Should I buy an existing machine shop or start one?
An existing machine shop brings installed machines, tooling, approved customer parts, trained machinists and a quality history on day one. A start-up brings none of that but carries nothing you did not choose. Which suits you depends on your skills and tolerance for inherited problems.
Anyone who wants to run a machine shop faces the same early choice: buy one that is running or build one from nothing. The general question is covered in buying a business or starting one. This page looks only at what a machine shop adds to that choice. It gives no verdict, because the right answer depends on you.
What you start with if you buy
An existing shop comes with machines already installed, tooling already built up and a floor that already runs. Customers may have approved the shop to make their parts, and approvals take time to earn. There may be trained machinists and a record of what the shop has made and checked. Ask what is leased, what is owned and what is tied to one customer.
What you inherit along with it
You also inherit the machines’ age and condition, any liens on them, the habits of the people and the quality record, good or bad. A shop can depend on one or two customers or on one skilled operator. Ask for service records, find out what the next big repair might be, and ask your lawyer to search for registered claims against the equipment.
What starting clean gives you
Starting means choosing each machine, hiring each person and building each approval yourself. That is slower, and it also means no one else’s problems. Think about how long you can go without customers, how you would win your first approved parts and whether you could find machinists. Be honest about which of those you already have.
Questions to put to yourself
- Do I know how to run a shop floor, or would I rely on the people already there?
- Can I price and quote work reliably?
- How would I feel about inheriting a customer list I did not build?
Related reading
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Legal
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
- 04Canadian Federation of Independent BusinessResearch dataSuccession Tsunami: Preparing for a decade of small business transitions
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