The Reality Is We Are a MICRO Sheet Metal Shop/Business

I stumbled on this video today and it reinforced the fact that we are a MICRO shop. The amount of duct that some companies can produce in such a short time is mind boggling. A straight section of trunk duct form beginning to end takes me roughly 8 to 10 minutes. I have heard that companies, like the one in the video, can produce that same section in under 10 seconds. It has become tougher and tougher to keep a shop like ours going because of this gap in production time and more importantly cost of production. Another problem is, most of the work available is commercial in nature and far too involved for a company like mine. Therefore, we are left to pick up the scraps of much smaller commercial work and of course, residential (our bread and butter). But residential and home owner projects seem to be fading more and more even though the housing market has "bottomed". 

Walking this line of keeping the shop smaller in size or taking out loans and making it bigger is a scary proposition. The lack of motivated workers and young people in the field is also something that can be worrisome. Shops like ours will always be needed, but if work can't at least sustain the owner and his family, then smaller shops will continue to fall and go out of business.

You Can Now Follow Us on LinkedIn.com

One thing that I have been meaning  to do lately is update my LinkedIn.com page with some new company information. To my surprise,

Slow Beginning to The Year Brings Hope for Stronger Summer Business

The beginning of the year for us is often slow and like many, we begin to long for summer. This year is no different as the last couple months have dragged on with limited work and not much in the pipeline. When business was booming, before the economy took one on the chin, we would have quotes and contracts set for the first sign of spring.

Local Markets Will Continue To Suffer

Being in the business of heating & air conditioning for residential applications is challenging when the housing market continues to decline. Today's news won't help the situation. New York was not one of the hardest hit housing markets by far and there was news recently that the Glens Falls job situation was improving, if not stable. But that doesn't change the fact that, if the country continues to decline, then the news will focus on problems and that will hurt the confidence of buyers in any market.

When people turn on the evening news in Glens Falls they see that housing is bad, the markets are bad, BP oil spill, you name it. Even if they are in a good place financially, this weighs on there conscience when it comes to buying a new dish washer or putting in a new furnace. This is bad for local business as a whole. Whether your a local restaurant, corner shop or sheet metal fabricator. Micro-businesses like mine and others suffer from the problems of the masses, even if the town is stable financially and employment is good.

The bottom line is that the countries problems aren't getting any better. I follow the markets on a daily basis and things aren't looking great. Is there progress? Some, but not enough to create more jobs and make people optimistic about the future. Even if people in Glens Falls, Queensbury and Saratoga Springs have solid jobs and aren't as bad off as the rest of the country. That doesn't mean they won't hoard every last penny and find ways to save just as much as someone with less. Which means that local businesses will continue to suffer and so will the housing market, job market etc.. If people can't buy a new dishwasher, they're surely not going to be buying or building a new house.

Is The Stock Market Telling Us Home Building Will Soon Pickup?

The stock market is a leading indicator for the future economy. The rally in the markets is a confidence in the future profits of companies and the economy as a whole.

The SPDR S&P Homebuilders Index ETF (XHB) is an index of home building, consumer durables, capital goods and retailing stocks. Some examples of stocks in the index are Toll Brothers Builders, Owens Corning, Sherwin Williams, Home Depot etc. Here is the link to the index website.

The XHB index has rallied for the majority of the year, while the physical housing market has yet to really pickup. Is this telling us that the housing market and home building markets are about to turn around? Will things in the home building industry get better soon? Being that we are in the residential heating and cooling industry, I hope so. There is a saying that the stock markets predict what will happen six months from now. If this saying holds any weight. We should see a pickup in the 4th quarter of this year.

Being a micro-business, sometimes it's hard to gauge what's going on in the local markets. You can learn a lot at the supply houses and on job sites, but you need to take that information with a grain of salt. The builders that we do business with are too small to really gauge the markets as a whole. Using as much market data as possible can help to give a time line of when things may be looking up. It may not be specific to your local market, but you can be sure that it will affect it at some point.

Receivables, Receivables, Receivables

The frustration for any micro or small business is being paid. This is our current dilemma. The slowdown in business has made us tighten on everything from driving less to not eating out with family. I feel like this would be the case for any company we deal with, if in the same dilemma. Not true.

Being a micro-business can be very tough when customers don't pay their bills. We can't afford to get a court involved and our receivables aren't large enough to pay fees for a receivables loan or something similar. You can send letters and make phone calls until your blue in the face, but you will always get the same answer...the check is in the mail. 

Our business is very small and we count on every dollar....literally! We will track down a single dollar if necessary. We as a company continue to pay our bills. We cut costs and use credit cards if possible, but we always pay or we call our vendors and are honest. They will usually be very forgiving and take whatever we can give at the time. We rarely get this courtesy. 

It can be frustrating on many levels. You provide a needed service that isn't compensated. Chasing money is not our business. Our business is metal fabrication. We fabricate, you pay...that's the deal.