High-Speed Investments in Action
Growing Your Business by Expanding Your Capabilities
One of the easiest, yet hardest, ways to help your business grow is to reinvest the profits in new machinery. Easy, because if you have any kind of a competent business manager or tax consultant, they will get you major tax benefits from reinvestments. Hard, because buying a new “toy” instead will usually offer a lot more short-term gratification than a new piece of capital equipment.
However, truth is, that new Corvette will start depreciating the second you drive it off the lot, costing you money. A new machine, on the other hand, will probably pay for itself in a short period of time – and continue generating more new income as time goes by.
Action Mold is a perfect example of a privately owned company whose owners have continually turned their profits back into the company to increase not only their capital worth, but their diversity and ability to generate even more profits.
Located in Anaheim, CA, Action Mold is a one-stop shop for plastic injection molding that specializes in getting parts from concept to finished product quickly. The company is co-owned by Bill Hall, who heads up sales, and Steve Burd, who is in charge of the shop.
“We started the business about 6 1 / 2 years ago,” says Bill. “At the time, we used to just call it the ‘Bill & Steve Show.’ Steve was building the tools and I was at the press making the parts and selling the jobs.
“We started the business about 6 1/ 2 years ago,” says Bill. “At the time, we used to just call it the ‘Bill & Steve Show.’ Steve was building the tools and I was at the press making the parts and selling the jobs.
“We would sleep in the shop watching the machines . . . the traditional story that you always hear about the poor saps with nothing going for them but their need to pay the bills,” muses Bill. “But over time, we’ve been pretty lucky, and we’ve built a pretty strong customer base representing probably 12 different industries. Because of this diversification, we find that somebody’s always busy, so there’s always a project to keep Action Mold working.”
Steve and Bill were originally co-workers who saw a future as partners. When the company they worked for gave them their freedom through a massive downsizing, they were thrown into “action,” and the rest is history. Luckily, their history proves to be one of success, but only because they put their company in front of their own personal material desires.
“We are partners . . . 50/50 partners since day one,” explains Bill. “We share all of the liability and we share all of the profits. We have returned 50% of all post-tax dollars back into the company and will continue to do so. What we find is that a third of your income goes to taxes, you get to take a third home to pay your bills, but the other third goes back to the company.”
One look at the Action Mold shop floor and it’s easy to see where this reinvestment is. “We call ourselves ‘Negative Millionaires,’” explains Bill with a laugh. “Because we’ve got it all out here. This is our future and we’re very happy. In fact, when you go out into our shop and see our equipment, it’s nice to know that 98% of that equipment is paid for. We don’t like debt. Debt scares us, in our personal life as well as in our business.”
SHOP FLOOR SUCCESS
When it comes to machines, it’s Steve Burd who is the soul of the toolroom. “Back when we started up, many people came to us simply because they wanted Steve to build their molds,” says Bill. “He’s been building tooling for over 20 years, now, and I’ve been selling for about 10 years.”
It’s Steve who does all the research and decides which machines are put on the shop floor, and he picked out the Haas equipment. “Those two Haas machines are workhorses,” he says.
When the two partners decided it was time to place the first CNC on the shop floor, they went to their local Haas dealership. “We had a little money and went to MTS (Machining Time Savers) in Anaheim, California,” explains Bill. “After deciding on our new machine, we went to nine different banks. I went to my mother. I tried every way I could think of to borrow some money, and nobody wanted to give me the money – and we had the 50% down!”
The banks said, “You’re too small. You haven’t been in business long enough.” So the partners went back to MTS and arranged for financing through them. “We made that payment every month, and we sent those guys a nice thank-you at the end,” remembers Bill.
“When it came time to buy the next piece of CNC equipment, we naturally went back to MTS,” Bill continues. “We knew that Haas was the way we wanted to go; we picked up a VF-1. At that time, however, our finances were a little bit better, I think we bought that one outright!”
Action Mold has continued to grow and become more profitable by enhancing it’s ability to diversify through the purchase of new machinery. One of their most recent purchases is a Haas VF-0 equipped with the new 15,000-rpm spindle and High-Speed Machining options. “This is the one that is totally groomed for electrodes and graphite,” explains Steve.
The new equipment came into immediate play when Action received a large mold order from Team Losi, a premier manufacturer of radio controlled race cars.
Steve knew an equipment upgrade was needed to manufacture the molds and parts efficiently, and the new high-speed Haas was scheduled for release about the time the Losi job was scheduled to start. “I called up Brian (the sales rep at MTS) on a Wednesday, and we bought the machine Friday. I mean it was like bam, bam, bam!”
HOW FAST ARE YOU GOING?
Action typically machines their molds in stages: First, they rough out some of the steel on a Haas machining center, then they use a roughing electrode on an EDM machine to burn the mold to a near-net shape. Finally, they use a finishing EDM electrode to complete the mold. The graphite EDM electrodes are also machined on the Haas machining centers.
“When we got this package from Team Losi, I knew we were going to be under the gun for cutting steel and cutting electrodes,” says Steve. “Because these parts have a lot of geometry and a lot of small radii, it was almost easier to just give up in the very beginning and figure that you’re going to burn the whole thing,” he explains. “You go in there and you rough out a little bit of steel, as much as is convenient, and then you make a couple of roughing electrodes and a couple of finishing electrodes.
“Now, with the new high-speed spindle and software, we can make the electrodes so much faster. It isn’t like in the old days where you were on the mill and the grinder and all over the shop. Now you just plug it in, you hit the button and, at most, a couple of hours later, you’ve got the electrode.
“That High Speed Spindle, it works real well,” says Steve. “You know, we’ve cut some nice electrodes on our VF-2, but we found that what really limits you is spindle speed, because a lot of the time, we’re just pushing small cutters. You can only take so much per tooth on a real small end mill, so if you want to get twice as fast on your surface speed, you need to get twice as fast on your rpm. That new High-Speed Spindle option proved to be the solution to our need, and we jumped on board. That’s what we really found helped the most, the higher rpm.”
WHAT DO YOU CALL SERVICE?
Delivery of Action’s new high-speed Haas VMC, however, didn’t quite coincide with the arrival of the Losi job as originally planned. “There was a bit of a stumble there,” explains Bill. “The new spindle wasn’t ready as soon as we had hoped, and we almost panicked, until we talked again to MTS. At that stage, they took a little bit of a risk and said, ‘Hey, you guys have always paid your bills, you’ve done a good job, we like you, and we’ve got machines.’” Triple-Action Mold works hand-in-hand with the designers at Team Losi, Inc., to make sure that the proper materials and mold designs yield the best possible parts.
MTS provided Action with a “loaner” VF-0 with a 10,000-rpm spindle to get them running on the Team Losi job until the 15K machine could be delivered. “They got a machine in here that really facilitated what we were doing,” says Bill, “and in our mind’s eye, THAT was real quality service!
“They went to bat for us, and got it in here. We were able to produce our first order of electrodes for Team Losi on time. Maybe not quite as fast as with the new VF-0 with the High-Speed spindle, but none the less, we didn’t get caught in a panic situation. The customer got product. And it goes back to sticking with MTS, and the good job they did as a distributor on our behalf. We appreciate that.” says Steve. “That’s a classic story, and if I ever have to describe to anybody what service is, that’s the story I’m going to use.
“But, then again, it was just another business opportunity for us: we committed, everybody came through and everybody won. The car came in on time, the tools went in on time, they were in on budget, Team Losi put the cars together, they went to their World Class races where they won 9 out of 10 of their divisions entered.
“It worked out great, we got the machine in and it helped us get it done. It was just that fast.”
PROFITS IN PLASTIC
“So we’ve grown! What started as the Bill & Steve Show has now grown to about 25 employees,” says Bill. “Last year we went from about $1.7 to $2.5 million in sales. You look around and virtually all of the equipment is paid for. What that allows us to do is to keep our overhead in check, allows us to keep our pricing competitive, and it allows us to sleep at night.”