The lack of concern is concerning: too many job shop leaders today think that being busy means they’re crushing the game. Reality check, it doesn’t.
Due to the critical nature of our sector, there is an incredibly large organic need for custom parts in manufacturing, and that’s not changing any time soon. This can lead to complacency; if you’re already inundated with work, why change anything? Thinking about how to grow your job shop may not be top-of-mind right now, but “if it ain’t broke, don’t fix it,” is a toxic approach to running a business.
The Dark Side of Complacency
What are the real dangers of running a job shop without pursuing opportunities for growth and improvement?
It keeps things chaotic.
Too many shop owners wear too many hats. In the early stages of a company, this is inevitable. But when your business grows, there’s an opportunity to offload work, and if you choose not to out of fear or laziness, you’re only shooting yourself in the foot.
Sure, you could do the job of an estimator. But what if you’re pulled in another direction? This critical task is now neglected and your competitor just beat you out on a job. You could also step in as head of accounting – see how well that goes over when you try to talk a customer off a ledge after just hounding them about an outstanding payment.
Taking on too much also takes time away from the dinner table, your hobbies, your kids’ sports games, vacations – anything that’s outside the shop. Doing too much leads to stressful situations that hurt your win rate, customer relationships, and personal life.
Diversification falls to the wayside.
If the pandemic taught us anything, it’s that life is unpredictable. And with a recession looming, there’s never been a better time to diversify your customer base. Otherwise, when your customer that makes up 60% of your sales says they don’t need any more parts for 5 months, you’re already behind.
Too many people don’t worry about sales until they have to. But with materials taking longer than ever to backfill, once you’ve realized you’ve got no sales opportunities in the pipeline, it’s too late. The lifecycle of building relationships with people is 6-12 months. People aren’t just going to buy from you for the sake of being nice: What sets you apart? Do you return quotes within the same business day? Do you sub your parts out to offer faster turnaround times?
We often sit in our existing business like it’s going to be there tomorrow. But if we’re not actively participating in growing our business, we’re doing ourselves and the next generation a disservice.
It exacerbates the labor shortage.
Deloitte and The Manufacturing Institute estimate that the manufacturing skills gap in the U.S. could result in 2.1 million unfilled jobs by 2030. The cost of those missing jobs could potentially total $1 trillion in 2030 alone.
So what – or who – is to blame? Shops that are stuck in the past, set in their ways, and averse to change tend to push skilled employees out and fail to attract younger generations. Who wants to work for a company that underpays and shows no plans for future growth? We are decades into the Information Age, and when people know their worth, they’ll fight for a job to match it.
If you’re going to complain about the labor shortage, you’d better be sure you’re doing what you can to combat it. And if we want to combat the labor shortage, we must abandon complacency.
What Job Shops Should Be More Focused on Today and Why
Here are 3 strategies for growing your job shop’s revenue that not enough owners are willing to invest in today:
1. A Strong Sales & Marketing Function
Many shop owners don’t hire sales and marketing teams because they don’t have the budget and/or can’t see the ROI. Also, we tend to be a pain in the a$$ (as a salesperson myself, I’m qualified to say that).
We may be expensive and demanding, but salespeople help you grow and diversify your business. And aside from the obvious benefit of making more money, having a dedicated sales team and putting effort into marketing your business has numerous downstream benefits:
Diversified work keeps your employees happy.
Your engineers and machinists don’t want to be making the same part every day. Sales and marketing people help to bring in new work that’s exciting and allows your team to be the creative artists they want to be.
More revenue = higher pay for employees = reduced skills gap.
Bringing in more sales may not feel important to you, but think about the value of being able to pay your employees more. Combine the fact that today’s job market skews in favor of the prospective employee with inflation, and it’s never been more important to offer competitive wages.
Stronger customer relationships.
Hiring motivated, tech-savvy individuals to head up your sales force appeals to today’s generation of buyers. They want fast response times. They want to be able to text you. They want quick sales cycles. If you’re the owner, you don’t have time to deliver on that kind of experience. Delegate and see what happens to your retention rate.
You don’t need to hire a bunch of people to get started; when you’re thinking about how to grow your job shop, small amounts of proactivity can go a long way. Start by asking yourself:
- What industry do I want to diversify into?
- Where can we immediately grow? Maybe this machine is old, but can we crank out a few brackets on it every month?
- Which customers haven’t we spoken to in a while? Can I task a few individuals with following up with them via email?
2. Dedicated Customer Service
Nobody likes it when DirectTV says, “We’ll be there between 7 am and 5 pm.” It’s inconvenient to a point where people will take their business elsewhere to avoid dealing with it.
Good customer service drives repeat business. If you can’t invest in a sales force right now, at least put time and energy into creating distinct customer service roles and training your team to be excellent. With today’s workforce challenges, finding people to hire is hard, but a lot of people who already work with you make great candidates for customer service because they already know how things work.
Questions to ask to identify people who might be good at the job:
- Are they a self-starter?
- Who is a natural conversationalist?
- Is anyone particularly witty and have a natural rapport with your customers?
- Who is a natural problem solver and critical thinker?
Most importantly, customer service should be this person’s (or people’s) number one priority. You can’t have the same person calling people about parts being late be the same person answering the calls of angry customers. And owners shouldn’t be stepping in unless someone is really pissed off.
3. Outsourcing Work
I started my own company, TAKT Manufacturing, this past June. Our job is to reduce the time it takes for you to find an exact fit for your precision machining and manufacturing needs. We work with multiple types of high precision CNC machined parts and shops so that people can offload work and open capacity on the floor to make space for more complex work. This helps them maximize their win rate and grow revenue by way of doing more with what they already have.
Outsourcing any work, whether it’s low-volume, prototype, or mass-production can help you save time and deliver parts faster to retain customers and earn new ones.
A Brighter Future
The grim stats we read today, whether they spell doom for our workforce, the economy, or material availability, should only motivate us to work smarter, not harder. When we find creative solutions to deal with a tough hand, we create a more positive organization, industry, and world.
If you’re living in the past, I encourage you to open your mind to new ideas that can help the manufacturing sector not only survive but thrive in honor of past, current, and future generations.
Learn how to drive revenue at your shop today using “offensive” and “defensive” pricing strategies in our Job Shop Pricing Playbook.
Jessica Wilber, Business Development and Operations professional with over 13 years of manufacturing experience, is the owner and President of TAKT Manufacturing Solutions: a service that connects custom part buyers and machining companies. Jessica is an expert relationship builder, negotiator and sales strategist. She has also been a proud user of Paperless Parts for multiple years.