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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017


Machine Shop SWOT Analysis

 

Strengths

 

The demand for machine fabricated parts for usage in construction and industrial applications generally does not change during times of economic duress. This is especially true in areas that have a number of real estate developments occurring at any given time. The gross margins for a machine shop are moderate. Companies that do exceeding well in this industry often have a number of high end CNC machines that allow for the precision development of parts and products. The barriers to entry for a machine shop are relatively high given the substantial capital investment required to start one of these businesses. A typical machine shop costs about $250,000 to launch operations. In many markets, the competitive issues facing these businesses is limited.

 

Weaknesses

 

Machine shops have moderately high to high operating costs. Typically, a stand alone facility is needed to house all of the equipment needed by these companies. Also, the revenues of machine shops are subject to mild fluctuations in the economy. If manufacturing or housing construction industries experience a decline in their revenues, so do most machine shops. However, the gross margins generated by these businesses often ensure that they are to remain profitable at all times. Competition among machine shops is usually moderate.

 

Opportunities


Lately, one of the ways that machine shops have expanded their operations is by providing 3D modeling services to their customers that have unique fabrication needs. The high gross margins from model fabrications can be significant. Additionally, many machine shops now offer their customers the ability to send plans online so that parts can be made and sent anywhere in the world. A machine shop can drastically expand its market reach by offering these services to the general public and companies.

 

Threats

 

At this time, there are no known threats that would impact the way that these companies conduct business. The primary threat faced by machine shops are competitive issues.


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