Growing a business can be a challenging job, especially for an entrepreneur entering a crowded market where major competitors have already been established.
Despite the challenging hurdles facing today, as the way manufacturing works changes, how can CNC machining companies secure their business and grow within the industry?
1. Development Partnerships
For many machining shop owners, the first few days can be an uncertain time filled with many concerns, such as: B. Quantity expectations, customer lists and even floor plans still need to be addressed.
In this case, existing friendships and business connections can be valuable assets.
Whether friends are mentoring clients, building partnerships, or simply advising on business practices, you can rely on your current relationships to give you a useful head start.
Many also build their own networks through industry events and webinars.
2. Target your niche
It's usually a good idea to focus on the specific type of buyers who buy your product at the best bulk price.
For example, if your business specializes in gear shafts smaller than 5 inches in diameter, try to develop a relationship with a company that can source that product at a price your production cycle and sales can afford.
Targeting your market niche allows you to make the most of your expertise as if it were only spare parts. Some CNC companies see this as a very successful model for a seemingly limited market. As your business grows, you can diversify into other markets.
Another marketing method is the use of new technologies such as the internet, video and social networking, which help increase your store’s online visibility and attract more buyers.
3. Diversify as needed
While it's sometimes a bad idea to start out with work beyond your store's capabilities, appearing within reach and producing cost-effective new projects can be a useful way to diversify your operations.
For example, if a turning shop has the training and resources to secure profitable milling or plastics processing contracts, the resulting diversity helps ensure continued growth even when the segment is in decline.
4. Don’t rush to expand
Purchasing machines that are not yet cost-effective, or expanding facilities without personnel to maintain them, can slow business growth and hinder long-term expansion.
In many cases, focusing on steady profits may be better than making big leaps, because even small businesses with fewer than a dozen machines or employees can still meet or exceed the national productivity average.
It's important to communicate your growth plans, even small ones, to the entire team.
5. Be open to new technologies
While new technological innovations can be costly in terms of additional training and initial setup, recently developed devices can have a positive long-term impact by simplifying production methods or providing the means to accomplish tasks previously considered impractical.
New technologies can sometimes help companies stay competitive, especially when innovation gets a lot of attention.
Store owners may wish to consider purchasing additional production equipment to fulfill existing and future orders. This can be a tough decision because future growth is not guaranteed and there are many upfront costs associated with buying equipment. On the bright side, new machines increase production capacity and reduce cycle times, creating more opportunities for your business.
Business owners need to weigh the risks and rewards—again, communicate your efforts appropriately to your team.
6. Respond to your competition
In most cases, especially during times of economic turmoil, knowing your main competitors is a valuable practice.
Market volatility can cause commercial manufacturing to slow while military production is relatively flat (and vice versa).
When this happens, competitors from one end can bring their operational standards to the other, forcing companies to increase productivity or lower prices to maintain market share.
7. Invest in digital marketing efforts
Another way to grow is by leveraging digital marketing strategies like email, video and social media, which help increase your store’s online presence and attract more shoppers.
Keeping your customer base happy is key to building your business, but if you want to attract more customers, online is the golden ticket.
Start building on what you already have and discuss with existing clients what can be done better. This feedback will help you learn more about their challenges and how to create resources to solve their problems.
What type of content are they consuming? What are their responsibilities? Publish this information on a quality website to attract new customers. Organize content into the "Working Examples" or "Machining Marketplace" section on your website, like the CNC Machining website example below.
8. Be flexible in multi-stage processes
Companies that combine in-house manufacturing and machining operations can often save time or money by purchasing equipment that integrates auxiliary operations with their primary functions.
For example, using laser cutting can often eliminate the need for post-processing such as B. smoothing or smoothing edges.
9. Integrate your operations
While vertical or horizontal integration is daunting for many small CNC companies, it can still help bring as many manufacturing processes in-house as possible.
Simplification measures, such as organizing production planning around the internal capabilities of the machine shop or prioritizing orders based on the availability of your own production centers rather than external suppliers, help ensure smooth workflow and ultimately improve performance.
10. Start scalable growth
In many cases, successful company growth does not depend on the size of the product manufactured, but rather on the depth of the manufacturing process.
It may be beneficial to evaluate the services or products you offer customers to see if you can expand the reach of those services. If you manufacture steel pipes for your customers, see if you can supply them with the fasteners that connect these components together. Obtaining larger contracts from existing relationships can be a safe and scalable method of growth.
No matter what your growth plan is, skipping a business plan is a common mistake industrial companies make. Create a plan that documents the milestones you should achieve and the steps to achieve them. This will also help you when you apply for a small business loan, grant or other crowdfunding campaign.
