Machine Shop Growth: Is Bigger Always Better? | Machine Shop Talk Ep. 48
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- Опубліковано 30 тра 2024
- Is BIGGER always BETTER? We all want bigger, better, more productive shops - but are there advantages to keeping your manufacturing business intentionally smaller?
Today, Ian Sandusky from Lakewood Machine is diving into the world of business growth, and exploring some of the common pitfalls companies experience when they grow too large, too quickly.
To combat this, Ian proposes three strategies:
1. Be intentional in your growth plan
2. Right-size your business instead of chasing infinite growth
3. Revisit and re-evaluate your plan frequently to make sure you’re on the right path
What are some of YOUR top strategies for taking your business to the next level?
What’s YOUR STORY of dealing with a company that got too big for its britches?
Grab the forum thread and join the convo here: www.practicalmachinist.com/vb...
_______________________
Ian Sandusky
Lakewood Machine and Tool
lakewoodmachine.com/
sales@lakewoodmachine.com
(905) 853-6194
LinkedIn: / ian-sandusky-3a223227
Instagram: / lakewoodmachine - Наука та технологія
What are YOUR top tips for growing your business?
10*/10* This is EXACTLY the problem i've run into with alot of shops that chase Dollars instead of chasing QUALITY.
Love your videos Ian! I have been an employee and also self-employed. As an employee, it comes naturally to think like an entrepreneur and an owner. This is the heads and tails, in my humble opinion, of how successful businesses operate and grow. It's the same coin! Divide that coin and it becomes worthless. I understand this is a simplistic view in a very complex situation.
The tip is always plan to change, don't let changes make your plans!
I first focus on loading up the shop to capacity, followed with a consolidation period where you improve your processes, review training and get everyone on the same page; finally increase rates slowly to remove the somewhat undesirable customers and find new good customer until you find a new balance. The improvements in systems efficiency and better paying work allows you to built a war chest. Once you have reach your target, hire and train people, purchase equipment than Rinse and repeat. We have double our personnel and triple our capacity over the last 7 years.
Know what you will do if you plan works, know what you will do if you plans works a different way that you want!
This is fantastic advice!
I don’t run a machine shop…I have an embroidery business that I built from the ground up..We are now in our 22nd year and have experienced all of what you have talked about. For us, and I assume most growing manufacturing businesses, when you start out you have systems that suit the small business and as you grow they aren’t upgraded until the old system can’t cope any more. Things turn pretty shitty real fast when a system collapses. In our industry you couldn’t just buy a Managment system off the shelf and we were constantly developing systems to cope. My advise would be to have a system in place as though you were a big company even if you are solo operator. That way your systems can cope with growth.
Also I recommend the business of machining podcast they talk about all this stuff. And they recommend some really good business/entrepreneurial books.
Well articulated, Ian!
Thank you very much sir!
We are seeing this at my shop now. We bought a fab company a year ago. Getting business has not been the issue. Keeping up with the new orders is about to bury us.
I feel you here at the moment - we could theoretically take on likely double the amount of work we're doing at the moment, but as is it's been difficult to keep up with all the orders at the moment. It's a great problem to have, but it's still something to be wary of in any case!
I met a problem with at least 3 small machine shops here in Toronto area. The owners are old enough to get retired, but nobody wants to buy their business. So they have to bankrupt shops with already old machines. On other side there is a middle size shop with 12 machines is for sale too and I’m sure someone will buy.
That’s incredibly sad and I’m surprised that no one wanted to buy them! It sucks because it seems like as a country we’re losing manufacturing capacity more and more each year - my neighbour will likely retire soon and his shop will be gone as well!
@@iansandusky417 my previous boss calls small shops - scavenger, he tried to grow up up to level Tier 2. He is still scavenging from big machine shops but most of his income are coming well known companies.
Funny cause first machine shop I worked at had 3 employees when I stepped in the door. I took everyone’s job till I was sole employee. Went to stop by and it’s closed 😢 I wanted to see about buying the Hurco cause they had it since new and I know it’s history
When your plan doesn't reach your goals change your plan not your goal
This is brilliant!
Continuous adaptive planning... including goals. If you're not adapting you're dying. Tunnel vision destroys opportunities.
Would investing in an ERP software system help mitigate some of the growing pains? I know of large businesses that use them but are there small companies that implement ERP systems?
There are a lot of positives to implementing an ERP system - we actually have some upcoming videos exploring this topic - the one thing I do hear repeatedly from many sources is that ERP really do help with scalability. Especially because if you have the correct systems in place before you need them, it can be much easier to grow with them - versus trying to do it after the fact!
Being a one man band is equally as stressful, the expansion of a company requiring extra staff and then having other roles within the company to support that growth is one thing. Being self employed you wear all the hats and have nothing but constant admin to deal with on a daily basis. What really gets goat is that other companies that you use or the utility companies insist on passing their responsibility onto their customers - Its up to you to find the missing cheque they haven't cashed or chase down your own delivery. In the UK i think its reasonable to say that Customer Service sucks and takes up a good 3 to 6 hrs of my working week (that may or may not include the time waiting in a que on a call to that company. As our companies expand we should also plan for the what if scenario, a 100k order has just come through the door, your machine capacity is almost maxed out and aged, you need extra staff. What if the job is a one off, what if the customer goes bust, what if a war starts and material becomes harder to source, What provision are you putting in place to take a hit. Funny thing about failing companies they have a bad habit of ordering goods they know they have no intention of paying for - once the receivers are called in the big guys and the utility companies are paid out first, The order you have just filled for them before they declare bankruptcy has just become an asset for them to cover some of their debt but leaves you out of pocket. Most companies know months in advance that they are failing, the tell tail sign is they become slow at paying suppliers, they get hoofed of some suppliers books. These are alarm bells. Tell your suppliers and customers what your terms are if they don't agree, consider if you want to deal with them on a long term basis, look what their reputation is like and always trust your gut. As we are still here reading this post we have done extremely well running businesses, we have just seen a world pandemic and are now facing supply issues due to a war. I wont get into skills shortages as its the businesses fault for not reevaluating their recruitment policy, your getting it wrong pure and simple. There are people out there wanting to work, many are well skilled and yet you cant recruit them. Are you prepared to train in house, why not. The only way half of the companies looking for staff will find the candidate they are looking for would be to poach them from someone else. Why would a person working for another company want to come to you. Poaching wildlife is considered a crime and society does not respect poachers - perhaps you are sending out the wrong message. Anyone wanting to leave their current employer will make a decision fast and be swallowed up fast, there is not pool of disgruntled employees out there willing to switch jobs to suit the whims of employers. That is like only betting on lame horses. like everything in life you only get the best if you invest.
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It’s better to be small shop 4-5 ppl max and If you have a lot of work it’s better to find good vendors. Premium customers only + good vendors. You don’t need 30 guys unless you want to have gray hairs in your 30 lol
too big too fast sounds like weyland industries