My PTM project is starting!

Did you remember the investment I was introduced to two months ago? Renting a place+machinery, to make some extra money?

I almost cancelled the deal last month when I went to see how the old man was working, and I saw that he was working at 500% his capacity, to produce months and months of “advance” work for my future Customers, attracted by a strong discount.

So, like an idiot, I would have found myself without ordersk for months, and maybe the customers would have asked “everything must go” discounts as he did!

In the end, however, we changed the economic terms, and here I am, ready for this new adventure!

The terms we agreed: € 300 per month for renting this room + several hundred euros of “free” raw materials (ie: as a refund of damages). Regular lease agreement with a duration of 4 years.

The problems started right away: the old man told me “I gonna teach you all about manufacturing” – but he barely just knows how to turn on the machine! The workmanship was totally handled by that employee, who found another job! That’s why even though the processing is “very simple”, he decided to sell everything!

So I had to call that employee and give him 40 euros to have a quick crash course.

Second problem: the work is not “simple” as he stated – the 2-3 hour crash lesson from ex-employee was not enough – I wasted a lot of raw materials to do the experiments! Luckily they were “free”.

So the first month was like this:

Expenses:

  • 300 per rent
  • 40 “lesson”

I got very small orders:

  • 98 euro
  • 40 euro
  • 10 euro
  • 10 euro
  • 20 euro (This was hard! In order to find the right parameters I wasted like 100 euro of materials!!!)
  • 67,5 euro
  • 25 euro
  • 10 euro
  • 150 euro (but also this order was hard, I wasted a lot of stuff……)
  • 90 euro
  • 10 euro
  • 200 euro
  • 30 euro
  • 10 euro

Total for first month: 770,50 euro made, 340 euro spent = 430 euro profit

Not bad!

What about a traditional investment?

Five years ago, a family friend, business owner, wanting to retire, having no sons, asked me to take over his company for 25000 euro.

Taking a look at the account book, the balance was very good, but including taxes, wages of many employees, the fact that I had to give up my job, it was a commitment too big for me.

In addition, at the time I was “full retard” from Forex, and all I thought was “well, if I had this money, I’d invest it with some EA, in a year I would be a millionaire” and “anyway in a few years I will be a millionaire, it’s useless to waste time” .

The years have passed and, because of his health, the company has been resized. Now the production is run by a part time employee. He doesn’t search anymore for new customers, in order to work more slowly and he has sold nearly all the machinery, leaving only one production line. Requiring less space, he stopped to rent his commercial space and moved into a tiny room in his property, saving thousands.

Instead my Forex investment, had a positive but very small return on investment, not the millions I dreamed in the beginning!!!

On Friday he invited me to see how his business works.

Starting from the raw material, the machinery, semi-automatically the product with the customer’s specifications. Customers, who are producers of furnishings, integrate it into their solutions and sell it to the public.

So he has a dozen clients, who make large orders once a month: he doesn’t make thousands of Euros, but also he works a few hours a day, I could easily fulfill orders in my spare time.

In a week his last employee will go away, so he told me this proposal: I would rent his room, including machinery and customer base, with a long-term contract and then manage orders by myself, keeping the earnings.

I am a bit scared of making a long-term contract and also on the bureaucratic side, but it is enticing to me.

What to do?