Low to Non Existent Profit Margins

Low to Non Existant Profit Margins

May 1, 2013  |  Tips: Increase your profit margins

Is your organization experiencing low to non-existent profit margins?  It is important that your organization operate as wisely as possible if you wish to remain in business. 

All manufacturers need to be aware of the importance of properly pricing jobs and staying aware of what lumber and overhead factors are doing. Many companies are following up on jobs they quoted 6-12 months ago. Lumber, insurance, and overall operating costs have risen in some cases 10-30%, yet the bid prices remain the same.

We are constantly hearing from more and more companies that if they do have work, they get to the end of the month and find they have not made any money and are lucky to be breaking even. Successful companies have also learned that they need to be as lean as possible and partner with their customers to survive in today's marketplace.

Here are some tips to increase your profit margins during this struggling economic climate. 

1.  Find ways to cut costs.  You can increase the amount your bring into your organization by decreasing the amount of money you send out.  Evaluate everything you spend on your business.

2.  Renegotiate what you spend on materials.  It is important to always maintain a good working relationship with all suppliers and distributors.

3.  Make sure all business processes are running as efficiently as possible. 
Find ways to streamline your organization’s processes to work smarter.

4.  Evaluate how you create and/or offer value to your customers.

The Wood Products Manufacturers Association constantly works to offer programs and services that deliver a strong return on investment and help a company's bottom line.

For more information contact the WPMA at 978-874-5445 or via email at woodprod@wpma.org