Landing That First Customer
In recent columns, I have discussed starting a manufacturing business and have related some stories of companies that have successfully met the challenge. Even with all the efforts needed to get the business started, it does not take a company long to realize that to be successful, it must find and ultimately satisfy customers.
Executive Director, Center for Manufacturing Systems, New Jersey Institute of Technology
In recent columns, I have discussed starting a manufacturing business and have related some stories of companies that have successfully met the challenge. Even with all the efforts needed to get the business started, it does not take a company long to realize that to be successful, it must find and ultimately satisfy customers. As a former boss once said to me "If you ain't got customers, you ain't got (fill in your own word)." So where do you begin in the effort of finding potential customers?
Many manufacturing businesses get started by providing machining services to former employers. Frequently, employers (either past or present) are a great source of work, as they may be trying to streamline their own operations. In doing so they may realize they cannot do everything themselves. If the company views you as a loyal and dedicated employee, it may be willing to give you an opportunity to provide machined parts to them, with the theory being that a good worker is a good worker no matter where they are. In my recent interview with Charles Wright, a former employer was willing to subcontract parts on a piece-rate basis. This was the first step to Mr. Wright eventually forming Wright Precision, a successful machine shop in Oroville, California.
Other companies realize that, for a variety of reasons, they can no longer efficiently manufacture parts in house, and they look for outside resources. In a rather unusual case, Randy Jezowski, now president of Ramco Machine in Rowley, Massachusetts, tells how he started his business by purchasing the machine shop of a major metal fabricating company that just could not make the machine shop profitable. As an experienced machinist, Mr. Jezowski was able to upgrade the operation and began to sell machined parts to that same metal fabricator. Both parties prospered from this arrangement, as the company was able to obtain parts at a lower overall cost, and Mr. Jezowski was able to make money by machining the parts more efficiently.
Sometimes a resource within a company will be key to getting business. Larry Kimble, president of Kimble Precision in Loveland, Colorado, admits he got lucky when he met an engineer in a large electronics company. As Mr. Kimble says, he and the engineer "just hit it off," as they had a lot in common. The engineer was responsible for buying machined parts, and based on his belief that Kimble Precision understood his needs and could supply good parts, steered business his way. Mr. Kimble says this engineer even recommended his company to other companies, based on his positive experience. And nothing helps to grow a business like recommendations from satisfied customers. Even if the company is not able to buy your services at that time, a well-placed resource within the company can direct business your way in the future and perhaps even refer other companies to you in the short term.
Of course, your first customers do not always fall into your lap. John Stamm of Modelwerks in Seattle speaks about calling "anybody and everybody, begging for work" to land that first customer. For Mr. Stamm and his associates, this at least got the ball rolling. Granted, its tough to telemarket your machining capabilities, but sometimes this is what you have to do to land that first opportunity.
Also, do not rule out manufacturers' representatives. Randy Jezowski says he has had a mutually rewarding relationship with a manufacturers' rep for many years, and he attributes a great deal of his business growth to customers brought to him by this rep.
Other sources of potential customers are professional society meetings, trade shows, conferences or any type of industry gathering. Being visible at such events presents a great deal of potential for meeting people with little or no downside.
In general, you should use all means at your disposal to land those first customers. There is no one formula for finding customers, just hard work and perhaps a little luck (which I have found generally go together). Most manufacturing startup businesses believe you do not need much to get started, perhaps just one or two customers, but the business you do get, you must do well. In today's fast-paced environment, people do not have time to take on new problems; they will go to great lengths trying to avoid them. If you can convince potential customers that you can help them solve their problems and provide them with "worry free" services, and you keep that commitment, then you will have all the customers you can handle.