Growth Opportunities in an Uncertain Economy

By Ed Young, Fabricator's Business Coach

Current economic signals are all over the map. Some geographic areas are still seeing record growth while some are already slowing significantly. Some market segments are still strong (large commercial projects) while some are weakening (new housing starts in some areas). Some forecasters predict a “soft landing” while others are predicting something more significant. Still other forecasters say we won’t have any sort of recession. It’s no wonder many shop owners are confused about how to plan for the next few years.

The good news is this uncertainty is creating opportunities for shop owners who recognize them and are prepared to take advantage of them.

Increase Market Share

When a market shrinks (or when companies think a market is shrinking), most business owners automatically start to reduce their operating costs. One of the first items to be cut is advertising. Their logic is, if people aren’t buying as much, then there is no point spending money to advertise. This is a poor strategy for several reasons.

With many fab shops tucked away in commercial areas, marketing is the primary way to let the public know you exist. Cutting the ad budget could lead many people to think you may have gone out of business. This is doubly so if you also cut showroom hours in an attempt to reduce labor.

If the market is truly shrinking (lower overall sales level) and if the majority of shops cut their marketing activities, then any shop that continues to advertise or even increases its ad budget has a chance to increase its market share. This means the shop that continues to advertise can maintain its sales level during slow times. Executed well, this approach can even increase your share of the market because other shops aren’t marketing. When the market eventually turns around, as they always do, the shop that increased its market share will grow much more quickly than those who stopped advertising.

Taking the opposite approach of your competitors can yield strong dividends.

Upgrade Labor

Even prior to the pandemic, good people were hard to find. Lockdowns made that many times worse. Experiencing a reduction in orders, some shops have started cutting operating hours while others have already laid off some employees.

When hours get cut, the first people to voluntarily leave for another job are usually the best employees — because they can more easily find other opportunities. If you have some current employees who aren’t performing, the increased pool of experienced employees can allow you an opportunity to upgrade your staff. If you have a competitor that has cut back on shop hours, consider placing yard signs near that competitor or use geofencing to target specific areas when advertising your current openings.

This cost-cutting mentality isn’t limited to the surface fabrication industry. Most businesses follow this model. If you have a good training program, there will be more quality applicants of all backgrounds to select from, allowing you the opportunity to upgrade your workforce.

Enhance Your Company Image

Get your Unique Value Proposition (UVP) out there. If you don’t have a UVP, now is the time to create one.

Your UVP tells prospective customers why they should buy from you instead of your competition. Even though fabricating every countertop requires templating (or a blueprint), fabrication and installation, your business still has characteristics that are different from your competition. Some of these are how well you execute your work, your level of customer service, the market segments in which you specialize, any additional services you offer and more. The key is to craft a simple but compelling UVP.

Pro tip: A strong UVP rarely includes a low-price component. If it is compelling enough, your UVP will reduce the pricing pressure that normally comes with an economic downturn.

A marketing strategy that leverages your UVP is the key to keeping your sales volume up while everyone else is slowing down. A solid strategy would include social media and an email campaign along with traditional marketing methods.

This strategy could also include encouraging your team to invest time working with local nonprofit organizations. A great way to do this is to provide a “paid match” for this volunteer time. A typical plan would be to match every hour an employee volunteers with an hour of pay. For example, they work an hour for free and the company pays for the next hour. This means the employee essentially gets paid ½ time for the hours they help a nonprofit.

If you are struggling to craft a UVP or to define a solid marketing strategy, get professional help. While this will cost some money, it won’t cost nearly as much as your mistakes will.

Improve Processes

Sooner or later, we know the business cycle will come back around to growth. When that happens, you will need all the good employees you can find. If you lay off good employees now or if you cut hours and some good employees leave, you will have to compete with everyone else who is hiring when the economy rebounds.

If you don’t want to lose your good people now only to have to replace them in a few months or a year, consider putting them to work improving your processes. If you have been struggling to find time and resources to work on your business processes, this could be your golden opportunity.

Have you been thinking about implementing a different software package? This could be the time to tackle that project. Have you been wanting to build out your training program so you can finally grow your own in-house experts? Now is the time to do it. Have you been wanting to straighten up the shop and organize your tooling? Have you wanted to visit other shops in the organizations you belong to so you can see what everyone else is doing? Or better yet – send some of your key people on those visits? Safety is a topic that is getting more and more visibility each day. This would be a great time to conduct your own safety training and conduct some self-audits.

Bring on New Product Lines

Are you getting more requests for porcelain but have struggled with this material in the past? Now’s your chance to get some solid training and start building and improving your procedures for those materials. Your consumables supplier can help you with getting the right tooling. The International Surface Fabricators Association can provide the hands-on technical training you and your team need for a number of materials including solid surface, porcelain, sintered stone and ultra-compact materials.

Further, increased pricing pressure is common during a downturn. Rather than reducing pricing on your main bread-and-butter products, consider taking on some lower-priced product lines. This will give your customers an array of options to meet their budget requirements without hurting your primary business.

Enhance Your Customer Experience

Chances are that while reviewing or developing your UVP, you have assessed your current level of customer service. This would be a great time to consider upgrading the overall experience of your customers. How long does it take to generate a quote? How can you improve the speed of following up on initial customer inquiries? What can you do that your competition is not willing to do? Is this the time to experiment with in-home sales? Is this the time to work on shortening your template-to-install lead time? Maybe now is the time to consider offering annual countertop inspections and sealing services. Raising the bar on your customer experience can put a lot of pressure on your competitors — yet another way to gain market share. For a business to grow profitably, key people must spend a large portion of their time working ON the business as opposed to working IN the business. While the uncertainty can be a bit scary, an economic downturn can present the ideal opportunity to work ON your business. Companies that execute well on these items will create a strong competitive advantage that will pay off handsomely — both now and also when the economy rebounds.

Ed Young is the owner of Fabricator’s Business Coach, a consulting firm designed to strengthen and elevate fabrication shops of all sizes. A former shop manager, Ed fully understands the challenges of today’s professionals. He has consulted with a range of businesses, from one-person startups to international Fortune 100 corporations, covering a broad array of products and processes. As a result, Ed knows that each business needs an appropriate structure for its unique situation. To learn more about how Fabricator’s Business Coach can take your shop to the next level, visit www.fabricatorscoach.com or reach Ed directly at Ed@fabricatorscoach.com.