5WAYS TO GROW A SUCCESSFUL MANUFACTURING BUSINESS

The manufacturing and fabrication industry is continuously evolving and changing to meet new customer demands, advancements in technology and economic shifts. That’s why it’s more important than ever for manufacturers and business owners to look internally and ahead when growing their business.

Whether you own a fabrication company that is looking to expand or you’re making the leap to open your own business, you’re in an exciting time filled with opportunity. But it can also be a chaotic time with its fair share of hurdles. The tips you’ll find in this guide are designed to set you up for success in a sustainable and strategic way, no matter what stage of growth.

HAVEA PLANIf you are planning to open a business, you need to develop a business plan. Most people think business plans are a waste of time, but the truth is that it will give you a very good idea about how much money and time you need to realistically establish your business.

Think about it this way: Do you work as much as you want and spend whatever you feel like? No. We all budget for what we need and want based on the amount of money we earn for a certain period of time. Planning for business is no different than planning for life.

We know what we need to earn, and we spend according to what we can afford. Many new business owners simply fail to plan—and that almost always ends in a plan to fail.

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How BMF Fabrication planned for success: Mark Chadwick and Bill Dreisewerd, owners of BMF Fabrication, have worked together in and around St. Louis for 30+ years. And they had talked about launching a custom fabricating business of their own for just as long. While they both knew they’d make good business partners, the numbers never made sense.

That was until they finally put real costs and prices behind their analyses, including the cost of machines, buildings and lease rates—even how much sales they needed to be able to support those costs. That’s when they saw an opportunity in one key area: quick response.

They knew some larger shops had a tough time managing lead time and making it predictable, and so they decided that was their business plan in a nutshell: quick, predictable delivery.

Chadwick and Dreisewerd spent years implementing some key tenets of quick-response manufacturing (QRM) with an improvement strategy designed for high-product-mix operations. The philosophy aims to shorten the order-to-cash cycle by moving the focus from machine utilization to job velocity, how long it takes for a job to make its way through the entire business.

They presented the business plan to bankers and just like that, BMF Metal Fabrication was open for business.

Customers are everything in business. From the initial sales engagements to ongoing customer service, the way you interact and serve customers can have a huge return. In fact, understanding their needs is a basic rule of business, no matter what industry, to help sustain a successful trajectory.

For early growth or quick expansion, it’s important to remember the “customer first” rule. As an owner, there will be many pressing issues that often need immediate attention—overseeing quality control, on-time shipment and the supply chain. However, keeping up with the changing needs of your customers in your best-end markets is just as important. After all, your customer base is what is driving the demand and adding to your bottom line.

2KEEP UP WITH YOUR CUSTOMERS

How Seconn Fabrication is rethinking customer service:“Anybody can buy price,” Rob Marelli, founder of Seconn Fabrication, will tell you.

To earn the loyalty that’s needed for people to look past just the price, Seconn Fabrication is trying to provide the ultimate customer service. The company bills itself as a one-stop shop for fabricating, machining and powder coating services with quick turnarounds and live customer service available every weekday—with more customer service offerings on the horizon.

The company is looking at establishing a prototyping cell to offer quicker response and handle the smaller jobs that slow up throughput of larger-volume jobs on the shop floor. Marelli wants to hold monthly meetings with Seconn Fabrication’s engineering team and customers to reconfigure fabrications that could be made more efficiently. There is even talk of initiating vendor-managed inventory programs in which Seconn will maintain inventory at customer sites and not charge them for the fabricated parts until they are pulled from the shelves.

Their plan in the future is to allow customers to connect into the material resource planning system to see in real-time where their parts are and maybe even shift delivery dates. While this isn’t live yet, it is a logical extension of the company’s information technology base. It’s also a prime example of how Seconn Fabrication continues to innovate for its customers to ensure satisfaction that will lead to repeat business and higher sales.

My objective is that I want to do business with a group of people and help them learn that there is a difference between price and cost.

If you read or listen to business reviews, you know that every successful business credits its wins to motivated and creative teams. Reading these, you may think that businesses just have to increase the number of teams in order to see performance indicators improve drastically. The truth is that more doesn’t always equal better

When starting your own shop or growing your organization, deciding where to invest can be one of the most crucial steps. The Fabricator recommends people, machinery and materials as worthwhile investments. Why people? Because they are the ones who are going to make your products and provide the services that will drive your business’ success.

Depending on your operational needs and profitability, there are many ways to approach hiring and staffing. If you’ve worked with or led a dedicated and passionate team, you know there is something to be said for having a workforce that is truly invested in your business and ready to grow with you.

While not every business has the capital to hire full-time employees, there are plenty of alternate options like staffing agencies, borrowed employees and outsourcing that are all gaining traction in the industry. These scalable options can be great solutions for early-stage or expanding businesses that need well-trained, flexible staff who don’t require insurance policies or additional benefits.

3INVEST IN YOUR PEOPLE

Another approach is letting employees wear multiple hats like cross-training production personnel in a particular skill or process like Seconn Fabrication. For instance, one laser operator can drive the truck or act as a backup for the press brake and some of the software programmers can weld and tend to the laser cutting machines. This not only helps the business from an output standpoint, but it also reinforces the company’s entrepreneurial spirit. Seconn even assigns mentors, conducts “organizational climate surveys” and has formal discussions on what to improve—all contributing to better company morale and more invested employees.

While there is no one-size-fits-all approach when it comes to hiring and staffing your company, there is a general rule of thumb: invest in your people and your company culture. The more positive your internal sentiment is, the better the work and the word of mouth.

Alternative hiring options in demand: · Staffing agencies – Temporary workers for short bursts of extra work that don’t require any long-term commitments.

· Borrowed workers – Leveraging employees from another shop that is in a slow period and providing the business owner with a small markup or rate.

· Cross-training – Training current employees in other skills or processes to improve efficiency and productivity.

The reality of being a business owner is that you need to be outgoing and fearless. You should enjoy dealing with people, going out to introduce yourself to potential customers, spending countless hours bidding on contracts and so on.

You also need to have an uncontrollable drive because even after all your efforts, the real investment may not pay off for a long time. Any business is a gamble, no matter what industry you’re in. The real challenge is keeping a laser-like focus on the ultimate goal and even when the cards are stacked against you, have faith in your plan and your promise to customers—and make sure you deliver on both.

4BELIEVE IN YOURSELF

Chairman and founder of Metalworking Solutions, Bill Hewgley took a huge leap of faith launching his business in 2006. At 55 years old, he decided to lay his cards on the table and cashed out most of his lifetime savings to get his business off the ground. “I had no customers, no hot leads,” Hewgley recalled.

He had a business plan stating that he wanted to become the FedEx of fabrication, borrowing its slogan: When it absolutely, positively has to be there—a good differentiator, considering on-time delivery in custom fabrication remains a continual challenge.

While this sounded great, purchasers were hesitant to drop existing suppliers back in 2006 when times were good. It’s risky for purchasers to change and that reluctance made the early days hard. Area customers were happy with their current supply base and as the new kid on the block, Metalworking Solutions couldn’t get its foot in the door.

But then the Great Recession hit and as area fab shops suffered, things began looking up for Metalworking Solutions. Purchasers were scrutinizing their long-term relationships, and they could no longer overlook delivery and quality problems. Hewgley began getting his foot in the door to tell his story—and he hasn’t looked back since.

How Metalworking Solutions embraced uncertainty:

I just believed I could do it.

Marketing reinforces the value proposition—that is, why customers buy from you and not your competitors—and enables the sales team to be more effective as prospects move to the final buying decision.

Marketing builds a company’s credibility, reliability, reputation and trust. Put another way, marketing shapes how customers and prospects (the target audience) perceive the company and addresses their pain points.

Although most custom fab shops or small businesses don’t have an entire department devoted to marketing, an element of marketing has always existed in this industry. Many shops were founded on work gained from that one-on-one, live human contact. It was—and still is, in many respects—very much a handshake business with reputations built through word-of-mouth. In this sense, such word-of-mouth communication is like marketing.

Today’s prospective customers have access to more information than ever before. With every option and detail at a customer’s fingertips, fabricators need to create awareness, strengthen relationships, develop credibility and build trust—all before the initial sales call. That’s where marketing can help.

Marketing and sales serve separate purposes within a broader revenue-generation team. It is the job of modern marketing folks to gain awareness and create a perception of credibility, trust and reliability within the minds of the people in the target audience, especially when it comes to the digital world. To do this, marketing should focus more on sharing your company’s expertise and educating customers on why to choose you versus simply pitching them.

While this marketing strategy may not replace all of your existing marketing activities completely, it should be your leading strategy for engagement and growth.

5SPREAD THE WORD EARLY AND OFTEN

Ready to take your business to the next level?Learn how membership in the Fabricators & Manufacturers Association, Intl.® (FMA) can help your company thrive at every stage of growth. As a driving force behind important research, professional development and training, student engagement and community building—we’re here to help our members succeed.

www.fmanet.org/membership-matters