Written by: Adrian Sansonetti
In today’s global business landscape, diversification is the key to sustainability. For CNC machine shops, this means breaking into new markets to expand their client base and revenue streams. While the process can seem daunting, there are systematic steps you can take to make the transition easier. This article will outline five critical aspects to consider when breaking into new markets.
1. Market Research: Find Your Niche
Why it’s Important: Understanding new markets starts with rigorous research. You need to identify potential sectors that have a demand for your CNC machining capabilities.
2. Analyze the Supply Chain: Know Your Position
Why it’s Important: Figuring out where you fit in the supply chain is crucial. For example, if a major global client only buys fully-made assemblies, you might not be their direct supplier but could partner with a company that assembles parts you can manufacture.
3. Real Opportunity Identification: Be Selective
Why it’s Important: Not all opportunities are worth pursuing. Your CNC shop should focus on markets where you can offer unique value or where there’s a gap that your shop can fill effectively.
4. Build Partnerships: Collaborate for Success
Why it’s Important: Building relationships with businesses you can add value to is a critical step. Sometimes, you might be a tier two or three supplier, but the partnership can still be profitable.
5. Risk Assessment: Prepare for Challenges
Why it’s Important: Entering a new market is always risky. Understanding these risks beforehand allows you to create a mitigation strategy.
How ProShop ERP Makes the Process Easier
While each of these steps is integral to successfully entering new markets, the comprehensive capabilities of ProShop ERP can streamline the process significantly. The software offers a range of functionalities from industry analytics to supply chain management and opportunity identification, making it easier for you to navigate the complexities of diversification. With features like job costing, profitability analysis, and risk management tools, ProShop is a valuable asset for any CNC machine shop looking to break into new markets.
Entering new markets is a multi-faceted process that involves research, strategy, relationship-building, and risk mitigation. By taking a structured approach to each of these areas, your CNC machine shop is well-equipped to break into new markets and flourish. Utilizing a robust system like ProShop ERP can make this complex task more manageable and effective.