Grow Your Manufacturing Business
Starting up or growing a manufacturing company can be extremely
challenging
and
involves
making
numerous
crucial
decisions
regarding financing, location, choosing the right machines, targeting
specific market segments, and setting the right team in place.
Here are a few strategies that some of the MFG.com members have
applied in order to expand their business.
Select a Target Market
Diversify Your Services
Becoming an expert in machining medical components and
devices or working with specific exotic materials are two examples of niche manufacturing that can help you target some
of the most desirable customers. Stay focused on what you
do best. Having a clear target will help you easily decide on all
other aspects of your business – machines, man-power, supporting technology, marketing, etc. If your target industries
require it, make sure you obtain all the appropriate certifications, so you can meet the standards of even the most exigent
of customers.
Accepting jobs outside of your core capabilities can be risky.
However, if your current capabilities support growth in
new directions, make sure you consider the possibility of
diversifying. In some cases, changes in the market will force
you to diversify.
Choose Your Allies
Your network of friends and business contacts can be an extremely valuable source for information and leads, particularly when your business is new. Talk to everybody you know
about directing customers your way, ask for advice about best
business practices, and develop strategic partnerships. Create
word-of-mouth among your peers and use their connections
and knowledge to expand your business.
Stand Out from the Crowd and Identify Lead
Generation Sources
The easiest way to expand is to look at your existing range of
services or products and see if you can go one step deeper
into the manufacturing process. For example, when you are
quoting opportunities, make sure you inquire if there are
any assembly needs, and extend that additional service to
your customers. Becoming a one-stop-shop for them can
result in significant savings and reduce the time-to-market
tremendously.
Innovate
Technical innovation can be extremely costly, but not keeping
up with it can be costly as well. Purchasing new equipment
can create additional costs including initial set-up, hiring and
training the right personnel, maintenance, etc. These costs
What makes you special? Make sure you know the answer to
this question before you have your first conversation with a
potential customer. Having a general machine shop is fine,
but make sure you are prepared to communicate your added
value. Be ready to tell them why you are a better choice than
any of your competitors. Identify where you can generate
sales leads for your business.
Adapt
The last few years have affected most small businesses tremendously, but the ones who managed to weather the storm
are the ones who were able to adapt to all the major changes
in the market. For example, machine shops that switched their
focus from commercial manufacturing to government work
during tough times may still be in business today because of
that choice. Understanding how demand evolves and being
able to adjust to it, is vital and can help you land on your feet
when other businesses fail.
Diversify Your Customer Base
Focusing on one large customer and developing your shop
around that customer’s needs seems like a logical way to
grow your business. However, that strategy can easily backfire
if your customer goes out of business or decides to work with
one of your competitors. Maintaining a customer base that is
relatively diverse in company size, geographical location, industry and volume, will make you less vulnerable.
cause many business owners to be weary of investing in new
machines. However, if you choose to stick to the basics, and
not keep up with technology, be ready to lose a few customers to some of your more innovative competitors. How much
is one customer worth to you? Can you afford to lose them?
For those of you who’ve been in the business a long time, remember when computers and CNC machines were first introduced in the industry? Many people fought the change and
some of them never adapted. Industry leaders easily adopt
new technologies, while followers fight to keep up, or fail.
Something as easy as updating the software you are using,
can make the difference between being competitive and
profitable, and going out of business.
Be Flexible and Creative
Streamline
Giant leaps of faith often prove to be more detrimental than
beneficial, and can significantly hinder your business in the
long term. Invest as you go and always make sure that every
machine purchase you make is cost-efficient. Consider all the
collateral costs that purchasing a new machine will entail
(training, new hires, etc.), and make sure you have the right
sales and marketing strategy to keep your new machine busy.
“Build it and they will come” does not count as a strategy.
Keep a tight production schedule. Prioritize jobs. Try to be as
independent as possible from outside suppliers. These three
things should help create a more seamless workflow. It will
also allow you to better estimate your future cash flow and
identify specific aspects of your business that need improvement. Achieving full vertical and horizontal integration is not
always possible, but moving the manufacturing process inhouse can be quite beneficial.
Finding creative ways to use your equipment can help you
save time and money. It’s a great idea to invest in equipment
that can incorporate secondary work in its primary function.
Take a waterjet cutter for example. If you choose to buy your
raw material in plates and not blocks, you can use a waterjet
to cut part blanks.
Grow Sustainably
Last but not least, make sure you have VISIBILITY. Regardless of how you approach the development
of your business, make sure enough potential customers know about you. Don’t be a “secret agent”.
With more and more customers using the Internet to identify new suppliers, an online presence can
help you get the exposure you need, and can direct customers your way without too much effort on
your end. Feel free to contact one of the MFG.com representatives for additional details and support.
MFG.com enables sourcing professionals and engineers to quickly and
easily locate quality suppliers for CNC Machining, Injection Molding, Metal
Stamping, Metal Fabrication and many other processes through an easy-touse online marketplace. For suppliers, they find open RFQs on MFG.com every
day to help fill open manufacturing capacity. MFG.com is a seamless online
system for requesting manufacturing quotes from the world’s best suppliers.
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