Mechanical Design and CNC Machining
Trusted Design Services, LLC
This is a review of a mechanical design and CNC machining home based business. Trusted Design Services, LLC is located in San Antonio, Texas, and started operations in 2010. Dale Ott, the founder and business operator originally intended to help inventors and entrepreneurs with small batches of products. In addition, Ott had many product ideas of his own, but wasn't able to get the components produced easily by others.
Ott began to produce machined components on his then-employer’s machines, but very quickly that relationship became a problem. Machine availability and the quantity of components he needed were conflicts. It became clear that he needed to decide whether to stop making his products or get his own machines.
Also, there was the loyalty issue of working for somebody else. Ott says: “I was a very loyal employee, conscientious and determined to complete a task. Employers do not all have that same ethic. As soon as the need for your capabilities change, so does your job security. When the economy changes, so do your benefits."
TDS was started in the owner’s garage as a part time company. But Dale Ott spent the next four years at his full time job managing a CNC1 shop, with evenings and weekends at his own business manufacturing mostly aluminum products. In 2014 TDS became a full time CNC machining shop and Ott’s only work.
Ott says: “There are lots of machine shops that take on large jobs but will not even consider small jobs, leaving the entrepreneur or inventor out in the cold for prototyping. TDS specializes in small jobs and one-off components. TDS has found a niche in the job shop arena for small quantities of components.”
Dale Ott started his business with a LOT of relevant experience: he has 30 years of experience with manual machining, 21 years of experience with mechanical design and 15 years of experience with CNC milling.
In regard to the financing of his business, Ott says: “Since banks view small businesses as a high risk, they have not been very helpful in building the business.” TDS has been solely funded by Mr. Ott and all profit from projects is reinvested into the company to purchase software and equipment.
Although growth has been challenging over the last seven years, TDS has been showing gradual and consistent growth. Ott attributes this growth partly to his use of a financial rule of thumb for pricing each project. Find out how this rule of thumb is used in Machine Shop Tips.
The Nature of the CNC Machining Market
As to marketing efforts, Ott says: “Although it's a slow process, networking with peers has been an excellent opportunity maker for larger projects. Most of the projects that TDS completes are valued under $3000 and the vast majority valued under $1500. Cold calling has not been a productive activity.” TDS’ Ebay store was a slow to build sales, but after a couple years has become a significant source of income from Ott’s unique automotive products. Overflow from local machine shops has also been a very good source of work.
Marketing of TDS has included the maintaining of contacts at local machine shops, which has been a profitable activity. “Our eBay store is ‘always on’ and as long as inventory is available, sales are variably consistent. Very little formal marketing has been done”, says Ott.
Challenges of the CNC Machining Business
When considering some of the challenges involved in operating this business, Ott notes: “Most people do not understand manufacturing. Part of my job involves educating the inventor/entrepreneur about the processes of manufacturing. Technology is rapidly changing and improving manufacturing and it's important to keep up with new technology.” Another challenge to overcome: “Financial planning is probably the most difficult aspect of running my own business. Machine shops require expensive equipment. I have realized that banks are not really ‘here to help’.”
In the near future, TDS intends to purchase one additional CNC milling machine, some support equipment and software to enhance capabilities. Personnel requirements will increase as a result and will require at least one additional employee.
Ott is also looking for a better house for his business. He says that he prefers the advantages of a house at this time, especially the low cost and convenience. But ultimately he hopes to find a larger property where he has more room, perhaps a house with a detached large garage and combined shop.
Mechanical Design in This Business
Before CNC machining begins, Ott uses CADD2 software to design and manipulate the layouts of parts so that they can be machined.
More details and inside information on this design and machining company is at Machine Shop Tips.
1 CNC – Computer Numerical Control means that this type of machine is programmed and can work for periods of time on its own.
2CADD – Computer Aided Design and Drafting, or Computer Aided Design is modern mechanical drawing software. It is available to produce 3D drawings that can be used to create CNC machine programing. Ott is proficient with advanced 3D CADD or CAD software.