Business Related Question

[baileyuph]

Since business after business has left our country, manufacturing for example either left the country or moved to right to work states, aren't we, collectively business and workers, forced to start working for less?

I priced and got a job of doing the seats in a chevelle for a hundred less than I got three or four years ago.  I paid the bills but it makes you work harder and smarter.  I look for the best buys on materials and maintain high sensitivy on how to do it better and faster.  Hopefully, experience was working better for me also.  I am busy but have to work harder, people are not spending the big buck just to impress anyone.

I do look for a tool, a better one even, that will save a few minutes.  Minutes do add up.  Sometimes I don't go home at quitting time.

That is business for me, how's it for you?  If you have any wisdom or something related to share, thanks in advance.  We can't run and hide, actually business has become more like it was for my parents, years ago.  You work hard and save up to buy things and don't go in debt.

Doyle

[mike802]

I think staying out of dept is a good thing.  My business has been dept free for years, I would much rather work for myself than the bank. 

I think what we have to realize is our government is giving tax incentives to big corporations to move their operations off shore.  That in my opinion is treason!, our government is supposed to do what is right for "We The People"  and a policy like that is hurting us.  It is always good to work smarter, but I am getting older and working harder is not very alluring, especially for less. 

This is defiantly not the environment my parents, or even my grandparents worked in.  My grandparents were depression babies, they were frugal savers, but they also worked for local establishments their whole adult career and had a good retirement.  My parents working life was similar, but both my father and mother are at retirement age and they cant, in fact my father still puts in a 14 hour day.

As for myself, why save?  With a saving account paying 2% or less and inflation running 10% or higher saving is a losing proposition.  I pay much higher taxes, higher food prices, higher fuel prices, just about higher everything than my parents, or grandparents did, but the average wage has not changed much since the 1970's.  I was looking at a chart the other day showing that since 1913 when the fed came into being the dollar has dropped in value by 95%.  I remember talking to my grandparents about inflation and rising prices, they never conceived that inflation wasn't really prices going higher, but the ability of their dollar to buy less, or becoming worth less.  How can I work for less in a business environment where all my expenses keep getting higher?

I have had customers who thought because of the poor economy that I should price my services and products lower.  The fact is my products and services have been to low for the past 10 years just to stay in business, I just cant cut out any fat, its not there.  One set of my grandparents ran a lunch counter and deli, they retired at 40.  The other set, my grandfather was a parts man for a local Chevy dealer, my grandmother was a book keeper for a local mill, they retired at 65 very comfortably.   My parents, my father has owned and operated a service station for many years, my mother is also a book keeper, they are retirement age but cant, my father has over a million wrapped up in property, but real estate is not moving in this economy.  Retirement for my wife and myself?  I just don't see it happening, its difficult to plan for retirement when you are just making ends meet.  In today's economy if you are making ends meet and still have your home, you are doing better than tens of thousands of other Americans.  I believe we are in a depression now, the gov and media just don't want to admit it, or just don't want Americans to know that everyone is having a hard time, its not just an individual American.

[Mojo]

Doyle:

It doesn't seem to matter which business your in these days, downward pressures on prices appear to be the norm. Many businesses are cutting corners and finding savings within their operations. If you take a look at wages you will see where some of these savings are coming from. Many companies who employ people are hiring new workers and paying them a lot less then previous workers. They are also putting pressure on their suppliers to lower their prices. They watch their fixed and capital costs much closer.

With the mass exodus of manufacturing, this in turn has brought cheaper prices on manufactured goods imported back into this country. This is a good thing for consumers price wise but I question some of the quality versus USA manufactured goods. It also means fewer jobs for us here.

In regards to my own business. I started getting tough about a year ago on my costs both fixed and capital. One thing I did is start sole sourcing my goods from one company ( Miami Corp ). I found that I was spending way to much time searching for bargains only to save 50 cents a yard on fabric. Miami treats me very well and gives me great prices. I now only have to make one call to Miami Mike and the fabric is on the way. No more time wasted shopping to save a couple bucks. One other reason why I source through Miami is that they have cut my shipping costs in half. They use a regional courier service to deliver fabric and supplies to me and it costs $ 10 regardless of size and weight. June and I both use this service. Mike is out of the courier region so he cannot use it unfortunately.

I am working faster and smarter and I credit my wife with some of this. You know the old saying of " Cannot see the Forest among the Trees " ? She is not an upholsterer but she is hell on wheels at patterning and sewing. She has been behind a machine since she was 14. She also has a masters degree with dual majors in Analytical chemistry and applied mathematics. What this means is she is one intelligent woman.

I had her sit back and watch me do awnings and solar screens from start to finish and she found alot of time I wasted doing different things. She has also helped me improve quality at the same time as she is anal as hell when it comes to " doing it right ". I was so buried in my work I would have never seen these things. It does help to have an extra set of eyes and to get " outside " input into your operations.

Through watching my supply costs, my overhead costs and my work procedures I have been able to drop my prices and increase my margins. I am no genius by far, nor do I have the experience most do on here but with my wife's help I found smarter ways to work and buy. Also many of you on here have taught me ways to do things that saves time and money. :)

I remain very flexible and I will try anything. Some people are hell bent on doing it one way because that is the way they have done it for years and it works for them. But in today's business climate you have to be willing to walk out on the high wire and try different things.

JMHO,

Chris

[Mike8560]

It's the same here Les work being done as they are tight with there money also.
Most want to pay less so I've had to cut some costo. My end

I wish I could get that devery service mojo. See s shipping g is gettig ridiculas  
Do you call mike mojo I just call  the Jacksonville. Office
me I'll end up working through my retirement  maybe a reverse morgage  :'(

[baileyuph]

Thanks for the feed back guys, I too see what is happening in my business representative as a general situation in this country.  There is no way a business man can start or sustain a business providing a product competing head to head with China, for example, and charge significantly more.  The market just won't support that happening. 

The outcome:  I see the economic water leveling throughout the world.  We have been up so long the outcome will be much more dramatic for this country, in general we have only one way to go, down. 

The situation can be modulated considerably by further automation, particularly for labor intensive work.  If we run a computer, there is a chance that we can run it about as cheaply as one will run in another country. 

My grand parents talked about the depression era, maybe now it is easier to relate to their stories.

Keep positive spirits guys, we will work together.

Doyle

[Rich]

Good question and some really thoughtful responses. I haven't run any other kind of businesses, so I can't say for sure, but I think this is a tough business to be in, especially since the advent of computers. Technology has helped mfgrs. to crank out products at more affordable prices while it's done very little for our industry. One trend that is evident in upholstery manufacturing is the move toward molded components. Even at the manufacturing level, cut and sew is time consuming.
Ours is still for the most part, a hands-on business that hasn't seen much in the way of inventions that could make our work easier. I think more and more, our profits will come from the wealthier customers b/c the average person cannot afford to pay the labor costs that go into this work. Much more could be said, but I'll leave it at that for now.
Rich

[baileyuph]

Right Rich,

The average person cannot afford to purchase intensive labor involved custom products. There is still some old money at play out there, we do a little expensive car restoration work, furniture, and even some boat work.  But, it will further wind down because all the customers have grey hair or none at all.  The younger, even those still working, are doing mere repairs or nothing at all.  They have two car payments, kids in school, you know the drift.

One among many big changes in our small business is we are less and less perceived as a retailer of a lot of things.  The net and bigger boxes have gradually taken a chunk of that.  My business is primarily a service business.  I cope with that because I don't spend the selling time of past transactions and instead do focus on the rudiments of getting the job done.  The labor rate is more critical now that the retail sales part has waned.  A small business just can't buy the volume required to get the cheapest price on materials.  On the other side of the situation, we don't have to invest as much.  So it isn't all bad. 

I do believe that it will never turn back to where it was just a few years ago, we will have to look to more specialty work, to stay in the business.  So, we will make it by looking for where we can fill a need.  We are doing more wood repairs than I ever conceived just a few years ago.  The wood used in imported items doesn't hold up and that is a plus for our business.  As cheaply as the new furniture is, when it breaks as new, it is still too expensive to throw away.  So, there is a glimmer of light there. 

Hang in there folks,

Doyle

[bobbin]

Interesting discussion, esp. since the latest book on my nightstand is, "The Jungle".  Upton Sinclair's masterpiece that shone an unflattering light on the Chicago stockyards and meatpacking industry at the turn of the 20th. century.  A groundbreaking novel, it ushered in the lately much reviled concept of "regulation" (sanitary standards with respect to our food supply) and worker's rights (fancy that?!).  A workday that didn't involve 12 hrs. and "docking" an hour's pay because the omnipotent company employer wouldn't recognize 1/4 of an hour of work as "meaningful".   Regulation is not always bad, and nor are taxes.  Too much of either is the real problem!

As we were eating our mid-day meal today we watched Buddy Roemer speak on the present economic woes that dog our country and contribute to precisely the issues that Doyle raised in his kickoff to this discussion.  Very interesting speech.  If you hit the CSPAN site you may be able to conjure it up.  But I will definitely think about both as I split firewood tomorrow!

[scottymc]

I find it interesting to read about how things are going in the U.S. as we hear alot of doom and gloom about your country on the news and current affairs programs , as when you go down the drain alot of other countries will get sucked down with you. We are pretty safe here in the "luck country" (here's one for you needle sand your shiela Chrishttp://www.youtube.com/watch?v=zo9jMPj8--0&feature=related) We are more dependent on china's economy as they buy so much iron and gas of of us. We also have a housing shortage as we are a growing country, we are having a real estate slump at the moment the top of the market has dropped 2% so as you can see it is easy street for us, I get a laugh listening to the reports about the economy "spending is down" no spend is just back to what it was before everyone was spending money that was not theirs. There was a comment that someone had a Million dollars tied up in real estate but could not sell it, well sorry but it isn't a million dollars anymore, it is only worth what some one is willing to pay for it at the time.   

[kodydog]

Job growth in the US was 0% last month. Guess they didn't count the guy I hired or a new customer that just got a job and is redoing her whole living room. The Gov. stats are a joke. I refuse to participate in the bad economy.

[Rich]

I do believe that it will never turn back to where it was just a few years ago, we will have to look to more specialty work, to stay in the business. 

Doyle, After being in the reupholstery business for 34 years, I have to say that being willing to investigate new avenues of work has been a mixed bag. I have, in the past gotten into work I probably should've stayed away from (window tinting and electronic device installations come to mind), but many times, being open to new business opportunities has kept my business profitable. One thing I've learned is to not expect the business to come to me just because I learned how to do it. It has to be pursued, so that means look at all aspects before branching out, or the dilution of your time and resources could be worse than staying put.
If done like that, then trying new things can open up new directions and may cause a shop owner to even discontinue less profitable work. Years ago, I stopped doing recliners, followed by sofas. I don't regret that.
Rich

[baileyuph]

Speaking of profitable work, this brings us full circle to the point that labor intensive items produced in this country cannot compete with foreign items produced in high volume.  Due mainly to labor rate differences.  Which was my original point.

But, to clarify that if we enage it has to be from a different business approach, suggesting repairs.  

Recliners for example, there are still many recliners sold in this country today.  Unfortunately, the market is supplied primarily by foreign industries.  Indeed competing by renovating these items on a custom basis might be suicide.

But, that isn't the end of the story, opportunity has surfaced in repairing these items because, as near new, they are breaking right and left, often long before they are paid for, therefore making it a throw away is not easy, plus often the item is under warranty.  It is a candidate for repair, is the point.

This can represent opportunity for a small shop, well experienced in wood framing as well as upholstery repairs, and an understanding of the mechanicals.  The mechanicals used in these seating devices, the upholstery, and the frames are vulnerable to breakdown.

This happens, primaily due to low quality products and people getting much bigger today.  But, early in their life, they are candidates for repair because of the circumstance stated above.

For example, we do several of these type repairs weekly.  This is the type of diversification that pays off in my shop.

Few years ago, I saw the need for wood equipment and got set up for that.  Never did I believe that sector of work would blossom like it has.

Back to recliners, since the breakage is usually at the same place or component, carefull thought was given to what could be done to gain efficiency in the specific work.  It has paid off for those parts, subject to breakage, have been patterned/sawed in numbers to gain efficiency.  In effect the benefits of ganging similar task and doing them in multiple numbers has shortened what took over two hours into one hour of work.  

We continue to look for areas of the service market where we can develop a nitch that can be done with profit through greater efficiency.   The first trip through one of these chairs can be daunting, well almost, but things become easier after you learn the answers.  Knowing the answers makes work less difficult.

On the marketing side of this activity, getting the word around was easy, everyone's chair was breaking and when you fix a few the stage was set.  Word travels like wildfire particularly when you can do what others say is not worth fixing.

Indeed we can't compete in manufacturing and in this case they can't compete in the service/repair market.

So, indeed Rich, recliners became more sophisticated in old days, reupholstering them that is, but you know, so many of those La-Z-Boy's were made using the same patterns, we did use that to our advantage like I described above.  Any techniques the factory uses to cut the hours in a job are worth giving consideration at the shop level. 

Last and not least, sure diversification can be a mixed bag Rich, it would be difficult to compete in retailing the auto electronic gadgets, the big boxes would eat us alive on price -- Volume!

Much better success doing something they can't do.

Great comments,

Doyle

[bobbin]

I am fall-out from the mass exodus of the garment industry in the early '80s.  I came to the needle trades via "tailoring/alterations/repairs".  I needed a job and I could sew and I was hired.  I was curious, bright, and mechanically inclined and I was willing to apply myself and take on work others avoided like a mud puddle.  Over the years I expanded my skill base and was always willing to "try something new". 

I watched the shoe industry dry up and then finally circle the drain.  but I was always able to find work because I had a broad skill base and was well trained and CURIOUS. 

I think curiosity has a good deal to do with success because a curious mind is one that isn't cowed by things that aren't easy; read:  already something easy and "known".  When someone asks me if I can do something I always say, "Yes".  Why close the door before you have all the facts?. 

I have always loved repairs and frankly, whenever the economy has been anemic they've been a nice source of steady income.  Often in cash...

[sofadoc]

opportunity has surfaced in repairing these items because, as near new, they are breaking right and left, often long before they are paid for, therefore making it a throw away is not easy, plus often the item is under warranty.  It is a candidate for repair, is the point.This can represent opportunity for a small shop.

I agree that recovering recliners isn't really profitable. But as Doyle points out, repairing them is. It's by far the easiest money that I make every week.
The last "High-end" furniture store in my town closed about 5 years ago.
So quality used sofas that are candidates for re-upholstery continue to dry up. But I actually make easier money fixing all the cheap junk.
Several times a month, people see me around town, and say "Hey, you're the guy who fixed our couch while it was still in warranty". "We ended up getting a new one anyway. The old one kept breaking."
If it were a sofa  I had recovered that didn't hold up, I would feel bad about it. But when the cheapo couches break again after I fix them, it doesn't hurt my feelings one iota (as long as it breaks in a different spot).
I don't have the least bit of sympathy for someone who weighs 300lbs., and spends $600 on a new sofa.
$2 a pound?  C'MON!! And a buck per pound for recliners? What do they expect? 
OF COURSE IT'S GOING TO BREAK!!
I still do just enough nice sofas to keep my sanity. The money I make repairing cheap junk is pure gravy.

[kodydog]

I wonder how hard it would be for the USA furniture industry to turn around its downward reputation of building cheep furniture. Turn the whole industry upside down, start building quality pieces at higher costs and build a whole new advertising campaign.

The funny thing is they advertise quality but their only fooling themselves. Everyone I talk to, even the layperson, knows the stuff coming out of our factories is cheaply built. Would the public pay more for better built, longer lasting furniture? Or are we in such a throwaway rut that price is all that matters?

Look at Japan 30 or 40 years ago when they turned around their manufacturing and economy and started building higher quality electronics and automobiles. Cars that last 20 years. How about a sofa that lasts 20 years or longer.

I remember back when everything coming from Japan was considered cheep. And that's where our furniture industry is now. I'm seeing sofas that are 6 months old that the seats are sagging. How much would it cost to put a few more spring in it, or a higher quality foam? Maybe beef up the frames a little. Here's a concept, how about joints that actually fit.

When I did factory work 25-30 years ago their was a guy at the end of the line called an inspector. If there were any flaws the piece would be sent back for repair. From what I've seen lately these guy's don't exist anymore.