Managing A Busy Spell

      When you're over-booked, how do you handle new customers (and should you change your pricing)? April 10, 2005

Question
No, I'm not bragging, just asking a question. Had a dreadfully slow summer, but the last couple of weeks have been unbelievable. I do most of my business in custom cabinetry, mostly middle of the road stuff. People won't pay for dovetailed drawers, but want good looking cabinets. I work primarily by myself, but hired a guy this week who needed work but has no skills. He can drill shelf holes, fill holes, sand... stuff like that. I delivered a house full of cabinets, with another set in the shop to deliver this week. Got a deposit check for another large house full of cabinets to get ready ASAP. Measured two more jobs this week, and got them both. So... if nothing else comes in, I'm booked through at least the end of October.

What do I do when somebody comes in the door and wants to know if I can do something for them? I've got a couple more quotes out there that I haven't heard from. One of them I figured two weeks ago and told them that I could do their house without holding them up time-wise. Of course they haven't given me a deposit check and secured their place in line:-) I don't want to sacrifice quality just to turn out more work. I haven't been able to find qualified help. I don't want to work 7 days a week. I know that it is probably time to go up on my prices, but it is too late for the work I've booked. Do you just tell people to take a number? Do you look for qualified help and try to get more work out the door? Do you try to rush it out the door and let the quality slide a little (just typing that out made me cringe!)? How do you handle a problem like this?

Forum Responses
(Business Forum)
From contributor V:
I don't think there's anything wrong with telling prospective clients that they'll have to wait 8 to10 weeks. I have to do it all the time and it's been like that for a year and a half. Some wait and some don't.

"I need it yesterday…" Very funny.

If you have the room and you can find the talent, hiring helps. But in your situation you need people who can do the job beginning to end, or else you'll spend too much time micro-managing every step. Your production will fall if you have too many trainees.

Unless you are providing perfection at a bargain price, you can't sacrifice service or quality. Both will be compromised if you say yes to jobs you shouldn't and get overworked. A solid reputation will bring you clients who are willing to wait and feel good about it. These are the people that I like to work for. They're planning ahead, they're willing to wait, they want quality, and they're willing to pay for it.



From contributor R:
It's nice to have a lot of work. Contributor V is right - tell any future clients that you are out a number of weeks due to a large workload. This should tell them that you are in high demand and that your quality of work is worth waiting for.

Good help is also hard to find. I sometimes find that a willing newcomer is easier to train than someone that thinks they know it all. And you can train them your way, but be willing to listen to their ideas, as they may look at things in a different way, and help speed up production.



From contributor M:
Why don't you find another shop in your area to do any of the work you can't get to? If you can find another good shop, then you could sub them the work. You would be making the money on the work you're producing and money on the work others are producing all at the same time. It takes a little organizational work and QC, but it works for us and I've seen it work very, very well for others.


From contributor T:
You are in an enviable position. Time to slowly raise your prices. You can now afford to lose 50% of your new business. This should allow you to take off some Sundays or to work cheap for family, friends, and seniors with homemade cookies.


From contributor I:
I agree with the others that there is nothing wrong with telling your clients that there is a wait. If you have a shop whose work you trust and who you are comfortable with, then you may want to think about subbing out some of this work. Slow growth is the ticket to having a woodworking business around for a long time. Finding good help is always going to be a problem. There are tons of people out of work because they have no drive to work or their location is not near where the jobs are offered, plus a handful of other reasons. If you are going to raise your pricing, make sure it's for good reasons. A friend of mine did this two years ago. He does kitchen cabinets and he had tons of work coming in. He raised his pricing and after the big rush, he was dead in the water. He called old customers and asked if they needed anything and one told him that they gave his name to a friend of theirs to have a kitchen done and his prices were way above most of the cabinet companies that they had quotes from for the same types of cabinets. Don't change your pricing unless you have a good business reason to do so.


From contributor A:
Did you ever notice the line outside the best little decently priced restaurant in your town? People have no problem waiting 30 minutes just to get a seat. Most shops typically work on a 6 week schedule. If the product must be had six weeks from the day they walk in the shop (and the client must make it abundantly clear), then inform the prospective customer that you will have to stop another project to do his and it will cost an extra percentage. If that customer believes he needs something in 6 weeks, but can actually wait 12 and pay the normal price, he will wait for the best cabinet guy in town. Slow and steady is the way the turtle wins the race. Bump your prices up a standard cost of living increase each and every year. Currently I do a $2.50/hr increase per year. Don't get greedy and jack your prices. With intelligent planning you and your customers will all be quite happy.


From contributor E:
I would not sub the extra work out. Just from experience, every time I have done this I have been disappointed and usually wound up redoing the work at my expense. Like many others have said, they have to wait. In the past, this was a death knell beyond 12 weeks, but not anymore. With the long delays in building and getting certificates of occupancy, it is not uncommon for a shop to be out a year or more and I have not heard of any complaints as long as your work is worth waiting for.


From contributor T:
1. When I start getting every job I bid, I know it's time to raise my prices. I try to review material costs every quarter just to make sure I'm not sliding behind.

2. Outsource. Doors and drawers are commonplace. Shops with CNC equipment often will welcome the opportunity to do your panel processing to keep their machine running.

3. Hire only if you are confident your workload will allow you to keep the guy. Increasingly, our laws make it almost a criminal offense to fire someone, even if it's known he was a temp hire.

4. If you have such a service in your area, consider hiring through a temp service. I'm in Los Angeles, where you can find pretty much anything. There are companies here who have construction temps. You tell them what skill level you want and pay the company directly. They take care of all taxes and work comp. When you're done with the guy, he goes back, no hassle. If you want to subsequently hire him, they usually have a buyout program.

5. Find the biggest bottleneck in your shop, and figure out how to make it go away. For us, this has generally been a new piece of equipment, but it could be outsourcing or changing how you do something.

6. Overtime.

7. Tell 'em they have to wait and why.

I've done all of these at one time or another to deal with such situations. Some of them I do routinely. It's painful to turn work away, but it's nearly as painful to overload yourself past a reasonable point. Just remember, this is way better than wondering when the next job is going to come in.



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