Adapting to Market Changes

I’d like to share a recent experience in my business that I think may help those of you who may find yourself in a similar situation. For over 30 years, my business concentrated on high-end furniture. I designed and fabricated custom furniture and restored antique furniture. I’d been doing these activities for many years and had never seriously thought about the demand for my services declining significantly. It wasn’t until the situation became severe that I realized I had to find something different to replace these activities. Even when I could see this coming, it was hard for me to change what I’d been doing for so long. In order to avoid a crisis situation like this, it’s important to re-examine your business from time-to-time in light of an ever-changing marketplace. Try to keep your personal feelings at bay when you do.

In the last 10 years or so interest in high quality antique and reproduction furniture has declined sharply, especially in the area where I live. The definitive evidence of this is that the average wholesale price of antique furniture has dropped by over 40% in the last decade. The demand for custom reproductions has followed suit. A significant amount of my custom furniture making was creating complements to antique collections with forms of furniture that didn’t exist in antiquity (e.g. coffee tables, computer tables). Many of my customers have grown old and handed their furniture down to their children. Often their children aren’t willing to pay the cost of maintaining this furniture or adding to it.

I believe that one reason so many younger people are less willing to pay for premium furniture is because of their values which can’t be completely separated from their tastes. In the past, when people bought furniture, they saw it as an investment. They selected furniture that had a “timeless” style (usually traditional) and planned to keep it for life. Often this investment would be handed down to their children and even their children’s children. But as many traditional values have been re-defined, so has the value of traditional furniture.

Like so many things in our society nowadays, furniture has become disposable. The generations following the baby boomers have lifestyles that don’t hold tradition in high regard. The traditional family is now seen as just one of several options. The divorce rate has skyrocketed. Why invest in furniture for the long term when so many families have become a short term arrangement?

As a result, I’ve had to make some drastic changes in my business strategy. I’ve started looking into designing, engineering, and fabricating different kinds of wood products. Ideally, I want to continue producing custom, high-end products because that’s where my strength has been. At the same time, I realize that might not be practical.

One category of work that I’ve found so far is engineering and producing wooden parts of high-end audio components. I have no knowledge of the physics of sound reproduction. Someone else is handling that aspect of the work. My job is to create 3-D computer models of unusually shaped wood speaker enclosures, prepare these models for machining on a 5-axis CNC router, and then assemble the machined parts into finished speaker cabinets. I’m also fabricating wood cladding for amplifiers that displays their components.

This work is not custom in the strict sense of the term. The designs were conceived by someone else. So far, the items are limited to three different styles of speaker cabinets, pedestals for two of those styles, and the amplifier cladding. I reverse engineered these items when I created the computer models. I designed fixtures for assembling the cabinets and set up a system for machining and assembling the amplifier cladding.

Once the design changes have been completed and the best methods of fabrication determined, the work will be routine and could even be a little boring. But boring is often the price to pay for efficiency and, in turn, making a living.

I’ve had to redesign my shop for limited production runs of these items. In order to make the process as efficient as possible, I’ve had to purchase new machinery. Fitting the machinery I needed into a limited space required the disposal of some materials that I’d always considered precious. These included specimens of old wood and veneers used to restore antique furniture. It was a tough decision because in the back of my mind, I think maybe someday soon things will turn around and I’ll want to go back to restoration work as an integral part of my business. But as Peter Drucker, the famous management theory guru from the past, taught: you have to let go of the old before you can move forward with the new.

I realize that I need to keep looking for new opportunities even as the work I’m doing now is keeping me very busy. If these stereo components become successful, I may have sufficient work for years to come. If they don’t, I’ll need to find different work. And if they become very successful, it may not be practical for my client to have me fabricating them in my small shop. I would either have to expand and become even more production oriented or let the work be fabricated somewhere else, perhaps in an area where the cost of doing business is lower. So I’ll continue to look for opportunities in different types of wood products.

This change has not been easy but it’s taught me to see things differently. The design and engineering of wood products that were previously unknown to me has been a challenge. For example, the speaker cabinets that I’m developing contain curved miters that join at odd angles to a domed top, all cut out of solid wood.

I’ve learned to adapt to change the hard way, by necessity. This lesson taught me that the more proactive you can be in adapting to change, the more smoothly you can make the necessary transition to the niche best suited to your business as the marketplace continues to evolve.