$300K - $500K machine that can be put to productive use immediately?
May 6, 2016 7:01 PM   Subscribe

Say one wanted to invest money in a capital intensive small business. What is one that requires at a minimum $300-500K of fixed cost machinery to start, but that is in high demand so that machinery will be used right away to make money?
posted by mtstover to Work & Money (23 answers total) 7 users marked this as a favorite
 
Does this assume someone relatively unskilled can operate it or will a skilled person be hired?
posted by stoneweaver at 7:08 PM on May 6, 2016


A number of analytical chemistry items (eg mass spec) could fit this bill but you're going to need someone with experience.
posted by Kalmya at 7:12 PM on May 6, 2016 [1 favorite]


Photo printing. There is a business in my city that prints on photo paper, canvas, brushed steel, and acrylic prints. 3-4 big machines.

I visited their office early in their startup. Rented space in a light industrial building. Seamless web presence. Owners doing everything. The printers, space, and web presence would probably cost that much.

My sense is that in most such businesses, if the capital cost is 100k, you have to have another 100k in operating budget to get it off the ground and cash flow positive. Having the gear is only half the problem. You have to market it.
posted by thenormshow at 7:15 PM on May 6, 2016


High-end 3D printers, like Objets. An acquaintance has a workshop with several of these, and they run 24/7 making props for movie sound stages.
posted by scruss at 7:22 PM on May 6, 2016 [1 favorite]


Pattern making. Big, expensive CNC machines that skilled operators use to make a small number of wood or metal parts that are in turn used as molds or patterns for fiberglass, plastic and so forth.

I'm not sure there's an expensive machine one can buy that just magically causes customers to show up and pay to use it. (If there was, it would certainly be more expensive to buy, just because of that property!) IME (and by common sense), an expensive, capable machine requires a highly-skilled operator to get the best results and to avoid breaking it. So you should budget for that operator.
posted by spacewrench at 7:23 PM on May 6, 2016 [1 favorite]


MRI.
posted by littlewater at 7:41 PM on May 6, 2016 [6 favorites]


screen printing and embroidery equipment would do it. Both processes take skilled operators, but there are people who know how to operate it (and several firms doing it) in most cities of ANY size. Selling decorated garments usually requires both of these types of equipment (you can do one and farm out the other, but if you sell one people will ask for the other). Sales cycle is pretty quick, i.e. you could set up shop and be selling and fulfilling orders within, say, several weeks, if you know how to market the product (or hire someone who does).

Major caveat is it's a highly cost-competitive business.
posted by randomkeystrike at 8:32 PM on May 6, 2016 [2 favorites]


as others have mentioned, I don't know if this is a cocktail party question or the beginnings of a business plan, but you'll need to view the equipment purchase as only part of the budget - you'll also need payroll, rent, marketing, etc. etc. etc.
posted by randomkeystrike at 8:34 PM on May 6, 2016


Lighting equipment for stages and conventions, including the lighting board.
posted by WalkerWestridge at 8:55 PM on May 6, 2016


A unique game for big corporate meetings, trade shows, carnivals, etc.
posted by michaelh at 9:09 PM on May 6, 2016


I imagine a machine for doing aftermarket waterproofing of electronic devices like smartphones would cost a lot, maybe in that range.

In case it's relevant, it should be noted that most small/new businesses probably lease such equipment or buy it with a loan rather than buying it outright.
posted by OCDan at 10:00 PM on May 6, 2016


In the most literal sense of 'make money' and 'productive use' -- a lot of things. Pretty much anything that you can buy and use to produce an item or unit of work with a non-zero value.

If "make money" means 'be a profitable investment (immediately)' rather than 'generate more than $0 of revenue,' well, that's a harder question.
posted by snuffleupagus at 10:31 PM on May 6, 2016


Laser tattoo removal machines look like they're pretty pricy and many states don't require medical training to operate them. The cosmetic surgery industry in general seems to be exactly what you're talking about. A suite of lasers, cryolipolysis (CoolSculpting) and other fat removal machines would be expensive yet also likely begin generating revenue quickly assuming you had trained personnel to run them.

Cryotherapy is another fad/health treatment that seems to have steep up-front costs per machine. I doubt they're more than $100k each, however.
posted by scottdavidsanders at 10:40 PM on May 6, 2016


Laundromat chain
posted by zippy at 1:15 AM on May 7, 2016 [8 favorites]


A NGS machine going by the demand criteria. But stoneweaver &al. upthread have an important point; once you have a machine, you'll need:

- rent/business-licensing-fees
- payroll/consumables/raw-materials
- marketing/billing/customer-service/delivery

In the case of MRI or analytical chemistry equipment (and the clinical use of NGS) you'll need relevant certifications (ie., ISO 13485, DAP) that may require additional renovations/certifications/QA-manager/regulatory-affairs-manager/board-certified-medical-doctor and you'll need to get your machine(s) validated by a relevant certification body. You can only skimp so much on payroll before you can't retain anyone but incompetents.

At the sunk cost of certification, it doesn't make sense to go through all that for $300-500k of equipment. Starts making more sense at the $2-5M+ mark. Fools game to get into NGS now, though.

I like zippy's idea, but the value there may be more on the real estate side (speculation on a soon to be gentrified area) and the machines paying the mortgage.
posted by porpoise at 2:35 AM on May 7, 2016


I'd suggest a bottling or canning line for a microbrewery. This would fairly quickly bootstrap a small brewery into packaging for larger distribution, and can be done on a contract basis to ensure it is highly utilised.
posted by sagwalla at 2:51 AM on May 7, 2016 [4 favorites]


Does it have to be "machinery"? If not, a buy-to-let/rental property could meet these criteria (with lower risk and less effort, but smaller returns, than most alternatives above).
posted by James Scott-Brown at 3:41 AM on May 7, 2016


Car wash.
posted by JimN2TAW at 4:24 AM on May 7, 2016


Like sagwalla said, around here there's a guy with a canning line in a couple of trailers, he comes to your location and sets up in your parking lot. He cans for brewers without canning lines.
posted by fixedgear at 5:40 AM on May 7, 2016 [2 favorites]


Laundromat.

Those places mint money!
posted by Ruthless Bunny at 6:38 AM on May 7, 2016


How much do construction cranes cost? How much does it cost to rent them out?
How much does it cost to buy a heavy-duty tow truck - the ones that rescue buses and cement mixers?
How much does it cost to buy an 18-wheeler tractor-trailer, and how much can you make driving one?
There is some very expensive software for doing big data processing tasks like bioinformatic analysis, tectonic analysis, statistics, video rendering, airflow analysis, weather modelling, and so on. Could you set up a server and rent time on it?
I like the idea of setting up a laundromat next door to an internet cafe, so that people can start their laundry, get some coffee and a sandwich, and then catch up on their email. This could be especially viable in places with lots of tourist and backpacker traffic.
Cryogenic hardening is a specialised form of heat treatment. I imagine that that equipment must be very expensive - how much demand is there for it? How much demand is there for specialised machining and heat-treatment in general?
thenormshow et al make a good point - once you have the equipment, you also need to consider the cost to operate it. (Especially if you need to hire specialists to run the equipment.) You also need to consider where you are going to operate. For example, the area around Washington DC is saturated with print shops, and Nashville is saturated with sound recording studios, but is there any place where the demand for, say, electron microscopes or TIG welders exceeds the supply?
posted by Multicellular Exothermic at 9:28 AM on May 7, 2016


Is healthcare okay? An interest in dialysis, endoscopy or radiology/MRI equipment might be in your ballpark.
posted by klarck at 6:03 PM on May 7, 2016


a capital intensive small business.

As someone who's spent most of his working life at semi-capital-intensive small businesses, my first question would be if you're interested in investing in an already existing business, or whether you want to start from scratch (even if this is just theoretical.)

Because lots of small businesses that already have clients and orders and reputations could certainly use a big influx of cash to buy equipment to increase productivity and start making money immediately - there are a ton of "small" manufacturers (going by the general SBA definition of "less than 500 employees") making all kinds of stuff, machine shops, print shops, industrial/specialized repair shops, so on and so forth.

But if you're looking for something where you buy $500K of equipment and the world beats a path to your door just because you own the equipment, that's a much narrower list, if not nonexistent. Equipment/machinery per se does not tend to generate business without an already existing client base, or someone to market to the potential client base.
posted by soundguy99 at 10:32 AM on May 8, 2016 [2 favorites]


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