The economic downturn presents more than its share of challenges for the small cabinet shop.
There's the basic challenge of finding new business. There's the related challenge of increasing competition as more shops vie for a smaller pool of available work. Then there's the challenge of being as efficient and cost-effective as possible to make the most from less.
And finally, for most owners, there's the challenge of doing all of this without formal business training or any comparable experience with a downturn of this magnitude.
It's already clear that only the smart and strong will have the best chances if the current situation continues very long. We're already hearing stories of shops cutting back and in some cases closing. That may be a good thing in the overall scheme of things, because it should weed out the least competent shops, leaving more work available for those smart enough and strong enough to remain.
Power of an open mind
I predict shops that do succeed in this downturn are going to have some common traits. These traits would help shops succeed in any situation, but they'll go from the "nice to have" column to the "absolutely required" list as fast as the economic indicators head south. The first required trait is an open mind.
That means open to learning new things, open to changing the way things have been done, and open to studying alternatives. Successful small shop woodworkers tend to be creative. They constantly see new ways of doing things and try them until they find what works best.
Open-minded shop owners are ones who embrace dramatic change sooner and, therefore, have a better chance of success. They also will be the ones wanting to learn more about more things. They'll have a better grasp of the situation, and the willingness to put pride aside and change direction when it's clear they've taken the wrong path.
Shop owners who martial their cash resources will have what it takes to succeed in spite of obstacles. In some cases, this may mean investing in equipment that will allow the shop to reap rewards in efficiency and productivity. In other cases, it may mean building cash reserves to prepare for the unexpected. But in all cases it will mean spending wisely on everything. Machine investments will require serious studies of the potential return on investment.
When the decision is made to buy, financing terms and price will get extra scrutiny, as will hidden costs after the purchase, such as support and maintenance. Vendors who can meet these demands will gain huge rewards in loyal shops that will buy again and more as times improve.
Service and sales
Successful shops also must have a commitment to service and aggressive marketing. Both of these traits don't often come naturally to the typical owner of the small cabinet shop. Most are more focused on production. It certainly is important to produce things well and efficiently, but if you can't sell them and can't deliver them as expected, you won't be in business long. That's especially true in a smaller and pickier pool of customers.
Shop owners have to devote some energy in this area, perhaps recognizing their own shortcomings and seeking help. I'm hearing lots of shop owners talking about hiring their first salesmen or business managers now.
And that touches on something very important about all of these traits for success. Even if they don't come naturally, you can learn them or even hire them. All of which goes back to that first trait of open-mindedness.
Don't let a closed mind drag you down.
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