FDM - May 2008

waiting for the postman or watching the fax machine.

Tough
managers will
champion
tough changes.
Strapped consumers

Second, and I might get a few arguments, I believe quantity and price of upholstery units sold in the United States over the past five years have declined each year. I believe U.S. consumers are strapped, fearful of losing their job, house, health insurance, etc. and are not in the mood to buy furniture, other than big screen TVs costing well over $2,000 each.

It is a fact that, even in the 1920 depression, people purchased entertainment. My new book, China’s War on the American Economy offers my explanation for the malaise impacting our economy.

That said, there is a huge growing world economy that tends to believe that the best designed and highest quality products are made in America. An additional assignment is for you to leave your bunker and get with your state and federal government and find out all the information you can about exporting your products to other countries. You will find there are programs available to assist you in your efforts as this country is desperate to find exports. You will also find that Asia and South American countries such as Brazil are just booming with new millionaires being created continuously. I understand that more than 256 Lambo-rghini autos were sold in China last year. India’s Tata Motors just bought Jaguar and Range Rover.

9OUR )NTERNATIONAL 3UPPLIER OF
#ASTERS
#OLLIER +EYWORTH

Got a
question?

o you have an upholstery-re-
lated question you’d like George
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D

Become an exporter

With globalization, it is my belief that if a minimum of 50 percent of your sales and growth is not from exports in five years, you will not be able to survive. There are just too many “insane” U.S. companies continuing to compete by price reduction for no profit/declin-ing sales until they run out of cash.

Now for a final assignment to move you out of your bunker. If you are not growing sales and profits, you’re going.

Use the current business lull

to answer the following

questions:

1. How do you stack up
in satisfying present
customers compared
to your competition?
What can you do bet-
ter? How? (There is a
hex on anyone who men-
tions “price reduction.”)
2. What does a potential
end-user really care about in up-
holstered products? Frame? Springs?
Padding? None of the above? (Note:
You don’t get paid more for what is
unimportant to an end-user. )

3. How do you get the attention of the potential end-user, leading to the selection of your product? (If you are relying on a rep and/or a retail floor sales person, as in the past, you’re “insane.”)

4. What potential customers are you not selling, and — most importantly — why?

5. Calculate the cash you have spent on going to markets, along with the amounts spent on sales commission, new product introduction, swatches and advertising over the past three years. Take this as a percentage of product sales adjusted down for inflation. Are you spending more for less? Are your present sales and marketing efforts “insane”?

6. If 20 percent of your products and
fabrics produce 80 percent of
your sales and 100 percent
of your profits, why not
reduce your line by 50
percent?
The “insane” bun-
ker-bound companies
will continue to slide
down the slippery
slope to oblivion. The
tough managers will
make hard decisions and
champion tough changes.
While your bunker is being shelled,
the tough get going. So get! ●

3WIVELS
(OME &URNITURE #OMPONENTS
%XT
WWW HOMEFURNITURECOMPONENTS COM

George Koeninger is an operations management consultant with more than 35 years experience implementing programs to improve quality, productivity and performance. He’s experienced in manufacturing, sales/distribution, finance, quality and information systems. He can be reached via e-mail at http:\\ bfcconsult.com