Finding your niche

The following article was developed from a presentation made at IMTS 2008 by Ted Toth Jr., president of Toth Technologies Inc.

Toth’s PowerPoint presentation can be found on the American Machinist Internet site at www. americanmachinist.com/Content/ Site304/Articles/10_01_2008/ FindingyourNich_00000055209. pdf, along with another of his presentations on changing the image of machine shops (www.americanmachinist.com/6S_ presentation_Lo.pdf).

Are you a General Job Shop, a shop that does a variety of general machining or manufacturing for just about anyone?

That type of shop has no standard industrial base, and could find it difficult to develop a steady customer base.

Those shops are not specialty shops, and generally have lower shop rates because there are a lot of shops that they compete with.

Every shop can become a niche shop. A niche is a specialized but profitable corner of the market.

By placing your job shop into a niche business, it should be able to grow and prosper by servicing specialized markets.

To do that you need to define a niche and serve it.

There are four basic steps in creating a niche profile, by reviewing your customers and their related jobs.

List your Primary Industries

List your Basic Customer End Products

List the services you provide

List the products you produce

Once you have defined your niche, try to stay within one primary industry.

It is okay to work in more than one industry if they overlap, but working in both aerospace and medical will work only if you keep manufacturing in different plants.

Many industries have different quality and manufacturing requirements.

• Keep within your knowledge base.
• Do not take on an industry that you do not know.
• Keep within your capabilities.
• Do not go after work that is out of your scope.
• Know your scope.
• Look for product overlaps.
• There are always exceptions to the rules.
• It’s OK to have a niche with one process. Have

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