Reversing a downward sales trend through a new product or an innovative marketing strategy can be a daunting task for a small manufacturing firm, but the results can be well worth it. In today’s Chicago Tribune, Ann Meyer discusses ways for family-owned firms to increase profits in an economic downturn. The article, “Survival, growth require breaking the mold” highlighted Berthold Electric Co. and Versatility Tool Works & Manufacturing Co.

Gus Berthold, president of Chicago-based Berthold Electric Co., centered on innovation and profitability to turn his company’s profits around. Berthold focused on reducing overhead and implementing a spreadsheet to help engineers more accurately determine a job’s profitability.

According to Berthold, “It made us aware of where we needed to raise prices and where to seek out work with more profit.”

After decades of making custom products, Berthold decided to change his business strategy and developed a standard line of generator-connection cabinets. In the end, his new strategy paid off and the new product line generated $700,000 in sales last year. Offering a standard product line, “saves time, money and provides for consistency,” Berthold said. “I was able to recognize the need in the market place and capitalize on it.

Alsip-based contract manufacturer Versatility Tool Works & Manufacturing Co. has taken a similar approach in order to jump start the company’s profits. Recently, Versatility launched a line of specialty tool storage cabinets. Last year, the line represented 10 percent of the company’s $3 million in annual revenue and is expected to double this year.

When launching the line, the company sought the help of Chicago Manufacturing Center’s Eureka program to establish the feasibility of the new line. The Eureka program determines what customers are interested in and conducts a market survey to get feedback about the product. If feedback demonstrates interest, they begin developing a marketing program tailored to the product’s needs.

“How you bring a product to market is as important as the idea,” said Demetria Giannasis, president and chief executive of the Chicago Manufacturing Center. After participating in the Eureka program, Versatility budgeted $100,000 for new marketing initiatives that included literature, Web site redevelopment and Webcasts.

In addition, Versatility worked with the Illinois Institute of Technology’s Interprofessional Projects Program (IPRO). Students conducted a customer-satisfaction survey, got customer testimonials and examined the structural design of the cabinet. Versatility used this information to make improvements the cabinet line. Universities are a great resource for small manufacturing companies. Using universities for marketing initiatives is a great way for small companies to get assistance without spending large amounts of money.

Unlike many manufacturing companies, Versatility did not slow down marketing efforts when the economy slowed down. “As the economy turned bad, we went on the offensive with our marketing programs, and it has had a positive effect,” said Edward Freimuth, president and son of the founder.

Despite the challenges of a shrinking economy, small manufacturing companies can still develop successful initiatives and increase profits. Companies can’t be afraid to break the mold and try something different—the results may be surprising!