you think it'll make you money? A laser will make you money, and in some cases, it'll make you a lot of money. It can be very profitable. However, there are many other items that will make you a lot more money, a lot quicker, in my opinion. A ShopBot (lower end CNC router) costs about the same, yet it takes you into a different world. You have to understand that things like name tags, etc. all coming off the laser will get you $6 at a time. Relatively speaking, the laser doesn't produce high priced products. It can, and some do, but for the most part, most of the things that come off it aren't expensive items. The CNC router is different. You can easily pull jobs that are $1000 and up. You tend to get much larger paying jobs, and the machine is the same cost as the laser, for the most part.

A Vinyl plotter is another one. For less than $2,000 you can get a very nice plotter. You can get them for $400, but a nice one is worth the money. You don't do $6 jobs on a plotter either. It'll pay for itself in no time.

Dye Sublimation is another one. Again, not too much money, but you can end up back in the $6 world, but you don't have a lot invested.

Sandblaster is another inexpensive way to get started. You can spend a little on that and end up doing some really nice work and making good money.

If I had to do it all over again, I'd have bought the CNC router first, the vinyl plotter 2nd, dye sub after that, and then the laser.

Just my opinion.

[Jim Coffee]

Good morning Bill...

I have two comments:
1) If you have a passion for something...follow the passion...be it laser or whatever. In my opinion the only reason that humans live is so that they can follow a passion.

2) Marketing (obtaining market share) must be in your thought process. Can you obtain the customers that you desire/need? And in my opinion the Internet is essential to any business that expects to move into the future. A proper "domain name" is essential.

I suggest going for a vertical market as opposed to just being a generalized laserhead. Find a narrow market that you can market to via the Internet and do the best that you can (and hopefully love what you are doing).

My 2 cents.

[David Fairfield]

That sums it up for me!

Good morning Bill...

I have two comments:
1) If you have a passion for something...follow the passion...be it laser or whatever. In my opinion the only reason that humans live is so that they can follow a passion.

2) Marketing (obtaining market share) must be in your thought process. Can you obtain the customers that you desire/need? And in my opinion the Internet is essential to any business that expects to move into the future. A proper "domain name" is essential.

I suggest going for a vertical market as opposed to just being a generalized laserhead. Find a narrow market that you can market to via the Internet and do the best that you can (and hopefully love what you are doing).

My 2 cents.

[Bill Korn]

I guess I was hoping that someone would state what I hoped was the case - that as word of the abilities of the laser, the quick turnaround possible, and reasonable per part cost spreads, the demand will rise and the customers themselves would dream up new uses.

No, I don't plan on getting rich. I want to make productive (by my definition) use of my time, and feel good at the end of the day that I accomplished my mission. I'm used to be asked if something is possible, and how it can be done faster and cheaper, and I enjoy it.

I guess my approach isn't 'I want to make a sign and what's the best tool?', but 'This tool is so capable, what can I make?'. I can see that this is not necessarily a good business strategy. Maybe I'm trying to push a rope.

Thank you, everyone, for your thoughtful responses. I would have been suspicious if there was a unanimous 'Go for it!'. I will certainly do as you suggest - learn more. I tend to believe that the big markets haven't been discovered yet. I know that the government is starting to force chemical plants and refineries - big here in the mid-Atlantic states - to tag and monitor every devise that can fail and cause a gas or liquid leak with permanent cataloged name plates. I worked at one of the smaller plants in the area and we had over 7,000 valves and 500 pressure and temp reliefs - Can you imaging what the Exxon refinery has! Combined with drawing updates and database services this will be huge affair.

Well anyway, thanks again for the encouragements and the cautions. Have a great Christmas.

Bill