28 WESTERN PALLET
Pallet Company Pivot: Part 2
Cont'd from Page 27
Diversify Your Product Offerings
One of the best ways to pivot your wood pallet business is to diversify your product offerings. Gruenberg shares an example of a pallet manufacturer who started offering nails and nail guns to customers. This move allowed the business to make more money while also offering their customers cost savings. Diversifying your product offerings can potentially help you stay competitive in the market and opens up new revenue streams.
Know Your Costs
“New pallet manufacturers seem to have a better way to track their costs (than recyclers) because they know the cost of new lumber and nails and what have you,” Gruenberg remarked. “But do you really know your costs? Are you making money? And are you making money on the full product line?”
To pivot your business effectively, you need to know your costs. Gruenberg advises that you track your costs by putting them in an Excel spreadsheet or using industry-specific software. By understanding your costs, you can make better pricing decisions and stay profitable.
Make a list of 10 companies you would like to do business with.
Explore New Markets, Double Down on Sales
To stay competitive, it is essential to explore new markets. Gruenberg suggests making a list of ten companies you don't do business with and would like to. Or, look through your past customers and re-engage with them. Exploring new markets helps you to identify potential growth areas for your business.
Financial Management in a Downturn
During a downturn, financial management is critical. Gruenberg recommends working with a good accountant to understand your material and labor costs, overhead costs, and fixed costs. It's also essential to create a rainy day fund to help your business weather any financial storms.