Suggestions for 'Buying Out'

"Hey, Max," I heard our foreman say hoarsely into the phone, "Are those maple drawers gonna be here Thursday, like you promised? We need 'em to meet the schedule. I'll have three guys standing around waiting if you don't come through."

"No problem, Eric, my driver will have them there sometime around three in the afternoon."

Familiar conversation in your shop? The fact is, more and more shops are turning to outside suppliers to provide both product and services that used to be done in-house. A lack of skilled workers has meant that shop owners are often looking to buy-outs for specialty products. If you're not one of those shops yet, you'll probably want to consider it sometime soon.

There are three main reasons for buy-outs:
1. You can usually control the cost. Let's take a supplier of doors, for instance that company usually has a published price for, say, walnut raised panel doors. That's the price you pay, no matter how long it takes them to fabricate those doors.

2. You're often in a predictable delivery situation. Many outside manufacturers have regular delivery days or lead times it can make things easier for you to schedule work around these services.

3. It's possible to get a defined level of quality. Your countertop company can usually be counted on to do a coved backsplash detail in a certain way time after time because that's what they do, and they do it all the time.

Traditional sources'
Probably the most frequently used service for the small-to-medium-sized shop is the door-making company. Quality and service can vary enormously; it's worth considering carefully which outfit to work with before giving them all your business or a huge job. It's good to know the company's sales rep well. Does the door company have a "quick-fix" department to take care of problems? Late or delayed door deliveries can really hang you up.

Drawer-making companies are on the rise, and we've found at our shop that it's difficult to compete with their pricing. Even if your drawer supplier is located in a different city, it's worth considering from the cost perspective modern freight and overnight delivery systems can often outweigh any distance considerations.
For veneer work, outside suppliers have long been the way commercial shops have obtained their panels and skins. Some veneer supply houses now offer custom lay-up and sizing options, and if your shop doesn't own a big press or have the labor expertise, this is the way to go.

For specialty woodworking, such as carving or intricate molding work, a subcontractor is often an excellent choice. The supplier has the equipment and experience to produce competitively you may be able to do it in-house yourself, but it will probably cost you more.

New frontiers
Many shops are exploring ways of "subbing" out more work. Just like the modern general contractor, there's a new kind of shop owner out there often sticking with a core crew of key people, with a few good pieces of equipment.

The small shop often will get edgebanding done by a bigger shop that has an expensive edgebander. An hourly rate will be charged expect anywhere from $75 to $120 per hour, possibly with a one hour minimum but it's usually well worth it.

You may consider getting hole drilling done too, if you can find a larger shop willing to give you time on, say, a point-to-point machine.

Some shops get their part cutting done by others if you can find a shop that has a computer-controlled beam saw, you may be surprised at how cost effective this can be.

The next level is getting carcasses or cabinet boxes made for you, and this, too, is a growing part of our industry. It's very cost competitive, and a fast and clean way to go, especially on the larger jobs; it can work for you if your shop does not have (nor wants to get) the machinery needed to process this kind of box.

Many shops are getting out of the finishing business, too. They're finding specialty companies that just do that work. A finishing subcontractor is set up, often with one or more spray booths, and maybe they have a flat-line finishing system in place; more importantly they have employees who know what they're doing. These companies don't mind the sanding and the staining and the smelling of the products it's what they do, and they do it all the time.

You may also want to consider buying out services. It's always good to research any potential supplier, but try to think differently and expand your horizons from the obvious fields.

For example, clean up from a janitorial firm can be done in the shop as well as in the offices and showroom. Accounting help from your accountant can run further than just bookkeeping perhaps you can try getting them to set you up with some trend analysis? You can get relatively inexpensive legal advice from outsourced seminars on such subjects as collections, lien laws and so on.

And there are other possibilities these days.

Some shops hire out all their bookkeeping by outside providers, and this can be a cost-effective way to help in the office. Make sure you get someone who's familiar with the concept of job-shop manufacturing or with the construction industry.

Other shops have hired out project managers on a subcontract basis by project, especially the larger duration jobs. Here, you have to be very careful with government rules as to how to define an employee (EDD, your local Employment Development Department, can help you here).

Other companies routinely hire out drawing, detailing and even cutlist services to be done by outside suppliers. Self-employed detailers are a small but growing part of our industry, and have been a big help in our own operation. Here, the key aspect of the relationship is usually getting the subcontractor on the same page as your shop with regards to how you like to detail and build using your standard methods.

These days, the modern shop is a specialty contractor that coordinates all the different and complex parts of its own trade rather like a general contractor would. The key to success is how well your shop can pull together all the separate pieces.