Focusing a Moulding Business

Shop owners discuss whether custom small-volume runs or large stock moulding jobs are the preferred path to profitability. June 12, 2005

Question
We have been in the hardwood moldings business for several years now. We make anything from cabinet frame stock to hardwood flooring. We have a nice facility and good equipment and we've never been without work, but it seems as though we work all the time of times.

I got a call recently, and it really got me thinking about evaluating my business. The caller told me that his business only produces one molding profile, and only sells in truckload quantities with employees in the single digits. It produces over 70,000 lumber feet per day and he says he does very well for himself.

My question is this - if I already have the machinery in place and ready to run high volumes at high speeds, what would be my best plan of action be to transform my custom molding business into a specialized high output cash machine? I've never run any product in truckload quantities, but I'm more than ready to take the plunge. I want to specialize in moldings that are less than 1" wide. Any suggestions would be appreciated.

Forum Responses
(Business and Management Forum)
From contributor L:
I would say to be really careful about having most of your business in one customer. If you are always busy and not making enough money, then you're either inefficient or priced to low. We charge a setup fee for all runs. I don't mind doing short runs, wide or narrow. I make better money on 6" crown than 2 1/4" casing.

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From contributor C:
To the original questioner: What kind of moldings are you doing that are 1" or less? I realize your waste could be reduced, but to me it sounds like you have high overhead and too many profiles.

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From the original questioner:
Contributor C, actually I have extremely low overhead. We have a whole lot of machinery for two guys to run and it’ run efficiently. Our shop consists of a chop saw, planer/sander, gang rip, 6 head molders, profile grinder, cnc router, vacuum dry kiln, and a few other machines we rarely turn on. Our shop could employ a few people if I can key on one product and sell in large quantities. We've managed to keep overhead low because we basically do everything ourselves.

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From contributor E:
To the original questioner: It sounds as though you have a well thought out plan. I caution you though about the dreaded unknowns such as breakdowns, suppliers, etc. Even the simple maintenance costs thousands of feet and at .05 it takes time to regain that. I think you may be optimistic about 80,000 feet with 6 employees - just moving and gang ripping the stock will be a chore.