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Apr 2025
1h 4m

Funding Your Dream Shop: Creative Owners...

MakingChips LLC
About this episode

Dreaming of owning your own machine shop but hitting a wall when it comes to the money? You’re not alone—and you’re definitely not out of options. In this episode of MakingChips’ Machine Shop MBA series, host Mike Payne sits down with Jon Hughes, Principal and CFO Consultant at CliftonLarsonAllen (CLA), to unpack what it really takes to fund a manufacturing business in today’s economy.

Too many would-be shop owners assume they need a mountain of cash sitting in the bank before they can even begin. But what if we told you that buying an existing shop—yes, even one with tired machines and outdated systems—could actually be less risky than starting from scratch? What if seller financing, SBA loans, or creative capital stacks could unlock the dream faster than you thought?

This isn’t just about borrowing money—it’s about funding your future wisely. From assessing your own personal runway to building a mixed financing strategy that includes banks, lines of credit, equipment lenders, and even friends and family, this conversation goes deep. Mike and Jon cover the practical tools every owner should use (hint: you’ll want to Google “13-week cash flow”) and how to present a rock-solid financial plan that banks will actually take seriously.

If you're wondering how to turn your machining expertise into a business that’s not only viable—but scalable—this is the episode to hit play on. Because if you’re not MakingChips, you’re not making money… but if you can’t fund the shop, you can’t make chips either.

Segments

  • (00:00) Why funding is the next step in your Machine Shop MBA journey
  • (0:21) Learn how to grow your top and bottom line with CLA
  • (1:36) Introducing Jon Hughes and his role helping manufacturers at CLA
  • (3:49) The two big funding buckets: operations and equipment
  • (08:18) The case for buying a shop over building from scratch
  • (12:16) Seller financing explained: benefits, risks, and how it works
  • (19:12) The reality of personal capital—and when to tap family, home equity, or personal loans
  • (24:58) Bank loans vs. SBA loans: how they differ and when to choose each
  • (31:40) Why you need to take the Modern Machine Shop Top Shop survey
  • (33:23) What can and can’t be financed—especially when it comes to equipment vs. working capital
  • (35:18) Determining how much working capital you really need
  • (39:54) Cash flow crunches: how a 13-week forecast can keep you afloat
  • (46:32) Planning for the unexpected: best-case, worst-case, and baseline budgets
  • (49:20) What a blended funding structure could look like
  • (54:35) Using equipment financing and lines of credit creatively
  • (57:20) Final takeaways + the importance of building your financial advisor network
  • (1:03:00) Why you have to check out the Machine Shop Mastery podcast

Resources mentioned on this episode

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