We have found that during the Covid-19 pandemic, some shops have been able to thrive while others have been severely affected, prompting the question of why some businesses are on the upswing while others continue to struggle. Here we go over some of the reasons that we believe are behind this disparity.
Revenue concentration, working capital, communication, and modern technology are all key distinctions between metalworking businesses that are excelling during this time and those that are not.
When it comes to revenue concentration, shops that have narrow customer, geographic, industry, and product concentrations are more susceptible to the impacts of external disruptions compared do those that do not. If your revenue is based on one industry, for example, your shop will face the residual impacts that the industry experiences.
On top of revenue concentration, a notable differentiator between shops that are excelling and those that are not is access to working capital. If your shop has an absence of capital, you may be less able to quickly adapt your operations to changing environments, such as pivoting your production to items needed during a crisis like Covid-19.
The ability to communicate with customers in a timely manner is another key differentiator. Updating your customers on what capabilities you have and if you have new capabilities will better aid in attracting your customers to do business with you. By not doing so, your customers may not even know whether or not your shop is currently open. Efficient communication also means being highly responsive to your customers, as a strong level of communication and follow-up is key to securing jobs.
The final distinction between those that are doing well and those that are not is the use of modern technology. A lack in modern technology means that shops may struggle to support quick turnaroud quotes, connect systems that reduce the need for human input, and access secure, cloud-based technologies that support remote work and collaboration. Alternatively, shops that adopt modern technology can harness these opportunities and make themselves more competitive recovering from the pandemic.
Watch CEO Jason Ray’s full Feast or Famine webinar here.