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Know your numbers

4. August 2018 11:13

As a business owner, you know it is important stay current with your financials.  However, there are a few key questions that are often overlooked.

  • Do you know much you have invested in your operation and charge every customer to recoup that investment? If you do not know what you have invested and you do not charge customers for the investment how do you get paid back your principal investment costs?
  • What do you pay yourself and how to you determine an appropriate amount?
  • What is the current replacement value if you had one month to get back on track, say in the event that your shop burned to the ground and you had to reinvent your brand? How much would it cost to replace everything you have?
  • How many billable hours per employee are there?

Learn how to calculate these numbers and more during “The Art of Pricing for Profitability” during IWF.

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Effective Estimating that leads to Bullet Proof Proposals - Part 5

3. August 2018 08:36

By: Bobbo Buckley, Software Developer: Cabinotch Innovative Solutions

Effective Estimating that leads to Bullet Proof Proposals - BMG10

In earlier posts in this Effective Estimating series, we talked about two principles of Effective Estimating. One being Managing Customer Expectations and we briefly touched on another, that your Estimates and Proposals should SELL MORE JOBS, but we have not touched on the first of these three principles, and in my opinion, one of the cornerstone principles of Effective Estimating.

Accuracy

I alluded to this principle when I said that your Estimates and Proposals should be bi-lingual in an earlier post, that they needed to speak two languages, Cost and Selling Price. The objective of a good Estimating System is to ACCURATELY account for the labor, material, overhead and profit, then AUTOMAGICALLY translate those costs into a selling price.

In my Effective Estimating Seminar at IWF-2018, we will go through the 10 1/2 Attributes of Accuracy, but in this context, I just don't have the bandwidth to go that deep into this subject matter. The primary point being, that if we abide by these 10 1/2 Attributes of Accuracy, we will have what I like to call a “full figured” Estimate (now you know why I like to use the word sexy when speaking about Estimates and Proposals), which makes certain your client is comparing apples to apples, not apples to broccoli.

In all my years of being a cabinetmaker, and owning a custom cabinet manufacturing business, there have been two predominate estimating methods. The most popular (or at least it seems that way in the Southeast) is pricing cabinetry by the linear foot, the second being pricing cabinetry by the square footage of the face of the cabinetry. If I dig back deep enough into my pretty darn old memory banks, I even remember a formula where the cabinetmaker would add up all his material costs and multiply them by a factor (usually 3).

Pretty much every cabinetmaker figures out fairly quickly that linear footage and square footage estimating methods are not only not accurate (1 ten foot cabinet with 3 drawer fronts, 3 drawer boxes, 3 drawer guides, 6 doors and 12 hinges costs the exact same amount as 10 one foot cabinets that have 10 drawer fronts, 10 drawer boxes, 10 drawer guides, 10 doors and 20 hinges using either method), and that these methods provide no way to translate material costs to selling price. If your hinges go up by $0.30 a pair, how much do you adjust your per linear footage or square footage price? If your sheet-goods go up by $0.10 a square foot, how much do you adjust your per linear footage or square footage price?

I am aware that lots of cabinetmakers have started doing add-ons, so much per door, so much per drawer front, etc., but this still does not translate from cost to selling price very well. Another attribute of these systems is they simply are not very accurate from one finish type or option to another, and the vast majority of pricing systems I have heard quoted simply used a percentage markup from one finish type or option to another finish type or option. How can we accurately express the difference in the cost from a natural finish on hickory to a complex stained, glazed, antiqued, distressed level three with wear sanding on cherry using a simple percentage markup?

We will cover the process I recommend in depth during the Effective Estimating session at IWF-2018 in Atlanta, and I will illustrate how I quickly and easily create very accurate Estimates and Proposals, and do so very quickly.

 

 

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Tooling: a primer

3. August 2018 08:33

By Leland Thomasset, Taghkanic Woodworking

As you get more comfortable with your nested-based CNC router, then you will want to take your tooling to the next level. There are two main types of tooling: solid carbide stock router bits and braze on and stock router bits. Allow to me explain the advantages and disadvantages of each.

Solid Carbide Stock Router Bits

Down Cut Router Bits

The geometry of these bits will give clean cuts to the top side of a piece of wood. Down cut bits are good for shallow pockets, and very thin, small parts will not move because of the downward pressure caused by this bit. They are not good for deep cuts as the material that is being cut gets pushed down into the tool path.
 

Up Cut Router Bits

The geometry of these bits allows for clean cuts on the bottom of a part. The tool will remove material from the tool path into the dust collection stream very easily. They work well when you have to take several passes to cut thru a thick piece of material, and they also work great for a deep mortise or pocket. However, they will pull the piece that you are cutting off the spoil board if it is too small or if you are taking too much stock out in one pass.
 

Compression Router Bits

The geometry of these bits are both up cut and down cut some bits have shorter up cut shapes to allow for shallow grooves or mortises. They are great for cutting composites and plywood with veneers on both sides, and they can come with staggered chip breakers which work well with solid materials. They cut very quickly with no tear out at all and are a great tool for nested-based panel cutting operations.
 

Ball Nose Router Bit

These are the bits that we use to cut 3-D parts, parts with compound contours, and curve molding profiles.
 

Braze On and Stock Router Bits

Brazed tooling, which you should be familiar with, is the tooling that used with hand routers to create counter edges, flush trimming bits for laminate and joinery bits for dovetails, box joints, etc.
 
Brazed bits require a lower rpm and feed rate, so if you have a one off item this can be a perfect affordable solution. If you are making many repeat items then it may be worth the money to invest in a custom insert tool.
 
You may find that your cut quality may vary due to tool balance, sharpness, and design of tool. Also, you run into the situation where you choose a profile, get the job all set up, and then you find out this is a discontinued profile.
 
To learn more about how tooling selection can impact your machining, register to attend “Boundary-pushing with your Nested-Based Router” during IWF.

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Woodworking is a fine hobby for people who are retiring….: The Stigma that is killing our talent

2. August 2018 11:27

By: Luke Barnett, Charimaker: Sam Beauford Woodshop Career Woodworking Institite 

The title of this article may be throwing you off a bit. We are not hobbyists, who spend our weekends making knick knacks for our family members. We are craftsmen and craftswomen who produce products that are comfortable, durable, and beautiful. We use our skill to the highest degree, while producing items that add value at an affordable cost.

Unfortunately the title of this blog is how our industry is viewed by 99% of the population. This is unacceptable. It is hurting our brand and it ruining the next generation of skilled woodworkers. When you say the word woodworking to someone, you will most likely get a response of “My grandpa was a woodworker, he used to have a really nice shop in his basement.” While I encourage everyone to be involved with woodworking, I must stress that this is not the kind of woodworking that I am referring to. I am talking about the type of woodworking that can give somebody a sustainable living. The type of woodworking that can provide a family with a house, food, music lessons, doctors appointments. Etc….

Our industry needs to change the way people view woodworking or all our future talent will go to other trades and/or college. Because of the hobbyist stigma, parents do not want their kids to pursue a career in woodworking. Our trade is the most ancient, it is prestigious, and it is lucrative. We just need to convince the parents of the next Orville Merrilat before they steer that kid in a different direction…….

 

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Designing for the build

2. August 2018 09:42

Now you’ve got that modern job, how do you ensure that the design considers all aspects of the project and also is able to be built as specified?
 
First of all your need to consider the materials required for the job.  It’s more than the cabinets; it includes the decorative hardware, countertop, sink and faucet, etc. Every aspect of the project needs to be determined at this time.  Knowing the requirements up front saves you time and frustration later on.
 
Then there’s the lighting aspect, which is a huge topic in and of itself.  The most important recommendation, though, is that you use a qualified electrician for many reasons, liability being one of them. Also, consider the color choices and how they may look in different types of lighting.  Some browns actually look red or pink under certain lighting.
 
As you design the layout of the kitchen, you also need to factor in the integration of appliances. This doesn’t refer to allowing for appropriate space for each appliance. Instead it is a total integration into the build.
 
Finally, there also needs to be considerable time spent considering all of the other aesthetics, to put it simply. Again, it’s important to recognize all of the project requirements and specifications before you begin the build, as they may impact the construction.
 
To learn more about the design process related to modern work, register to attend “Acing that modern job” during IWF.

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IWF 2018: Harnessing the Power of Social Media to Effectively Market Home and Building Products

2. August 2018 09:38

By: Amanda Eden, Stoner Bunting Advertising

The home and building products industry is filled with innovative products and brands aimed at everyone from middle-class consumers in suburbia, to the influential and powerful movers and shakers of the architecture and design world. Some of these brands and products are about as niche as niche gets. And on top of that, marketers are tasked with executing social media strategies for companies and organizations that have extremely narrow and hard-to-reach audiences. What are the keys to making it all work?

Honestly, it takes a combination of experience, planning, strategy and education.

Below are some tips and tricks from two influential industry blogs that align with our social media development strategy and offer helpful hints for home and building product companies out there looking to break through the onslaught of social media noise out there.

Think Like a Whizard

The folks at Whizard Strategy, who just so happen to also be experts in the building material industry, offer some great tips for implementing a social media strategy. The Internet is a big empty space after all and can be extremely intimidating for companies with little-to-no existing presence.

However, with effective, educational content tailored to the right audience, this space begins to shrink. If you are just starting out on social media, or are looking for a change of pace, follow these 6 steps to success:

1 | Set Up a Blog

Anyone can set up and start a blog a little or no cost.  It’s an easy process and there are more options than ever. The secret to having a successful blog — meaning one that pops up in search results — is posting content to it on a regular basis and making sure that you link your website to every post.

2 | Create Business Social Media Accounts

Remember, this is your business account, which represents your brand and should always be separate from a personal account. Making sure business social media accounts are separate from private ones ensures inappropriate party photos — or worse — don’t get mixed up with the company.

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3 | People Like Doing Business with a Real Person

Put someone in charge of all social media. No, it doesn’t have to be their only job, but they will become the “face” of your company. When they do post it will show up as “Josh, from Stoner Bunting,” not a nameless digital representative named “Author.”

4 | Find the Right LinkedIn Groups for your Business and Join Them

For building material marketers, they can reach many of their channel customers through LinkedIn groups such as the Roofing Contractor or Kitchen Dealer or Architect groups. Individuals can join these groups while companies cannot.

5 | Establish the Process and Boundaries for your Social Media Program

You can take an active or passive approach to social media. With an active approach, the lead person is online frequently making comments and responding to others. With a passive approach everything you do is planned and has time for approvals, if required. An example of a passive approach is to post to your blog once a week. These posts can be written in advance and then posted.

Learning from Established Brands
While Whizard Strategy offers great tips for establishing a social media presence and creating specific social media campaigns for product launches, sometimes it is best to take inspiration from larger, more established brands with a strong digital presence.

Social Media Today published an article discussing how startups and new brands can learn and absorb from the expertise and social know-how of proven companies. The author provides four ways to emulate the successes of industry giants:

First, steadily scale your social media marketing efforts. New businesses are often eager to find the right tools for developing a successful marketing strategy. Fortunately, social media provides the opportunity to market broadly with minimal cost — but there are many different networks to choose from.

Take a look at how the established brands within your startup’s industry are growing on social and try to set that pace for your business. Too much, too soon can spam the social scene with unimportant posts or result in sudden lack of content. Quality is more important than quantity, so identify which platform is best to start with and grow from there at a pace that is comfortable for your own business.

Second, you should both recognize and use social media as a customer service tool, not just a dumping ground for photos. Providing customer service is an impactful way for startups to utilize social media. Customers expect instant replies, and monitoring and responding through your social accounts is a great way to meet that demand and help turn customers into brand advocates.

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Larger brands do well with this, as they usually form teams responsible for responding to social inquiries. Just because your startup is smaller, it doesn’t mean you can’t have this type of dedicated team or team member ready and waiting to reply. However, since two-way conversations on social networks are critical customer service gateways, whoever is charged with responding must remain committed to the task.

Third, it’s also important to select the right social media platforms for your business. Not every company needs a Snapchat, Facebook, Instagram, Pinterest, Twitter, LinkedIn and Google+ account. For example, visual social networks like Instagram and Pinterest are particularly effective for the fashion industry, whereas the technology community often gravitates toward Twitter for brand-building.

Established brands already have a clear overview of which platforms are most effective in getting their content and message across. Look to others (even fellow startups) in your industry and identify which platforms are most relevant for promoting what your business has to offer. This will help to define your startup’s social media presence more strategically and achieve your overall goal of brand awareness.

Fourth, maximize social media as a recruitment tool. The entrepreneurial startup spirit is increasingly more attractive these days to both recent graduates and established professionals. Social media is the perfect way to tap into the pool of available talent, but it can be a challenge to promote job vacancies on Twitter or Facebook, successfully. Take a look at larger brands’ recruitment posts to see how they are reaching out for job openings. Is one platform more successful than another? Big companies have mastered the art of identifying top talent and knowing who to bring into the company.

Want to Know More?

Learn how to harness the power of social media for marketing home and building product brands by attending the Closets Symposium at IWF Atlanta, Tuesday, August 21.

Stoner Bunting has been building relationships in the home and building products industry since 1984. Our insights into what excites audiences at every stage of the design and construction process – and our access to the people and publications that influence them – make your marketing smarter, so it works harder.

 

 

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Tooling Up for a New CNC Router

2. August 2018 09:36

Chris Dehmer, owner of Dark Horse Woodworks in Atlanta and a board member of the Cabinet Makers Association, recently answered our questions about transitioning from outsourcing CNC work to having his own CNC router. Before a live audience of about 150 CMA members at the CMA’s 20th-anniversary conference in Denver, Dehmer talked about many issues including how he deals with tooling on the new machine. Here’s a transcript of that part of the interview, edited for length.
 
Will Sampson: What were your decisions on tooling and tool holders?
 
Chris Dehmer: Because we had been using someone else’s machine, I had a pretty good idea of the tools we were using that we needed for that. We actually use a lot more now than we did then, just because it’s easy for me to do. We also have a 10-position tool changer, so we can put more in it. Despite universally pretty much everybody telling me I should have bought a drill bank, I didn’t. Some of that was money. Some of it was, “Do I really need that – $10,000 to be able to drill those holes a little faster?” I will admit when I’m watching that thing do this (makes up-and-down drilling motion) it gets a little bit maybe I should have bought that, but we’re just not a production enough shop to where it’s not a big deal to walk off and do something else while it does that.
 
Sampson: What kind of tools are you having in your tool library that you can use on the machine? For guys starting out, what’s the kind of basic tool kit that you’ve got to have?
 
Dehmer: Well, it probably varies for everybody, depending on what you do. We do a qualified blind dado. We predrill. I’ve had issues in the past with guys who would screw – we do plant-on backs – we’ll have guys that will put one screw in each side and think that’s good. We’ll have other guys who will put, you know, 35 screws in. Somewhere along the line I said, “OK, I’m going to put a hole where I want a screw, and you’re going to put a screw in it.”
 
Read more from the interview: https://www.woodworkingnetwork.com/best-practices-guide/panel-processing/tooling-new-cnc
 
If you are interested in learning more about Chris’s decision to buy his CNC router, register to attend “Buying that Big Machine” during IWF.

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How a Tax Free Asset Becomes Taxable

1. August 2018 09:41

(Part 5 of 6)
 
Life Insurance Payouts are always Tax Free – Think Again 
 
A misconception of many successful business owners is that life insurance payouts are always tax free. They should be, but many times the death benefit can become taxable both on an income and estate tax level. Are you absolutely positive your life insurance benefits will be tax free? How do you know and what are you basing it on?

There are various reasons that cause life insurance benefits to be taxed substantially. Because of space restraints I will only mention one. It is directly tied into the Pension Protection Act of 2006. Specifically, if an entity (corporation, LLC, partnership, etc.)  owns life insurance on an employee (even the business owner) and an acknowledgement and consent was not signed prior to issue of the policy, the entire death benefit will become income taxable. A recent example is a new client of mine. While reviewing various legal documents and insurance contracts I came across corporate owned insurance policies that were acquired for business buyout purposes. The total insurance amount was $125 million. An acknowledgement and consent form wasn’t signed by any of the insureds – that means every dollar of the $125 million will ultimately be taxed. The only options to avoid unnecessarily paying legally avoidable taxes in the tens of millions of dollars is for the clients to scrap the insurance and start new. This problem cannot be corrected any other way.

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How to choose the right finish for your shop

1. August 2018 09:40

ATLANTA – The newest types of finishes will be discussed at the IWF Finishing Symposium, set for August 21, 2018 in the Georgia World Congress Center in Atlanta, the day before IWF exhibits open.

Leslie H. Smith, market development manager Industrial Wood Group for Sherwin Williams Co., will discuss how to choose the right finish for your shop, also technology changes, how to reduce formaldehyde and VOCs, and what causes a shop to choose a certain type of finish.

The presentation will also cover low VOC, non-isocyanate and non-formaldehyde technologies in the coatings business, not just waterborne.

The full-day event will look at new technologies and best methods that finishers could use in their business. This symposium includes a number of presentations and an opportunity to talk to suppliers and finishing experts face-to-face with your questions.

https://registration.experientevent.com/ShowIWF181/Flow/ATTFLOW#/registrant//Dashboard/

The IWF Finishing Symposium is sponsored by Fuji Spray, Gemini Industries and Milesi Wood Coatings.

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The cobots are coming

1. August 2018 09:37

The Boston Consulting Group predicts that investment in industrial robots will grow 10% each year for the next ten years in the world's 25 biggest export nations, when the robots will take over 23% of the manufacturing jobs. So far, robots have taken over only 10% of the jobs that can be automated.

The fact of the matter is that robots can be programmed much faster and more efficiently than humans can be retrained during manufacturing changeovers. Then only highly trained humans remain employed.

New advancement in robotic manufacturing technology now enables robot workers to be integrated into the labor force to increase productivity and efficiency, and more robotic systems are entering the realm previously occupied exclusively by humans.

In manufacturing, there is a growing need to integrate robots into the workforce in order to take advantage of the diverse strengths of both humans and robots. A "cobot", which is short for collaborative robot, works in tandem with a human worker. A cobot and a human can produce an end result better and faster than either could do working alone. These cobots are usually designed for an explicit task.

The manufacturing environment has a wide range of potential applications for cobots. However, in some manufacturing processes, there are applications where it makes sense for workers to perform a task manually. In other applications, the best option is overall automation. Cobots are practical for many of the tasks that fall somewhere in between. In these situations, a worker needs to see, feel and react as needed, but the cobot can handle certain physically taxing motions.

There are a variety of cobots from small table-top models to robots capable of moving heavy loads. Cobots are relatively light weight and can be moved from one work assignment to another. Most cobots are easy to program, using a smartphone or tablet. Just as a power saw is intended to help—not replace—the carpenter, the cobot is designed to assist the production worker. Collaborative robots are generally simpler than more traditional robots, which make them cheaper to buy, operate and maintain.

While the robots perform the repetitive jobs, human workers can be creative and improve the ways to carry out manufacturing. This can make manufacturing more efficient and cost-effective.

Because cobots are affordable, highly adaptable, and almost plug-and-play, small and medium-sized manufacturers are eager to take on this technology. This segment of robotics is projected to see substantial growth.

Learn more from John Park during “Robots in the small- to medium-sized shop”.

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