Two challenges to growing a small or medium-sized machine shop or 3D printing service bureau are heavy operational costs and low margins. Allow me to explain.
Why are operational costs so heavy? You need multiple different software platforms to complete both complex and simple projects for any client, which adds up to heavy operational costs. These platforms may include a project management tool like Trello to coordinate internally with your team, an Enterprise Resource Planning (ERP) system to manage inventory, a Product Lifecycle Management (PLM) system to oversee your workflow, a Customer Relationship Management (CRM) tool to communicate with your clients, and a file-sharing system like Dropbox to share files. You’ll certainly need a 3D file viewing system and an invoicing system like Quickbooks to collect payments. And for a digital presence, which is all but required for any shop looking to scale, you need a website builder, domain hosting, and a way for new, potential clients to submit their projects to you.
These costs add up. Your expenses can rack up to be at least $50K a year in software alone. This leads us to the second reason why growing a machine shop or 3D printing service bureau is difficult: low margins. Assuming that you price your services to be competitive in the market, your margins will still be variable and unreliable, likely less than 10% to 30%, especially if you factor in headcount and people’s time managing that software and process.
If you’re a smaller shop, where you’re either a solo entrepreneur or have a small team, the burden of every aspect of the business falls on you. Your time is taken up by a multitude of tasks. On the engineering side, your responsibilities include quoting out a project, scoping it out with a project manager, seeing it to completion, among other things. On the sales side, there’s the tedious, operational minutiae that comes with operating any business – expenses, invoices, personnel responsibilities if you have a team. These engineering and operating tasks add up to a lot of time. You only have a limited capacity to actually execute on multiple projects and make your machine shop a viable business.
I faced both of these challenges head-on while running two different 3D printing service bureaus in Chicago back in 2013 and in Detroit back in 2015. How can I scale my businesses when I’m bogged down by heavy expenses and operational responsibilities, leading to low margins?
At the time, I remembered thinking that I either needed a large amount of capital from an investor or through a loan to cover the heavy expenses, enabling me to scale faster (albeit I’d be indebted to the lender at that point) or find a miracle software solution that was more tailored to me, a small-medium sized 3D printing service bureau, for a reasonable price that my shop could afford.
Obtaining capital was out of the question, so I searched for that miracle software solution. I tried various platforms that I thought would suit well for my business, but none did. Most were really good at one thing, such as quoting or workflow management, but lacked in other areas, ultimately leading me to more responsibilities and headaches. I finally reached a point where I knew exactly what I was looking for, and since I couldn’t find it on the market, I decided to bootstrap and build it myself. And that’s when MakerOS was born.
MakerOS is an all-in-one business operating software for manufacturers, engineers, designers, and fabricators to facilitate modern product development. Our platform provides an out-of-the-box set of tools that includes an automated quoting system, a client portal, a 3D file viewer, a project manager, a payment gateway, and more.
Essentially, what my team and I have done is we’ve combined the best elements of the necessary software to run a machine shop business and packaged them together. Aspects of ERP, PLM, CRM, and even point of sale software are all found in MakerOS.
The client portal is the best example of a tool in our platform that emphasizes connectivity and collaboration. It grants the client access to the same tools and systems that you’re using, enabling them the option to essentially become part of your team while you work together on the project. Comment on files, share new ones, send messages, provide clear reasons for quote changes, and save price estimates on parts for future use. It’s an unprecedented level of collaboration and transparency. MakerOS is truly the ultimate single source of truth.
Have clients that would prefer not to create their own logins in your MakerOS Client Portal in order for them to pay you? No worries. You can send them a link to an invoice that does not require your client to create an account and log in to pay you if they prefer not to.
These tools reduce costs and time to market. They’re designed to alleviate much of the day-to-day operations of managing a business, and in turn, the MakerOS platform enables makers to focus more on their passions. Within the first year of using the MakerOS software, one of our clients reduced their development cycle from three weeks to just four days.
Finally, the MakerOS platform is applicable to more than just 3D printing service bureaus, it can be used by small manufacturers, distributors, large manufacturers, CNC shops, contract manufacturing, low-volume-production, prototyping, CAD, engineering, product design, reverse-engineering, and even education. We made sure that any maker would be able to use our business operating system so that they can free up time, focus more on completing projects for their clients, and ultimately increase their margins.
About the Author, Mike Moceri
Mike Moceri has deep experience in manufacturing, design, and software. In 2013, he co-founded the world’s first 3D printing retail service bureau in Chicago. In 2014 he founded Manulith, a 3D printing and product design agency, where his clientele included Fortune 500 companies within the aerospace, automotive, and medical industries. Mike is also a mentor at Stanley+Techstars Additive Manufacturing Accelerator, a mentor at WeWork Labs in NYC, and formerly a mentor at TechTown Detroit. He’s previously been featured on MSN, Make Magazine, NBC, and the Encyclopedia Britannica. D-Business Magazine called him the “Face of 3D printing.” Mike is currently the founder and CEO of MakerOS, an all-in-one business operating software for manufacturers, engineers, designers, and fabricators to facilitate modern product development.
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