Will Sampson discusses the importance of business growth and building your business to withstand things that weren't in you business plan. His guest is Amanda Conger, executive director of the Cabinet Makers Association, discussing the results of their annual Benchmark Survey of the woodworking industry.
This episode of the Woodworking Network podcast was sponsored by FDMC magazine. FDMC magazine is your vital source of information to improve your woodworking business. Whether it is keeping you apprised of the latest advances in manufacturing, helping you solve your wood technology problems with Gene Wengert, or inspiring you with case histories about successful businesses and best practices, FDMC magazine is there to be the sharpest business tool in your shop. Learn more and subscribe for free at woodworkingnetwork.com/fdmc.
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Intro music courtesy of Anthony Monson.
It’s the classic story. Young entrepreneur starts out as a one-person operation in a garage and eventually becomes a gazillionaire. Was it luck or skill? Or both? When the business was started, was there a cohesive plan in place? Was it followed? Did everything turn out as planned?
Having just survived the year 2020, we all can agree that no matter how well you plan anything, plans are likely to change. Who plans for a pandemic? Most business plans I’ve seen and even the ones I’ve written tend to work under a series of assumptions, the biggest of which is based on some kind of expectation of growth.
It’s a business truism that if your business doesn’t continue to grow, you will likely fail. Just to keep up with inflation and growing overhead costs, you must continually add to your bottom line to keep the business afloat. But how much growth is enough? How big is big enough?
In the woodworking industry, there are thousands and thousands of shops that begin with a business plan that is little more than, “I like to make stuff out of wood, so let’s try to sell enough to make a living.” That’s not much of plan, of course, but a surprising number of small shops grow from that to actually being productive and profitable businesses. As they grow, typically a more detailed growth plan emerges. It might not be written down, and it might be step by step. One product becomes popular, so the owner tries to figure out how to capitalize on that to make more and sell more. Maybe it requires buying more machinery or bringing on some employees.
From there, it’s hard for most healthy businesses to look back. But growth brings challenges and at every bump in the road, owners are likely to wonder whether they did the right thing and what new path they should take. Whether the business is four people, and the owner is trying to wear all the hats, or it’s a big factory with a whole management team to wrangle, the challenge is really the same. How do you plan for growth and set up some way to anticipate and overcome the challenges along the way?
One way is to think about the growth of your company not just in employee numbers or sales figures or profits, but also in survivability for the long term. Are you hiring for the long term and investing in both brain power and machinery? Do you know what industry benchmarks for productivity, staffing, plant size, and compensation are? How do they apply to your business? Do you have the depth to survive and overcome the unexpected? Do you have an exit strategy or plan for a new generation of management?
No plan can account for everything. Soldiers talk about how the best of battle plans go out the window as soon as the first shot is fired. But focusing on thorough knowledge of your industry and building a dedicated team can go a long way to making your business as big as it needs to be to make it to the next step.
Before we get to Amanda and the results of the survey, let’s pause for a word from our sponsor. FDMC magazine is your vital source of information to improve your woodworking business. Whether it is keeping you apprised of the latest advances in manufacturing, helping you solve your wood technology problems with Gene Wengert, or inspiring you with case histories about successful businesses and best practices, FDMC magazine is there to be the sharpest business tool in your shop. Learn more and subscribe for free at woodworkingnetwork.com/fdmc.
Today we are pleased to have as our guest Amanda Conger, executive director of the Cabinet Makers Association. Welcome to the Woodworking Network Podcast, Amanda!
You recently completed tabulation on the annual CMA and Woodworking Network Benchmark Survey that gives us a snapshot of a major segment of the woodworking industry.