IWF Education: The Importance of Suppliers & Customers

15. April 2020 16:51
 

 Presented by:

 

 

Sponsored by: 

 

By: James Fox, Owner: Fox Woodworking

This may seem like an obvious title to any business person, especially the owner of a one or two person woodworking shop.  I encourage you to read along, though, to learn more about how both suppliers and customers are important to your business.

Suppliers

In the woodworking business, you may have suppliers for the following services: hardware, lumber, plywood, finish, machinery, tooling/sharpening, etc. In order to work efficiently and effectively with your suppliers, the most important factor is your relationship. Nope, it’s not price, delivery time, or any other component of the system. It’s your relationship with them that is the crucial part of your business. And not necessary about how they treat you: it’s how you treat them. Be sure to pay on time, develop friendships with the sales staff and – especially – the drivers. Also be loyal, and finally, don’t be intimidated. How you treat them will impact how they reciprocate. You can control in this relationship based on your behavior.

Customers

Your customers more than the end-users of your products. Customers can also include contractors, architects, designers, and even other shops. Just like suppliers, your relationship is what’s important with them because your business lives or dies here. Also like suppliers, it’s important to treat them well. Be sure you always deliver a quality product because you are as much of the product as the cabinetry. You should sell your personal connection to the job: remember you are the artist – not just a hireling. And last, but certainly not least, charge well for your work and time.

To learn more: I encourage you to attend my session "Running a One or Two Person Shop: How to Make it all Work" during IWF 2020.

IWF Education: Job Costing: A Systematic Approach

13. April 2020 17:54
 

 Presented by:

 

 

Sponsored by: 

 

By: Ken Kumph, Premier Builders

“Job Costing” isn’t just a task that you do when the project is complete. It requires setting up procedures and processes from the time you create the estimate through the time you run your P&L reports. Tracking the costs in a systematic manner is essential to an accurate accounting of what your jobs cost.

The true benefit of tracking your job costs is the actions you take after your run the reports and get your results. At that point, you need to make the necessary changes to your numbers, processes, and procedures to intentionally not make the same mistakes on the next job and ultimately make more money going forward.

To learn how to systematically approach job costing, register to attend the "Job Costing: A Systematic Approach to Comparing Estimated to Actual Costs" session during IWF 2020.

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IWF Education: What's Your Problem?

7. April 2020 10:36
 

By: Amanda Conger, Executive Director, Cabinet Makers Association

All companies have pain points. What’s yours?

Time Management

From scheduling and project management to finding time to do the business side of running your own business. How do you fit it all in and still have a life outside of work?

 Finding Your Niche

Don’t stretch yourself thin by trying to all things for all customers.  Know your competitive advantage and clearly communicate it to your customers and prospects.

Customers

Sometimes managing the customer’s expectations is the most difficult part of the project. Then when it’s over, how do you ensure that you get paid?

Employees

Finding, keeping, motivating, and staying on task. Do you find yourself doing more because you know you can do it better and without the hassle?

The Unexpected

Disasters, either man-made or natural, will happen. How can you be prepared for the inevitable and unpredictable?

Growth Management

When should you add more employees? When should you buy more equipment? Or perhaps it makes sense to outsource instead

Pricing

How do you price for profitability yet stay competitive?

Vendors

Find the best fit and accept nothing short of your expectations. Form strategic partnerships with responsive vendors and build lasting relationships that add to your bottom line.

Avoiding Burn Out

How do you get back to the pleasure of the craft that got you started in this business in the first place? Get an inside look at how some of the top woodworking shops are continually growing and making significant profits.

Regardless of your particular struggle, you should attend “What’s Your Problem?” during IWF 2020. This round table discussion is a unique networking opportunity to help you learn from others who have been there, done that, and succeeded.

Learn more at CMA’s popular, “What’s Your Problem” roundtable discussion is an opportunity for show attendees to relax, learn and share their problems and solutions with other like-minded woodworking professionals.

 

 
 

Getting Business Finance and Help at Your Local Level

6. April 2020 10:38

By: Laurie Wolff, Certified Global Business Professional

So far in my blogs we’ve focused on small business resources available at the national level through the CARES stimulus package. Where else can you get help? Almost certainly your state has programs available to assist small business. Many states are offering zero interest or low interest loans to businesses that qualify. There are funding pools available in some metropolitan areas or parts of states.

For example, the state of Illinois has several programs for businesses, some limited to Chicago, some to outside the Chicago area. California has state wide programs, and specific areas such as Sacramento and San Francisco have their own programs.

I live in St. Louis and our local tech incubator, which does lots of small business development, is networking and sharing links for a variety of regional programs. Your local Small Business Development Center (SBDC) or economic development office will have the best information about programs available just for firms in your area as well as state wide or national programs.

If you haven’t made a relationship with them before, now is a good time to get networked with other businesses in your community. I’m sure District Export Councils and Chambers of Commerce are also trying to identify and share resources with their members. Local business communities and business assistance centers are pulling together to help get us through this pandemic induced economic crisis.

Private lenders, both traditional and the “fin tech” nontraditional lenders, are also offering help. Our new era of “fin tech” where nontraditional lenders and payment mechanisms have grown rapidly is both good and bad—there are new sources for funds and new abilities to move them rapidly, but there is also more possibilities for fraud and for nontraditional intermediaries to have liquidity issues. Exercise caution.

Do due diligence before you agree to anything. And, don’t forget that the government resources may be grants, which directly contribute to your bottom line, even if they might take longer to access.

I plan to talk with you about exporting when we meet in Atlanta at IWF 2020, but in the meanwhile I’m happy to answer questions and make referrals to resources, whatever will help you move forward with your business.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com

Herman Miller Poster Child: Resident Graphic Artist

5. April 2020 23:15

By Bill Esler, Editor, IWF Network News 

His posters for the annual Herman Miller company picnic have been accepted into the collection of New York's Museum of Modern Art. An intriguing snapshot of the work of graphic designer Steve Frykholm, who says life at Herman Miller really has been a picnic. Frykholm reflects on his 45+ year tenure at the company and revisits his first—and now canonical—assignment on the job. 

The New CARES Act Lets You Seek a Payroll Tax Credit of $5,000 Per Employee

4. April 2020 13:52

By: Laurie Wolff, Certified Global Business Professional

Is all well or at least okay with your business? In my last post, I described a payroll grant program that has just become available for businesses under pressure by the current health crisis. 

The Paycheck Protection Program offers small businesses loans that can be forgiven if all employees are kept on payroll for eight weeks and the loan is used for payroll, rent, mortgage interest and utilities. The forgiven amount has to have at least 75 percent related to payroll expenses, but other expenses can be part of the loan package. 

If you qualify as a small business, you can get a government loan that becomes a grant based on maintaining your payroll. Even if times are still good, this will increase your bottom line and allow you to invest in future opportunities. If times are tough, this is a potential life line to hold out until we get through the pandemic induced shut downs.

If taking advantage of a loan turned grant from the SBA isn’t right for you, then consider a couple of other options created in the recent government stimulus package.

For example:

  • You are eligible for a payroll tax credit if you have maintained employment and don’t seek or obtain an SBA loan. The credit is equal to 50 percent of wages and includes qualified health expenses. This is up to $10,000 gross paid out for wages and health benefits per worker, so the credit would be $5,000 per worker.
  • You can claim the credit against quarterly payroll taxes or take advance payment of the tax credit if you need cash now. Please talk to your accountant and claim this tax credit if you are eligible.
  • You also can defer your portion of payroll taxes, which is 6.2 percent of payroll. It won’t in the end save you money, but it will improve your cash flow now. The repayment schedule is stretched out to 2021 and 2022.

I will address this theme in other blogs but I want to hit home with you that the firms that expand, that buy capital and invest in developing new customers and new markets in the down times are best situated to grow and gain market share in the next up cycle. If you are healthy now, please deploy resources so that you can thrive when we get through this pandemic.

Economic expansions do not die of old age, and our underlying economy is strong. We just lived through the longest expansion ever. Our underlying capacity is amazing. We got hit with a shock that for once is not really economic, not about liquidity or the financial system, or anything else that we usually would label as causing a recession.

We have a health crisis which is making all of us make different choices than we usually would make. We will have the worst numbers ever in jobless claims, unemployment and decreased production. It will be a sharp downward move and bad in most measurable ways.

But we are also doing the largest stimulus ever and have the best underlying productivity ever. Jobless claims are so high because the technology is there to immediately make them, and the funds are there to pay them. It will help stabilize spending.

I like to think of the really bad numbers as a really good sign that we are on top of this. Be strong and prosper. (My scify fandom is showing but I want to encourage you that we will get through this.)

I plan to talk with you about exporting when we meet in Atlanta at IWF, but in the meanwhile I’m happy to answer questions and make referrals to resources, whatever will help you move forward with your business.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com   

The New CARES Act Is Aimed at Helping You With Worker Payroll. Here's How to Tap It

3. April 2020 16:01

By: Laurie Wolff, Certified Global Business Professional

My guess is you are struggling with the economic impact of COVID-19. Some of you have new opportunities, given the need to retrofit spaces to protect employees and possibly even to produce high need items to fight the pandemic. Some of you can still operate normally. Others are facing state-wide stay-in-place orders that are challenging operations. Still more are seeing large decreases in your booked business and are having to lay off workers and manage your cash flow.

Help is on the way. But you will have to actively engage if you want to take advantage of any of the programs. I will have blogs on several opportunities but for this one I’m focusing on one program offered through the Small Business Administration (SBA).

Part of the CARES Act (the recently passed more than $2 trillion stimulus package) is directly aimed at keeping people working in small businesses across the country. Even if all is great for you right now, pay attention and consider applying. If you qualify as a small business, you can get a government loan that becomes a grant based on maintaining your payroll. Even if times are still good, this will increase your bottom line and allow you to invest in future opportunities. If times are tough, this is a potential life line to hold out until we get through the pandemic induced shut downs.

The Paycheck Protection Program offers small businesses loans that can be forgiven if all employees are kept on payroll for eight weeks and the loan is used for payroll, rent, mortgage interest and utilities. The forgiven amount has to have at least 75 percent related to payroll expenses, but other expenses can be part of the loan package. 

Consider including expenses related to business expansion. The can include attendance at trade shows such as IWF 2020, which allows you to meet new customers or find new suppliers. I advised another small business I work with to include in his loan package funds to relocate part of his business to business sales effort - which now can’t happen in person - to an online platform. Are you getting the idea? 

 


Is the Tide Favoring U.S.
Wood Industry Exports?

IWF 2020 offers two learning opportunities
on export for the U.S. wood industry
by economist Laurie Wolff. Read more

The loan has a maturity of two years, no payments for six months, and an interest rate of 1%. For now the window for payroll is between February 15th and June 30th so firms that have laid off workers can rehire them based on the loan and still qualify. Possibly the government may lengthen the window or increase the total funding level given future need, but for now the authorization is $350 billion. Loans can’t be for more than $10 million and most will be small.

You need to have a relationship with a banker to get this loan. Many banks that previously did not do SBA loans are seeking approval to make them for their customers. The existing SBA lenders, including the large national banks, are saying they will not be able to expand beyond their existing customers. If your bank isn’t trying to become a lender under this program, my best advice is to talk with the other banks in your town or region to find someone willing to work with you. While the loan is guaranteed by the government, the banks still have to do diligence and so the best situation is to work with a bank that already knows you and your operations.

I hope that the business owners that attended my IWF 2018 workshops on expanding their business through international trade stepped out, followed my advice, and got SBA loans because that now is advantageous. If you already have a SBA loans, it makes it easier to get this one, and the SBA has two programs open to extend payments or add extra lending to their existing clients’ loans.

To qualify as a small business, you generally have to have less than 500 employees, but you can go to SBA.gov to see if your business qualifies. Information about this and other programs is available there, but really, truly for this program you need to talk to your bank to see if they are ready to accept applications and if not, call around town to find a bank that will.

More on other opportunities in future blogs, but all the best as we try together to get through these challenging times!

IWF Education: What is slippage and how does it impact my bottom line?

31. March 2020 10:00


By: Marc Sanderson, Owner: INNERGY

We are all in business to make money. What we do determines if we fall short, meet or beat industry average profitability. It’s our actions, decisions and behaviors that define our organization’s performance. I regularly ask the following question when I speak before large, industry gatherings: “What would happen to your business’ profitability if you could consistently (a) release clean, complete shop drawings, (b) provide 4-6 week lead time, and (c) have all material ready in inventory awaiting production?” 65% of the industry responds that achieving this trifecta would cause profitability to more than double! What would you do to double your profitability?

Most of the industry focuses on the sawdust producing portion of the process. Production is viewed as the holy grail to incremental profitability and operational effectiveness.  And this belief makes sense given that ~90% of the capital employed is on machinery and production activities. 50-75% of our staffing is also on the shop floor and thus warrants managerial attention.  However, what prevents clean drawing, reasonable lead-times and raw material availability?  It’s not the shop floor. The factors that can double one’s profitability are defined prior to release, prior to sawdust production. Problems manifest themselves on the shop floor, but their genesis is in the office.  How do we think through and structure the office workflow towards the trifecta?

I am excited to be with you at IWF 2020 and grateful for the opportunity to present.  There are many things that impact and prevent us from achieving the conditions that would double our profitability.  The big questions I will address are, “What is slippage?” and “How does it impact my bottom line?”

Together, we will explore:

  • What slippage is
  • Both positive and negative examples of slippage
  • Causes of slippage in the architectural woodwork industry
  • Tools to impact slippage
  • How to reduce/prevent slippage
  • How to create your own Slippage Action Plan

I’m excited to be with you all and explore how we can mitigate slippage in our businesses during the "How Does Slippage 
Impact Your Margins?", session at IWF 2020.

 

IWF Education: “When to Outsource”

30. March 2020 09:48
 

 Presented by:

 

 

Sponsored by: 

 

By: Joe Knobbe, Past President: Cabinet Makers Association

How do you determine the value of and when you should outsource? Whether it’s doors and drawer fronts, the cabinet boxes, finishing, installation, or any other aspect of your production process, you should know why it may or may not make good business sense to do everything yourself.

Just because you can do it doesn’t mean you should do it.

Outsourcing makes a lot of sense for smaller companies, especially those who don’t have the sophisticated equipment to do every type of project. Machinery is a really big investment for smaller shops, so outsourcing the various components is a viable solution, especially for unique projects.

Learn what is right for your business during the "When to Consider Outsourcing" session at IWF 2020.

IWF Education: The Most Successful Companies Are Run by Owners Who Understand the “Business” Side of Their Business!

24. March 2020 16:47

By: Tom Grandy, Founder: Grandy & Associates

Let’s face it, you used to work for another company and then decided you could do it better and faster and make the big bucks the owner was making if you went out on your own.  Bingo, you leave and start your own company.   Things go well the first year or two then you start doing more and more work…..while making less and less profit.  What’s going on?

First of all, 90% of all small businesses started like you did.  You’re strong on the technical end (getting work done) and weak on the business side.  There are two things that put most small companies out of business.  Number one is improper labor pricing, not know what YOU have to charge per hour in order to cover your costs of doing business while generating the profit you desire.  The second killer is cash flow.  A company can be priced perfectly…..and still go out of business because of cash flow issues. 

The good news is that Grandy & Associates will be offering a seminars on labor pricing, and cash flow, at the IWF Conference.  Hope to see you in the sessions!

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