I build wood screen and entry doors. I started with just screen doors because I saw a hole in my market. The two lumberyards in my town were paying $150 to have them shipped in from Seattle.
I offer stock designs in different woods and thicknesses, and also design custom doors. I am selling through three retailers, one builder, and one design/build firm.
I am in the process of getting somebody to run all the office stuff, mostly bookkeeping and scheduling. I found somebody with 10 years experience including a little over a year with a veneer company. All other office experience was outside the woodworking industry.
I plan on taking this year to standardize and make lists of all shop procedures. Then I am thinking of hiring somebody to handle sales and one experienced worker in the shop.
Would it be most productive to go after more retailers, more design/build firms, or is it productive to go after architects? Obviously I would welcome anybody's business, but want suggestions on where to focus.
Any suggestions on how to capitalize on my office hire's experience?
What types of products would be good add-ons to better serve my customers? My background is mostly in cabinets and I did quite a few short shaper runs of custom trim at the shop I used to work at.
I work with a shop that will pre-hang my doors when needed and I also have a painter I am starting to work with to pre-finish.
(Business and Management Forum)
From contributor M:
Sounds like you are making smart moves. How many shop employees do you have now? What is your machinery?
You should make a real business plan. More than 20 pages typed up with spread sheets and the standard financials. It is a big deal. My wife and I used to argue about it all the time, but I would claim "I don't need no stinking piece of paper to tell me I gotta sell more cabinets and make more cabinets." I was dead wrong. When opening my new shop, developing a real business plan forced me to look at things in a way I never really did before.
Find a good book on the subject that walks you through the steps for an official business plan. Then give it to someone who knows business, like an MBA. These people might not know how to run a small business but they do know the numbers that work and that do not work.
Right now it is pretty much just me. My wife was helping me with office stuff, but she really doesn't like doing it. My dad is somewhat involved in the business and I am trying to get him more in it and my brothers help me out every once in a while, but are not really part of the business.
Machinery: table saw, planer/moulder, 3 horse 1" shaper, 1 horse 1/2" shaper, chisel mortiser, jointer, double spindle horizontal boring machine, chop saw with multiple stop, 16' table. The table is off a jump saw I have but I still don't have a phase converter to actually hook it up. I use a variety of routers for some of my doors as well.
I am thinking of getting the drum sander adapter for my planer/moulder and getting a helical head planer. I often get my material surfaced, since my lumberyard is attached to a cabinet shop.
My machinery purchases in order of planned acquisition:
Maka style mortiser
single end tennoner
pneumatic door clamp
I started with dowel construction, which is why I bought the horizontal boring machine. But I kept getting asked "do you use mortise and tennon joints?" So I switched. Still using a chisel mortiser and table saw jig though. That is my biggest time waster right now. Definitely want to upgrade before getting a regular shop employee.
Although my volume for this business does not warrant hiring an office person, things were getting too disorganized trying to run both my businesses. I have subs that help do work for my service business and will eventually hand that business off to them but in the meantime, I need somebody to help with bookkeeping and scheduling for both businesses.
Potential production volume with my current machinery is 15/week for my most basic screen doors, 3-4/week for an engineered stile entry door. Of course custom designs are much more involved. These estimates are for my stock designs.
That would be with someone in the shop full time, something I can't really do in the busy window cleaning season (my other business). By next year I want to be able to do the door business full-time though.
The shop I work with charges $180 to pre-hang an entry door, double bore with hemlock jambs, weatherstrip, threshold and hinges included. I would have to either 1) spend $10,000 or so on equipment so I could match their price or 2) spend about $1000 on some good templates and charge my customers more for pre-hanging.
It's the same logic with the pre-finishing. Without a spray booth, it takes me longer to do a finish job and I always have a little bit of dust in the finish. I have a painter that will charge me $35/door for paint when I do 10+ doors at a time. He does good work too. I don't see how I can compete with that, even if I buy a spray booth.
I could just charge more, but since I am selling to retailers, my thinking was to keep everything as low as possible since they will be adding a markup. I'm not saying I know what I'm talking about, just asking how your recommendation would have a positive effect on my bottom line.
I'm leery about putting anything on a credit card as well. Why a credit card over a loan?
I've been putting off purchasing a powerfeeder but will be getting one before the end of the month.
The advantages are that I do not have multiple vendors submitting bills, each due at a different day of the month. Also, when I pay the balance in full, I pay no interest or service charge. In essence, it is like a free short-term loan that is due in full once a month.
Often I need to order specialty items over the phone or Internet. Almost all of these vendors will accept credit cards, so I don't have to worry about opening up another line of credit, or sending a check, or whatever. I tell them what I want, I give them a credit card number, their stuff turns into my stuff, and they ship it immediately.
I do not use the credit card for cash advances. That is expensive. If you need working capital, then some type of loan is probably more appropriate. But I offer no advice in that area.
Does anybody have advice on where to focus my marketing? More retailers, designers or architects?
2- Getting set up. Yeah, I understand the outsourcing and it's great, but at some point you gotta get it all under one roof to have better control and stop the windshield time. You will add capacity and capabilities that go along to add to your bottom line. You need all machines in place and a quick change system on profiles and such. A Tigerstop or Digital Readout of some sort stops the 1/16" miscut here and there.
3- The power feeder is safety, and you need your hands.
4- You are the reason your shop is successful, not an outside personality. Careful that outside salesperson is trained on your plan. Have you considered a rep that is paid on commission?
5- Marketing yourself is about getting the product into the right people's hands, a catalogue or brochure of capacity and custom features. Stopping by clients' facilities and offices and saying hi monthly goes a long way.
6- I really think you could offer custom profile runs of millwork and if you buy a moulder, this can work for a lot of capacity. Make sure you have dust collection set up.
Even if you pay your balance in full every month, and never have any interest charges or service fees, the bank is still making money. They get a percentage of the sale amount in fees paid by the seller. The more of these transactions they have, the more money they make. And since most of the credit card and banking industry is highly automated, their costs per transaction are quite low.
Do not get a card with an annual fee. There are other cards out there. Beware of some of the new business cards that are being advertised. Many of them, I have read, do not offer the same protections as the more familiar card companies.
If your bank does not have good terms, or the cash back that you can use, shop around. If you are a small business, you may have to back up the credit card with your personal credit history and guarantee. I have been told this is not uncommon. Check with your accountant/financial adviser on this issue.
This is what finally pushed me to look for office help as well since I'm pretty sure I wouldn't have done what I did if I wasn't overworked and tired.
Your comment on a commissioned rep is actually what I was considering when I said salesman. This will be next year at the soonest unless I get advice that I should do it sooner?
I have several business checking accounts since I have two businesses but I was just a little nervous about getting any credit. In the past I have used credit with the plan of paying it off at the end of the month but then I ended up accruing debt. With a bookkeeper in the picture, I think this will help me follow through with my stated plans.
A bookkeeper is not what you need. You can get a lot of production done in 6 un-interrupted hours and Quickbooks can do a lot in 10 minutes daily. Where does the rest go? You may not be able to handle the outside rep selling you if you are not set up, so be careful.
When they are done, repeat the problem back to them. What they said may not be what you heard. Communication is a two person process. Repeating the issues lets them know you were listening. And it often helps to refine some of the issues.
After all of that, you will know what to say. There are a couple of rules I try to follow. Do not give a dollar figure off of the top of your head. Not even a range, unless you are very, very confident in your numbers. If you want to compliment them on something (advice usually given to new sales trainees), be sure you really, really mean the compliment. Otherwise it looks and sounds phony and you have already lost the sale before you started.
The buyers need to believe in you and your ability to do the job they need done. Be yourself. Be honest. Be on time. Be neat, clean, and professional.
Just to get you started, sales is control. In order to control the prospect, you have to be good at controlling people. This is done by communication and intention. You have to be good at communication and using intention (this is what you have to practice). Watch someone who is good at sales and you will get the idea - watch how they communicate and use intention to help the customer.
The sales process actually requires that the prospect buys in sequence:
Qualify the customer before you go out or, better yet, get them to come to you. Either way, qualify. A lot of the disappointment in sales comes from talking to someone who is not qualified or genuinely interested. Watch the salesman at the shows. They know who is a prospect and who is not. They don't waste time talking to people who are not genuinely interested. Ferrari salesmen spend most of their time qualifying to see if the prospect can actually afford a quarter of a million dollar car.
Stay cheerful. Stay interested. This pulls the prospect up to interest. Be sincere. Don't talk too much - do more listening than talking. Remember - control the conversation. You are not there spending your time as a public service, you are there to help them by them using your service or product. If you want to get good at something you have to practice.