Using a TS55 Profitably

[ccarrolladams]

Recently someone stated that it is not possible to "make more than wages" using Festool track saws and guide rails building cabinets professionally.

Pardon me, but from 2006 until I opened my new 20,000sq ft shop, I made one heck of a lot more than "wages" using my several TS55 and guide rails.

In my shop now I have a state of the art CNC pressure beam saw, as well as a CNC slider table saw. Nothing can approach the efficiency and accuracy of the beam saw when all you need on a sheet goods part are right angles. Where the slider table saw is so effective is making parts with bevels and odd mitre angles. However, in business you need to consider return on investment. My beam saw uses a lot of electricity, dust extraction and compressed air. It also needs a lot of floor space. Shipped to me and installed it represents a USA$125,000 investment. My slider saw requires almost as much floor space. It is 12.5hp with up to a 5mm kerf, so it also needs a lot of dust collection and 480v 3ph service. Mine cost USA$65,000 shipped and installed.

As a consequence it takes a lot of business to keep those machines active and making money.

The beauty of the Festool track saws is that for dust collection all you need is a CT extractor and a 36mm hose. Sawing one bag will last a long time. When I was working alone or with just one other cabinet maker with the track saw I could make the parts as fast as I could assemble the cases, with an investment of under USA$2,000. The combination of a CT and TS55 runs fine on a single 15a 125v 1ph circuit.

So, if you do not have a large shop with unlimited 480v 3ph power and are not willing to make the investment in some big machines, do not give up hope.

Assuming you know how to make top quality cabinets and how to sell those at a profit, all that can be done with a CT and a track saw with a few guide rails.

 

[oil trader]

Good post.  Now can you tell me how to make a top-quality cabinet?  [big grin]

 

[ccarrolladams]

Good post.  Now can you tell me how to make a top-quality cabinet?   [big grin]

In my experience building top quality cabinets starts with excellent design and the most appropriate raw materials. Over the years you will become more confident and efficient.

Generally the bigger problem is finding ways to sell your work at a profit and also at a volume which justifies the investment in work space and equipment.

Probably most of us could earn more per year in other lines of business. In my case I found how to please clients able to afford well-made custom cabinets. The challenge these past 65 years has been staying ahead of state of the art as to what constitutes well-made cabinets.

My shop only supplies cabinets at wholesale to independent designers and installers. Therefore my firm must know how to design and build cabinets in any style desired by clients.

My personal design reputation is frameless European style, but I have built thousands of face-frame cabinets. These days over 75% of my business is frameless. My shop does no finishing largely because my wholesale customers have relationships with finishers who often are doing other painting and staining on the same job. Customers rarely pay my prices for paint-grade cabinets.

A lot of my business is in newer-style cabinets. Right now over 40% of the uppers we build have tilt-up doors, rather than being hinged. Another big trend for us is sliding shelves. Of 8 large jobs we have built during the past month, only one had any static shelves in base cabinets. All the other base units had a mix of drawers and sliding shelves. We make all of our own cabinet doors and drawer fronts. We have a drawer-making department with a CNC Dodds dovetail machine and assembly machine.

 

[sancho57]

Good post.  Now can you tell me how to make a top-quality cabinet?   [big grin]

here ya go
http://festoolownersgroup.com/member-projects/midcentury-renovation-in-deep-over-my-head/

 

[Jalvis]

If you were making "so much" money with "so little" overhead then why would you change?

 

[greg mann]

If you were making "so much" money with "so little" overhead then why would you change?

One can have a high 'rate of profit' but not necessarily a high 'amount of profit'. There is a tipping point where even very profitable techniques and equipment should be changed rather than duplicated, triplicated, and so on, to increase productivity. A kid with a push mower may have a great return on investment but if he wants to grow his business he needs to look at more productive equipment. His rate of profit may fall but his overall profit should grow.

 

[GhostFist]

Hats off to you Greg, sound and honest advice!

 

[Svar]

If you were making "so much" money with "so little" overhead then why would you change?

One can have a high 'rate of profit' but not necessarily a high 'amount of profit'. There is a tipping point where even very profitable techniques and equipment should be changed rather than duplicated, triplicated, and so on, to increase productivity. A kid with a push mower may have a great return on investment but if he wants to grow his business he needs to look at more productive equipment. His rate of profit may fall but his overall profit should grow.

Yes. But doesn't this thread only support the argument that you can't "make more than wages" with a push mower / TS55 without investing into more productive equipment? Seems like Jalvis' original premise was accurate.

 

[sancho57]

If you were making "so much" money with "so little" overhead then why would you change?

Why not dood, Ya get older, Ya expand your business you hire employees, ya run the run the business.

simple basic business.

 

[sancho57]

If you were making "so much" money with "so little" overhead then why would you change?

One can have a high 'rate of profit' but not necessarily a high 'amount of profit'. There is a tipping point where even very profitable techniques and equipment should be changed rather than duplicated, triplicated, and so on, to increase productivity. A kid with a push mower may have a great return on investment but if he wants to grow his business he needs to look at more productive equipment. His rate of profit may fall but his overall profit should grow.

Yes. But doesn't this thread only support the argument that you can't "make more than wages" with a push mower / TS55 without investing into more productive equipment? Seems like Jalvis' original premise was accurate.

depends,

If you want to expand your business and hire employees, you have to also expand the shop, tooling etc.

Big difference between working out of your garage making onesies twosies mostly buy cabinets from manufacturers and installing them and  hiring employees and running a production shop and make a profit ad maybe 4-5 manufacturing jobs or more going on at the same time.

 

[Jalvis]

I'm not trying to "Ruffle" any feathers.

Gregs' point is basically what I'm saying about the track system.  Theres really a limit of possible income and profit from that setup.  From my experience that equates to basically a wage.  Your not going to build a business that will allow substantial profits and a high salary.

A simple example would be ones hourly rate for say cutting panels. 

Track system for 10 sheets = 9 hours

Panel saw = 3 hours

The reality is the said project only has a limited "billable" for that phase.  Now if I use the panel saw my hourly triples.  Thats called working 'smarter not harder' in one of many task in a project.

When your a small business time is your greatest asset.  The earlier you upgrade equipment to allow higher billables per hour the greater your chances of success.

 

[gkaiseril]

What do you mean by profitability?

Total income?

Amount after expenses?

How are you expensing assets that last more than 1 year?

 

[kmdwoodwork]

I will throw my 2 cents in.

I started my company in 05 with an old Craftsman tablesaw and assorted other crappy tools, business was great the first two years and i started buying bigger equipment and was looking into renting a 2500sqft building. Well in 08 the local economy took a huge nose dive and it turned me from cabinet maker to remodeler and occasional hole digger. For the next three years i watched a lot of cabinet shops disappear and the owners forced into bankruptcy because they tried to hold on to long or they ended up like me but only worse because when no one is opening new shops it is impossible to sell your equipment so they lost everything they worked so hard for. The only shops that made it through were the one man shops or the really big ones like Carroll has.

The past three years have been great again as far as cabinet and custom woodwork in general goes, 2 years ago i started the same process as before. I was talking to one of my clients who happened to be a retired CFO who had worked for a couple of large companies. I told him of my plans and he offered to do a cost analysis for me, when he broke down the volume of work that i would have to get and the change i would have to make in my business to allow me to make what i was making then i almost fell to the floor. After that talk i decided that i will always be a one man shop working out of my garage so i invested heavily in Festool and began raising my rates, i have never been busier and am making more sooner than if i had gone the typical route of getting bigger and pumping out more work and i am a lot happier also.

Running tighter and leaner is far more important than running faster, i know that when, not if business slows down in the future i will still be standing working out of my small garage and not losing everything. Unless you are doing a lot of volume a track saw and table saw will be all you need to break down sheet goods because it is only a small portion of a cabinet job.

 

[Jalvis]

What do you mean by profitability?

Total income?

Amount after expenses?

How are you expensing assets that last more than 1 year?

who are you asking?

 

[Jalvis]

Kmdwoodwork,

Your situation was similar in my area.  There was a lot of guys getting out while some of the larger shops stayed in business.

Although from my understanding almost all of the guys going out of business were in debt.  In my opinion debt has a lot to do with whether a business succeeds or not.  A lot of shops in my area invested capital they couldn't lose in equipment, trucks, trailers, shop space, advertising and the list goes on.  AND it wasn't just there business but also there personal expenses as well.

If someone owed nothing but rent each month then survival would be much better in a down economy.  In the end every business needs cash flow and profit to keep things going.

 

[Michael Kellough]

Very interesting thoughtful thread.

Thanks for starting it CC.

And thanks to all the contributors.

 

[NYC Tiny Shop]

I appreciate this thread, also. I'm on the precipice of having a possible oppurtunity for a large workshop and have been looking at various production tools.  Right now, I'm busy, having fun, and have work flowing in.  My present shop is too small, though.  Everything takes too long, because of set-up and break-down time for every new process. And, this is also in our apartment!  I think that I will be calling on some of the FOG expertise, in the future. Thanks.

 

[kmdwoodwork]

Kmdwoodwork,

Your situation was similar in my area.  There was a lot of guys getting out while some of the larger shops stayed in business.

Although from my understanding almost all of the guys going out of business were in debt.  In my opinion debt has a lot to do with whether a business succeeds or not.  A lot of shops in my area invested capital they couldn't lose in equipment, trucks, trailers, shop space, advertising and the list goes on.  AND it wasn't just there business but also there personal expenses as well.

If someone owed nothing but rent each month then survival would be much better in a down economy.  In the end every business needs cash flow and profit to keep things going.

I hear you on the debt issue i have managed not to incur debt so far in business, it helps you be able to sleep at night.

Some of the shops that closed were probably over their head in debt but a few that i knew were doing it right by buying equipment as they went along. The problem that they ran into when closing is they could only get 25% of the value for the equipment and that was before going the auction route. When they downsized back to their garage they could not bring the large machines with them and paying for storage was not a solution. A couple of years ago you could get some very nice machines for the cost of smaller models because no one was buying them.

I live just outside of Providence and the cost of renting a nice good sized space that is not in a flood zone with insurance and utilities will run you $ 2000 and up a month or if you can find a suitable building to purchase it would be in the $ 150,000 to $ 200,000 range. With that kind of overhead you had better make sure you have the work coming in, during my worst years i could go a month or more without work. Even if you owned every piece of equipment having any large breaks in work will sink you.

The bottom line is what someone wants from their business, i like what i do and the way i do it, i am not a rich man and probably will never be one but i get to do what i like everyday and that is important to me. On the other hand if i run into a golden opportunity i would be reluctant not to take it but i don't see that happening.

 

[Guilliaume woodworks]

i like what i do and the way i do it, i am not a rich man and probably will never be one but i get to do what i like everyday and that is important to me.
[/quote]
That sounds like true success to me!

 

[NYC Tiny Shop]

i like what i do and the way i do it, i am not a rich man and probably will never be one but i get to do what i like everyday and that is important to me.

That sounds like true success to me!
[/quote]

Well said! Guilliaume!

Aristotle said, " Happiness is living well."

It sounds like you got it!