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Manufacturer of Hydraulic Presses
Small machine shops are usually run by people who understand how to mill, grind, press and assorted other processes. But they often don’t know how to run a business.
Like any skill, it can be learned. And it must be if the shop owner wants to grow and prosper. Here are five tips that have helped other small machine shops get more clients and stay competitive.
When you start a small business, you can’t go it alone. For one thing, you need customers. And you also need suppliers and business helpers, like a lawyer, accountant and insurance agent.
Networking is an essential part of any successful small business. Reach out to others in the field. They are a fund of excellent advice and will save you from making avoidable mistakes. Reach out to other small business owners in other fields too. They can be your support network when clients are few and bills are many.
The most reliable way for a small machine shop to build a reputation for quality and to find steady customers is to decide on a segment of the marketplace to serve. Not sure of your niche? Start with what you are good at. For example, if you’re a whiz making small gears, that’s your niche. You can change your niche as you grow. But right now decide on one.
Then research which companies need what you are good at producing. Use the search engines online to find out which companies use the exact products you are making. Contact them by email, a letter or a phone call. Set up an appointment and show them the quality of work you do.
After you get one client, it will be easier to find another. Ask for testimonials and post them on your website. Keep marketing so you develop a steady supply of new customers.
You don’t need every piece of equipment you are drooling over. Start small, make a profit, then slowly invest in new machines, training and technology.
Make steady progress instead of expanding right away. That gives you peace of mind and regular growth. You don’t have the headaches of not enough customers to pay for your huge overhead. Expanding too quickly is the fastest way to go out of business.
The more value you can give your clients, the more money you will make. But don’t try to do it all, all at once. Instead, take on a new project that is within reach but just outside your comfort zone. Expand from milling into lathing if a suitable job shows up.
Another way to diversify is by offering related products to your current customers. For example, if you offer a certain type of tubing, consider making fasteners to go with them. Test it out to see if your customers are interested. Keep modifying until you discover what they need and will pay for.
The more you know, the less you’ll be hit by a downturn in a specific area of the market. You can simply move into one of your other specialties.
Find out who else is targeting the segment of the market that you are. Find out as much as possible about your competitors. Are they offering services that you aren’t? Do they provide faster turnaround? Are there prices lower? Do they use new technology?
If your competition is making major inroads into your niche, you need to incorporate some of his best practices. Or it might be the time to take on a similar niche, with slightly less competition.
On the other hand, your competition can give you the impetus to try new methods and new technology. It pays dividends to keep current with what your competitors are offering the marketplace.
Just like you learned to run the equipment in a machine shop, you can learn to run a new business. It takes commitment and discipline, but it is the only way to grow and make a profit.
