Today we are continuing our series on The Seven Irrefutable Laws of Manufacturing Business Growth. To review, here are the 7 Irrefutable Laws of Manufacturing Business Growth:
- Your Company Must Be Highly Visible
- You Have to Have the Right Asses In the Right Seats
- You Must Work On Your Business, Not Just In Your Business
- You Must Market Yourself and Your Company
- Keep Current With Technology
- Diversification of Your Customer Base
- Expand Through Acquisition
Today we are taking a closer look at Number 3, “Work On Your Business – Not Just In Your Business.” In two decades of providing services to the manufacturing industry, including business brokerage, industrial auction services, certified appraisals and web development, I’ve discovered that most manufacturers have a common story of their beginnings. Most did not start out as entrepreneurs; rather they started working for another manufacturer, or as an apprentice. Perhaps they saw opportunity when the company they worked for was not servicing their customers quick enough or with the quality required to maintain the account. They became “accidental” entrepreneurs, by seeing an opportunity and jumping on it! Most who started in this fashion are incredible at whatever part or “widget” they make. However, making a business work, even a small business, requires SO much more!
You have to work ON your manufacturing business, not just IN it. “No time for that,” you say? I say, MAKE TIME.
If you don’t, you’ll have all the time in the world because you’ll be OUT of business. The subject of working on your business, not just in your business, has been the subject of many books and the basis for several business coaching franchises. Probably one of the best I’ve read is “The E-Myth Revisited – Why Most Small Businesses Don’t Work and What to Do About It” by Michael E. Gerber. If you haven’t read it, I highly recommend it. Gerber is a proponent of establishing “systems” to run every aspect of your business, much like a McDonald’s would do. Written instructions for everything, so that in your absence, the business could continue. Gerber says that if you can’t take a month away from your business without it collapsing, you own a job, not a business. I realize that for very small manufacturers….one man machine shops, a month off might always be impossible. Yet, there are valid and important points to be learned and thought to be sparked by Gerber. As a Manufacturing Business Broker, I can tell you that having systems in place with every process well documented adds value to your business when it’s time to sell. That is PRECISELY what buyers want to see and they will pay more for companies that are well organized. For more information on what manufacturing business buyers look for, see our ongoing series, Selling a Manufacturing Business – The Top Five Things Every Buyer Wants To Know.
While I do think the E-Myth makes many valid points, there is more that must be done in this day and age to maintain the health of a manufacturing business. I would argue that 50% of your time should be spent on visionary planning. Here is a brief outline of things you can do to work ON your business:
- Market your company and your services to existing customers. Have regular communication with them. If you’re not, I can assure you that your competitor is. Of course you think the quality of the work you are providing is awesome, but what if they don’t? What if they never tell you, but just move on? Do they know about other services you have the ability to provide? Perhaps custom design, prototype, finishing. You’ve already got the fish hooked – reel ‘em in baby! Give serious thought to everything your ideal customer might need. Do you have the ability to provide that service? Tell them!
- Market your company and your services to your competitor’s customers. We all know that sometimes companies get too big for their britches and sometimes bite off more than they can chew. Companies going through growing pains sometimes screw up. Sometimes the BEST place to be is number 2! The guy that gets the account next will be the one that communicated their worth and capabilities on a regular basis. The squeaky wheel gets the grease – make sure they know who you are when your competitor is about to lose the account. Working ON your business means making time to communicate with current customers and ones you hope to get in the future.
- Make sure new business can find you! If you are a small manufacturer, a bulk of your business comes from sub-contract work from larger manufacturing houses. When sophisticated companies need services, they use sophisticated methods to find the right fit. Your future business is online. If you are not there, the new business goes to someone who is. At this juncture I can just hear some of you saying, “I don’t need that crap, I’ve survived in business all these years without it.” Really people? Let me be blunt, like a good Jersey Girl should be – If your company does not have an online presence, you have effectively put a gun to the heart of your business and pulled the trigger! It doesn’t matter how you did it in the past. The rules of manufacturing business survival have changed. For more information on web development and social media specifically for manufacturers visit http://blog.mfgwebsolutions.com. Perhaps you have a web site but it was developed in the dark ages. Working ON your business means updating your marketing materials and web site on a REGULAR basis.
- Keep your crystal ball shined up! Our world and the technology we use is changing at a faster pace than ever before. As technology changes, entire industries can get wiped out. Think typewriters in the 80’s, bookstores and the printing presses used to make the books that are now being purchased electronically. Postal meters? Who needs them anymore; most are using email. Ignorance of changing technology is NOT bliss and can be the death of your business. But, if you continually educate yourself on what’s coming down the pike, you can make strategic decisions to get your company into alternate industries BEFORE its too late. Working ON your business means paying attention to the world around you so that your business is not side swiped.
- Forward planning – know where you want to go. This should probably be listed first, as all other decisions should flow from your vision for your company. Referencing one of my favorite books of all time, “The Seven Habits of Highly Effective People,” the late, great Stephen Covey advises that we “Begin With The End In Mind.” Do you want to dominate the field? Do you want to stay small? Your marketing decisions should be geared to achieve your specific goals. There is no one size fits all here. What’s right for one manufacturing house might be totally wrong for another. The point is to KNOW what you want to obtain, and then make a plan to get there. I am NOT a fan of long-winded mission statements that fill volumes. Entire industries have sprung up to charge business owners tons of money to figure out what their “mission statement” should be. News flash – Nobody knows your company and where you want to take it better than you! For a great do-it-yourself approach, read “Prioritize!” by Joe Calhoon & Bruce Jeffrey. This is hands down, the BEST thing I’ve ever read on mission statements. These guys are no nonsense and advocate mission statements that are NEVER more than one page. “Prioritize!” teaches you how to take a kick ass mission statement and transform it into an actionable, prioritized plan. Does it work? Joe Calhoon was a keynote speaker at the National Auctioneer’s Convention a few years back. One of the association’s past presidents took his company from $5 million in annual sales to $20 million in one year’s time. I like Scott Adams view, 1996, “The Dilbert Principle” “A mission statement is defined as a long awkward sentence that demonstrates management’s inability to think clearly. All good companies have one.” No matter how funny, the last sentence is true – all good companies have one. Calhoon and Jeffrey will teach you how to get one. Working ON your business means making the time to develop a plan.
- Training employees and then delegating. Let’s be honest, most entrepreneurs are control freaks. Nobody can do it better than you the business owner. Many of you, (including myself), are saying, “guilty as charged.” Working on your business means taking the time to train, then letting go a bit. For many small businesses, manufacturers included, this is an absolute essential for business growth. The time investment can be PAINFUL, but the benefits far outweigh the pain. Do you REALLY have to do it all? Some areas you might consider delegating or outsourcing are accounting, payroll, advertising, marketing, social media and more. Don’t have employees but need help? Hire an outside virtual assistant. Alternatively, hire a professional for a specific job through a service like www.freelance.com or www.elance.com. This is a great way to get the help you need, without having payroll. You are paying for a specific job to get done at a pre-negotiated fee. Working ON your business means taking the time to train and delegate.
Volumes can be written on different ways to work on your business rather than in your business. In fact, once this series is complete, we may do just that! Next month we’ll be taking a closer look at Marketing Yourself and Your Company as part of our continuing series. Until then…thanks for reading!
Fran Brunelle is an industrial auctioneer with almost 20 years experience, a manufacturing business broker, licensed real estate broker specializing in industrial properties, a real estate auctioneer, certified appraiser and author. Fran has established several corporations that provide services to the manufacturing industry. The “Accelerated Group of Companies” provides tools and services to help manufacturers grow and exit strategies to maximize dollars when they are ready to retire or sell their manufacturing business. The group of companies that Fran Brunelle has established includes:
www.AcceleratedBuySell.com – Provides Online Industrial Auction Services, Used Equipment Auctions, Capital Equipment Auctions, Plant Liquidations, Industrial Plant Cleanout Services, Used Machinery Location Services, Certified Machine Tool and Equipment Appraisals, and more.
www.AcceleratedMfgBrokers.com – Specializes in Manufacturing Business Brokerage and Mergers and Acquisitions. We help manufacturers develop exit strategies to maximize retirement dollars, and successful manufacturers expand through acquisition of other manufacturing companies, product lines and customer lists. Manufacturing Companies for sale throughout the United States are listed on this site.
www.AcceleratedRE.com – Provides Industrial Real Estate Brokerage Services, Online Real Estate Auctions, Sealed Bid Real Estate Auctions and complete industrial facility cleanout services.
www.IgniteMfg.com – Provides funding for products made in the USA, and engineering/manufacturing educational needs through Crowd Funding.
www.MfgWebSolutions.com – Provides web development and social media services for manufacturers at under-market rates.
Fran Brunelle is a contributing author to:
blog.AcceleratedBuySell.com - A site that provides the latest manufacturing news, statistics and opinion. It also provides information on how to grow a manufacturing business, and what to do if you are a manufacturing company that needs to close.
MFGWebSolutions.com/blog - Provides the latest information on social media and web development for manufacturers. It gives manufacturers tips and tricks for boosting their web presence.