Turning a welder into a profit maker - Establishing Relationships
Gaining customer loyalty is important to long term success of course, but there are other relationships that you must have to make things a success. A good relationship with a bank is a must if you plan to operate with lines of credit. Credit is almost a necessity in the welding business. Many times a job of sufficient size will tie up cash resources that need to be used for payroll or even basic maintenance or repairs. Even if "borrowing" money isn't an idea you want to entertain, having a good credit base should be priority, unless you have good financial cash flow. A single visit to the welding supply store may cost $ 500.00, just in consumables, a couple tanks of gas and rent and safety equipment. These stores will allow you to charge to an account without having to pay out money at the time of delivery. Using credit to give you financial flexibility has an ever present opportunity for abuse and misuse. But in reality, it can offer you some freedom, especially when you have one of those days that can easily tap out all your cash reserves and still leave you short on what you need to complete the project. Going in and visiting your local welding supply stores is an imperative because it gives you an inroad to any special deals or discounts. Going into a store and paying cash without a special account established by running your credit information will usually result in a full list price or a higher price than you’d pay if they put it on your account. Cash sales to a local welding supply store is hardly worth it, and unless the employee has a company or personal name to tie it to, a default, list price is automatically charged. This sort of business practice may not seem fair, but in some ways, having a credit account gives you an opportunity to grow or to purchase that tool for the next project. By the time it is sold (hopefully) you can in turn pay off the line of credit fully. Not having an account set up with metal suppliers and local welding supply stores will cause the most well funded operation to go bust in just a brief amount of time.