Why Most Welding Businesses Fail and The Reality Check You Need.
Allow me to illustrate with an example. For this example, we observe a welding business owner making tons of money but not producing a good product, or good welds or anything else. Most of us may know a business owner like this, and don’t understand, why they do so well. Let’s call this owner Bob. Bob is always busy, pays his welders poorly, treats them badly and does bad work in general. The big secret is that he is a good salesman; he is cheap and knows how to take advantage of every situation. He is a successful business owner, who can make it no matter what business he has chosen, and this is the aspect that you need to strive for. His business will always be successful because he knows how to get the work in the door, and he respects the value of money. The lesson is to learn his good points, which include; knowledge of the nuts and bolts of managing his business, focus on his market segment, keeping his costs low and a laser-like focus on sales. When most welding businesses fail, it is the owner’s fault. The leading reasons most fail come from three areas:
- Starting Without Enough Cash
- Not Willing to Do Sales, Marketing and Networking
- Investing Your Time and Money Improperly
Starting Without Enough Cash
The first word that must be learned is plan. To successfully raise money for your business, you need a plan. Perhaps a plan B in case you do not do it right. You must figure out what your business needs to reach your goals. Decide on your sources for money. Let’s address the issue of having enough cash on hand. If you don’t have the cash then you are wasting your time and money on an unattainable dream. Most businesses fail because they cannot make it long enough for the owner to learn how to get business in the door. Starting out with the needed cash is the first part. You will need enough money to get yourself through the start-up period of living costs and business expenses. One of the biggest mistakes new business owners make is spending on new equipment. Stay away from new equipment, because you can’t afford it .You need to preserve your money for as long as possible, spending only for necessary expenses. It is most important that the business owner know, where their money comes from, and where it goes. Remember, a 20 year old pipe bender bends just as well as a new one!
Not Willing to Do Sales, Marketing and Networking
Many business owners open up their doors and expect people to just come in and spend money. If you open up a shop, and hope for work because your doors are open then you deserve to fail. If it were that easy, then why would anybody work for anyone else? Unions and big companies would all be out of business because the little person would no longer need them. The facts are that most business owners fail because they feel their work, products or services are so good that they do not need to advertise or make personal sales calls. This is a death sentence in the business world. To succeed you need to focus most of your time, money and efforts on marketing, sales and networking. A welding business with no customers is not a business. Customers are the focus of every successful business, so finding new ways to get their attention and build long-term relationships for your mutual benefit is of the highest importance. You must understand your customer’s needs and seek to provide the best customer service that you can. It will take mighty exertions on your part, but it is the only path to having a successful business. You must know your customers, and involve them in your business. The long-term relationship that you build with marketing must be built on trust.
Investing Your Time and Money Improperly
This is an area where many new business owners make a big mistake. Don’t waste your time and money on things that do not work. Many mobile business owners that I know complain that they have no work. However, all of them spend their days talking to other people who are in the same business. Don’t spend your time and money associating with the people who are fighting for the same jobs that you are. Yes, you have a lot in common, but that is how you go broke and end up working for someone else. Idle chatter may be fine, when you are working for someone, but not when it is your business and, you are in competition for work.
Successful business owners make sure they can afford what they are doing by spending their time wisely while taking advantage of those who are not willing to do what they are doing. The owners, who fail, buy shiny new equipment, pray for work and finally just complain the economy is just that bad for everyone. That is why 20% of the people in the world make 80% of the money. What side of that proven number are you on? Think about this before any business expenditure.