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Business of Machining - Episode 106
256 Plays7 years ago
Proud Machining Moments Hit Home Sometimes you only need an upward glance to find comfort and strength.
Click Image Below to See the IG Post:
#Throwback #NeverForget
An epic Lakeshore order is a testament to how far you've come but the past is never too distant. The Taig ER-16 spindle and some cheap double-sided end mills conjure up fond memories of the early days.
Saunders discusses the emotional impact of a "major curve ball." This health concern causes terror and confusion, but one thing is clear: it puts life into perspective.
"It's not a sprint. It's a marathon."
YOU ARE WHAT YOU WANT TO BE Although entrepreneurs are driven by behavioral economics such as fear, convictions and outside interactions, at the end of the day, it's decision time. The Johns discuss how their ideas and plans have evolved.
BOOKS TO HAVE YOUR NOSE IN:
Freedom's Forge: How American Business Produced Victory in WWII
Big Mistakes: The Best Investors and Their Worst InvestmentsThe Perfectionists: How Precision Engineers Created the Modern World
"SPEEDS AND FEEDS ARE YOUR THING." - Grimsmo "YOU HAVEN'T SEEN ANYTHING YET." - Saunders
CASH CRUNCH: How cash flow management can affect your business decisions.
STUPID GOALS? Goals are easy to declare BUT they ignore the actions between.
Recommended
Transcript
Introductions and Weekly Reflections
00:00:00
Speaker
Good morning. Welcome to the Business of Machine, Episode 106. My name is John Saunders. And my name is John Grimsmo.
00:00:08
Speaker
How are you? I'm excellent. How are you doing? Actually, really good as well. Nice. Love to hear that. Yes. I'll tell you more about it, but I had a heck of a week. Pretty big roller coaster. Life threw me probably the biggest curve ball that's ever thrown me. Yesterday, just finishing up the day at 5.30, was making sure I didn't have any. Does anybody else ever take pictures of their to-do list to move it from your desk?
00:00:37
Speaker
to your phone and was excited to go home and go home and see what the... My wife actually had a dinner, so just me and the kids. And I just stood up from my desk and looked at the shop.
00:00:54
Speaker
I think probably because of what an emotional week it's been, I just looked at the shop and I thought, oh my God, we're doing it. I say this all the time and maybe it's annoying, but I didn't know what an end mill was probably in 2007 or a bridge port or I knew what a lathe was, but I didn't know any of this stuff.
00:01:17
Speaker
I've only been doing this full time for just a little over four years now. And I just looked at it and I thought, oh my gosh, we have...
Business Growth and Feedback
00:01:27
Speaker
I threw it on Instagram. I think you saw it, but like... Yeah, I did see it, yeah. We have a company. We have a culture. We have a reputation. We have a product. We have a staying power. And I hope this is all part of building something that is in some form bigger than me or us, or maybe I hate to use the word legacy because I think that's
00:01:47
Speaker
I don't talk myself that way, but like that's, that's, that's why I do this. Absolutely. Oh, so good. It felt good. But it, it's so rare to step back and see those times. Like we need to do it more, but, um, that's fantastic. Yes. It was a, it was, it was good. It was really good.
Shop Organization and Tooling Systems
00:02:11
Speaker
Yeah, man. Yeah. I had somebody DM me yesterday. That's like,
00:02:16
Speaker
You know, big fan of everything you do. Thanks for all YouTube videos. I posted like a big order of Lakeshore end mills that we got in. He's like, oh, so that's what a real shop like buys end mills. I'm still buying them $10 at a time. And I'm like, dude, I remember I was there. I completely remember doing that. Buying that cheap wooden block of high speed steel end mills. Like it's $5 for four end mills. Even still, you're like, oh, I broke one. Oh, I feel so bad.
00:02:43
Speaker
I still have, I should throw that up on the table. I still have a one drawer of those. Um, they are, and they were Enco MHC, Chinese high-speed steel double sided. Like it was a quarter inch end mill was still on a three eighth and shank and it was just tapered down. Yep. Yep. We spent the big bucks. You got the double sided.
00:03:03
Speaker
Oh, well, it wasn't, it was a creed. It was a creative. Um, and we throw them in the tag, which was only an ER 16 spindle. That's funny. And so you had to retouch off every time you did a tool change. Yep. Yep. I had all my tools in a drill chuck for years in my mini mill. And, uh, I would touch off with a two thou shim. I would just move the thing down and move this little metal shim underneath. Um,
00:03:33
Speaker
That's hilarious. I think I still have that shim. Maybe I should throw up a picture of it. You should frame it. Yeah, that's a great idea. Dude, that that Lakeshore order was not a large order. That was an epic order. Yeah, about $1,700 bucks on Lakeshore stuff. Yeah, I think I don't even usually 27. But Oh, yeah. Oh, whatever. You know, whatever. I get what I need. And it
00:04:00
Speaker
I know I need it, so I don't always look at the cost anymore. Fair enough. Right. Yeah. Right. But yeah, we do that once a month, once every month and a half, maybe. It's great.
00:04:12
Speaker
Yeah, that's cool. Yeah, that was an awesome size door. So you just keep all of those in your shallower bins in the red toolbox? And that works? It works for now. Yeah. Do you leave the end mills in the
Insights from Recent Readings
00:04:26
Speaker
plastic end mill sleeve? We currently take them out and gingerly place them in the shallower bins. OK. Probably not the best. I don't know if I've seen any downsides to it yet, but they could clink together. Yeah.
00:04:41
Speaker
So we're aware of the potential and trying to think of solutions.
00:04:47
Speaker
Yeah, we're doing the same thing. And I used to take them out too. And the problem is not only the micro, like banging together, but I hate to say it, things fall over, things happen. Like it would be, you would have, I would be feel pretty compromised if all of the end mills fell out, both in terms of sorting them and when they hit the floor and baggy to each other. I mean, just, you know, yeah, we're on that business anymore of taking those kinds of risks.
00:05:16
Speaker
No, that said, what was it? Maybe only a year ago, I think I opened up all the four top drawers on my tool chest and the top section tipped over and I caught it, but some stuff fell. And I don't think there was any problem, but you know, like that stuff happens and there's thousands of dollars of tiny end mills in there. Yeah.
00:05:41
Speaker
Yeah, I don't think of these things but so that was another point of just conviction that I had this week because you and I have talked ad nauseam about lean and CRM CRM
00:05:58
Speaker
ERP systems and organizing and lots of stuff, but I kind of had this conviction this week of now, it's what I've said before, you are what you want it to be. So if you want to have a good system for storing your tooling,
Personal Challenges and Family Priorities
00:06:13
Speaker
make the decision to do that. So sit down and think about, okay, so for me, what I want is I want the end mills protected, but I want a visual representation of what it looks like. So I need a photograph, whether that's on a digital system or whether it's literally just
00:06:26
Speaker
a picture that's cut out and taped to the front of the box so that you don't have to spend time. Because I'll be honest, if I do something, then everyone else is going to do it. Because I have, as an owner, just a hair more of that ongoing lingering desire to be perfect. So when I go to put tools back, which we do fairly often, if I have to think, oh my gosh, is this the 15,000 corner rat or is this the five or the six flute? And I can't figure out where it goes.
00:06:53
Speaker
hogwash or over. Yeah. Wasted time already. It's not going to happen. I literally put it into like no man's land in the back of the box and I'm like, you'll deal with it later.
Financial Planning and Business Strategy
00:07:01
Speaker
Right. And you don't. You just have this pile, this growing pile of used stuff. Yeah.
00:07:07
Speaker
So you think about what, so, but it's like, okay, let's stop having mental exercises and like thinking and just do it. What is the system that works? And then what's out there that will help us get that done, right? Period, period. Make that investment, make that decision. As I guess as I grow, I become less interested in being wishy washy and more, let's make a decision, let's try it, we'll improve it or it will fail and we will change it and that's okay.
00:07:35
Speaker
But with full conviction and love it, just move forward. You know, we both have kind of weak systems we've put in place over the years just because that's what works, you know? The end mills are here, you go find them. Incrementally though, we're always improving, always making something a little bit better, a little bit better.
00:07:54
Speaker
I love it here where I get to take input from everybody else. Like how would you want it? What do you think would be best here? And then you get, you know, a bit of their brain power. It's that you don't have to think of everything. And it's the kind of amazing ideas that come up are just priceless.
00:08:09
Speaker
You're right. Oh, no, it's interesting. Very much in that sense, I prefer to be a leader in the sense that I'm willing to forge that path within our shop and implement that. But I'm very much a follower when it comes to, I would prefer if you'd said, oh, Saunders, this is what we do, and this is the compromise, or but it works, or anybody else that I talk to that I look up to or respect or know or trust that isn't a shill for somebody or isn't just running their mouth.
00:08:37
Speaker
I'm basically, I'm going to heavily wait in favor of that system done, period. Yep. And I think you and I both think that way, whether it's tooling purchases or machine purchases or whatever, we put a lot of weight to the people that we put faith in. Yeah. It's one reason why I honestly built the NYC CNC website, which I want to get back into a little bit more. It's good, but it's now.
00:09:04
Speaker
When I originally created that site, I thought it was going to be more of a living site with content constantly being revised and tweaked. And I'm realizing now it's better fit as a more of a resource that's a little bit more static in nature, but nevertheless represents who we are as a shop, the software we use, the systems that we use. We had an email from a fan yesterday who's like, I really want to understand, you know, how do I get my website up? Like do I do Wix with PayPal buttons or do I do this and this? And I just sort of said, hey, look, you know,
00:09:33
Speaker
I'm not advocating, if you're not ready for this, I understand it, but really I just would say Shopify, it's become this prolific choice among so many folks, it integrates with things, blah, blah, blah. And yeah, I pay fees, I pay Stripe fees, Shopify payment fees, hosting fees, but free is not the right answer. And I don't have time right now to micromanage minor differences in fee structures between systems. I want the system that people use. Yep, exactly.
00:10:03
Speaker
And what I love about your site is it is kind of a static source, because information doesn't change that much. And when it does, you guys update it, which is good. But people can use that as, if anything, just a starting point. My personal favorite is, what kind of computer do I need for video editing and for Fusion? I personally use that. I was just telling Aaron, we've got to check that page out today, because we need more computers around here. And that's the first place I'm going to look, which is awesome.
00:10:31
Speaker
Yeah. And that's literally like that was, it was my antidote to YouTube because YouTube is this kind of constant battle to have the flashiest video, the newest video. And I was like, no, I want a resource that people can go to. And so every, I think it's every two weeks, Alex with my help or Kevin's help, like goes through that page. We check the links, the information, and I don't even know a lot of that computer stuff. I'm not up to date now on what uses multicore and whether this solid state, um, I'm a consumer of that information, not a researcher of it,
00:11:01
Speaker
I was thinking, it is your FAQ. People ask you, what computer do I need? How do I do speeds and feeds? What end mill do I use? It's your living FAQ. I wonder if that's
Balancing Life and Work
00:11:13
Speaker
a coincidence or not, but what you just said, the computer article and the speeds and feeds article, those are the two most popular pages on that site. For sure. I'm not surprised at all. That's funny.
00:11:21
Speaker
Yeah. I mean, in a way, it's kind of what you're known for. You're known for being a super nerd about stuff, and you need a computer to be a super nerd. And then speeds and feeds are your thing. Yeah. Oh, you haven't seen anything yet. I know. I know. You haven't seen anything yet. I am freaking excited. So this was also cool, too. I was kind of complaining, not complaining, but recollecting that I didn't read. I don't think I read a single book in 2018. I'm fine with it, blah, blah, blah.
00:11:52
Speaker
Well, it ties back into that you are who you want to be. I don't want to be somebody who thinks that they're ... You don't think that you're a better person just because you read books. Frankly, I don't care. That's not anything to do with the airport test of someone you want to get stuck in an airport with. It doesn't need to be somebody who mansplains the number of books they read to you. Nevertheless, actually,
00:12:16
Speaker
I think when I'm not stressed or feeling overwhelmed, I actually enjoy learning and reading. Oh, for sure. And maybe I needed to have that break to get back to it, but now I've read a book and a half in the last week.
00:12:28
Speaker
Nice. The first one was awesome. It was on some of the most famous stock market investors and their biggest mistakes where they absolutely blank the bed. Completely huge mistakes by very famous people. I like that
00:12:46
Speaker
sort of not introspective because it wasn't written by them, but like inside look at the fallibility of it. And it really ties into the fact that the stock market and frankly so much of an entrepreneur's life is driven by behavioral economics. We're driven by our own fears, our own convictions, our own concerns, our own desires, how we interact with the outside world. And it's not always rational, but it is proven.
00:13:18
Speaker
Mm-hmm. And it's recurring. Yeah. Yeah. It's predictable. It's everything. I mean, even to the point where you are a different person now because of your own success and, you know, the Grimsmo, go look up the YouTube videos from what, not even that long ago, 2014, where you've got a tag or a seag and you're putting doubt pins in a, I actually, I love both Grimsmos, but they're a different person.
00:13:41
Speaker
Yeah, evolved. That's fine. I'm happy with both. I'm happy with the evolution, but yes. Yeah. What was the other half book that you read? Just started. I got to give a shout out to a sent in from a fan who's been a really solid guy. He sent a lot of nice little words of encouragement along the years, and he sent a copy of a book called Freedom's Forge, How American Business Basically Won World War II. Nice.
00:14:11
Speaker
start to talk about these two gentlemen who were involved in the metal working in big auto and manufacturing world. And then the second guy was a paved road. I'm only, I don't know, 80 pages into it, but I've already started underlining phrases and I actually started my book.doc file. So I tie in maybe a page worth of notes from a
00:14:36
Speaker
every book I read and it's oh my gosh it's like the best it makes me feel good and some of the like little entrepreneurial snippets and business wisdom stuff about it's kind of what what just drove me to say that thing I said about the tooling stuff it's like you know John we've only got
00:14:52
Speaker
one chance to do this, whether it's because we retire, or whether it's because we are no longer able to be involved in our business, or whether we expire with time, or in these guys' cases, it was kind of a holy cow. They were at a certain point. Can you imagine, John, if in nine months the Canadian government basically told you, Grimms on Eyes is now in the
00:15:15
Speaker
war department for the government making, um, something involved in the defense industry. Yeah. That's effectively what happened. Um, you know, if everyone from Remington sewing machines to singer to, uh, all the car companies, um, all were retooled to make stuff for the effort. Right. So it's an interesting point to think about that. Um, and, and I'm again, not only just started it, but I like it. Whoa.
00:15:45
Speaker
There's another book that a fan suggested to me that's called The Perfectionists, how precision engineers created the modern world. Ooh, okay. Yeah, so I'm like, okay, that sounds really good. So it sounds like a look in time about the art of measuring and creating precise things from gears to engines and things like that. So I mean, that's about all that I know about it, but it sounds pretty cool so far.
00:16:10
Speaker
There was a line or section of the early paragraphs of Freedom's Forge talking about an individual, K-N-U-D-S-O-N, I assume that's pronounced Nudson, who sounds more important than Henry Ford was to Henry Ford's
00:16:29
Speaker
He was the person that made Henry Ford who he is in terms of the assembly line. It's interesting because I've always heard you hear Henry Ford in assembly line. This is a synonymous thing. The point was I think less to do or sounds like less to do with
00:16:46
Speaker
Well, not actually less to do it, but interchangeable parts was a key part of that. So everything was made to a tolerance like a saga pan, right? Where it's interchangeable. That was a big deal, which goes certainly back to precision engineering. Everyone had assigned tasks. So there was flow as everyone did one thing rather than everything. And then the part I had not heard that he mentioned was
00:17:09
Speaker
nothing stops. There's always product in motion. And so literally he's talking in 1920 in this book about, or excuse me, it's talking as if in 1920 he was saying, we're going to do spaghetti charts. We're going to look at factory layouts. And if I see a worker put something down,
00:17:28
Speaker
That's bad because if he has to put something down, he has to pick it back up. That's wasted motion. It's wasted time. It's not the way to solve it. He literally was explaining that they want to put a car together without having the physical material stop moving. It's always in progress. You would have loved it, John, or you will love it if you pick it. It's awesome. This was Freedom's Forge? Yeah. I write that down.
00:17:58
Speaker
I'll even send you my notes. In fact, that was something I'd always envisioned doing for the pro members at AYC was sharing my personal notes because sometimes you do want the cliff notes. I'm fine with that. But hey, where did you read those nuggets of wisdom? Because it means something different to everybody, but also is different to people at different times in their lives.
00:18:21
Speaker
Absolutely. And for people wondering if they want to get the book, reading your nuggets of wisdom might easily push them over the edge to be like, I need to know everything. Right. That's a good point. So I will do that. That's awesome.
00:18:37
Speaker
Well, I'll share this briefly, kind of to get it out of the way, but I mentioned the curve ball. My wife was diagnosed with what's called a carcinoid, which is a cancerous thing within your lungs. It's not lung cancer. And long story short, it's been happening for a few months. We didn't have any clue with the certainty of what it was until last week. And so I actually
00:19:03
Speaker
basically knew when we were recording the podcasts, which probably, I think it was very awkward because I'm excited about what's going on here, but it was a true curveball. Good news is we've been up at the Cleveland Clinic a bunch, world-class care, world-class folks, and she's got a procedure scheduled pretty soon now, which knock on wood is something that we can hopefully then put behind. It's a
00:19:27
Speaker
bit of a surgery and a bit of a recovery, but it's not, it's a slow growing thing. And so it's not the type of thing where, um, there's generally speaking a high risk of recurrence or what you would behaviors you would typically associate with that with cancer. Yeah, exactly. Yeah. Um, yeah.
00:19:45
Speaker
Well, hearts and thoughts and everything towards you guys. Yeah, I've known for a few months, you certainly kept me in the loop with that. And I'm glad you guys have found a resolution. Because I remember in the beginning, you're like, scared, obviously. You didn't know what it was. So concrete, you know, plan certainly helps a lot. Yeah. And yeah, I feel for you guys.
00:20:09
Speaker
I've had a lot of thoughts. I mean, how does that relate to what I do here? The energy, the commitment? Do I need to be spending time at home with her or the kids now or in the future for how that goes on? The financial element of this, this is going to... I am proud that we're going to
00:20:32
Speaker
do the right thing and get that stuff taken care of. But I was kind of like, you got to be kidding me. I bought a five-axis machine in the same week. I get this kind of a setback. Like, oh my God. And I was like, do I cancel it? Am I taking on too much? And she's very tough, and we will get through this.
00:20:49
Speaker
Yeah, absolutely. Yeah. Awesome. Yeah. It's one of those things like, I mean, I don't know how much you want to share, but, um, you know, she's a marathon runner and now she has a long problem. It's just the silliest thing ever, you know, incredibly rare. Yeah. Yeah. Yeah. And she's healthy as a fiddle or whatever the fit is a fiddle. Um, she'll, she'll do fine. She'll do great. Yeah. Yeah. Onward, onward and upward.
00:21:16
Speaker
What else I wanted? I had a note. Oh, yeah. So all of that. So it's interesting because you certainly, you gain perspective on life with events like that. It gives you conviction. It gives you a point of focus. And I like that. And it's reminding me of something that I have not done a great job with over time.
00:21:39
Speaker
But I want to keep doing better, which is to remember that I literally had this written down, and you just said the word. What we're doing is a marathon, not a sprint. That phrase gets thrown around a lot, but you live your lives, I think, as a sprint. I do as well, in terms of you look at your daily list and your activities and pallets to be changed and parts to be made and tested, and it feels like
00:22:03
Speaker
a hustle, right? Because you're moving, you're going. Yeah. But you've got to look at it as the summation of what we do over some period of time.
00:22:13
Speaker
Yep. Yep. And step back and thinking, where are we going with this? What do we actually want in life? What things are important to us and to our team as well? And you know, how do we, how do we sprint towards that marathon finish line in a way, you know, like, like daily hustle, but towards a proper direction? Yeah. Yeah. Yeah. And putting, you know, lots of people can run a sprint,
00:22:37
Speaker
and then kind of pay the consequences later. But the marathon is much more to do with everything involved from the physiological element, the mental element, the emotional element, prepping for having the right infrastructure, the team, knowing when to stop at the water station and where to keep going. There's a lot more to it than just closing your eyes, gritting it, and trying to bang out something real quick. Yeah.
00:23:09
Speaker
As you were just saying in the beginning of this podcast, 10 years ago, you started. So far, it's been a 10-year marathon. Do you feel like you're at the finish line or do you feel like you're just getting going? What's interesting is I feel more rejuvenated and more excited today than I did two weeks ago or six months ago.
00:23:33
Speaker
Seriously, I think, I always hesitate to use the word burned out, but yeah, I was ready to let Ed and Alex and others at the shop here kind of take over the Wednesday widget. I've made 200 and some straight.
00:23:50
Speaker
my passion. I used to see a CNC machine and just go bananas. This is so cool. I mean, I'm looking right now at your Dura vertical 5100, DMG more. That was the first vertical machining center I ever hit cycle start on. That exact one. That was this moment of just pure elation to me. I love it. And I still love machining and subtractive manufacturing. I still do, but I don't love it as much as I did at one point. I have to be honest. It doesn't
00:24:19
Speaker
When I walk into a shop for a factory tour and I see things that what I have to see to get me excited is it's a heuristic thing where the bar moves, right? Of course. Now, if I see a mill turn or a five-axis with automation next to a CMM, like military shop, that gets you fired up. But when you see a normal machine shop now, it's like, okay,
00:24:40
Speaker
Yeah, you know what, maybe it's it's in relation to knowledge. Like if we go into a old three axis shop, like we know what's going on, we understand that there's nothing new and sexy. Careful there, bud. Well, I'm just saying, but you walk into Mill Tera where there's like eight five axis machines doing stuff that we don't understand.
00:24:59
Speaker
It's exciting. It's like, what is that? What's going on? Tell me about this. Wow, look at this measuring device. I don't have one of these. I don't know it. But when you get super comfortable and complacent, you and I can just look around our shop and be like, yeah, this is our stuff. Whereas five years ago, we would have looked around and been like, oh my god, this is the coolest stuff ever.
00:25:17
Speaker
Oh my gosh. Yes. If I had walked into my own shop five years ago, I would have lost it. You're absolutely right. I guess I want to move back to being a little bit more of an outsider in that sense. I don't necessarily want to become the world's best five axis machinist. I want to be the guy who just continues to
00:25:41
Speaker
enjoy this and have fun. It's what I'm doing. When we get that UMC 750 in here, I cannot wait to start making parts. I don't care when people are like, oh man, you should have saved up and bought a more expensive machine. That's not what it is about. I can't wait to have this machine to do it. It's the marathon. It's part of our
00:26:04
Speaker
business plan from the control of the relationship, it makes sense and I get to have fun with it and the marathon's not over either. As Barry says all the time, it ticks all the boxes and as you said, the marathon's not over so it's merely a leg of your marathon and it's going to be an amazing leg and you're going to feel victorious going through it and it's a perfect choice.
00:26:33
Speaker
Yeah, I am super, super, super excited. Um, so when's it, when's it coming? You know, I kind of ask them, um, they said like a few weeks. I got the sense it could be on a truck at the end of this month. Yeah. So soon ish. Um, yeah.
00:26:55
Speaker
That is exciting. Yeah. So are you, I mean, I know you've got a lot going on with the, with your wife and everything, but is your brain kind of going nuts a little bit? Like, okay, I gotta get this ready. I gotta get this ready. I want to buy these vices and pallets or whatever.
00:27:08
Speaker
A little, but we have ... I'm so glad I had that TR200Y for the time we had it because it gave me the confidence and conviction. I'm not staring into the unknown, the abyss of uncertainty. I know what we want to start with. We've got one self-centering vice for now. I'm sure we'll get more stuff, but I'm not in a rush or worried about it. We've got some parts we want to make and have fun with.
00:27:33
Speaker
and we'll just take it from there. The UMC was not a casual purchase. I say that seriously, but someone was joking about like, oh yeah, okay, so last week you're like, yeah, oh, we bought a TM3P also, blah, blah, blah. We reinvest
00:27:50
Speaker
what we earn into this business, which is why we could do things like that. But I will also share to the folks out there who are on the fence about, do you want to focus on getting your business to a point where you're debt free? Let me tell you, the beauty of being debt free is the snowball effect of rolling retained earnings into future machine purchases. It is a powerful, powerful tool that is something that I, I'm not going to get up on my soapbox today on it, but in a year or two, when we're even in a
00:28:20
Speaker
better place, it's going to be freaking awesome. Back to reality though, I mentioned I think a week or two ago that we're cash crunch ish right now.
00:28:34
Speaker
I'd like to hear what you do about that or maybe it's a Barry thing. I don't know how involved you get, but managing cashflow and accounts receivable and accounts payable and what kind of a cushion you want and how you tie that into those Lakeshore orders and material orders and all that. How do you, do you guys chew on that or is it on autopilot?
00:28:56
Speaker
No, absolutely. We chew on it. We have fairly steady cash flow due to the way that we sell our stuff, but it is variable. Some months we'll make X amount and some months we'll make double that. Or not months, but a week to week for sure.
00:29:15
Speaker
We definitely feel cash crunch. I wait to order a $2,000 Lakeshore order until I'm feeling a bit more psyched. Unless it's time and I need them, then that becomes an absolute priority. Will you do something as contrived as saying, okay, I really want to do that Lakeshore order, so I'm going to throw up a knife that's ready to go and I'm going to assume that it sells. I'm going to earmark that money for that order?
00:29:38
Speaker
No, because we have, you know, several orders a day and it's money kind of flows. And we have we have a spreadsheet, kind of like you do, and Barry has evolved it to his own needs. But
00:29:53
Speaker
All the fixed expenses coming out, all the variable expenses, cash flow in the bank, cash at the end of the month, everything week by week by week looking forward so that there's no surprises. We know when all the credit cards are due and what the balances are going to be and just everything's on there. Then if you go, boom, I want to make a $2,000 Lakeshore order, you plunk it in and you go, how does that affect
00:30:14
Speaker
our cash. And that's been crazy helpful because you can then foresee, you're like, okay, I want to buy a tumbler and it's going to be 10 grand. When can we do that? Well, if things keep flowing the way they should, we can do it in three weeks or whatever. And that's kind of how we do it. And luckily, the cash lately, as we've gotten all of our outstanding credit cards and stuff paid off and personal debts and all that are clean now, which is squeaky amazing. Yes.
00:30:44
Speaker
Now we can actually build some cash reserves and buy cool stuff. No, no, no, no, no. You can build cash reserves end of sentence. Yeah. So that's my issue is that it turns what you just said will then unequivocally without fail lead to lifestyle creep. True. I'm just saying. But you just bought a UMC.
00:31:07
Speaker
Yeah, well played. Well played. But there's stuff you need. There's stuff you want. There's stuff that's just plain cool. We've got to be careful what we buy. Yeah. I have done well in life by putting myself on budgets. Even when you have a good day, make yourself feel poor. It affects you. It's a behavioral economics thing. Like I just said, I used to, well, for quite a few years,
00:31:36
Speaker
spend a lot more money at restaurants than I didn't have to, right? But I enjoy it. We go out for a lot of lunches or dinners, whatever. In the last month, partly because of all the things going on, I have done a lot more packing lunches, packing or making my own dinners at home, and it's symbolic. The total summation of that delta of buying the food and prepping it yourself versus going out to a restaurant, the summation of that is relatively low compared to
00:32:06
Speaker
earnings right here, but that's what it matters. It's a mental game. Yes. We've got a living room heater thing with fake fire light bulbs, and the light bulbs burned out. So Meg's like, can you replace the light bulb? So I go to the store and I'm like, okay, do I want LEDs? Because they'll just last longer? Or should I get the $5 box of regular bulbs or the $20 box of LEDs? And I'm like, ah, I don't know. So I just got the $5 box because I'm like, ah, it's just
00:32:36
Speaker
You know, but it's even on a micro scale. I still think like that. I'm just not throwing money at things because... Please don't ever lose that. Please don't ever lose that. No, of course. But it's hard because when you see... So I've had to move.
00:32:52
Speaker
are budgeting. We put out videos on it. There's NYC articles on this. We do a budget that's much more from a macro view. So across a year, maybe a month, I expect I'll probably sell this many fixture plates or memberships to the website, or this is what we earn from YouTube, whatever. It can be lumpy, but over time, as business grows, there's some element of stability, or certainly a portion of that is stable and a portion can vary.
00:33:22
Speaker
That is a complete disconnect from what you were just talking about, which is this lots of different words for it, but a weekly budget, a cashflow budget, a working capital budget. I have basically shifted the past six weeks to a complete focus on our working capital budget. I do it in Excel. I think it's something you have to do by hand. You've got to add in the rows and the columns. You've got to know
00:33:46
Speaker
Okay, I've got some accounts receivable coming in from a couple of customers and it's kind of funny, John, we now have five figures of receivables for companies and schools on fixture plates, which is exciting because it's a growth element, but it wasn't something I had to deal with months ago. Of course. So when do I think I'm getting paid from those people and how does that tie into
00:34:08
Speaker
how we're handling the operations of this business. So I have my accounting side and I have my like year end budget that I think we're gonna do for 2019. But then really what I live in every day is. Absolutely. And that sheet started with like 15 rows and I'll open it up right now. The number of, so each row would be like a AR or AP or something that now has 57 rows in it.
00:34:37
Speaker
But it helps. Of categories that you can put information in. No, just like individual things. So like down payment for the UMC 750 or the deposit. And then we had to repair a machine system parts for that. I'm expecting to buy something next month and line item for that. Selling something or receivables. We have taxes come in for our building. All that stuff is now
00:34:59
Speaker
on this sheet. It lets me do a cash forecast to understand. Absolutely. It's not hard. It's the simplest math, but oh my gosh. It's not hard after you've done it. If you show it to somebody, explain it. They're like, oh yeah, that wasn't hard.
00:35:15
Speaker
It just takes time to evolve. You need the idea. You need the spark. You got to get started. And then you got to populate it and keep it going. And then it becomes a living organism. And I see that with our cash flow chart, too. And it's got everything you need right at your fingertips. I can look ahead four months from now and know that if we make the same amount of money every month, then all these expenses come out normally, payroll, taxes, things like that.
00:35:38
Speaker
then there should be this much cash in the bank or not. Then if we make a huge purchase here versus here, it affects that down the road. It's like short-term and long-term planning put together. Remember, I don't know, six months ago when you and I had a really good talk about how goals are complete BS and we're in our
00:35:59
Speaker
worthless, whatever. It's a little bit extremism, but the point is not the goal. The point is what do you have to do between now and the goal to reach it? What is that execution plan? This is that execution plan. When people are like, how could you ever end up with X amount of dollars in the bank account? That's crazy talk.
00:36:15
Speaker
Well, it's that stupid thing. Everybody says, I want to be a millionaire. It's like the easiest thing to say. Do you know how hard it is to actually personally have a million dollars after tax in your bank account? Oh my gosh. It's like an insane amount of money. But it's so easy to make that goal. You know what I mean? Oh, sure. But John, you are 100% cop. I would never place a bet against you on that.
00:36:41
Speaker
Absolutely. My point is, if I made that goal 10 years ago, I did not think it would have taken me 10 plus years to even get there. I actually still have this in my wallet. Let me pull it out and show you. I used to live in America. This is an American $1 bill.
00:37:04
Speaker
that I sharpied on. The one is now $100,000. I taped this to my ceiling in about 2005, like above my bed, so I'd wake up and look at this.
00:37:17
Speaker
To this day, I still don't have $100,000 in my personal bank account. But one day, it will not too distant future. We will. And I have full confidence in that. That said, we have had that much in our business bank account. And it's like, oh my god, it's working. Yes, John, yes. I've never seen that much money in my entire life. And now it's flowing through the business. Yeah.
00:37:39
Speaker
So the working capital thing to me has morphed into this capital planning tool as well because I think about tool presetters and CMMs and automation and dare I say a lay, then you start to realize, okay, I can now make more rational
00:37:55
Speaker
planned decision making around those things instead of the very emotional and roller coaster thing of like, oh my gosh, we're having a problem with a part. I wish we had a CMM today. So I should really just email that guy and get a quote back. No, no, no, no. Plan it out and look and say, you know, again, like how would you get to this kind of money?
00:38:16
Speaker
How would you get to that level? The thing I like about this is it's unlike budgets and unlike business plans and other forecasting tools, it's not possible to fib on a cashflow because you're not – It's real. Yeah. It's real, exactly.
00:38:38
Speaker
Yeah, it's, you know, sometimes events are predicated upon an instant desire, like our Tumblr broke, maybe it's time to get a new one and a better one. And now it's time to like, invest the real money in something. But a lot of times, you can't always see that stuff coming. But it's really nice when you can, you're like, okay, it's time, let's do it. I know exactly the one I would want. I've done the research, let's just jump on it. Yeah. Well, so that's a good point, too. I don't do hours,
00:39:07
Speaker
completely, perfectly, or honestly, in the sense that I basically look at most of the stuff that I know is going to come in, like actual AR. So those are sales that we haven't had anybody default that I can think of ever. And then a relatively low baseline for revenue, but then I don't include... So it's basically more of an actual
00:39:30
Speaker
In other words, we sold a, what did we sell yesterday? I don't remember what model, but a fixture plate. Well, that wasn't in there. And if it was a cash sale or like a website sale, I don't even include it type of thing. So meaning I also don't include a line item for, you know, Hey, let's allocate. It's kind of crazy, but I mean, a thousand dollars a month, John, isn't that crazy for depreciation or repair expenses. That's only 12 grand a year. I don't do that because this isn't driving us to a zero. Like this isn't that tight.
00:40:00
Speaker
Exactly. And I don't like turning this into a theoretical thing of like, what's a good month of sales? Or what if we really had a bad outcome? This is more just when those things come up, I know how much cushion I got.
00:40:12
Speaker
Well, and what Barry does is he looks kind of historically, last few months, like how much is John spending on end mills and tooling and stuff. So he kind of plunks in, OK, every month we're going to spend $2,000 on tooling, whatever it is, so that he's not scared anymore about anything. It's just like, oh, this is not a surprise. Of course you're going to make a literal order. And of course it's going to be $2,000 every now and then. And it's no worries anymore. Right. Yeah. It's a good way of tying back into how we started this conversation, which is also
00:40:41
Speaker
as you grow, it'll become more important to know how much tooling do I have today? How close are we to needing a reorder? Those numbers get bigger and it ties back to into the Freedom's Forge, those guys for their era of time. Well, obviously, way before computers or EHR
00:41:01
Speaker
ERP systems and so forth. Their ability to win government bids and be profitable and sustainable based on information and culture and work ethic and policies is this kind of stuff. It's core to what a business is. Unfortunately, Grimsman Ives for you is probably more about these systems and processes than it is about Timascus.
00:41:24
Speaker
Yes, I agree. It's that whole working on your business, not in your business. And the more you and I can be better about that and even share as much as we can through the podcast or YouTube videos or whatever, the stronger we're going to be at it.
00:41:40
Speaker
Yeah. The other funny thing is I was going to bed earlier and earlier. I'd watch some TV. I'd get so tired. If I'd started watching this show at 8.45, man, by 9.15, 9.30, I'd be exhausted. The past three, four nights, I've stayed up reading with energy till like 10.30. Nice. It's totally unexpected. Then I could still watch a few minutes of TV and I'm like, hey, I just found some free time.
00:42:07
Speaker
Yeah. I love it. Do you go through cycles like that of waking up or going to sleep at different times? Are you pretty, pretty consistent? Consistent. Yeah. Yeah. I think for the past few years, I've been trying to go to bed earlier, like, you know, 10, 11.
00:42:22
Speaker
uh, a clock and then wake up, you know, around five or five 30 or something. But past few weeks, it's been like, I'm up till, you know, 11, 12, one, two in the morning. And then I kind of wake up when I need to get the kids to school or something. And yeah, it's okay. Cause I'm certainly getting a lot done at those times, but, uh, or sorry, you go, are you not like goofing off a bad thing? Are you working till one or two? Or are you? Sometimes you just get into it and you're like, I need to keep going.
00:42:49
Speaker
Oh yeah. No, that's totally, I'm with you there. Yeah, absolutely. But yeah, it's interesting. In a way, I feel less in control because of that. You feel less in control because you let yourself subject yourself to the whims of staying up late. Exactly. I let myself be guided by my insatiable desire to do something as opposed to like being in control and being like, no, I'm going to go to bed early. I'm going to wake up early with purpose and crush it.
00:43:17
Speaker
And then like I'm a little bit groggier because of it and not, you know, not sleeping as well. I'm getting kind of stiff and sore because my sleeps are weird now and little things they add up, you know. Yeah. And that's where I really enjoyed the
00:43:32
Speaker
theme that we've talked about some, which is this kind of like military or discipline attitude of, no, John, I don't want to hear about it anymore. Cut it out, stick, have the self-discipline to put yourself to bed, tuck yourself in when you need to, because it's not about you anymore. It's not about your whims of grinding through a fusion probing routine at midnight. It's about you being there for your wife, your family, your kids, the business. Cut it out.
00:43:58
Speaker
and being my full best, happiest, energetic self. Yeah, absolutely. Oh, yeah. So what do you see today?
00:44:07
Speaker
Lots. Saga pen stuff. Making saga pen stuff. Super excited about that. Things are going really well. Trying to make 50 of every component for the first little batch, just to get everything dialed and put it together. Easily made 63 of one of our components yesterday, so that was good. Awesome. And then we've got this, I've got this tool life macro on the Maury that basically, at the beginning of the code, it says, oh, your tool's worn out. Replace it now. But with two palettes,
00:44:36
Speaker
It does it before the first palette and before the second palette, like three and a half hours in. Okay. So normally I can look ahead and like prepare for it, except I didn't, I replaced the tool, but I didn't set the counter down to zero. So I put on two palettes last night late and I'm like, yeah, super excited. It's going to be good. And then I get in in the morning and it says tool aid worn out first palettes finished second palette hasn't even started. And I'm like, no, I replaced the tool. I just didn't tell the machine that I replace the tool.
00:45:03
Speaker
So get the pallet going first thing. And then is there a way to tie those together? Like when you replace the tool, have an auto reset that. Oh, yes. We're checking the height change. I don't know if you want to base on a height change because it's a good question. Coincidentally be the same height. I could do that. Of course I could do that. Just build it into the tool setting routine, the macro.
00:45:30
Speaker
Or perhaps not have it trigger a action, which requires you to confirm or deny. You want to reset that would be sick. I love it. I'll see if I can, I'll see if that makes sense. Good. Yeah. Yeah. Sweet. That's the stuff like in freedoms forge. I feel like where they're like, we're, we're on time for like, like we got to, this has got to work. Let's do it. You know? Yeah. I like that. Okay. Good. Good. That's awesome. What are you up to today?
00:46:00
Speaker
Um, the folks from helical tool are here kind of on their own. We're not really doing much. They brought, they shipped all that titanium. So the folks that saw the Instagram posts, that's not our titanium, but it's was 11 or 13, like six by six by seven cubes of titanium. That was, it was a lot of titanium and they're doing some, uh, tool testing on a tool, just about coatings and geometries and grinds. So, um,
00:46:29
Speaker
I like it. It makes me happy. It was part of also what inspired that post when I left the shop last night. I was just like, hey, we've got this reputation. There's a tooling companies coming to us. They're using our shop. They're like, you have a beautiful shop. We're not involved with them. I mean, they're going to throw us a couple of tools as a thank you, but we're not charging the forward. They're just here to borrow some spindle time, to do some testing.
00:46:52
Speaker
I like that. That makes me feel part of this community. It's fun to nerd out, to talk about these things. They're here for the rest of today. I'm doing a Wednesday widget for the Fusion Cam Challenge. Pretty cool workflow. I had to bang out a set of cufflinks for a
00:47:09
Speaker
charity event on Saturday, which is actually for the local community college that has really helped us in terms of resource pool and the machinery and manufacturing world and all that. It's been a good kind of relationship. And so I wanted to make a set of cufflinks for a couple of the folks that are at that event. And I literally was like, I want to do this in a fun way, like not stress, don't have them muck up one and done. And the tape plus super glue plus tabs plus surface finishes, it all just like came together.
00:47:39
Speaker
Yes. So I made these on Saturday. They went great. I chose not to film them on Saturday because I wanted to just focus on getting them done. And then I thought, I'll come back and make another set on camera this week. And of course, the set I made on camera, I had two mistakes on. I'm like, come on, you got to be kidding me. I already did this successfully. Why does it now not work great on camera? My mistake on those. But I think it'll be a fun little video. And
00:48:05
Speaker
what Audra does says on the cam challenges is pretty cool too for kind of raising awareness and actually some pretty good prices this time too. Yeah. Nice. Until someone like Marv enters and makes a mirror. Yeah. I don't know. Did you say that? I don't think they like my, my, me trying to make the word kerning a thing when someone currents. I'm like, guys, it's a compliment. Seriously. Yeah. Yeah. So that's all I'm up to. Sweet.
00:48:33
Speaker
Sweet. Uh, anything else? No, that's it. Good. Good. Awesome. I'll see you. Until next week. Take care. Okay. Take care. Bye.