Extreme Powder Coating Makeover
Florida coater gets help from SCORE to improve business.
Here’s a riddle for you: What do you call a new powder coating shop that was getting so busy it had to turn away customers?
A failing business. That was the case for Bullseye Powder Coating Broward, located in Hollywood, Florida.
Two years ago, Tony Balestena sunk $50,000 into his new coating shop after learning the ropes for a few years at a friend’s shop. He brought on his two stepsons, Michael and Mario Saavedra, to help run the shop. Fourteen-hour days were the norm, and they never stopped working. The company was averaging about $53,000 a month in sales, and customers were lined up at their doors.
Everything was great … except they were doing it all wrong, as do a lot of smaller coating shops in the U.S. Balestena couldn’t handle the quick growth spurt and demand, and they were running the business—and themselves—into the ground.
Luckily, Balestena realized he needed help. He placed a call to SCORE, a nonprofit with about 400 chapters around the country offering free counseling to small businesses. The Miami Herald profiles projects between the agency and small businesses with a monthly feature called “Small Business Makeover” that details the recommendations that the SCORE volunteers bring to the small business.
SCORE sent in attorney Russell Thompson, who coincidentally has extensive experience working in the manufacturing and powder coating business, and marketing coach and social media specialist Rosie Taylor, owner of Rosiemedia.
When Thompson and Taylor lifted the hood on the engine that was running Bullseye Powder Coating Broward, what they saw was typical of the mistakes that many small coaters make.
“The biggest change has been analyzing what direction our business should go,” Balestena says. “We strive to make every customer happy, but there are some projects that were not worth it for our company. It’s hard to turn away work, but by doing so we have been able to capture more of the specialty work that we enjoy and can capitalize on.”
Although the shop was doing a mix of high-cost work—such as boat and yacht parts, car rims and trim pieces—it was also doing batch work for industrial customers, like fencing.
Thompson saw that with the mix of customers, Balestena didn’t know where his most profitable business was because he never refused work and took on anything that came in the door.
Here’s Thompson and Taylor’s advice for Balestena, which could apply to any coating shop in the U.S.:
Strategic Planning: Develop a plan based on what jobs are most profitable, and give priority to those customers who keep coming back. Fewer jobs might mean higher profits.
Expenses: Thompson called the shop’s cash flow “murky,” which means no one really knew the expenses they were paying, including many personal ones. Keep in mind that if you have to go to a bank for capital purchases, they will want to see clean records.
Control: Look for “invisible” costs and make sure those are included when accounting for each job. Are you taking into account all the expenses for labor, transportation, equipment and materials?
Pricing: Balestena was often strong-armed into quoting lower prices by customers who beat him down on price. The shop went to a base-price system, and then added options to add material and labor as a job warrants.
Educate: Teach customers about lead times so that not every job is being rushed, and employees are not staying until midnight to get jobs coated. One-day turnarounds are a thing of the past at Bullseye Powder Coating Broward.
Systems: Thompson advised the shop owners to get software that tracked scheduling.
Target: Taylor helped them find who their most profitable customers may be and to advertise their services to that market.
“I think the biggest, immediate impact came from analyzing our costs and books more consistently,” Balestena says. “They taught us that growing pains are normal, but if we don’t control costs beforehand, we may be losing more than we believe we are growing.”
Balestena said his shop now has a clear path forward. It’s never too late to learn new tricks.
“An experienced eye will always provide new insightful information, if you are receptive and open to suggestion,” he says. “We learned to listen more and talk less during our makeover, because every small bit of information can be critical to change. For other coaters we recommend the same information—find your niche, and control your costs.”
For this shop owner, it means hitting the bullseye.
To find a SCORE chapter in your area, visit score.org.