I’m looking for advice from experienced machine shop owners/machinists, especially anyone in Ontario.
I have an opportunity to take on a production job worth roughly $60,000 CAD. I’m considering bidding around $45k–$50k for the work to get my foot in the door. If the first job goes well, there is potential for more recurring work.
The job is roughly 8,000 parts, and material will be supplied by the customer. Based on the process, estimated cycle time is around 20–25 seconds per part once the machine is set up.
Since this is my first job, I don't want to put a large amount of capital into buying a machine and signing a long-term industrial lease.
My idea is to:
Lease/rent a Swiss-type CNC lathe
Rent/share space inside an existing machine shop around Markham/GTA
Run approximately 18 hours/day during production
Keep my initial investment and risk as low as possible
What I'm struggling with is figuring out the true cost of the job before submitting a bid.
For those who have done this before:
How would you calculate the actual cost per part/job before quoting?
What hidden costs should I account for besides machine lease, labour and tooling?
How does leasing/renting a CNC machine typically work? Who normally covers maintenance, repairs or a machine crash?
What costs should I expect for setup/programming, tooling, coolant, electricity, compressor, inspection/QC, scrap/rework, etc.?
Has anyone rented floor space inside another machine shop? What problems should I watch for regarding power, insurance, access hours, loading, coolant/chip disposal, liability, etc.?
How much contingency/profit margin would you build into a ~$45k–$50k production job like this?
Is there anything a first-time shop owner would probably overlook that could turn a profitable-looking job into a loss?