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Set Your CM Business on Fire
February 14, 2024 | Dan BeaulieuEstimated reading time: 1 minute
What often surprises me when working with contract manufacturers (CMs) is that many of them, especially the ones earning less than $25 million a year, have not done much planning for their future. I’ve realized that many started to build a specific sub-assembly as offshoots of a larger company.
One company, for example, started as an offshoot of Caterpillar, which promised them unlimited business if they would start a small company nearby to service their needs. The same was true of several smaller contract manufacturers in the Phoenix area that were started to serve Honeywell. In the Seattle area, Boeing was surrounded by these smaller “satellite” companies that started up to serve the airplane giant.
Around the world, these small CMs were promised all the business they needed into the “unforeseeable future.” Now that unforeseeable future is here, and after several years, “all the business they would ever need” has dried up. It’s now time for these companies to do what they have never done before: Plan for their future.
Even just five or six years ago, these contract manufacturers really didn’t need to spend their time thinking about strategy, direction, branding, marketing, or sales. They had a strong base of business they could rely on, and the rest of their backlog came automatically over the transom.
That has changed. These companies now find themselves in dire need of strategic planning and everything that comes with getting their names into the marketplace: Becoming known, finding and wooing the right customers, creating account plans, and growing their businesses.
The Strategic Business Plan: What Business Are You In?
The strategic business plan should be part of a company’s foundation and sales efforts, and the best way to develop, execute, and implement a strategic business plan is to be intentional and focused. This can’t be the owner’s plan alone; developing a good strategic business plan must involve the entire management team. This helps create ownership of the plan across the board.
Continue reading this feature article which originally appeared in the February 2024 issue of SMT007 Magazine.
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