Founded in 1949 and acquired by the Kloé family in 1979, Headland Machinery is an Australian owned and operated, second generation family business, with a strong history of supplying machinery to the manufacturing industry. They identify as being a family business and aspire to keep the business in the family in the future. Managing Director Annaliese Kloe shared with us their secrets for growth in a declining market.

The secrets of growth in a declining market

Running a successful business in Australia’s mature and declining manufacturing industry is incredibly challenging, and forces business owners to critically evaluate every facet of their operations to ensure the business’ future viability. In an industry that’s constantly throwing a curveball at you, it’s often hard to think strategically when all you want to do is survive.

In today’s society, surviving doesn’t always mean to continue with your same business processes, it means, be smart, be innovative, don’t be afraid to change and look at new technology that can help shape your business in the future.

Five years ago our business was growing. Despite our growth, we found that we weren’t seeing a big impact to our bottom line due to our inefficient IT systems and duplicated processes. We knew that we needed to streamline our business by investing in new systems that would enable us to simplify our systems into one solution, take control through real time information and enable growth by gaining access into new channels, markets and opportunities. We needed to ensure our business was agile and able to respond quickly to changing market conditions.

Invest in Technology for the Future

Sometimes in an unstable environment, business owners are hesitant to invest in new technology – our clients say all the time that they don’t know what each month will bring. But that is exactly the time to decide whether you want your business to be around in the long term. If you continue with old technology (whether machinery or software) and if you continue doing things the same way, then your business will not survive in the future. The choice is, whether to go down slowly, resigning to the fact you will eventually need to close your shop, or, adapt and grow in line with the changing market.

If you want to have a successful business, you need to look at the new players in the market and the new requirements for the customers in the market, then you need to invest in technology that services the needs of those customers and consider different industries or verticals.

It’s not easy, trust me. When you are passionate about the industry you service, sometimes you just need to re-analyse the situation you are in and ask yourself:

• Is your business lacking efficiency; mutual or duplicated processes?
• Do you have internal costs or products that aren’t providing a positive return?
• Are your IT systems outdated; on premise and/or disparate?

If your answer is yes then it is time to look at new ways to improve your business and steer it in the right direction.

Look at areas of the business that are costing you the most money without delivering value – duplicated processes, high levels of admin, IT costs and lack of visibility over staff, inventory and business as a whole.

Invest in technology that gives you a competitive advantage and that can be fully automated and flexible. A lot of our customers are investing in automated technology, whether automated machining centres or big storage systems to make the whole operation more efficient. Those companies are able to compete internationally because they have managed to take out a lot of the labour components of the business. Innovative, flexible technology is important.

Currently we are seeing our market consolidate. You have to be nimble and flexible because manufacturing is dramatically changing. It’s not the same as it was, even three years ago and you need technology to be able to give you agility in the market and cost effectiveness.

Adaptation and Diversification

Be open to change. The industry has changed so much over the years that certain industry sectors you were targeting are losing stability. Now is the time to diversify your business in order to keep ahead.

You need to ensure your team is adaptable. Your internal team must be able to adapt to a changing market and you need to hire people that are forward thinking and innovative. You have to be prepared to change what you are doing and to think “out of the box”.

I believe that you need to look at doing things differently. The automotive market is no longer here for a lot of people, so what are they going to do? That’s the question, what other work are they going to do? How are they going to utilise their skills, where is the opportunity in the market for them? They need to be looking at different sorts of technology, different sorts of contracts or different ways to do things to capture new work and build a business in a new way.

This could even mean looking at your competitors as partners. There’s the realisation that Australia is a small player in a large market, how do we capture that share of the market globally and help each other out in Australia? You could look at working together to capture bigger deals and work, so you can develop a partnership together.

That’s the key, if you don’t change you won’t survive, especially in a market that’s weakening and contracting.

The businesses that are doing well are the ones investing in new technology. It takes foresight, dedication and hard work but the rewards are there.

Headland are members of FBA and find value in “networking with like-minded people and being able to relate to the issues other businesses have and learning from them”.