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Business in a down economy

Discussion in 'Picture Framing Business Issues' started by AWG, Feb 29, 2008.

  1. surferbill

    surferbill SGF, Supreme Grumble Framer


    John, your post was very close to my business outlook.

    My business was off last year, but WAY UP so far this year. However, it's mostly an increase in corporate sales, not retail.

    I pay everything COD, have no business debt, and try to pile as much into savings, Roth IRA, Simple IRA, and investments as possible.

    I'm trying to buy more moulding specials, and more box moulding, along with keeping the payroll down as much as possible.

    In my case, it's not a new airplane, but a new boat I won't be buying anytime soon.;)
     
  2. wpfay

    wpfay Angry Badger

    In my business, at least, it is the corporate end that does the heavy lifting. For whatever reason the retail end has fallen off drastically. I've seen good growth though (thanks Cassandra for your help in that) and though I don't operate debt free all the time, I get there a few times each year.
    What is concerning me currently is the scaling back by the corporations. I've seen jobs cancelled or put off indefinitely and some lowering of expectations. One company has gone from open budget framing for their corporate HQ common areas to plaque mounting...direct from the manufacturer.
    I'll stop before I get into Gloom and Doom...though I think where we are going is not like anywhere we have been.
     
  3. PaulSF

    PaulSF PFG, Picture Framing God

    Kirstie, I have not fully analyzed the new LJ pricing...but from the tenor of the cover letter, I would expect prices to go up between 3-5%.

    As for Framerica, I've had really good success with it, including the Bonanza Wood. When I encounter price resistance, I know that if I try a Framerica moulding, it will bring the price down. The Bonanza Wood in particular has made it possible for me to offer some low-budget framing that looks good, without my having to discount. Let me repeat that -- without my having to discount! And when I get myr invoice and see that the 10-foot stick of bonanza wood only cost me $10, I get all trembly and warm.
     
  4. Jay H

    Jay H PFG, Picture Framing God

    I hear ya Wally. Maybe it's gloom and doom or maybe it just is what it is. If you owned a hardware store in the late 70's, would it really matter how you viewed the future?
     
  5. JRB

    JRB PFG, Picture Framing God

    I have almost no corporate work, no galleries except for the odd one or two pics now and then. I do not cater to decorators. 98% of my business is retail. I have been going after this segment of the market for many years. It is a hard way to build your business but the discounts are minimal. I do end up with a lot of odd sticks of mouldings and mat scraps. I turn the mouldings into ready mades. The scrap mats we use or donate.

    I have just one employee, and she is an incredible producer.

    Staying out of debt and saving, I honestly hope is the key in surviving in this market. So far this year has been the exact opposite of what I expected, we have been very busy.

    John
     
  6. Kirstie

    Kirstie PFG, Picture Framing God

    Uh, yes, and they are offering chop for length price. Hmm...
     
  7. Paul N

    Paul N In Corner

    AMPF has also reduced their prices on may items, some by a large margin.
     
  8. RParrish

    RParrish PFG, Picture Framing God

    I've reviewed a little of it, glass is the same price some acrylic has gone down, especially optimum, don't know about the molding yet, but i believe a price increase is coming on mat boards, at least I know Rising is going up 15% this march
     
  9. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    I've had three moulding vendors increase prices in the past month. Average looks like about 5%. With the dollar as weak as it is, I don't look for this trend to improve anytime soon. Unfortunately, price decreases are usually indicative of re-sourcing to different manufacturing suppliers. This is often accompanied by a decrease in quality as well-- less detail and subtlety in ornament, cheaper finishes, cheaper (read: softer, warpier, buggier) woods.
    :kaffeetrinker_2: Rick
     
  10. JFeig

    JFeig SGF, Supreme Grumble Framer

    IMHO, if a vendor resources a specific moulding profile/finish to a different supplier, they should assign that new (similar) item a different SKU.

    This is due to:
    slight differences in finish
    slight differences in the cutting knives
    slight differences in embossing and or compo dies

    Trying use one or 2 rails from one supplier in a frame with the balance of the moulding from a different supplier - results in 4 rails of scrap!
     
  11. slop101

    slop101 Grumbler

    We're about 80% wholesale framing and 20% retail, and while we are a little down (Feb./March are usually our slowest months anyways), we're still doing okay, and not in a place where we need to panic. Thing is, we also have way more clients than we've ever had in our 25 years. So we really shouldn't be down at all.

    Talking to gallery directors, right now they're doing less business in one month than they would do in one week just last year. A few designers we work for, and used to do many model homes for (you can bet your butt that's dried up) would be all but out of business if not for designing homes in China.
     
  12. mayos

    mayos MGF, Master Grumble Framer

    Steps I'm taking in a down economy-
    1. reduce any outstanding debt.
    2. take on no new debt.
    3. control inventory tightly. Keep just enough to satisfy demand and take advantage of any purchasing discounts.
    4. scrutinize advertising and eliminate any questionable venues.
    5. increase my direct mail
    6. be more aggressive in pricing. Not necessarily reducing pricing, but maximizing any income opportunities and being aggressive enough to land those jobs that might go somewhere else.
    7. I'm going to be aware of what my competition does, but concentrate on making my business the best it can be.
    8. eliminate as much waste as I can both in terms of materials, but also man power, energy, donations, etc.
    9. carefully scrutinize the delivery charges assesed on my invoices to make sure they are correct and do not include any handling charges. I'm only going to pay the actual costs of UPS/Fed EX, etc.
    10. keep enough cash that I can take advantage of vendor discounts and purchasing opportunities.
    11. clean my stock of older, discontinued styles and try to offer them to the public at reduces costs (via pre-making frames). same with old mat scraps and glass.
    12. anything else I can do to make a buck or save it, while protecting the image of my shop.
     
  13. PaulSF

    PaulSF PFG, Picture Framing God

    Speaking of businesses strugging in a down economy, Sharper Image has announced it cannot even honor the gift cards it has issued. Gift cards are considered loans to the company, so if a company files for bankruptcy, the bankruptcy court may prohibit honoring the cards until all the competing claims are adjudicated.
     
  14. mayos

    mayos MGF, Master Grumble Framer

    Wouldn't that torque you??!! If you received gift cards from Sharper Image and now they're worth exactly $0.00. I see some competitors are offering a % off in exchange for Sharper Image gift cards.
     
  15. mayos

    mayos MGF, Master Grumble Framer

    That reminded me of one more thing I was going to do this year (I don't know how this and gift cards relate, but anyway....)

    13. I'm going to re-shop all my insurance coverage...business owners, work comp, auto, home, disability. No kidding...I shopped my auto and saved $300/ 6 months by switching to Progressive. That's $600 per year, and I thought my old company was giving me a "preferred" rate because of our good driving record. I wonder what they would have charged me if we DIDN'T have a good record????:faintthud:
     
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