Business Growth in a Time of Change
As a custom shop, you may prefer to produce certain type of products. These products may be what your creative team are best at designing or what your customers in the past have ordered. These are the products that allow you to keep your business open and more importantly give you the funds needed to pay your employees, your bills, your vacations, your retirement account, and for everything else you want. But, what happens when these products are no longer in high demand nor any longer ordered?
What effects the change of custom product demand?
First let’s look into why demand changes. There are many reasons this happens, but these are a few of the biggest reasons that effect the custom manufacturing industry.
New Laws: Sometimes there are new signage laws that are passed that prohibit specific signage or lessen signage. For example, the Lee Law in California. If your custom sign business relied on repeated window signage from California liquor stores as your main source of revenue, you would have a loss after the Lee Law went into effect.
Industry Decline: If your industry target is on a decline that can mean less business for you. For example the video rental industry. If your focus was supplying custom promotional tools for video stores, your sales would be declining. There are many declining industries right now and if your custom shop is focused on these, you will see a decline on your revenue as well.
Mass Interest Change: When humans change their activities on a large scale, you will see big changes in custom manufacturing as well. For example, right now, due to the unfortunate over-watching screens, there is a large decline of Little League participation in certain areas and seems to be spreading. If you are supplier of custom t-shirts and hats for these leagues, there will be less orders coming in.
What can custom manufacturers do to remain profitable in times of change?
This is where we can learn from what is currently happening in the Beverage Industry. Soda sales are suffering for two of the reasons above: 1) Mass interest change due to heightened consumer awareness of the dangers of sugar. Consumers are buying less and less soda. 2.) The new tax laws on sugar that are being imposed by the government.
Since soda sales are lowering, beverage companies are changing their focus to healthier drinks that are more appealing to the changing demand of consumers. Water is a main focus now. They have been creating new water products and new ads to market them.
So what can we learn from the beverage industry?
- Be aware: The big winners of the beverage industry are those that were aware of people’s desire to be healthier was growing and the new tax laws. This is the first major step. Be aware of two things: 1) Changes in your area of focus whether it’s changes of laws or human behavior. 2) Changes in your incoming sales.
- Don’t be stubborn nor nostalgic. Sometimes it is hard to let go of what you know and what has worked for your custom shop. People fail all the time because they do this. But, if you do your research, you will see that the big beverage companies change their products as needed to meet the demand of the consumer. They will change ingredients or create new products. If you must be nostalgic, create a collage or display your old products as art like this coke bottle resin table designed by Signarama of Baldwin.
- Act quick. If you wait to long to change, competitors will be happy to take your customers. For example, if people in your area are growing concerned over dangerous chemicals in your materials, then change to safer materials. If you take to long to offer this solution, another company will pop up and take your customers.
- Promote, promote, promote. During the Super Bowl, a big named beverage maker took out an add for it’s new water brand. Now you see their ads everywhere — online and offline. So, make sure you promote the changes you are making in your custom business. Share these changes with your current customers and with the public.
- Manage properly: They have systems in place to manage their inventory, tasks, sales, and other areas of their businesses. This gives them insight to changes faster, as well as run their business better. When new products and changes happen, it’s useful to already have a management system in place because it can make the processes run smoother.
We have seen big time businesses like Borders and Blockbuster go out of business because of their lack of adapting to change. Learn from these big time beverage companies and be bold to make the necessary changes when needed. This will make it easier for your business to expand.
Want to learn more about managing your custom shop with shopVOX. Sign up for one of our live webinars.