Winning Business Strategies for Makers and Buyers

Transcription

1 Winning Business Strategies for Makers and Buyers Meeting Needs, Setting Goals and Reaching Success in the High End Residential Home Market (HER) New Business Ideas WERC Workshops-June 2010 Harry Watt NCSU Wood Products Extension

2 Discrimination Policy The work upon which this project is based was funded in whole or in part through a grant awarded by the Wood Education and Resource Center, Northeastern Area State and Private Forestry, U.S. Forest Service. In accordance with Federal Law and U.S. Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability. (Not all prohibited bases apply to all programs.) To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 1400 Independence Avenue, SW, Washington, DC or call (202) (voice and TDD). USDA is an equal opportunity provider and employer.

3 Goals & Purposes Education-Learn the HER Market & Begin/Continue Strong Networking Efforts Business Planning and Organization-Be Focused and In Control Create Outstanding Products and Services Valued by the Customer, Create Superior Business Results

4 Your HER Market Education Strategy Be a Collector of Contacts-More is Better Get Out Every Week Look In Both Directions-Suppliers and Customers Encourage Others in Your Company to Build Their Contact Network

5 Contact Information System Strategy Find a System to Collect Contacts Company Wide Review Your Contacts Each Week-Routine Start a To Do List That Includes Keeping Contacts Fresh Never Have Lunch Alone When You Can Lunch With a Contact/Prospect/Customer

6 Business Planning-Be Serious Create Weekly Plans for the Business Create a Weekly Production Schedule Estimate Sales and Expenses Based on the Schedule Estimate Weekly Profitability in Advance

7 Controlling the Business Out of Favor Business Concept Now, Was Popular in the 1970 s When Profitability Was Twice What is Common Today in Many Wood Shops Requires Setting Goals and Following Up Requires Making a Budget and Tracking Performances

8 Outstanding Products/Services Strategy Design P/S That Meet Customer Needs Design P/S That Can Be Manufactured Ask Customers/Prospects What Is Important

9 New Technologies Strategies 3-D Software for Products and Homes Software Now Affordable Home Software Begins at $50 3-D Product Software Begins at $5,000 NCSU Wood Products Extension Teaches SketchUp 3-D Software for Wood Products

10 Merits of Using 3-D Software = WOW!

11 Obtaining Superior Business Results Most Wood Businesses Are Not Obtaining Superior Results = <5% Profitability Too Many Opportunities Are Wasted Typically Too Little Talent in Employee Pool Morale and Motivation Problems

12 Good Management is Key to Success Perform SWOT Analysis Internal-You Have Some Control Strengths-Advantages Weaknesses-Problems External-Mostly Outside Your Control Opportunities- Threats

13 Operating/Management System Needed to Implement Good Management Practices on a Daily Basis Goal-to Create a System Where You Have Good Weekly Plans and Have The Crew Carry Them Out Automatically

14 Business Strategy-Buyers-Upgrading Upgrade Styling With Elements From Valued American Home Styles, Like Arts & Crafts or Other Styles Convert Ordinary $400 Interior Door to $600 Interior Arts & Crafts Door!

15 Business Strategy-Design- Modular Construction to Lower Costs Initial Design is Modified-No Recreating the Wheel Design Makes Good Use of Materials = No Waste Design Manufacturing Where There Are Few Setups Example-Closet Systems

16 Business Strategy-Use Local Materials Eliminates Much of Freight Costs Easier to Obtain Extra Material if Needed Helps Create a Story to Tell Example-White and Red Oak, Sweetgum, Soft Maple-Many Are Low Cost

17 Business Strategy-Customization Two Kinds of Customization Lots of Design Options Using Standard Products-Cabinet Industry Example-Custom Kitchen With All Items Out of Catalog or Spec Book Real Customization-No Standards Often Discussed as Casework vs. Millwork

18 Business Strategy-Follow the Hot Trend Closets and Garage Cabinets Are Hot-a Pre Engineered Product That Can Require Low Overhead Granite and Solid Surface Tops for Cabinets Wine Racks and Cellars-Shows Personal Passions -Know the Customer

19 Business Strategy- Customer Designed Products Set Up a Product Line Within Standard Elements Outline Variety of Design Options That Can Be Manufactured at Reasonable Costs Create a Self Design Program/Process Where Customers Can Self Design Products Now Available on Internet for Wine Racks and Closets

20 Business Strategy-Offer Packages Combine With Current Offerings Products and Services Valued By the Customer But Purchased and Resold Example-Offer Complete Home Millwork Packages When You Only Make Cabinets

21 Business Strategies- Pre Engineered Products Create a Product Line That Has Some Efficiencies in Materials and Labor Document the Bill of Materials or Parts List So New Orders Require Little Effort in the Engineering Department Goal is to By Pass Design & Engineering Bottlenecks Examples-Closets, Garage Cabinets, Bookcases

22 Business Strategy- Picking Marketing Channels Positives and Negatives With Every Channel Direct Offers Highest Price But May Lose Efficiencies in Manufacturing and Marketing Many Small Operations Cannot Support a Commission Sales Program

23 Marketing-Architects and Designers Add Value in Eyes of Customers By Developing a Large Group of Local Shops That Can Supply Products That Can Meet Client Needs Support Repeat Projects When Performing Well for Designers and Architects

24 Summary-Find Your Strategy for Success Everyone Needs a Success Strategy Generally One Wants to Help Others Reach Their Goals or Satisfy Their Needs Identify Needs, Create Strategies, Implement Strategies, Followup, Be a Success