The Economy Part II

[wberminio]

Back in the spring I was wondering how everyone was holding up in this economy.
We had some good feed back.
How about now-going into the fall?

I've been progressively slower-worse in 25 years!
BUT-I'm starting to get some calls(not Jobs as of yet)Most said to call back in Sept.(hopefully Sept of this year)

A small ray of light in a very long dark tunnel!


Erminio

[ljdm]

A small ray of light in a very long dark tunnel!
Right now, I'd be happy just to see the tunnel!
Things have to get better eventually.

[coach]

A majority of my work is commercial rehabs. The apartments I worked at had 5-10 skip outs weekly. I am starting to get some calls. One property claimed 40 new leases in 10 days. Several others are telling me more move ins in the last 4 or 5 weeks than the past year.
Like you Erminio I am getting calls preparing me for work in 3 or 4 weeks.
David

[coach]

every time I see a light at the end of the tunnel there is a freight train attached to it.

[erniek]

I've got more work than I ever have. Mostly cabinetry. I can't keep up. Working double shifts.

[thewoodcrafter]

Ernest,

I'll take your leftovers.
I need something to do.

[gene]

I am starting to get calls as well , I think things will pick up in the near future but they will not be as good as a few years ago. I am thinking of offering a "cash for your old cabinets " deal but now i need to find a way to hide that cost in the price. Every night when i lock the shop up i am thankful for another day, It still beats the hell out of saying " do you want fries with that" for 7.65 an hour

[ricky_spearman]

I need .RLF files floating out there. maybe some for indexer, (Y-parallel) would give me a chance to get a fire burning in my stoker... I have to put my clothes in an old fashion ringer (roller type) to find some change to get tools sharpened.. NO WORK here in St.Pete, FL.

[chodges]

A few months back, we hired a dedicated salesman to beat the bushes because of the decline in work were were seeing.

He has been somewhat successful by selling enough to more than pay his salary, but not by a big margin.

The REAL problem we are having is collections. In our market area, the norm is to extend net 30 days terms on orders over about $1,000. If we don't do that, another sign company will and we will lose the work.

Recently, we have had an excessive amount of "slow pay" and a few bounced checks from corporations. That's scary!

[coach]

I haven't had any checks bounce (**knock wood**)
but my net 30 accounts are all at 60 plus days. Makes it difficult to pay suppliers that won't hesitate to put you on C.O.D.

[harryball]

I must admit I'm scratching my head but we've had a record month... in fact it would make a record for 2 months. I don't want to bring unwanted sunshine to a rain storm but we've been doing well.

It's not been all kicks and giggles though. Suppliers are slowly reducing their stock and getting any quantity of items is more difficult. I order 20 sheets and find they have 8 on hand. I try to buy a case of adhesive and find they only have 3 tubes etc... Lead times are increasing as well. Packing foam we generally would get cut and delivered in 1 week, now it can take up to 3.

No bounced checks, one declined charge that went through later.

To be honest I believe what WE are seeing is 2 fold. 1) Many of our competitors have stopped building bat houses. That excess is coming to us. 2) We've been here 4 years now and people have begun to recognize us and are able to see our history. The "Stamina" theory of business.

/RB

[gerryv]

Harry,

Perhaps it's value that's working for you. Notice that I didn't say price. By that I mean real as opposed to perceived value. Not sure I can enunciate this well but let me give it a try:

Marketing has mostly been a boon to countries like ours over the last few decades but, unfortunately, it took on a life (and overblown ego) of its own and has gone a long way to getting us into this mess. Where we crossed the line was when the greedmeisters and their butt-kisser wannabees realized that most folks tended to trust others in general and that presented them an opportunity. Essentially it came down to the fact that creating "perceived" value by lying and/or building hidden costs was far more profitable than creating "real" value by actually delivering it.

How does this relate to bat-houses? Well, my take on it is by way of analogy. Think about inkjet printers. 173 great features in this state-of-the-art printer for only $79 +/- ...then there's the ink! Pity the small business owner that wants to hand out 100 self-printed, full colour flyers once a month! We used to use the term hi-way robbery. I think it meant this kind of rip-off. Better still (smirk), there's the "free" hi-tech, state-of-the-art, fantastic (perceived) value home blood testing machines for those with diabetes. Wow. Then of course there's the $150 +/- PER MONTH for the dinky little sharps and litmus paper type test strips that must cost at least a buck or two to produce.

To me, those are perceived value but really hiway robbery and kill our longer term economy! Period. So is the mosquito trap thingy that my danged neighbour convinced me to share the cost of. It burns off propane all day/night to attract the little critters who then fly in to get stuck on a big strip of flypaper. $30.00 for two pieces of these "custom fit" consummables! Now he want's me to pay for half of those too... right! My son went out yesterday and wrapped a couple of those old-fashioned fly-papers around it. They work better. $1.99 for six. That's real value.

What's this got to do with bat-houses? With bat-houses we pay the "price" once and once only. No hidden costs. No need to by Ball's Bat Bait to put in the optional Ball's Bat Bait Bin. Again, real value. The bats come, and stay, and eat bajillions of mosquitos - WITH NO ADDED, ONGOING COST.

To me this is perhaps a part of the reason why your business is surviving or even thriving. In tough times people are forced to look harder for real value. You're selling it and good for you. Now I suppose you'll want me to buy one, Sheesh.

[woodworx]

Here is what I see.

I have probably talked to over 1000 companies in the past 2 months about their businesses. I am selling wholesale ply/lumber here in southern California and am usually calling out 4 to 6 hours a day. We cater to many industries: Boat builders, crating companies, cabinet makers, exhibit builders, general contractors, handyman services and a few others. After analyzing account histories I have found what everyone else could easily observe. This economy is weeding out the companies that were not very strong to begin with.

30% of the accounts I call are out of business. 60% are still slow, but are seeing a dramatic increase in quotes. 10% are doing really well.

The force that has to be reckoned with is the power of a changing market. You must realize that the way business is done has completely changed over the past year.

First off getting customers to "buy in" to your product or service isn't as easy as it used to be. Free 3D designs and stain samples before the deposit......no more. Customers will take you for everything they can before you put the brakes on. You must get some kind of commitment before putting a dime into proposals.

Charlie's observation is right on the money. Most customers are slow to pay. Just like most of us have been to our own vendors. It is just a trickle down effect that is inevitable in a slow economy. We pay when we can, and manage our business with it's survival being the main goal in our cash management.

The lumber company I work for has over $3 million out there in credit right now, with many larger companies owing 100K or more. Since we are a strong company and my v.p. understands our industry (manufacturing) is suffering, he is willing to help people out because it builds great long term relationships.

Keep in mind that survival mode is very different than what most are used to. There is an old adage that I read somewhere that pertains to many of our situations. "In reality we are all spinning at over 500 mph, even though it feels like we are standing still." If we were all to take a step back and look at our businesses from a higher prospective we would see that if you are still in business you are actually performing leaps and bound over the competition. Be happy you are small and only having to come up with thousands to keep your doors open, and not hundreds of thousands. ;)

[carlhopkins]

I am still ok as well a little off from last year but for me to look at the numbers for a short time frame can be deceptive.
I too am having trouble with some HPL shipments. I delayed an order so we could go to the beach and when I did place the order I needed 30 sheets and found they only had 2 and should take 1-1/2 weeks.
But for now I feel very blessed!
good luck to all
Carl

[dakers]

i had a friend who was a child in the depression living in an orphanage. He met his future wife there. she lived in the orphanage too. He was about 25 years older than me. He was very frugal as was his wife. He always told me that financial independence came not through what you made but through what you spent. He lived that way. Paid his house off in 5 years. I could not be as frugal but his wisdom has given me some balance that i do not posess by my nature. I am trying harder to be balanced in thinking i need to make more vs i need to spend less.

[robtown]

Slow payers have the bane of my existence since 2003 when I opened my doors. It seems as if the larger the customer, the more you can count on them not honoring your payment terms, they'll agree to anything to get the job started, but then won't honor that agreement when the job is complete.

[gundog]

I have been surprisingly busy. I make marine parts for fishing boats. The sales I have for new boats to the dealers has slowed a little but the sales to sporting goods stores has climbed to make up the difference. I keep expecting it to slow but it hasn't so far. This is my 4th year in business and each year it gets bigger. I run my business on the side it is not my main source of income. I really don't want to get any bigger because I never get time off. I am tired of working all my days off from my regular job but they cut my retirement package at work and I want this business to help when I retire in about 10 years. I am just afraid I won't make it another 10 years at this pace. I really don't know what to do.

I have thought about an employee but I would have to charge more for my products. I am also worried about my shop not meeting OSHA requirements. I have so many tools that are home built for making my products. Many of the things I do require some hand skills using various tools and I don't have enough work for a full time employee so how do I find a skilled guy who would work part time?? Maybe a retired guy I was thinking hiring someone as a sub contractor rather than an employee could I do that and allow them to work with my stuff in my shop? This would make it much easier but I am not sure of my liabilities in case they were hurt.

Mike

[knight_toolworks]

things have picked up a bit for me. I am never as busy as I could be but it is getting a bit better. made some ski profiles this week and a big walnut door I vcarved a map into and a table I cut for epoxy inlay and working on some table parts that I have done before. will cut some purse handles out this week of the customer gets the wood to me. most of these are around 200.00 not big by some standards but not bad for me. also did a speaker prototype.
I do so many odd things it keeps things interesting.

[shoeshine]

Hey Steve,

Like a lot of us small shops, it sounds like you do a lot of a little bit of everything.

Any thoughts on how you generate, find, or let these small/one-off jobs come to you?

There are many of us that are looking to come up with filler work these days to supplement and make use of downtime, sometimes out of our primary areas of expertise.

Not asking for a lengthy treatise or business plan, but any anecdotes might give someone else here a new tack to try or at least help us to think outside our litlle boxes.

Thanks
Chris

[knight_toolworks]

I wish I could claim I do something but I don't really and it shows in my lack of income sometimes. but I was in good with the two biggest woodworking stores locally long before I got my bot and I get referrals from them (they turn out the best customers) I post a couple ads week in creigslist. most of those fall through when I give them a price. I guess they expect free.
I also have my info in google maps and that's free and pretty useful. then word of mouth has done well too.
though doing one off's is fun it's hard to make much money sometimes for the time.
yesterday doing a big walnut door it was 80x30 and warped. I had to figure out how to hold it down and get the warp out. the bad part of one offs there may not be much room for error. you get this expensive piece of wood and it is one of a kind the pressure is on. no room for mistakes.

[myxpykalix]

Craigslist is like your local Bucksaver paper. Many of the people who read it are looking for cheap deals. The woodworking stores on the other hand deal mostly with older retired or dedicated woodworkers who have more of a disposable inconme for their hobby.

I know you have said you don't like to go out and be a salesman but i have been admiring your work long before you got a shopbot and were making some of the most beautiful hand planes and selling them on ebay. You need to develop a thick skin for rejection and let your work do the talking for your quality.

[shoeshine]

Silly question, but I see you Steve and Michael are within a few miles of each other portland/vancouver. Have you met? Just curious how much this forum translates to the RL (real life in textspeak)

[dray]

Im getting calls and doing estimates but not hits.

[gene]

Has anyone approached their local woodworking clubs?
In alot of towns there are woodworking clubs that you can join and rent space with the use of tools there . Maybe some work could be picked up there. Does anyone put their buisness cards up on the bulletin boards at the lumber stores and big box stores? How about a notice in the church bulletin?
Who knows where this may lead.

[ghostcreek]

Work is slow here in Northern calif. We have posted our business cards all over. But the best source for jobs has been the local farmers market & craft shows and local events where they have vendors. We made alot of small $10-20 items, (boxes, cutting boards, small signs etc) My wife sells a few of them (pays the vendor fee, and i hover to get the clients that want something else. No cabinet work for over 6 months (we were, Mainly a Cabinet shop). Pays the bills. Just another thought for you all.

Keep talking with people, it helps.

[carlhopkins]

Update; and a bit of my history.

I started this business just over 5 years now. I was able to sell the first two jobs that I bid on and sold a third before I could get the first one installed. For the most part it has been that way since, just saying it has been very good. I have on occasion not get a job due to price maybe one in ten, just a guess.
Fast forward... now I am bidding very few anymore which is no surprise to most.
Getting just about nothing, some folks are talking but not even getting prices. And the things they are talking about will not even pay the bills.
What does one do? I know that I am not the only one in this position. Cutting prices cuts all of our throats sooner or later. I just found out that one that I bid on went elsewhere. I must say I was a bit shocked to say the least. My wife does our books and she gave them 10% discount because they are good friends. I have some customers that have said they would have paid more “this was after the fact”. So I know my prices are a bit low for what I provide.
I am looking into putting an ad in a local monthly magazine and will see how that goes but I feel as if I will be spending way to much time doing bids and less time doing the craft. My plan is to devote only a set time for meetings and a less labor intense price quote so as to manage that aspect of it. I guess kind of a last ditch effort before I give up.
I live west of Atlanta very near the recent flooding and I do work for a restoration company but they rarely use custom.
Thanks for reading my story and yes my Shopbot has served us well. Things would have gotten bad much sooner had I not bought it.
Carl

[henrik_o]

Guys, try to hang in there even if it's tough. There's positive signs for the US economy I think, so the rebound might be coming around soon.

Over here, the first half of 2009 was really slow, and that was on the heels of a very slow fourth quarter 2008. But just after the summer, the rebound happened. We are literally drowning in work: all the jobs that were put off during the crisis are now put on the market, and because some companies went belly up those of us who remain are busier than ever. Due to this, our prices have also gone up.

[wberminio]

Henrick
The light at the end of the tunnel is getting a little brighter,at least for this week!

I just spoke with someone here from Italy.
Said the same situation there as you describe in your part of Europe.

As we used to say "Keep on truckin!"

[coach]

Watch out that light isn't attached to a frieght train ! ! ! !
Things here are up and down. But do seem to be improving. Large complex's are finally doing work. A lot of door and drawer orders but it is money.
A lot of complex managers are telling me their occupied percentage is on the rise a few tell me over 80% which is huge. 3-4 months ago they were at 60%, some even worse.

[wberminio]

David
Is that the front or back of the train?!!!
Anything will be a relief at this point.

[gerryv]

Erminio: Now's there's a "relief" carving that should sell well right now - a train with its light on (rays) coming down the tunnel at you.

[wberminio]

Gerald

I "give" that one -no charge!

Erminio

[ljdm]

I'm hoping my question for customers doesn't change from "Do you want interior or exterior finish" to "Do you want catsup or mustard on your burger?"

[gerryv]

I posted this on the "Price Free, No Charge" thread by mistake but thought it might offer a bit of help on the "no/low cost marketing" side of things here so hope no one minds.

I went on a local art tour last week. Certainly, a number of those with showings fit into the "starving artist" pigeon hole, but not all.

Most were doing their best by handing out business cards, brochures, homemade cookies, fresh fruit and even samples from local wineries to the point where it became expected and, well, normal.

One of them, lived in a rather sumptuous home with several rooms of the first floor dedicated to the display of her art. It was some of the better stuff we saw but not the best, based on our tastes anyway. She didn't offer any of the above freebies as an enticement but was being approached by many, many more shoppers than any of the 30+ others that day.

She did however have several little trays of dead-simple, tiny, but otherwise "original" painted clay thingies. Very cute, all of them. The price was 5 cents each - 10 cents for the slightly bigger ones! Her initials were on each one :-) Because they were being sold, the buyer had to approach and meet her to pay for their pieces of original art from a successful and very pleasant artist.

I think I may know why she owns the biggest house in that prestige area. I believe she knows she has to do something different and more memorable than those equally good or even better skilled artists working out of their garage. Something that costs her nearly nothing in materials during those down times but seems to turn the trick in expanding her customer base in slow economic times. Maybe even a conversation piece to trigger 2nd hand references?

Thats my take on it anyway.

[gene]

Gerald ,
That's a very interesting concept of thinking. The artist gets to meet the potential client and make an first impression. I can see where you're going with this. Kind of like fishing, it isnt the biggest but later on you could get the whopper.

[cabnet636]

people call me for small things, (and i do not consider panel production small) a lady came in for a small sign for her lake house, took a few minutes and she offered to pay, i told her to remember me for her or her friends cabinet needs,

on that sign i have done three kitchens and two commercial jobs in the last three years. it adds up but i do pick my battles carefully. generally if someone hands it to me and say's do it then they pay, if they take the time for a bit of conversation some friend making, then they are gonna save money!
jim