Growing your manufacturing business is hard work. In the end, many owners decide growth is uncomfortable and that a “lifestyle” business capping out around a few million dollars in sales is less risky. Running a lifestyle business is a great plan – until you decide to sell or transition ownership.
So how can you avoid falling into this trap? This guide dives into some strategies for growing your manufacturing business more efficiently and effectively.
Growing your manufacturing business can be a challenge.
The owner mindset is a common occurrence in the industry. Typically not trained in business yet highly skilled in their craft, oftentimes owners wear multiple hats and try to do too much themselves. Delegation is a learned ability and it takes a conscious effort to develop the trust required to delegate.
- Many shops feel they’re running out of space. When a shop simply runs out of room to add equipment, they may feel stuck, even if they have the option to rearrange (many view this as too costly). If a shop owner also owns the building, it is often difficult mentally to make a move to a new building.
- High concentration. This occurs when a single customer or business accounts for 10% or more of your revenue, or when your largest 4-5 customers account for 25% more of your revenue. When a business over-relies on a small group of clients, revenue becomes highly sensitive; just a 10-25% drop in revenue can cause a business to go from profitable to dropping below the break-even point. This poses risk to your ability to grow (or even last) and puts you in a position to dictate unreasonable terms such as free expedites or annual price decreases. Shops with high customer concentration also keep capacity open for these large customers rather than filling it with orders from new customers because they are afraid of losing them if they can’t fill last-minute critical orders.
- Lack of investments. Understandably, owners like to enjoy the fruits of their labor and take cash earned in the good years to use outside the company. But a lack of cash keeps shops from expanding to multiple shifts, which leverages the investment already made in space and equipment and allows you to dramatically increase revenue. Other investments outside of equipment such as employee training and marketing are often overlooked in the manufacturing space. Finding out where you’re lacking proper investment = finding out where you have opportunities for growth.
No matter the state of the market, the key to growing is being primed to take on the work that’s up for grabs. In order to increase revenue and grow your business, you need to drive more opportunities to quote. Let’s look at some ways to do that.
1. Start with your existing customers.
Understanding your existing customer base can help you drive a significantly higher amount of opportunities and revenue. It’s so important to understand their business, from their overall spend to the type of work they contract, to establish long-lasting relationships and diversify your business into end markets. Start by building a list of your existing customers and asking questions that help uncover the strength of your relationship:
- “Who are your top suppliers?”
- “How can we get into your list of top suppliers?”
- “What are the qualities that your top suppliers share?
From there, consider sending newsletters to that customer base to communicate shop enhancements, the purchase of new machinery, and other information to make the relationship feel mutual and long-term.
2. Adopt new software.
Adopting new software can be daunting, but it’s the fastest way to tackle many of the challenges that are hindering your growth:
- Triage your quote backlog. Many shops feel too busy to triage the backlog of quotes in their inbox, when manufacturing software solutions can cut the manual labor out and enable you to prioritize quotes in a strategic manner. Being able to tap into the opportunities in your backlog quickly unlocks the potential for exponential business growth. Prioritizing quotes based on strategy also allows you to maximize your win rate because you’re focusing on pursuing business opportunities that are right for your shop.
- Make a good impression. Using software like Paperless Parts allows you to share a digital quote with your potential customers. When they receive a quote that allows them to interact with the part file, select expedite options, and submit an order all on the same screen demonstrates your professionalism and encourages them to want to work with you.
- Stay consistent. Quality requires consistency, and so should your estimating process. Having software that allows you to automate the costing and
quoting process helps you stay consistent with the prices you’re offering your customers. Quoting a customer a certain amount one day
and another the next makes it look like you’re not being fair or honest, which can drive business away. Relying on technology that’s built
on formulaic, geometry-driven insights about the part ensures consistency and ultimately increases your chances for repeat business.
- Monitor what’s going on around the shop. When you have technology that connects the front office with the shop floor, it allows you to monitor and track what’s going on, analyze your quoting activity, understand the status of your customers, gain control over your vendor base, and more. Having all of this data at your fingertips allows you to make smarter decisions that enable you to scale. This is what can help you survive during downtimes and thrive during peaks.
3. Become more agile.
Implementing agile manufacturing practices allows you to support urgent requests. What are some ways your shop can be prepared to step up to the plate at any given moment?
- Implement standardized processes. How are jobs being prioritized? If there are standard processes in place, you’ll instantly be able to tag certain requests as “urgent” and deploy a workflow to ensure things are completed as quickly as possible.
- Have an easy and secure way to collaborate between employees and locations. This enables you to work smarter, not harder and solve problems more creatively. Your site may not be able to help right away, but another location might.
- Have a centralized quoting system. Being able to access valuable data on your customers, like past quotes sent and order revenue, ensures you have all the context and data you need to deliver work fast. Be sure to capture tribal knowledge all in one place for easy searchability.
When that urgent request comes from a struggling supply chain partner as a result of some macro problem, you can be the shop that’s ready to take on that work.
4. Have a strong communication strategy.
How else will your customers know that you’re ready and willing to accept new work? Here are some ways to effectively communicate that to prospects:
Make sure your website is up to date. This doesn’t mean you need to invest thousands of dollars into the most cutting-edge, ultramodern website; there are numerous affordable options on the market that are easy to use (or easy to learn how to use).
The two main goals of your website? 1. To communicate exactly what your shop offers and 2. To serve as a simple and easy way for customers to request a quote. Allow that to anchor you throughout the design process.
Think about the user experience: is the call-to-action for requesting a quote easy to find? Is it easy to submit their information? Are you highlighting the type of work you specialize in through photos and pages across the site? Is your branding clean and recognizable to make them likely to trust you as a professional business and remember you for their next job?
Below you’ll see an example of a strong “Request a Quote” call-to-action and the page it leads users to on one of our customer’s websites:
Notice how the button to get to the page is easy to see in the right-hand corner, and the form on the page makes it easy for buyers to provide all the necessary information.
Be easy to find.
When people search for your business name on Google, what comes up? Make sure your Google MyBusiness is up to date to reflect your accurate hours of operation, address, and contact information. Check out this article on our blog to learn more.
Implement secure internal communication channels.
As important as it is for external parties to contact you, it’s equally important to make sure your employees have a way to communicate securely with one another. Be sure to use a cloud-based, secure software that allows you to collaborate in compliance with requirements like ITAR and CMMC. The more you’re able to communicate, the more insights you have on the status of your shop and therefore, the smarter decisions you’re able to make about where to grow the business.
Provide professional quotes.
Professional, digital quotes deliver a strong impression of your business and keep people coming back. They also enable faster purchasing. Quotes generated through Paperless Parts are interactive, allowing customers to interact with the part file to review notes, select expedite options, and submit a PO all on one page. They also provide transparency into the quote so that your customer can see how you arrived at the price you’re offering them. This builds trust and understanding around your business which can make all the difference when it comes to beating out competitors.
5. Consistently market your business.
It’s important to get in front of the engineers and buyers that are looking to get custom parts made. But how should you go about doing it?
Let’s think about where they’re starting their buyer’s journey: in 2020, 70% of buyers said they turned to Google first to find new suppliers. The days of part buyers calling or emailing a shop for quotes without visiting the website are over. However, this doesn’t mean that your job shop needs to spend an arm and a leg on building out the most elaborate website and marketing campaign.
Keep these marketing tips in mind and you’ll make a surprisingly huge impact on how likely customers are to find (and trust) your business:
- Build a LinkedIn company page. Marketing on LinkedIn can help you generate new business by connecting with potential and existing customers. Google and other search engines even rank LinkedIn pages and company posts in search results. Use LinkedIn as an opportunity to tell your company story, build credibility, establish a customer-facing image of your company, and open up another line of communication with potential customers. Best part is: it’s completely free.
- Give your website visitors a reason to return. Prospects are searching for information, and if you have content that answers their questions, they will continue to come back to your site. This means keeping your content current – content can be blog posts, videos, a new testimonial from a happy client, a profile of an employee or a short article on industry trends. The content can be about the techniques you prefer or materials you use, or the machines and technology you have in your shop. It is also a way to keep your prospects and customers “in the loop” on process updates, new services, or promotions.
- Communicate in ways your buyers will understand. Many don’t understand the nuances of “horizontal and vertical milling” or know what a tussen haas machine is. Saying “we make parts that are super complex that you’re struggling to source elsewhere” will resonate much more with your audience. Consider adding a part image library to your website to help build trust; pictures of machines don’t communicate what you can do. Part images are relatable to your potential customers and will communicate your capabilities (just make sure you get permission to use images before sharing them on your website). See below for an example on one of our customer’s websites:
Paperless Parts’ cloud-native, secure software platform automates your estimating and quoting process so you can spend more time growing your business. On top of that, we offer a full suite of marketing services to help you better spread the word about your manufacturing business. Want to take your business to the next level? Check out a free demo of our platform today.
See how our platform can help you grow your manufacturing business today.