Home – New › Forums › Starting your journey › Helping grow my dads small business
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August 14, 2019 at 3:06 pm #999692Up::0
Hey everyone!
Looking for some overall help and unsure where i could look so here I am. This could be a long one but I want to give a full background so I can get the best advice possible.
My Dad is an mechanical engineer who had an opportunity to purchase a business about 5 years ago. It had been run into the ground by the previous owner who owned it for just two years and managed to destroy most of the relationships the business had previously. Over the past five years he’s built the reputation back up and the business makes an OK income. Problem is that he works 80 hours a week, he’s an amazing engineer and not a great businessman and he’s hit a point where he can’t grow without help.
My background is in Sales, Automotive and finance mostly with a few small online business’s I’ve started and sold. He’s asked me to come on board as a BDM contracting as the business can’t really afford another staff member on salary. Obviously hiring someone with experience would be preferable for him, but it’s just not feasible.
And so here I am with absolutely zero network or experience in the industry.The business :
Security equipment manufacturing (hardware)
Custom product design
3D printing
CNC machinery
4 staff (not inc myself)Sells standard product lines through wholesalers who don’t seem to push the product unless directly asked
Custom design currently only focused on security for government jobs (prisons ect)Website- May as well be none existent it’s so bad, he’s had quotes but they are between 40-100k. He applied for a government grant for the site but was denied.
The industry is obviously super niche and the standard equipment line can typically be purchased much cheaper from China. With no experience in the industry I’m struggling to find points of difference can we create to differentiate ourselves from competitors within Australia before we even begin to look at export.
Basically I don’t know where to start.
August 15, 2019 at 1:31 am #1220927Up::0Hi And Welcome to Flying Solo [USER=115523]@Dcarl89[/USER] .
It is great to have you!
Hopefully some helpful members will be along soon with some advice to point you in the right direction.
Cheers
August 15, 2019 at 4:24 am #1220928Up::0Ok I can see 4 problems straight up
Dcarl89, post: 266776, member: 115523 wrote:Sells standard product lines through wholesalers who don’t seem to push the product unless directly asked
.Have you asked why they don’t push the products, that would be my first question? Or is it that the profit margin on your product is far lower then the imports, retailers will push products that make them the most money, and are easy to sell.
Dcarl89, post: 266776, member: 115523 wrote:Custom design currently only focused on security for government jobs (prisons ect)Well the problem is is very obvious, unless you get out and seek other custom markets, this area isn’t going to really bring you much profit as it’s a limited market. But gee I can think of a million business’s that want security so why haven’t you gone beyond the easy targets of government.
Dcarl89, post: 266776, member: 115523 wrote:Website- May as well be none existent it’s so bad, he’s had quotes but they are between 40-100k. He applied for a government grant for the site but was denied.You have highlighted the problem, but what are you asking them to build you, a gold plated website, If you are spending that much on a web site I would be interested to know what you are planning, crawl before you walk. Why did the government deny it.
Dcarl89, post: 266776, member: 115523 wrote:The industry is obviously super niche and the standard equipment line can typically be purchased much cheaper from China. With no experience in the industry I’m struggling to find points of difference can we create to differentiate ourselves from competitors within Australia before we even begin to look at export.
Was the biggest mistake your dad made with this business, made 5 years ago when he bought it, maybe the business was dead, and should have being left to go where it belonged. Being the worlds best engineer, and even the worlds best business person, and even the worlds best salesperson, won’t guarantee that a business will be successful, or should even exist.
Yeah I know brutal comments, but someone has to say it, before you spend 5 more years flogging what could be a dead horse already.
August 15, 2019 at 4:53 am #1220929Up::0Seems like you’ve done part of your SWOT analysis but perhaps breakdown each section and complete a little more thoroughly. Its the best starting point for strategy development.
Regarding the external element (the opportunities and threats part) it seems like competition (from China based on price) is the biggest threat. That really traces back to the fact that perhaps there is no USP to be found in the current offering. I mean exhaust all brain power trying to find it but if your collective heads cannot find a sustainable competitive advantage (sustainable USP) that may mean you are flogging a dead horse.
The single biggest business killer = no sustainable USP. You have to create or find an unfair advantage.
Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900August 15, 2019 at 7:17 am #1220930Up::0Dcarl89, post: 266776, member: 115523 wrote:Hey everyone!
Website- May as well be none existent it’s so bad, he’s had quotes but they are between 40-100k. He applied for a government grant for the site but was denied.A $40-100k outlay for a website does seems quite steep even without knowing everything about your business. Without knowing everything about your business, I’m still almost certain you can get a website that will suit your needs for much cheaper.
Feel free to PM to discuss your circumstances in private and we can talk about your circumstances in more depth.
businesstrade.com.au - buy or sell a businessAugust 15, 2019 at 2:01 pm #1220931Up::0bb1, post: 266790, member: 53375 wrote:Ok I can see 4 problems straight upHave you asked why they don’t push the products, that would be my first question? Or is it that the profit margin on your product is far lower then the imports, retailers will push products that make them the most money, and are easy to sell.
Well the problem is is very obvious, unless you get out and seek other custom markets, this area isn’t going to really bring you much profit as it’s a limited market. But gee I can think of a million business’s that want security so why haven’t you gone beyond the easy targets of government.
You have highlighted the problem, but what are you asking them to build you, a gold plated website, If you are spending that much on a web site I would be interested to know what you are planning, crawl before you walk. Why did the government deny it.
Was the biggest mistake your dad made with this business, made 5 years ago when he bought it, maybe the business was dead, and should have being left to go where it belonged. Being the worlds best engineer, and even the worlds best business person, and even the worlds best salesperson, won’t guarantee that a business will be successful, or should even exist.
Yeah I know brutal comments, but someone has to say it, before you spend 5 more years flogging what could be a dead horse already.
Profit margins aren’t super high on what we sell. They will typically only sell our stuff if the client directly says that they need a housing. I’ve been thinking to visit them to try and teach them why and how our products will benefit there customers almost every time and perhaps some sort of additional prize or compensation on top?
My dad knew the guy who he bought it off. He has a history of buying business cheap, draining them of resources then selling the carcass. As I mentioned, the business makes an ok income, he’s comfortable possibly even more than comfortable but he can’t keep working 80 hour weeks and he wants to scale.
With regards to the government jobs, the jobs can be a bit of everything. We don’t directly quote to the government, typically we’re asked to quote for the company who gets the instillation contract if the job requires a housing ect. I’d love to find other retail clients I’m just not sure who.
The websites the issue, I’ll have to look into exactly what he asked them to quote, but the grant requires 8 quotes and they were widely ranging in cost for the same thing. Unfortunately they don’t tell you why you don’t get it which would be super helpful as you can apply twice a year.
August 15, 2019 at 2:05 pm #1220932August 16, 2019 at 1:39 am #1220933Up::0I hate the build site places. but really have you tried using wix or squarespace kind of deals. you could get a modern site with little money involved and it would generally have all the features you need.
videos of the plant, video of production lines, images of the australian location. your USP sales pitch and a contact form. maybe even a simple store selling common items
August 16, 2019 at 4:08 am #1220934Up::0I agree with above. No need to go with a very expensive site nowdays. A simple site to start with is all you need if you are not selling on site.
August 20, 2019 at 6:01 am #1220935Up::0You can give some of the works to outsourcing company and let your dad to concentrate on his core business. This will help your father’s business to reach the next level.
August 21, 2019 at 7:10 am #1220936Up::0Hi [USER=115523]@Dcarl89[/USER],
A few things that stand out to me:
- The company seems to do a number of things. Which one (or more) should be dropped because it’s not scalable or not profitable?
- Look at your books. Which are your most profitable customers? Find more like them.
- Competing with China – There’s an advantage (physical or psychological) of being local. Which types of customer is this critical for? This is another clue for who to target with your sales.
Overall if you trim the current business, keep the most profitable/scalable services/products/customers, then you’ll see more clearly which new customers to go after.
Currently you don’t know what differentiates your business. Speak to all your customers and ask how they decided on you compared to other companies. Whether it’s your products/service/location/speed/specific needs of their industry or simply the way they found out about you, the answers will tell you which new customers to chase and how to sell your offering.
Hope it helps.
DaveP.S. Really it’s switching the question from “What should I do?” to “How can I figure out what to do?”, so you have a place to start.
September 13, 2019 at 1:22 am #1220937Up::0Hey Dcarl89 – feel free to drop me a line if you want to chat about small business solutions in more depth. I’ve got a few ideas that may help. Of course, feel free to throw any general questions my way as well : )
February 17, 2022 at 2:12 pm #1234487Up::0Hello, great story. I can add that for the proper development of a business, it is necessary to create a website, software, or mobile application. This helps to increase the number of potential customers that directly affect the profit. With the help of IT outsourcing, you can find any programmer, using Node.js, or Flutter. Hope you find what you need.
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- This reply was modified 2 years, 1 month ago by Paul - FS Concierge.
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