CUED

Millwork Shop Market Analysis

The main demand for custom-made wood window units comes from not-for-profit community organizations engaged in housing rehabilitation. The main demand for wood replacement sashes comes from private rehabbers and homeowners and, to some extent, small developers and construction firms. Total demand in Chicago is estimated at approximately 250,000 sashes per year. Most current demand for window units and sashes is satisfied at reasonable prices by three very large mill shops in Chicago and suppliers from out of state. Small millshops account for approximately 10 percent of the total supply. Market opportunities for custom-made window units in general are poor. Due to the woodshop's expected special access to community organizations, a sheltered market can probably be established. Total market potential for the woodshop is estimated at 360 window units in the first year ($59,400), rising to 475 by the third year. Local demand in Uptown and Lakeview will need to be captured to establish a market position in sash production. With adequate marketing, potential sales for the woodshop are estimated at 1,295 sashes the first year ($42,000), rising to 3,185 sashes the third year. Among other products, only trim will play a significant role the first year. Assuming competitive pricing, sales of 54,000 lineal feet and 15,200 board feet ($61,000) should be attainable. In the absence of complete price information no estimate of the potential for later years can be made.

The estimated first year sales volume matches the level of production which has been calculated as necessary for operation ($150-160,000 in sales). For subsequent years, however, the estimate of market potential lags behind what is deemed necessary for operation. Based on this, the following recommendations are made: The woodshop should be organized within the framework of the larger Voice organization so that personnel may be shifted back and forth easily. Investments in machinery, facilities, etc. should be made so as to maximize flexibility in case a commercial woodshop proves in practice to be unfeasible. If sales and growth in sales is as estimated in this analysis, other product lines should be seriously considered.

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