5 years from now

[doctor Bob]

Following on from the public sector strike thread, just wondered what the country will be like in 5 years time.
Will rioting be common place?
Will people be buying luxury goods (top end furniture)?
Will unemployment be massive, with minimum benefits?
Will the Eurozone exist?
My business has grown every year for the last 8 years, I want to invest in machinery but will need to borrow £50 - £80,000, I will need to give personnel guarantees even though we are a Ltd company, I will probably do this but seems very risky in these bleak times.
So come on, are there any positives to come?


The £80,000 would be for a CNC and associated equipment (vacuum lifter, additional extraction system etc)

or should I just listen to Jacob and not seek financial security but instead hand it out to the needy (those young kids hanging around on the street corners with no jobs but yet still seem to have iphone4's and designer cloths, poor cherubs)..... whilst I'm at it I may grow a beard and become an aging hippy "free love man" and wear my trousers high.... :lol:

 

[No skills]

I hate hippys, route of all evil.

On a brighter note you will be 5 years older

If you can expand then good for you, I'd rather see young folks given a job oportunity than handed out benifits. =D>

 

[tsb]

If you invest £80k into cnc machinery, are you not then competing with the likes of the sheds , magnet, etc instead of being a bespoke furniture maker. I know a couple of people who have gone into debt to expand, (not in the woodworking game) are as busy as ever, but after the extra expenses are taken out, have realised that they aren't really making any more money than they were when they were smaller.

 

[cutting42]

Following on from the public sector strike thread, just wondered what the country will be like in 5 years time.
Will rioting be common place?
Will people be buying luxury goods (top end furniture)?
Will unemployment be massive, with minimum benefits?
Will the Eurozone exist?
My business has grown every year for the last 8 years, I want to invest in machinery but will need to borrow £50 - £80,000, I will need to give personnel guarantees even though we are a Ltd company, I will probably do this but seems very risky in these bleak times.
So come on, are there any positives to come?


The £80,000 would be for a CNC and associated equipment (vacuum lifter, additional extraction system etc)

or should I just listen to Jacob and not seek financial security but instead hand it out to the needy (those young kids hanging around on the street corners with no jobs but yet still seem to have iphone4's and designer cloths, poor cherubs)..... whilst I'm at it I may grow a beard and become an aging hippy "free love man" and wear my trousers high.... :lol:

Firstly, congratulations in being successful!

Secondly ignore the very tedious whining and moaning from the "everything UK/British is worse than .... it was... rest of Europe .... world" crowd! I know they have not descended on this thread but as soon as anyone looks like being proactive and making money I am sure they will creep in and share their misery with you Nothing pineapples me off more than the constant complaining that many people seem to get off on here and many other forums. Life will be - as always - a combination of fate and what you make of it. Anyone who sits there wringing their hands and worrying about what might happen or what other people think of them deserves everything they get. You carry on working hard, supplying what people want and making a success of your life. I really like the stuff you do and the fact you get rewarded for doing it. Your success will employ people, allow you to spend time and money on your family and with Lotus cars.

Go for it

 

[Paul Chapman]

Will people be buying luxury goods (top end furniture)?

I think it depends who your customers are, Bob. The impression I get is that you work at the top end of the market (ie customers with plenty of money). There will still be plenty of them about in five years time, IMHO. It's the bottom end of the market that is going to suffer.

Cheers :wink:

Paul

 

[Digit]

Being an area of high unemployment etc my son has a regular job of delivering high end furniture, recession? What recession?
As bad it is we will get through it and there is always a market for quality.

Roy.

 

[Jacob]

I just watched the Robert Peston prog. Our problem (the bankrupt west especially USA and UK) is borrowing. The suggestion seems to be that low interest rates are unsustainable and that borrowing now is going to cost a lot later, even if you have the customers. So the boring sensible answer is don't do it. Less boring - put your prices up instead, change product range, go up market, or other changes.
Old cliche: Turnover Is Vanity - Profit Is Sanity - Cash Is Reality.
But then I've been forecasting a collapse in the housing bubble since about 1975 and have been consistently wrong except for 2007/8 and a few other minor dips. :roll:

 

[cutting42]

I just watched the Robert Peston prog. Our problem (the bankrupt west especially USA and UK) is borrowing. The suggestion seems to be that low interest rates are unsustainable and that borrowing now is going to cost a lot later, even if you have the customers. So the boring sensible answer is don't do it. Less boring - put your prices up instead, change product range, go up market, or other changes.
Old cliche: Turnover Is Vanity - Profit Is Sanity - Cash Is Reality.
But then I've been forecasting a collapse in the housing bubble since about 1975 and have been consistently wrong except for 2007/8 and a few other minor dips. :roll:

Very good post, cash is everything in small businesses. You do not need to leverage foreign currencies and service credit swaps so no need to over borrow. Get in while the rates are reasonable, fix if possible and ride the storm.

 

[tomatwark]

CNC DOES NOT MEAN CHEAP

Just because Bob is going down the cnc route does not mean he is down grading his work, most of the big high end makers use it.

It is a great tool and one I hope to be needing in about 5 years or so.

Rant over

Bob

I would go for it as you are obviously in the position I would like to be in a few years and there is lots of money around at the higher end of the market.

The only advice I would give based on companies I know how have already done this is to buy the most versatile machine you can afford.

I couple of people I know have gone down this route and then kicked themselves once they realised what they could have done for a few extra pounds.

Also don't let the salesmen blind you with technology, one firm I know was told that the machine was all singing and dancing and was exactly what they needed and when it was installed it would not quite all the tasks it was needed to do.

Good luck

Tom

 

[Digit]

If you are going to use a machine then common sense says use the most accurate one available, and that's CNC.
There seems to be a misconception that Chippendate et al would have foresworn modern technology.

Roy.

 

[Eric The Viking]

Bob,

I'd see it as value versus volume: if the new kit lets you do clever stuff faster and/or better, so as to drive down the variable costs of your existing business/designs, that's good.

If there's an implication that you have to do anything new or ramp-up volume to amortize it, I wouldn't go there.

I'd also go over the depreciation rates, etc. and carefully consider the opportunity costs -- what else you might do with that much money, which would drop favourably to the bottom line. For example, would better premises, either location or facilities or both, mean you could do the same work only faster (room to move)? How does rent compare to a commercial mortgage?

Interest rates will go up from here (they have to), so how affordable would the kit be at, say, 8% compounded? If it wouldn't be affordable, don't do it. Also consider: 1. you may get a much better deal later when sales are harder for the machinery distributors, or secondhand, 2. in this climate, don't buy anything that uses breakable 'hens-teeth' parts: if the manufacturer dies, you might be left with a white elephant that you're still paying for.

In one way it's a nice problem to have, in another it's tough. One thing I was taught in business school though was that a carefully made decision NOT to do something is still valuable. Chances are that competitors who haven't analysed will jump in and catch a cold in consequence. On the other hand, if the numbers do stack up in a higher-interest-rate world, be bold.

Bet that didn't help much! ;-)

E.

 

[tomatwark]

If you are going to use a machine then common sense says use the most accurate one available, and that's CNC.
There seems to be a misconception that Chippendate et al would have foresworn modern technology.

Roy.

Exactly

Or MDF, Ply etc.

While I love using my hand tools I am doing this to make money and while I don't want to comprise quality, I am not going to use a machine when if used properly will do as good or better job, in a lot less time.

There are very few people who make stuff completely by hand commercially in this country any more.

And CNC is the next tool in the box which is starting to become more affordable to the small maker.

Tom

 

[beech1948]

At £50 to 80k investment I would think it over several times because of the uncertainty in the future of the economy. Even with the Merkosy effort there is no certainty of success in rescuing the euro. If the Euro goes then there will go the pound for a long time.

The Merkosy effort will only add a little to future certainty. What they may need to do to make it a success is to push Greece out of the Euro in order to show some discipline against the budget defaulters. Germany will hate it but they will have to allow the ECB to take up billions in debt from Italy and Spain and Portugal. Merkel is currently fighting this tooth and nail to prevent the Germans having to underwrite such a move.

Now an alternative to ask and answer is what level of accuracy and speed of cutting does Doctor Bob want to achieve. An investment of about £6000 to £8000 would allow him to make his own CNC from ply/MDF and steel and to experiment.

If all he needs is accuracy of 0.01mm and speeds of cutting of say 100 inches per minute in say 1/2 inch MDF/PLY/Oak he could get there with a self build CNC. An investment of £80k should get you to 0.001mm accuracy and more speed but do you need it.

google Blacktoe
Look at a design that is 10ft by 5ft work surface its the biggest they do..

regards
Al

 

[doctor Bob]

Hi,
Thanks for all the replies.
Firstly, the CNC is a good one, multi axis, saw, pod and flat bed combination with auto tool change.
Again this may be over the top but as mentioned if I'm going to to do this I wan't to be able to use it on all aspects of production. With this type of CNC I can make carcases, frames, doors etc etc.
Does this make it less well made, no, to be honest all my stuff is machine made now anyway with minimal hand tools.

The machine I'm looking at is Italian so the worry is the "PIGS" economy crashing even worse if thats possible.

My market is high end but not all my customers are wealthy, most are middle income who appreciate quality.

Thanks for the replies, lots to think about.

 

[StevieB]

My only advice, not working in high end furniture manufacture, would be to ensure that whatever you borrow - make sure your house is not at risk if the company goes belly-up.

 

[doctor Bob]

My only advice, not working in high end furniture manufacture, would be to ensure that whatever you borrow - make sure your house is not at risk if the company goes belly-up.

How, every one wants personal guarantees these days?

 

[Karl]

PG = house on the line.

Looking at it from the lenders perspective, if you don't have the confidence in your business model to act as guarantor to the loan, why should they take the risk of lending.

Cheers

Karl

 

[Jacob]

PG = house on the line.

Looking at it from the lenders perspective, if you don't have the confidence in your business model to act as guarantor to the loan, why should they take the risk of lending.

Cheers

Karl

God no! Only if you think it's a dead cert or you are desperate. Life isn't a casino (unless you are a gambler) and ideally you should be squirreling things away and paying off loans and mortgages as priority number one.

 

[Karl]

I agree, but if you want to expand and the bank ask for PG's which you aren't willing to give, it's unlikely they'll risk their money if you aren't willing to risk yours. At the end of the day Bob is a LTD Co and could walk away from the debts if it all went Pete Tong.

Cheers

Karl

 

[Jacob]

Yebbut surely one of the main points of being a Ltd Co is so that you can walk away i.e. keeping personal and business affairs quite separate?