A comment about surviving a recession:
I know when business get slow we tend to take any work, even out of our scope. Most of these jobs, you loose money on, but you are keeping your employees busy. It would have been wiser to have not take the job and pay you’re hard to replace employees to do slow time projects, to repair equipment, clean and organize, cross-train. Maybe design and build new tooling or play with reducing run time on repeat jobs. My Dad always said, “You never lost money on a job that you did not takeâ€. Letting go of good hard to find help, is not an option either. Invest in slow time projects for the future is investing in the future. Empower your employees to help find these projects; they should appreciate you not laying them off.
Let your customers know what you are doing, upgrading your facility, adding a process, and upgrading your quality or employee skills during these slow times. Ask if they could suggest you add any new process that might help them in the future. Let them know that you are keeping a core workforce and will be waiting with expanded capabilities for the economy to turn-a-round. Ask them what they are doing to survive the economy. Keeping in contact with your customer, but try not to beg for work. Because you are not asking for work, you just might get some. You might also give them some ideas about updating their plants that might lead to some work. Communicate with your employees, your customers, your vendors and your banker. Working together makes survive more achievable.
Another way to survive a recession is to group together by joining a trade association. There are some good ones out there, I belong to the National Tooling and Machining Association. Local or national networking with larger companies that are in your association may be another sales opportunity.
Just a few ideas that might help.
Shop Doc Forum » General Questions
surviving a recession:
(23 posts) (13 voices)-
Posted 3 years ago #
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If you are taking jobs that you will lose money on, you will lose money. You have to make a profit on a job to survive, otherwise you spend your own money funding someone elses project. That just doesn't make sense to me. You can reduce the price down until you make a small profit, but the profit still has to be there, IMO. We tend to work with other shops in the area, kinda pool together and share work, we each take on parts of the jobs that we accel at.
Posted 3 years ago # -
Ingenuity, combined with increased effort is the formula for success during lean times. Find ways to work smarter. Remember the product you're really trying to produce is money, not parts. This is a time for your top notch employees to really shine. I like to stop work and brainstorm once a week. I'm mining for new ideas!
Posted 3 years ago # -
I've been through several recessions since I started work in 1972, and when work was slow, I made or repaired tools, cleaned things, learned CAD/CAM and wrote programs.
My companys had foresight, the people prepared for the busy times to come (and they will) and be ready to hit the floor running.
There was the time an apprentice made a dozen grinder diamond dressing blocks out of aluminum...
TomPosted 3 years ago # -
Taking a project that will loose money or is out of your scope of operations is a loosing proposition. Taking jobs that are
within your area of expertise and will at LEAST break even, are
good news. You might experiment with expanding your scope by
reviewing possible jobs, experiment/train and see if you can do
the job and at least break even, thus expanding your scope of
expertise.Be careful of taking a deep plunge in desperation. You will loose money and your reputation thus spoiling your potential for the economic rebound.
Posted 3 years ago # -
Respectfully, Ray-Vin.Com is not participating in the current recession.
Many shops wish they had some little product to bang-out in slow periods. All we do is make little products and we bang them out year round and have been doing so since 1993.
Look for a niche market and fill a gap. We found ours making accessories for target shooters. Through the years we have had inquires from many un-related fields. Things like decorative aquarium corners and figural pad locks.
Using the Internet, for less than $100/month we have a 24-7 catalog store that will take orders and directly deposit the payment into our account. We do no advertising at all.Instead of re-painting that old horizontal mill, surf ebay and see what you can do.
Recently, I was discouraged to get only $.15/pound for aluminum scrap. I tumbled 15 pounds of drops and sold them on ebay for $27 + shipping. Hobbiy machinists' need our scrap!
Work is there for those who want it.
Regards, Ray in FLAPosted 3 years ago # -
Agreed, in this economy, taking any job, though tempting given the tone of our times, is not the way to go. However, jobs beyond your capacity can expand the scope of what you're capable of. What with the shakeout of job shops occurring in many markets, it's smart to work with the shops in your area to balance what work is going where and why, and so is taking stock to look at what you can improve in your shop and how to best concentrate resources. This is also where, as rbrandes points out, consistent niche work -- your bread and butter -- is going to keep you afloat.
Posted 3 years ago # -
I used to deliver pizzas at my age! (I'm over 50) and now that I've stopped doing that I have tons of car problems to make up for it. Whenever I get a little cash I want to invest it in learning but never know where to start. But I agree there are no jobs to apply it to. Every day I lose a little more.
Posted 3 years ago # -
So Masters, what has been your involvement in the machining world since you say you've been delivering pizzas? Have you thought of investing in learning in a class in machining at your local community college?
And what are you losing a little more of everyday?
Hope your car's OK!Posted 3 years ago # -
I used to work at a Tool and Die shop designing molds for car parts. But that industry is going bye-bye so now to live in this dark world, I must deliver virgin pizzas to the insatiable stomachs of middle america. It tips ok but my car is in ruins. I pray Allah lends me a helping hand soon! But everything turns out ok. I lose a little more of everything. Thank you for your well wishes.
Posted 3 years ago # -
The people in the precision parts industry have long believed that opportunities would drop from the skies. If you made good parts prospects would come to you. During a recession this idea is no longer viable. Job shops and virtually all businesses have to market themselves. Post a video, telemarket, knock on your neighbor's door, join groups, be visible, and toot your horn. The badge of honor in this business has been "I don't need to advertise." Not good enough in tough times. Build a brand, even if it is a local one, present a unique identity to your target market. Then you have a chance.
Posted 3 years ago # -
Agreed. This is where partnering with shops in your area can come into play too. With the level of shakeout occurring in all industries, surviving businesses can benefit from thinking smarter about the nature of competition. Nearby shops may start outsourcing work to you that they'd been sending to someone before they went under, and vice versa. Or they may have a machine they're willing to cannibalize for parts you need, or, again, vice versa. In economic times like these, networking is where it's at.
Posted 3 years ago # -
I recently lost my job in another industry (finance) and had to move back home with my parents. One day while rummaging through our garage, I discovered my father had a boring machine from the early 70s he bought for some hairbrained scheme that never panned out. I took it to a local shop and they said they could fix it, but that it would cost me. With the right attitude and patience, could fixing this machine eventually be lucrative if I develop the skills to use it? Would shops outsource a boring job to a rogue like me? What about environmental boring? Should I look into repairing it? Thanks
Posted 3 years ago # -
Tupperware, that boring machine could be lucrative for you depending on your level of proficiency in using it. Not all boring work requires skill with CNC; actually the one-off, one-on nature of boring work lends itself to custom jobs, and CNC may in fact be too expensive for that kind of work. But you're going to need the machining skill necessary to run a manual boring machine.
If you have no skill as a machinist you might look at selling that machine -- there's a good market for used boring mills. Or maybe you and your father can get a little parts work going in the garage. Next thing you know you have your own little job shop. The sky's the limit!
Posted 3 years ago # -
Yesterday I visited a beautiful shop in Chicago making dental instruments. Naturally, I asked how business was. The manager showing me around said that last year was great until last quarter the dentists sopped buying. Dental insurance was cut back, people with insurance lost jobs and many people started to put off regular appointments.
Every body is getting whacked in this recession.
Posted 3 years ago # -
Health care has looked pretty recession proof pretty far. I guess dental health is less of a priority. I know I'm cancelling my checkup in May; I think yearly is fine for the time being.
Posted 3 years ago # -
There s a lot of quoting going on,but does anybody see firms pulling the trigger and buying product?
Posted 3 years ago # -
Not much results from quoting. Small quantities, sometimes 1-2 peices! Some times more but overall slow.
Posted 3 years ago # -
That must be frustrating considering your name, letitrun ;) Are you a big believer in lights-out machining? There's a thread on that topic going on here on the forums.
Posted 3 years ago # -
All of us who have been laid off should band together and start a restaurant or something. Then after a few years we could write a screenplay about it, sell it and split the profits 6 ways!
Posted 3 years ago # -
LLoyd - a huge "YES" that the smart open minded companies are still pulling the trigger. We all know that the companies pretending to knowing everything are short lived and see them on the auction block.
Keeping suppliers & distributors involved in our quoting processes has been most benificial here. Having the manufacturers & distributors competing for your business at the initial quoting level has been optimum here.
Machine capabilities with tooling competition is where it starts to making money as an opinion. The "BIG SECRET" of what's being quoted is way in the past and leaping that old school hurdle is the toughest for most manufacturers. The only constant is change!
Getting those non-military, non-medical, non-aerospace jobs with larger quantity runs are very much alive & still highly profitable.
Posted 3 years ago # -
I was talking to a client out in the Bay Area who is doing great business despite the recession. He is relatively new in the game having bought the business in 2005. He has been buying new Star CNC Swiss lathes to run medical work like endoscopy parts and aerospace components which he got by cold calling and then working the clients hard to get the jobs nobody else wanted. He recently bought a new Toyoda pallet machine and a Mori vertical and says he is picking up another Toyoda and more Stars. He is also going after the European market for exportand ramping up a proprietary product for launching next year He has just added two marketing people in house. Another sharp guy I know says he is adding sales people in house because he is disgusted with his old reps.
I think that as the automotive supply chain dwindles there will be opportunities for the solid survivors to step in where the Delphis and Visteons choked.
Posted 3 years ago # -
I find it very interesting that this "sharp guy [you] know" found it necessary to get new sales talent. In economic times like these it's probably crucial to root out some new blood to make sure how you're poised toward the market remains competitive and fresh.
Posted 3 years ago #
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