old businesses evaluating new markets?
We don’t have any really active business threads currently—maybe this one will spring to life in a recession economy ???
How can a small”mom & pop” service business successfully evaluate a potential new market for its’ services?
I have an idea( it’s certainley not original) for a business—that might be right for somebody—-but probably isn’t right for my existing skill base. How would someone reasonably evaluate the potential for this idea?
MEGA Corporation USA would certainley pay for a expensive,exhaustive market study——- but how would a little guy handle it/
Here is the Overview :
I am primarily a roofing contractor—- who dabbles in some oddball carpentry projects— both personally and professionally. Currently— I am building some wooden storm windows– BIG ones— up to 72″x72″. things are going well.
Neighbor across the street—-has a house about my homes vintage——- it needs a wooden storm door—arch top—-something similar to my own front door
As recently as 10-15 years ago– this would be a simple thing locally Brown& Graves, Carter Jones, and Schneider Lumber would all have built these things in their mill work departments, no problem.
none of them can/will do it now as a practical matter.
potential market?—-city of approx. 200,000, greater surrounding area–perhaps 600,000. city expanded approx. from 60,000 to 190,000 approx. from 1910-1920—so there is a large stock of houses of a certain vintage
but–we live in a HomeDepot/Lowes world. some people( most people ) will happily cover their 1918 house in vinyl. Other people want what they want–and will pay for it. A certain percentage of “old house people” fall in to this category—- but how many.
in my neighbors case—- she is currently looking at storm doors in the $1200 and up range—and she isn’t happy with the doors—– price is not an issue—-the DOOR is the issue—she wants what she wants.
so—- it seems to me their might be a potential market for “one offing” things— that formerly were commonly available—often from lumber yards—- but now are almost un-obtainable in a Home Depot/Lowes world.
i am thinking of a specific lumberyard— Carter Jones. (I actually live across the street from Mr. Carters home circa 1925) untill ,say 10 years ago Carter jones millwork department would have produced stuff–pretty much on the SAME machines they were producing on back in the 20″s,30″s,40’s when my dad and grand dad were contracting.— certailey those millwork departments(union) were set up to produce LARGE amounts of stuff for a building boom—-and by the ’80s/90’s became un-economical to “one off” stuff—- but what about a one man business( say somebody like Sphere) ?
how would you evaluate the potential viability of this market?— how would you contact this market?- quite likeley there are several small guys attempting this locally—- but since I haven’t heard of them and are unaware of their operations— they aren’t really successfully contacting the prospective market!
BTW— I AM keeping in mind the precedent set by small cabinet shops—who complain that they can’t compete against the economics of bigger operations—AND that any homeowner can go into Loews and order ready made cabinets— I AM keeping that dynamic in mind
HOWEVER– what I am talking about is something you can’t possibly buy from Loews or Home Depot—- for example—–besides the wood storms or screen doors– several years ago I needed to replace a couple of wood louvered gable end vents– un-obtainable so i built them myself.
sorry for the ramble folks—- and BTW– I don’t think this is particularly a possibility for me with my current skill base—- but in general how would one evaluate and contact this market?
When you start talking about "one-offing" anything, you're talking custom work and that's gonna make it more expensive (often much more expensive) than a similar, mass produced, product.
It's all about economy of scale. The production companies crank out hundreds (if not thousands) of copies of something and their "unit cost" (design, materials, machinery & tooling, production, packaging and shipping, sales and marketing, profit, etc) can be spread over the hundreds (or thousands) of units they sell. For the customer, the upside is lower prices. For that same customer, however, the downside is limitations of their choices.
We, OTOH, can offer our customers a wider range of choices, but since we have to recover our costs and profit on a "one-off" production run, our "unit cost" has to be far higher.
Since we live in a "big box" world, our potential customer base is limited to those who can/will pay the freight to get what they want rather than accept what the big box offers.
Dave45your assesment is right in line with what I figure--- in fact the weakness is the strength of proposition. in my house I have a pair of frenchdoors opening onto a sunroom----each door has 15 panes of glass--and the door is stained a specific color my office opens onto the sunroom as well-----again same door--15 panes of glass-same finish. i would like 2 more doors---2 replace some other existing ones--- and i want them to match the garden room doors as close as possible---- close enought so that I think they have always been there a home depot or loews operation can't accomplish that--- but for the guy who can "one off" those doors who knows what I would be willing to pay---because I really,really,really,really WANT those doors. a good many people into old houses--will operate on the same irrationallity-- they want what they want--and they will pay for it----if somebody can actually accomplish it.-- the impracticality of it is where the opportunity is.stephen
Ok, allow me to comment on what you said based on a few years in the custom woodwork business."...a home depot or loews operation can't accomplish that" - True, but customers often don't know that."...the guy who can "one off" those doors who knows what I would be willing to pay" - That's only part of it. The more important question is "Will you be willing to pay what I may have to charge you?" That's the real test of how badly you "really,really,really,really WANT those doors.""...a good many people [are] into old houses." While there are some who "want what they want--and will pay for it", there are many more whose dreams quickly fade when the bids come in. The biggest problem I've experienced is sorting the buyers from the tire kickers without wasting lots of time trying to sell a job. That's why one of my first questions of a potential customer is "What budget do you have in mind?"I'm in the midst of designing and building several pieces of furniture for a customer who almost fainted when I gave her the price for her dining room table. We had a lively conversation for about an hour while I explained the difference between custom and production pieces, her ability to get a truely unique piece incorporating HER wishes, etc, etc. When I delivered the table, she literally danced around the room gushing about how much she liked it. She's told me how much her friends, neighbors, and family like it - and may want one of their own. Early last week, she gave me a sketch she made for a lamp table she wants for her living room that is a variation of the dining table.The lamp table is in the pipeline behind the audio-visual component cabinet I'm building for under her new flat screen TV. She whined about what that was going to cost her, but laughed while she did it and ended by saying that it would probably be worth every penny. - lol
"will you be willing to pay what I have to charge you" yes--that's a good question---that you can't always ask straight out. i will give you an example---- bought a house that needed a new front stoop---well a stoop a little different than most----semi circular in shape brick risers, stone treads------ the treads had to be templated and then cut to 4 different radiuses. Many people came and looked----only 1 guy was willing and able to do the work---he named his price--- I paid it.- He supplied what i wanted( I want what I want) It took me 2-3 years to find a guy who could or would even do the work---another year to come up with the moneyso-in genral- i am probably the kind of customer you might want--YOU set your price--- it's my job to come up with the moneyI run up against this frequently in roofing, you know.--- customer really wants my roof---- but they want it at johnny tarbuckets' price. but-- look how things work out in the long run. the guy who did my steps---well thousands of cars go past my home every day---- on a good evening a couple hundred people walk past it.-- after he did MY steps--- he went on to do 3 other stoops farther down the street.- I hand his name out regularly. I finished a roof for a customer last week---- he did chimney work for them before i did the roof this spring on my referall--and he is curently doing a patio for them now.-- additionally---on my desk--arrived in the mail yesterday from ANOTHER customer---- i have a thankyou card with a long gushing thankyou note--- thanking ME for referring the brick guy to them a few weeks ago--he has already rebuilt their chimney----it's an eleven line note thanking me and complimenting MY work ethic---so they new they could trust the referall.so---- that's what we want in a customer isn't it---- people who want what they want--and would rather pay for stone front steps than a big screen TV ?
the trick is--- getting the 2 parties together-- guys like the brick layer--or myself----- not so much with the advertising----and customers like me-- or like the ones i look for---- they don't exactly have their suitability tatooed on their foreheads , LOL please be sure that I appreciate your input.stephen
Unfortunately, it's the question that has to be answered early in the process. Unless you're Sam Maloof (RIP), you won't be dealing with customers willing to pay any price and wait for months (or years) for one of your pieces.Since you can't sell custom work based solely on price, it can take quite a bit more hand holding and explanation to close the deal. This means that you have to be able to effeciently separate the customers who can be sold from the ones who can't - no matter how much they might want your offering.My selling time is time that I have to "steal" from my shop time working on a "sold" project. I enjoy most of the selling process, but just can't invest a lot of selling time in customers with a low-to-nonexistant willingness (or ability) to pay the price. I try to leave all of them smiling, but I need to spend my serious selling time with customers that I believe will actually buy.
There is also a business model for a company that can make custom "stock" units.They could mill a couple of 100 ft of a give pattern of rail and styles at a time.Have cut stations setup. Have adjustable squaring assembly tables premade insets, and other options setup.While each unit is custom made a large percentage of the work is "mass" produced.Custom shutters are made like that.But it is not a one man operation. Maybe 3-5 as a minimum.And it would take larger area to support that.Probably need to setup a website to display and take orders. And advertise in Old House Journal and TOH and the like.I would not be surprised is some such operations don't alreay exist.Maybe a better option would be to find those companies and unofficial rep them and install them.And can still do any stuff that is really odd that comes along..
William the Geezer, the sequel to Billy the Kid - Shoe
Very interesting post, it was a great read.
I offer a lot of pieces similar to what you describe, one off doors, windows, cabinets and the like. I find that advertising those items specifically seems to garner no business or at best tire kickers ; however, the way to sell them seems to be that on a more typical installation or trim job I get to know a customer and either due to faith in my abilities or because it's more practical due to the long lead times they have me make up such an item. For anything remotely not stock from the big boxes there is usually quite the wait, if you need or decide you need an arched window mid-remodel with your living room wall torn out it's worth the premium to have me build it(to some customers..some will go buy a vinyl clad atrocity and put it in place as an interior transom).
several years ago I stumbled across a web site for a guy doing something a bit like you described. I remember quite clearly that he was a graduate of the North Bennet Street School In Boston------ which was interesting as I always wonder what sort of jobs those guys can actually get after investing a zillion dollars in a woodworking education--------
anyhow--- he had set up a business building true divided light windows---historically accurately sized mullions and the like--for different historical periods that's actually a good example----say you own a house built in 1720----and want an authentic historically accurate window-----where ya gonna get it???------your potential market is small---- but if you can serve that market---ya got 'em over a barrel don'tcha?
In many types of business I think that there is a good market for small niche companies that can do semi-custom work that is much cheaper than a strictly "one off" company.For example a friend of mine had powder coating business. He was setup for small runs and he could quickly switch colors or size of items that he ran through.He was cheap enough that he did a lot of one off refinishing or for example a patio table and matching chairs.But who where is biggest customers? Manufacturing companies, many that had their own powder coating lines.But they where setup to do 100's per hour. If they would doing a prototype of 5 units or maybe a custom color of 50 units it was not cheaper to use my friends shop..
William the Geezer, the sequel to Billy the Kid - Shoe
I'm certainly no business man , but I think you'd need to develop the product first and then the market would follow .
The " if you build it they will come " line of reasoning .
Similar to my mini business - start by doing nice work for people and they will tell their friends and neighbors who appreciate quality and after awhile there will be a line wanting what you're making .
Best , Walter
walter-- I don't really propose myself for this operation---because it would require more woodworking skills than I think I have
If I was gonna do it--- i would step into it from the side yard or the back yard for instance---- the wood storm door across the street. I could absolutely sell them that project--- no doubt AT ALL in my mind. I know exactly what they want----- and that level of wood working is within my capabilities------ but when would i do it?---- In hindsight-- I should have sold it to them 2 years ago when they first started hinting around about it----surely I would have built it by NOW?, LOL- Reasonably I could have built in at any time over the last 2 winters.As a strictly practical matter it's hard to jump back and forth from slamming out roofs to wood working-and back again---- but for somebody else--- might be just the thing.stephen
I'm the same way -- get in a groove and stick with it .
But I'm buying timber framing tools now to do a couple nice projects for my own home -- which will help sell similar structures to those who are interested .
I'll line some up for a Spring delivery -- cutting them out next Winter .
Same for you I bet -- line 'em up for this Fall after you stop roofing .
Going in on a granite sawing operation too -- out on Vinalhaven , but don't intend to compete against the imported stuff . Will provide product to those who want authentic Maine stone from one of the finest sources anywhere .
Picture threads are going the way of the buffalo it would appear - was looking forward to your slate job .
slate is here----it's stored inside at a friends small lumberyard---- It's been here for 2 weeks now and i haven't seen it yet! I am building some windows this week(in between bicycling, LOL)-- I expect so fit in some Slate/rubber roof interesection repairs for a referall from Calvin at some point this week---- we roof a house the week of June 8---and some point between THEN and mid july I will do the slate job--- mostly I am waiting on them to build the building. At present I have 5 nice projects like this--but all are tied up/delayed for one reason or another----which is actually kind of good for me----after the last 2 years I could use a breather/some slack time. Are you timber framing a Pergola type thing??? we will want pic's of that. I am hoping tommorrow get a little cooperation from my youngest son tommorrow and sort out a new cel phone and pick up a new camera so I can resume pic's( If he can't fix the existing camera)
Yes I've got two small intricate structures I want to build with Douglas fir beams .
Bought a 16" Makita saw last Fall and just picked up a slightly used Makita beam morticing machine last Sunday .
Looking now for a portable beam band saw .
Looking forward to seeing your carraige house project .
After quickly reading all the replies my answer to your question is this statement.
I like what you have in mind and would suggest that to properly market your idea of semi custom/one off, a business person incorporate the skills to sketchup or CAD render a 3D model of the said door or piece of furniture.
Then once a sale has been made, the CAD drawing can be transformed into shop drawings used to create the pieces. A "CNC" machine can be used to create perfect pieces that anyone of reasonable skill can then assemble and finish.
I also agree with the example one poster (Dave45?) made about the powder coating business set up for small runs, a small setup for custom millwork may be a great business if you can market it to other contractors who can email you a CAD program that can be entered into a CNC machine to produce the parts. You may even be able to sell the service to the lumber yards that used to do it but abandoned it because of the cost of running the custom millwork shop in a slow economy.
If you can set up examples or how to's of similar projects, and then show others how to do the sketchup drawings that you can transform into parts/pieces that you can then ship for easy assembly I think it would be a going business.
I knew a guy who worked for a short time for a custom door maker in Colorado. Their business consisted of making very expensive doors for expensive homes. Their customers wanted just the right look for the high dollar vacation home and were willing to pay for it.
I would expect some of those sort of businesses would be hurting now and looking for a new market. If you could find the right place, maybe they would be happy to build a few orders for you and see where it went from there.
I think you might have answered most of your own questions.
How do you market to a customer with such specific needs/wants? Word of mouth referals pretty much wraps it up.
other than that, how would you target marketing? Most people would spend double to replace a front door..frame, trim and all.......before they would pay and wait to have a new door or storm door made.
It sounds like from your past posts that you have developed a base of customers with specific expections who are patient and reasonable enough to wait for the person they want to do the job they want.
Having had the chance to work in both small exclusive communities as well as larger developments........................................
In the exclusive, descrimintaing neighborhoods?
There develops a small group of contractors/Artisans that work in a very small circle by referal and seldom compete against outsiders.
In the larger developments it's every man for himself and the referal you just got will dump you for a price $200 cheaper so he can afford a big screen TV when that new basement is done.
You're already on the inside...........is the inside big enough to support someone doing this? If you found a shop that could do the work but:
a. Didn't have the inside connections you have.
b. Didn't have the personal skills to break into that market.
Could you mark it up enough to cover the cost of you selling/installing/being responsible for it?
By the way..........Most of our local lumber yards no longer do special/custom orders. One of the local shops that was doing such work in a very small area has branched out and is now busier than ever.
robert-------- I wasn't thinking of this thread----as really a thing for me,personally---as I don't think I personally have the skill base/efficiency to do it myself. Using My neighbors storm/screen door as an example--- If I think through the time it would take ME personally to make her door-------well the same time spent roofing can CLEAR me over 8-10K so-- for me-- it wouldn't be more than a hobby. however--- some of the other guys here on breaktime- I expect might be 8-10 times as efficient and skilled at woodworking---- it might be a lucrative thing for them--- but me--- at this point----- it couldn't be more than a hobby.also--- looking at my neighbors door---surely there is sombody with in 30 miles that is ready ,able and willing to do that door----- but I don't know who they are, my neighbor doesn't know who they are----and WHOEVER they are---- they don't even know my neighbor exists------ so how are the 2 of them ever gonna get together?,LOLstephen
so how are the 2 of them ever gonna get together?,LOL
That's the problem.
I know so many skilled woodworkers who could knock out beautiful storm doors or operating shutteres ect, ect in one lazy afternoon in the shop.
But almost none of them have the personality to actually sell that work.............and as such live barely above the poverty level.................I suspect that may also describe a few guys who hang out here.
You seem to be the kind of guy who put together a deal where the guy in the shop gets the work, the customer gets what they want, you get a small profit....and everyone's happy.
Maybe it's worth it for YOU to find that shop that will do the work and make a deal with them...since you already have the customer base willing to pay for that kind of work?
well the same time spent roofing can CLEAR me over 8-10K
A friend of mine has a shop the size of a 3 car garage...........and does some fantastic work. He's done some shutters and doors ect, ect......but he tells me he still makes three times as much trimming as he does working in the shop.
Maybe that's why it so rare?
thinking about your friend with the 3 car garage sized shop. the door i am thinking of-----it's arched topped--- which complicates things------- so you need the arch topped door AND an arched topped glazed inset for winter AND an arched top screen insert for summer-------so, I don't really think it can be built in an afternoon because you are doing the same number of joints as if actually building 3 seperate doors but---- lets say someone like your friend---can do it in one day Ok-- my neighbor as an example----- unsatisfied with comercial offerings in the $1200-$1300 range?-- someone like your friend can build the door of her dreams------ bet she would hem and haw----and then willingly pay $1800your friend has maybe $300 in materials---- I am guessing he doesn't bill $1500 a day working as a trim carpenter? BUT--- I realize ---- that's not what you said--- you said he makes 3 times as much as a trim carpenter as he does in the shop----- which I am guessing means he can bill out around$400/day fairly steadily as a trim carpenter--- but he hasn't really developed the shop work portion of his business perhaps because---- he doesn't appreciate and market the value of a good story.- your friend has $700 in time and materials invested in the door--- my neighbor has $1800----- but she also gets what is to her a GREAT story- every visitor to her house will hear about how it took her 3 years to find your friend---- how the door cost $1800--- how she had to wait 4 months for your friend to work his way through his busy schedule to custom craft her beautifull door--- how it's a work of art, where the wood comes from, how it's dried---and on and on and on and on The DOOR-- is $700--- but the story ( and the ability to tell it)is worth another $1100 ! you are right-- I gotta meet the Akron version of your friend!!!
He and I used to work together and split projects every now and then...it was not uncommon to make $1500-$1800 in a day when we really, really hustled.
Average was in the $400 to $600 range.
But now you see the light.................your personality and ability to sell.........and your connections are far more valuable to the equation than your ability to actually build the door.
if the time ever comes when ANYTHING depends on my personality--- I am truly Efeweseekayedstephen
Interesting thread. I would love to be able to do something just as you mention...Problem is I suppose there is not enough of it to keep you going full time.
Its like the consulting stuff I do. I LOVE it and it pays great...problem is there just isn't enough of it. For some reason the fun stuff only seems to come around once a month when you need it once a week! :)
I guess the anomoly of the custom work would be Stan and his staircases. He only needs to do a few a year to be successful as opposed to how many doors you would have to crank out to stay afloat.