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It's far too easy to talk about all the negative setbacks the novel coronavirus (COVID-19) has had on our business over the last few months.
Read our last post for small business recession survival tips.
Having relied on China for a few components of our watches; we started to feel the pain as early as January. We're going to change the narrative on this post and focus on the positive things the pandemic has given our company.
LEAP FROGGED OUR PRODUCT ROADMAP BY 8-10 MONTHS
In tough times we're forced to innovate. During the 1st week of February, we came to the harsh reality that our supplier from China would not be able to fulfill the custom order for our infrastructure for an indefinite amount of time due to the coronavirus factory shutdowns. We were seven (7) weeks from the One of a Kind Show and on track to have no samples ready for sale!
With this not being an option, we did a local sourcing exercise and reached out to seven (7) machine shops in the Toronto area. Instead of sending them the current 2.0 screw-down model that China was producing, we met with our engineer and finalized the specifications of our new 3.0 solution (twist off). The new model would allow for universals seals, easier assembly, servicing, and the full confidence to use the "Made in Canada" claim.
Our original goal was to get to this 3.0 model by the end of the year. Given we had no choice but to make things local, we pushed to leap forward in the product, and we're able to work with Kris Tyler from KTP precision to make 3.0 happen well ahead of schedule.
ORGANIZED OUR BOOKS + RE-SCOPED OUR COSTS
The delays in supply have pushed us to optimize key areas of our business, such as quick books. We're now fully caught up and have re-organized our accounts strategically. This gives us a real-time view of our cash inflows and expenses. It's enabling us to make better decisions backed by financial data, which saves us money in the end. This is especially important in a recession as every dollar counts. It's insane to think that we have been operating the last three years with a passive/reactive financial review. Numbers are everything when it comes to operations, and long term sustainability and the pandemic has forced us to prioritize finances over everything.
We've also taken the time to go through a new costing exercise and have our parts and labor rates broken down to the minute based on what we know today. This allows us to fully understand our margins and decide if we can extend any offers for loyalty or upcoming promotions to keep our community invested.
You would think finances are always number one, but you'd be surprised by how this gets neglected when you are trying to get the business off the ground and stay afloat. We rest with a little more peace in these coming months that we have a good grip on our costs and cash flows.
REDUCED MANUFACTURING TIMES
We allocated many hours of our downtime to work on all our resin watch cases - The Resin Classic. We created several molds to streamline our casting time and learned what works best process-wise to create a consistent mold injected watch case. It took a lot longer than planned, and we needed the time to sort it all out. As a result, we've eliminated all CNC machining time for our resin classic watches and can pass these savings down to our customers.
RENOVATED & BETTER ORGANIZED OUR STUDIO
We've had an insanely cluttered hallway that leads from our shop to our studio. It was a complete mess and blocking a door to an old bathroom that was out of commission for over 10 years.
We took some spare time and allocated a little bit of capital to clear out the hallway, paint the walls, add display shelving, and replace the red carpet with laminate. We also restored the bathroom and made it functional - this was a HUGE win for us. This not only gave us useful functionality and extra space, but it also makes the area more presentable to our clients. It's our new retail space, and it didn't cost much but enhances our in-person experience as well as make things more uniform for shooting content.
BATCHED SAMPLE PRODUCTION
Knowing we had a lot of watches to assemble when the infrastructure arrived, we started sourcing coconuts in bulk and preparing a stock of cases. We usually batch small runs of 5-10 coconut watch cases at a time but leveraged the time to pump out 50!
We're also batching sample watch cases for sale, auctions and for our eventual debut at the One of a Kind Show.
INNOVATION > FEAR
What the last couple of months has taught us is just to keep moving forward. There are so many areas of our business we can be working on when another comes to a halt - albeit our most core area...watch making. Even writing this blog is something that gets deprioritized when we are too busy working with our hands.