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Planning workload in a small shop6/6
I'm convinced construction planning is more voodoo than science. A contractor always says, "I need these cabinets in 3 weeks," but inevitably the design phase flounders or there's a site delay, and then I have 3 big projects piled on top of the other. At that point the Gantt charts fall apart. A big shop might be able to absorb the crunch but it's just me and a "sometimes" helper.
On the other hand, when (not if) the market cools off, I'll be back to the feast-or-famine cycle typical to one-man shops. I am doing my best to maintain a 6-8 week backlog, but I have seen that dry up many times before.
In other words, let's say I have production for Job 'A' scheduled for June, and Job 'B' scheduled for July. Job 'B' stays on track, but Job 'A' is delayed a month. I can't just tell Contractor 'A', "sorry, I can't get your cabinets out until the end of August," he would burn my shop with kerosene.
How do you small shops keep your work on track in light of all the speedbumps and detours of the construction industry?
I would usually give the contractor a drop dead date. He could hold his place in the queue until that date, then he slips to the end of the line. It was a rare situation where I could not at least get started on his job, usually building some of the boxes while a single section was in dispute. They usually don't want to get bumped from a schedule, since starting over with someone else would really delay their project.
We tell our customers that it's their kitchen. They can wake up in the middle of the night and change their mind any time they want. The only thing they can't do is usurp somebody else's delivery schedule. It they want to make changes it's fine with us and we will re-schedule delivery times based on current obligations.
This works very well for us when we are selling directly to the homeowner. Not so much if someone else is standing between us and the decision maker.
Which leads us to why are you doing this job for the contractor? He may want you to think all oxygen flows through him but in reality it is Mrs. Smith who created the job. You just need to introduce yourself to Mrs. Smith.
If you solve the problem at the source (marketing) you will be less impacted when the (not if) market cools down. Don't get sucked into the gravy train mentality. You shouldn't sell all your time to contractors as they are a very fickle bunch and usually tend to socialize the downside but privatize the upside.
As a small shop, i have found that good communication/relationship with the job runners is crucial. They try to help me out and i try to service them as best as possible. most of the contractors i work for either have space to store my completed products or they find room onsite. Having been in business for 5 years, I prefer working with contractors/designers(or worse, decoraters playing designer). the time and money it saves me from having to market to, and meet with possible customers is more than worth it. I wear enough hats as it is, and its nice to take some off.
Just remember that the more people that live between you and the well means more people will sip from that water before you see any.
Sometimes they will wash their dishes in it or do their laundry or take a bath or pee in it or use it to water their garden. In any case more people mean more effluents.
I understand your point cab maker but for my shop, the time the contractors save by getting rid of all the tire kickers, doing the design work, and always feeding you work is a win win in my opinion. I don't believe that having people between me and the well is a bad thing. We all have different things we Excell at, and a roll to play. Maybe the people near your well stink, but I've developed a good relationship with mine. Sure, I could go kill a animal in the wild, but most of the time I just go to the butcher.
We use the restaurant model: You walk in and take your place in line. If you can't place the order when it is time to place the order, you go back a place or two. No matter how hungry, or how much or how little, you all have equal places in line. Wait your turn, no line jumping.
All my proposals prominently mention that we invoice from a 'shop completion' date. This means that when we are done, you pay the balance (or the clock starts ticking), regardless of your need or lack of it. Larger jobs will get a mention of delivery within 3 days, or indeterminate storage expenses will be applied as needed.
Contractors always say 3 weeks, and they are never right, and they know it. You can also make an effort to keep in touch with the job by checking in once a week. That is a good Monday AM thing to do - make a round of calls to see how things are progressing.
Let us move away from the purity of the water and talk about the volume. We'll get back to purity later.
If you are a small shop and already wear too many hats I would guess that you also don't spend a lot of unnecessary time courting new contractors. The ones you work with "always feed you work" so there is no real apparent need to expand this customer base.
As you get busy your prices tend to increase. You're still so busy that you don't have time to do any unnecessary marketing.
Meanwhile the cabinet shop down the street has also increased his prices so much that the contractors he used to work for have noticed this. For some reason he develops extra capacity. This could come from a lack of work because his prices are too high or maybe he just became more efficient. For whatever reason he is becoming more aggressive with his marketing.
The contractors you work for really like you but they like profit even more. They also enjoy a free meal and will readily allow this other cabinetshop to take them out for a hamburger. The contractor knows it makes sense to have more than one supplier for every trade so he keeps his eyes open for possible new vendors.
This loyal contractor also thinks it's a pretty good idea to check your prices so he asks the other guy for a bid. He knows that he can only do this about three times before the other guy will stop bidding so the third or fourth job goes to the new guy.
It may take the contractor a few jobs to realize that your work was higher quality and you delivered a better value but maybe the other guy's work is just as good as yours. Or good enough. Remember always that the contractor is not looking for the best work, he is looking for the best profit. Good enough work is good enough work.
The end user, however, has a completely different agenda. The cabinet you build is absolutely identical whether you sell this to the contractor or to the homeowner. The contractor is buying it to create a profit. The homeowner is buying the cabinets to improve his or her standard of living.
When (not if) the economy contracts you will want to be closer to the well.
I believe that any small(or large)shop has its head in the sand if it is not looking for new customers (either homeowners or contractors). Just as that it is foolish for the contractor to use just one shop, it is just as foolish for the shop owner to use just one, or a couple contractors . I always make time to impress and deliver when courting a new customer, either by working extra hours or subcontracting parts of the job out. Not all contractors are just looking to pad there pockets by buying cheap. I think most shops have had to deal with people who want something for nothing, both homeowners and contractors/design er rs. The key is to cull the bad ones out. I would rather have to cull one or two a year, learn reputations, and build trust, than have to meet and greet a plethora of customers that need to be vetted and culled multiple times a month. I still will work direct with homeowners, but I sure would rather not.