Metalworking shops are key to North America’s success — and more need to go into business

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Metalworking shops are key to saving North American manufacturing, but a new wave of entrepreneurs need to answer the call. PHOTO courtesy Okuma.

by Jason Lengyel, Director of Business Development at Master Fluid Solutions

The reshoring movement has become a major strategy consideration in Canada and across North America since the turn of the decade, fueled especially by supply chain disruptions and geopolitical tensions of the past few years.

Canada’s reshoring efforts place significant focus on reshoring industrial machinery and medical equipment manufacturing, both of which are key to the supply chain and economic security at the heart of the movement. At the same time, the Canadian manufacturing base is also expanding from the similar nearshoring movement.

This manufacturing sector growth is crucial to increasing industrial capacity in Canada, but it can’t succeed without support from auxiliary industries. Among them, metalworking shops are key to saving North American manufacturing, but a new wave of entrepreneurs need to answer the call. The trailblazers who step up have an incredible opportunity for success — and could transform the Canadian economy in the process.

Why Metalworking Is Crucial for Domestic Manufacturing Success

The metalworking industry quite literally makes the world move.

Metalworking shops comprise a significant portion of the tier 1 and tier 2 supplier markets that original equipment manufacturers (OEMs) rely on for their essential components, assemblies, and precision parts. Without this support, OEMs wouldn’t be able to focus on their core competencies, creating bottleneck productions, hurting quality and even depressing innovation. What’s more, without local metalworking shops, OEMs would have to continue sourcing from international suppliers and struggle with supply chain vulnerabilities the reshoring movement is meant to address.

It’s safe to say that small metalworking shops are as vital to the North American manufacturing sector as the globally recognized OEM brands people associate with the industry.

4 Critical Steps to Succeed in the Metalworking Business

As the reshoring movement picks up steam, opening a metalworking shop places you in a position to be a vital part of manufacturing recovery. This is what it takes to launch your business:

1.    Identify your niche

The first step to starting any business is to identify the niche you want to work in; a metalworking shop is no different. Research the industry landscape and market demand to understand where your shop can excel. The automotive, medical, or aerospace sectors each have specific requirements you will need to tailor your capabilities and offerings to — as well as specific regulatory requirements and industry approvals needed to supply to specific OEMs.

Capture all of these insights and plans in a comprehensive business plan. This will both guide your operation and serve as a tool to attract potential investors and lenders. Resources like Canada’s Business Benefits Finder can link entrepreneurs to valuable guidance, financing, and other support throughout this process.

2.              Set up the location

It’s essential to open your business in a strategic location near companies in the niche you aim to serve. For example, if your focus is on automotive parts and components, it might make  sense to set up shop in Ontario, where it will both shorten the supply chain and be easier to foster relationships with potential clients. Also worth considering are the tax implications and regulatory environments of your domicile of choice before starting your company. Strategic location selection will have a significant impact on your shop’s competitiveness, growth opportunities, and overall success in the industry.

3.              Secure funding

Consider the available options for gathering the capital you need to open your business. Instead of self-funding, consider taking out loans from banks and other financial institutions, finding investors who can foot the bill for startup costs, or even crowdfunding from your community. Fortunately, the reshoring movement could promise significant ROI for investors, so depending on your connections, it might be easier than in previous markets to find financing. The Canada Small Business Financing Program also offers loan programs specifically designed to support entrepreneurship, including starting metalworking shops, with favorable terms and assistance in navigating the loan application process.

4.              Hire the right people

The quality of the parts your shop manufactures will directly reflect the expertise of the machinists who produce them, so hiring well-qualified and talented employees is crucial. Of course, it can be challenging to find skilled and dedicated workers in today’s labor market, making it essential to incentivize employees’ strong performance and loyalty.

Creating a positive work environment where employees feel valued, motivated, and engaged is key to attracting and retaining top talent. You can do this by investing in workers as both individuals and professionals, providing educational opportunities, and high-quality training that equips them with new skills needed to advance in their careers. Not only will this improve retention and workforce engagement, but it could also help your company achieve more growth and profitability. The quality of the people you hire (and what you invest in them) will directly impact your company’s productivity, efficiency, and competitiveness in the industry.

The Future of Metalworking 

There’s no way to predict exactly what the domestic manufacturing landscape will look like once reshoring and nearshoring efforts get into full swing. But we do know what the industrial sector looked like in the past: an incredibly robust OEM market, supported by tens of thousands of smaller shops, all enriching workers and their communities across the country. Better days are coming for the domestic manufacturing sector, and entrepreneurs who step up to open their own metalworking shops will play an essential role in supporting it.

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