This article from Banks Hardwood that I found while searching for information on domestic and exotic hardwoods resonated with me. In my last blog I talked about the particulars of my custom wood business. Here are more thoughts on running a woodworking business. (Read my last blog on the subject here).
Know Your Market and Stay Out Front
Never let yourself fall into a rut. Always look for additional ways to expand your customer base, meet new clients, differentiate yourself from your current competitors or potential future competitors, and ways to serve your past and current clients even better.
Analyze your competition and always look for things to do better than they are or will. What are they not doing? Why are they not doing it? It could be because it’s a poor business practice, but it could also be because they have become complacent. Look for a service that is not being done and start offering it. Better yet, look for a product or service that is not being offered very well, and do it better than the other guy. Think about how many of the industry leading companies were the ones to perfect a product or service, not to invent it (Google, Toyota, Dell).
Network with other local business people. No one understands what the small business owner goes through better than another small business owner. They are a wealth of information, tips, and referrals. Use Facebook, Twitter, your local chamber of commerce and industry groups.
Visit any trade shows or business conventions that are happening near you. Scope out which competitors are there and what they are doing.
Read some of your industry’s publications to learn about trends and breakthroughs in the industry.
Stay Flexible and Innovate Often
If your lead times are long, work on streamlining your production model to shorten them. If your inventory is high, work on designing and implementing a just-in-time manufacturing model. Offer your customers options and services that are not and cannot be offered by the larger, global companies. These are just some areas in which your smaller size is an asset to you, not a liability.
Manage Your Labor Cost
Always look for ways to cut labor costs, which tends to be the largest expense for a small company. As I mentioned above, work on making your production line more efficient by implementing a cellular layout, a just-in-time inventory system, and a pull rather than a push production model.
Seek out the most qualified labor in your area, not the cheapest. Zappos, the shoe retailer, offers to pay a new hire in their first month of employment $2,000 to quit their job. The rational: Zappos wants employees dedicated to their job and the company, not just to a paycheck. Turnover can cost a company huge amounts of money in lost productivity, the cost of training, and lower quality. Hire talented labor, pay them a good wage, and your bottom line may just benefit.
Look for Part 3 in this series next week.
Have something to say? Share your thoughts with us in the comments below.