Upholstered and Wooden Furniture Manufacturer

Background
The firm is a manufacturer of upholstered and wooden office furniture. At certification, the firm had 30 employees and annual sales of approximately than $2 million.

A highly competitive market has battered the firm for years.  Canada and Mexico have been flooding the U.S. market with goods produced from inferior material and cheaper labor. Russia has entered the picture with its vast supply of cheap raw material that can offset the cost of transportation to the United States. In addition, Japan has been exporting its imitation wood products at reduced rates making it difficult for many U.S. firms to remain competitive. During the mid 90’s, the percentage of imported furniture continued to rise, on average 14 percent per year, making it very difficult for U.S. producers to keep abreast of the market.

Moreover, the firm also competes in a domestic market that has for years experienced the trend of mergers and acquisitions resulting in a glut of used office furniture in the marketplace.

Assistance Provided
The recovery strategy highlighted two areas deemed critical for the continued operation of the business, management information systems (MIS) and marketing. On the MIS issue, the NYS TAAC discovered that accounting, job costing, procedures, methods, and standards were not being captured in a manner that provided management with timely or useful information. A plan was developed to design a new information system, design the necessary hardware, and spec the necessary software. Once management purchased these components, technical assistance was provided to integrate the information system and customize the software to the business. It was estimated the system could be developed for $30,000.

Marketing is important for both the short-and long-term. It was discovered the firm lacked a formal, structured, comprehensive marketing plan. The development of a marketing plan was viewed as the foundation from which new business development could take place. A marketing plan was developed for $30,000.

Project Results
A MIS consultant evaluated a number of management information systems before making a recommendation to the owners. Once the firm purchased the required components, the consultant implemented, converted, and provided complete training for all suitable personnel. The new system eliminates excess paperwork, which has increased productivity and provides management with timely information to effectively operate the business.

A marketing expert developed a detailed and attainable marketing plan for the firm. Budgets were addressed, sales forecasts were planned and clearly laid out, new geographic sales territories were introduced, and the selling tools necessary to produce results were completely spelled out.

Results have pleased everyone involved with the firm and the technical assistance. The owners were recognized at the 1998 New York City Entrepreneur Of The Year Awards. Cited in the award was the owners' abilities to effectively manage and keep the company afloat during a period when furniture markets were under attack. They were able to do this by staying abreast of technological needs (MIS), and anticipating customers’ needs (marketing). As a result of the publicity surrounding the owners receiving the New York City Entrepreneur of the Year award, CNN showcased the firm in a segment of "Managing" on its financial news network.

Since completion of the projects, employment at the firm has increased to 40, and annual sales have increased to over $3 million.