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What’s Next For Your Micro-Business
Small Manufacturers Face Challenges
The future of U.S. manufacturing depends primarily on the continued success of small and mid-size manufacturers.
That’s the finding from the report “The Future Success of Small and Medium Manufacturers: Challenges and Policy Issues,” released earlier this year by the National Association of Manufacturers (NAM) and The Manufacturing Institute (TMI).
Small and mid-size manufacturers account for more than 40 percent of the value of U.S. production and 60 percent of total U.S. manufacturing employment.
The report cites important competitive strengths that help attract outstanding employees to small and mid-size businesses, including a close relationship with their customers and a flexible, innovative approach to doing business.
However, the report also finds these same companies face fierce future challenges.
The report describes how changing customer demands, worker shortages, evolving technologies and high costs are constant challenges that may impede the ability of small and mid-size manufacturers to compete against foreign competitors. Businesses also face internal management challenges because of limited financial and human resources.
“Small and mid-size manufacturers are doing many things well and it shows,” says NAM President John Engler. “However, there are some growth-related challenges they must address to achieve long-term, competitive success in a dynamic global business environment.”
What You Can Do
The NAM/TMI report outlines best practices that are inherent in successful small manufacturing companies. See if your small manufacturing business can implement some of these ideas:
Stay in touch with customers. Talk to them about their needs. Look to them for new product ideas. Differentiate products and services to better define and develop a competitive advantage. Devote the necessary time and energy to marketing. Develop a distinctive product and marketing strategy. Expand and diversify your customer base. Go global: Develop export markets. Make sure your company holds down cost increases. Focus on those activities that consume the most resources. Find ways to save. Look for a long-term relationship with a banker who is willing to take the time and effort to understand your company. Invest at least 3 percent of your payroll in employee training. Get involved with government-sponsored training programs and local educational institutions such as community colleges that offer training in manufacturing skills. Explore how experts from a Manufacturing Extension Partnership, www.mep.nist.gov, can help you with your business. Develop a plan for management succession. Start estate planning early and continually keep abreast of estate tax laws and regulations.
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(Posted May 2006) |
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