Apart from new and innovative products and technology on the show floor, presentations and seminars held at the AWFS Fair in Las Vegas in July presented attendees with guidance on how to better sustain, manage and grow their businesses.
The keynote address, “Be Careful What You Wish For: Economy in Recovery” by economist Chris Kuehl, managing director of Armada Corporate Intelligence, shared insight to the economic status of the woodworking industry and what might be expected in the upcoming year, specifically focusing on the manufacturing, construction and housing markets.
Kuehl’s talking points seemed somewhat ironic at a trade show offering the latest machinery, tooling and services as he encouraged business owners to have restraint as the economy rebounds. His recommendations were intended to help keep companies solvent and successful in the years ahead.
“The basic message is to expect a return to normal business, so don’t overspend trying to catch up with demand right now because it’s going to go back to what you’re used to seeing. It’s going to still be good but not ridiculous,” he told Woodshop News prior to his speech addressing the same points.
“The advice would be that more companies go out of business during the recovery than during the recession because when things recover, they want to catch up and see all that new business, and then they start buying machines and hiring people. Don’t do that.”
He suggested staying lean and mean during these recovery times because business will likely go back to what it was two years ago. Therefore, it’s important to consider the higher costs of machinery and other goods at the present time.
“We’re dealing with inflation. Machine [costs] are higher, labor is going to be higher, so you end up spending money on things you’re not going to need. And it’s hard for companies to do that because they’re looking at leaving money on the table and they’re going to disappoint customers, and they’re afraid they’re going to lose market share. But if you stretch yourself too far and all that demand fades, you’re in a position of ‘what do I do now?’”
Another discussion at AWFS that highlighted discipline in spending was delivered by Sebastien DesMarais, president of Hollywood Woodwork in Hollywood, Fla. DesMarais is board president of the Architectural Woodwork Institute. His seminar, “Maximize Your Profits Using AWI’s Cost of Doing Business Survey,” focused on the benefits of the annual survey offered to AWI members.
He noted that 85 percent of businesses fail within their first 10 years and touched on mistakes that can be avoided using tools such as the survey and other resources. He also promoted solutions such as paying close attention to balance sheets, generating and preserving cash, and knowing your break even point.
This article was originally published in the September 2021 issue.