In general, the cost of doing my business has increased, particularly over the last few months. Perhaps is the best guess on my mind is approximately 20%.
Fuel, utilities, taxes, and materials have increased in cost. A good look of this happens almost daily, about the only way to overcome this is to increase output in my operation. We are doing six days now. A primary issue is everything we touch is related to oil and we know what the cost of that had been doing.
I am sure this is prevalent, anyone else doing anything differently to maintain profits?
As stated, need to increase output, but need some ideas on this. We are in a challenging business, not alone howeve.
Doyle
I am watching my waste. I watch everything now from the lights to wasting material. I am especially careful when patterning and cutting to minimize waste.
Other then that there is little else I can do but raise my prices and educate my customers on why my prices have gone up. And you can bet your bippy I will let them know that oil prices are the biggest reason many of us are getting hammered with higher costs.
I just explain that upholsterers are not Fortune 500 companies and we are bare bones outfits. They understand if you take the time to educate them on why your costs are up and why you cannot afford to absorb losses.
Chris
Same here, low energy light bulbs in the workshop make a difference, keeping the waste low as well and with diesel prices hitting the £1.42 a litre mark (Thats $11.50c a gallon folks :'() I keep my mileage to a minimum even though I get 50+miles to the gallon.
That is something I forgot to mention that Steve brought up.
I am trying to keep my driving to a minimum since I own a gas guzzling pickup. :)
Chris
Some good thoughts guys, reduce your overhead and waste to keep more.
That has been the game plan so far. What I really want to do is look into ways of doing that plus increasing the net, which means increasing through put with essentially the same effort.
Any other ideas about doing this?
Doylel
Doyle, is that 20% of the expenses you mentioned that went up or 20% of ALL expenses? I doubt that it's all expenses, but no doubt about it, irregardless of what Ben Bernanke would like us to believe, inflation has kicked in.
My ways of dealing with it?
For one, believe it or not, I stopped answering the phone!
Here's my thinking, have you ever called a business and gotten a message something like this "we're busy taking care of customers at this time, so please leave a message and someone will get back to you later"? Got me to thinking-everytime I'm focusing in on a customer's job and the phone rings, I come back and have to get my thoughts back on what I was doing again. By setting aside certain times of the day to return calls, I find I can concentrate better and get the job done in less time overall. It's especially great for auto-solicitors who hang up as soon as the machine kicks on!
Another is to group orders together whenever possible to save on shipping costs.
And of course there's always the strategy of passing costs along onto the customer whenever that's possible. After all, the reason we're paying higher prices is because another business did just that to us!
Rich
I've been able to cut cost on one of a shop's greatest expenses......FOAM!!
How? By doing something that I was never in a financial position to do in my younger days. I buy in bulk from a delivery truck. No shipping fees. And much better prices on the foam.
Fabric is the ONLY thing that I will pay shipping for. All supply items I buy off a delivery truck (free delivery).
I've also been able to buy out the remaining supply inventory from a few shops that have closed in the last couple of years.
I'm way over-stocked in many supply items.
I know it's hard to let go of money for stuff that you don't need right away, but when opportunity knocks.....
Beats the heck outta the way my mother, and grandmother used to do it.
When they needed a roll of zipper, they picked up the phone and ordered ONE roll (shipped). 10 minutes later, they were back on the phone ordering something else. If they were alive today, they would easily spend $500 a month just for supply shipping.
Quote've been able to cut cost on one of a shop's greatest expenses......FOAM!!
How? By doing something that I was never in a financial position to do in my younger days. I buy in bulk from a delivery truck. No shipping fees. And much better prices on the foam.
You must also have room to store it. How much foam do you have to buy that way?
Rich
Rich, I was primarily focusing on supplies needed to do the work. However, there are other associated expenses that have risen related to the operation of the business. For example, the local taxing body just layed a fee (tax) for the water run off on my parking lot for well over a hundred bucks a year.
While we are seemingly doing things to cut waste, save time, and making adjustments by passing cost on to the customer, there is another dimension to all this that can't be over looked. That is the net must be adjusted for inflation. What I mean by this if I typically took a buck home and then am hit with a supply cost that must be passed, as we are saying here, that isn't the end of the overall issue of making a living. More specifically we have to increase our net because as we go to the grocery store and fill the tank, things there are costing more. Putting this in perspective, behooves us to make more money out of the business. That requires more thought than recovering cost on a job. Hope this is clear enough.
Then, following through we have to look at things like you guys are saying, how we buy and making more efficient use of our time and if the market will stand it, even raise our prices more than the business cost.
Yes, phone time is expensive. It even seems that number of solicitors, tire kickers, and other types of calls have gotten worse.
One practice that has helped some in my business is to gang common task together.
Inflation has and continues to be a problem. I bought a machine sewing light bulb this week for over seven bucks. Not long ago that was about half.
Sofa, you mentioned foam, are you able to get higher quality furniture foam at all? Around here, in addition to foam cost increasing, there isn't as much higher quality foam even available. I suppose the market is driving that.
Doyle
Rich: Yes I do have room to store it. I have a huge building downtown. One might argue that my expense for the extra square footage offsets my savings on being able to buy in bulk. ;)
Doyle: I usually stock foam that is around 2.0 density/ 34lbs. compression. I buy a dozen 6" sheets at a time. I use the "U-Cut" foam slicer to slice any thickness that I need. This way, I don't have to stock several different thicknesses.
In addition to free delivery, the sheets are 108" long for the same price as most places's 82".
As for higher quality foam, I do have to order some for high-end jobs. I really don't get any special price on it, though.
Even though it's only me in the shop, I've recently given this some thought and effort. Particularly the grouping of operations. Some operations - like pulling staples - I can only group to a certain point due to fatigue. But once I start to slow down I'll start patterning and cutting. Then when all is cut, sit down to sew. The exception to this is large covers. I'll work on one side of a large piece typically till that side is finished simply because the time used "changing gears" is less than the time it takes to rearrange the massive pile of fabric and figure out where I'm at.
I also have cut waste. I just finished a cover today that used only left-overs for the hem around the edges. I never had to man-handle a 60 pound roll of Sunbrella onto the table to cut new strips. For the same boat, I used left-over strips to bind the edges of the enclosure. I'm glueing foam where before I'd just cut a new, whole piece. Depending on where it'll be used, if I thing the seam could be felt, I'll cover the cushions with 1/2 or 1" of foam.
Truly, I think if I were to save significant production time, I'd have to get better equipment. I spend FAR too much time fooling with temperamental idiosyncrasies of my various sewing machines. Knee lifters that don't work so well, bobbin winders that don't work so well, rattling oil drip pans that make me crazy, other little things that all add up.
Like Rich, I've quit answering the phone unless I know who's calling and I want to take it. I return calls at lunch and at the end of the day. Some people move on to other suppliers, but I have all the work I can handle anyway. If I were sitting idle, I'd take the calls immediately, of course.
June
This is a well-known "time management" principle. Let the call roll to voice mail and group return calls when convenient to you.
Aside from the actual time lost to the interruptions, there is additional recovery time which negatively impacts productivity. Once interrupted, it takes 20-25 minutes to regain the level of focus we had attained prior to the disruption. In addition, close to 50% of the time, we never even get back to our original task. So a 5 minute interruption really costs you 30 minutes of time off task....and a strong possibility you'll never get it done at all. A landmark study by Basex titled "The Cost of Not Paying Attention," calculated that workplace interruptions cost the U.S. economy $588 billion a year. If the matter can wait until a more appropriate time, let it.When I get a solicitation phone call, I note the number and add it to my phone contacts as "Spam ###" When I see that number next time, I ignore it.
Quote from: DB on March 22, 2011, 05:21:35 am
Yes, phone time is expensive. It even seems that number of solicitors, tire kickers, and other types of calls have gotten worse.
On grouping common task, I do try to designate a machine to that function also, if one is required. That is helping a great deal.
If an item is in work and likely will likely come up again, I started making templates. That helps but I need more repeat work.
Making templates seems to be making me more money than about anything else I do, that and grouping tasks.
Here is a good one, I used to park my vehicles at the back so customers wouldn't know I was there, but an old fence blew down. That blew my cover. Interruptions can be big time killers.
There was a not to long ago post from a person who worked in a furniture factory and it was amazing what a group of few workers could get out in a day. I believe he said they specialized in some part of the process and gained tremendous speed from knowing what to do next and how.
This stuff is important to staying on tract toward turning a better profit.
Maybe someone else will chime in on making/using templates and such.
And too, keith those phone calls, I average at least a call per day from someone wanting to save me money on my phone bill or trying to sell something like insurance. Usually they start by asking for the owner. LOL.
Repetitive work and a lot of it will get you there, If you can stand up to it. ;)
Doyle
QuoteWhile we are seemingly doing things to cut waste, save time, and making adjustments by passing cost on to the customer, there is another dimension to all this that can't be over looked. That is the net must be adjusted for inflation. What I mean by this if I typically took a buck home and then am hit with a supply cost that must be passed, as we are saying here, that isn't the end of the overall issue of making a living. More specifically we have to increase our net because as we go to the grocery store and fill the tank, things there are costing more. Putting this in perspective, behooves us to make more money out of the business. That requires more thought than recovering cost on a job. Hope this is clear enough.
Oh, so you want a COLA? I think that as small business owners (I'll speak for myself) when the business is run more efficiently and/or customers are paying more, there is more left over after expenses to take home. Maybe many of you are like me and are single person shops (mu wife works the office end P/T). This is probably the most inefficient arrangement since their are no opportunities to make a profit from someone else's labor. Add to that the fact that running around doing so many different tasks takes a lot of discipline to make sure we don't spend too much time doing things that really don't produce much profit (as Hammerandhand said).
Rich
Templates and patterns. I try to focus my work on repeatble work. OK, it leads to boredom and the custom one-off jobs are the most rewarding to the creative part of us, but it seems like such a waste to go through the trouble of taking measurements and developing a well fitting cover for something we will never see again. Developing usable patterns takes time to do, but when you do get that same (or similar job) over and over it does pay off.
Rich
I don't hate answering the phone as much as I used to. Now, it's more of a welcome excuse to take a break.
The greatest thing about this business is:
You're your own boss. Nobody looking over your shoulder tapping their watch.
I really don't care anymore about maximizing my productive time.
Having said that, I have absolutely no patience anymore for piddlin' jobs that don't pay.
I used to think that you had to "Take the bitter with the sweet" in order to keep return customers. Now, I only take the profitable jobs. If a customer gets offended because I won't do their silly stuff, so be it.
You're my HERO, Sofa! ;D Hardest thing to learn in this business is to walk away from the unprofitable jobs. Problem is recognizing them. Like the old Kenny Rogers song - "Know when to hold 'em, know when to fold 'em, know when to walk away, know when to run". Hardest thing to learn to say is "no".
June
Great read, you guys. I knew it would be.
In our home, I "declared war" on vampires a few years ago. Vampires are those appliances that draw electricity even when they're "off" because even when you think they're "off" they're actually just lurking. Any "solid state" appliance fits the vampire bill. Anything with a clock on it, is a vampire. So, we use strips for things like electronics. Everything is plugged into a strip and when we're done watching TV or using the stereo we switch off the strip, ditto the computers. We unplug the coffee maker/etc.. We cut our electric bill by nearly $15/mo. doing that. Programmable thermostats! In the summer we flip the emergency switch for the boiler to the "off" position when we've finished with the shower. Big savings there with the price of oil pushing $4/gallon. We don't have air conditioning, we use AWNINGS instead and deal with the occasional hot and humid day (New England).
I do the same thing in my shop, as does the husband in his. Battery chargers draw juice all the time even when they're not "charging" anything! I have a wood stove in my shop but I only use it when I'll be in the shop for a full day... we're not into wasting seasoned firewood either. I keep my shop at 40 degrees when I'm not in it. I time my orders to my local supplier and usually pick them up myself, scheduling them to coincide with our routine "pleasure trips" to that city.
I have always categorized my work by color and operation. I minimize the number of thread changes that way (matters on overlock machines). I do all the prep. work at once, and then sort the work by machine required to perform it. I minimize the number of times I turn on the machines that don't have Servo motors, and plan to convert them to Servos as soon as funds allow. That approach was learned in garment factories and alteration sweat shops and it's a concept completely lost on my present employer who refuses to turn up the thermostat because "costs are too high". Flourescent lighting is the norm in my shop. Only 2 "vintage" lamps have incandescents in them and they're used infrequently... less than the Aladdin oil lamps, actually!
I'm still struggling to set up my business for maximum efficiency, but I am moving toward on-line ordering and bill pay. I have seen first hand the wasted time running for the telephone and the loss of productivity because of it (robo calls infuriate me!), not to mention the calls to a supplier to "add to my order"... that's what computers are for! hit "send" before your order deadline and be done with it, for Pete's sake. Don't even get me started on the lost time "required" to maintain a post office box when it's not necessary.
I think it is real important to always be a better accountant and keeping track of anything that can be a business expenses so it can be taken off of gross income and not pay taxes on that money. I look at it as for every dollar I can show went to an expense for the business then that is at least 25 cents that I do not have to pay in taxes. That really adds up.
In the Artisans and Money Joe Rollings talks about how important it is to come up with your own "products" to sell so that you can create "production" work for your shop even if the volume is on a small scale.
I been trying to think of ways that this applies to upholstery shops.
For marine I can where once a certain cover, bimini..etc is made for boat make, model...etc then you market that as a product and try to draw in more business for the same boat. Creates that repetitive work that patterns and having done the job better helps makes it go quicker. Something could go with autos.
Furniture seems a lot tougher though because there is not that make, model and year thing to reference to drawing the repeat business on.
Loren
Good point Loren. My wife (the accountant) keeps time of every peice we do. She constently updates our price list.
Upgrades are a good money maker. Toss pillows. arm covers, rewraping cushions used to be free. Not these days.
When I call a custimer to set up a delivery I'll tell them I have enough fabric left for a couple of toss pillows. Most times they say do it.
i only order what i need limiting stock. i used to have a wall full of zippers and snap ect. ive left my commercal shop space cutting rent light and water sewer phone . that a big savings there. my troublte is time . It seenm ive only got a good 6 hours in me ( my dads used to day that ) so by 230 or 3 i dont feel like starting something new.
Hay Mike I Know what your saying. I just saw an add on monster. A factory in NC looking for upholsters. The pay was good, best I've seen in that area. Twelve hour days. Three day work week. Maybe when I was younger but now I don't think I could handle those hours.
Quote from: bobbin on March 23, 2011, 01:38:22 pm
I minimize the number of times I turn on the machines that don't have Servo motors, and plan to convert them to Servos as soon as funds allow.
I am setting up my own shop here not finnished yet and have noticed that power is a bit short at time when everything is on the light and ac ant two machine. the machine non servo will draw allot of power when first turned on spinning up and with the ac going on the same circut can dim the power . so if a servo only runs wen the pedle is pushed would it use power as mine doese at start up each tiem you sew? i guese setting up my own shop is the savings no rent extra light bill phone computor ect.