Taking a cabinet shop from $250K to $500K

See $0 to $250K here.

 

I remember this stage of growth very well. We were still in our small backyard shop, just getting to the point of looking to hire another employee. But then we bid off a job that there was no way that we could handle!

 

It was a 62 duplex project in a town that was about an hour and a half drive from our shop. We thought we should bid it and much to our surprise we won the contract! All of a sudden, we had way more work than we could have possibly imagined; it was an adrenaline rush.

 

This phase of growth was totally brute force and awkwardness. Looking back we could have made our life easier if we would have done several things differently.

 

Normal Path

 

On the normal path to breaking through this threshold, your business starts to acquire recurring customers outside of friends and family. These customers may be builders, architects, or a developer that you’re working for who is feeding you some recurring jobs because you’ve built up a level of trust with them.

 

Meanwhile, monthly volume has increased to about $30-$50k a month and you’re starting to find out that it’s enough work to consider hiring some extra help around the shop so that everything gets done. At this point, you’re considering buying some machinery or equipment to help in the production process. Additionally, you may be looking at finding and leasing a space of your own.

 

It seems at this phase that you’re growing faster than you’re learning. Mistakes are common on almost every job that you send out from the shop which can be a frustrating process. Unfortunately, this is the point where most smaller businesses fizzle out because it can be such a frustrating time as you aren’t able to learn at the rate you’re growing your business.

 

Accelerated Path

 

The most important thing that separates a business from the normal path is learning to be transparent with your numbers.

 

This is a hard thing to do without coming across as either: we’re making a killing or we’re going out of business. But you have to find a way to convey the right numbers to your employees so that they have an understanding of how the finances of the business are working.

 

If you aren’t transparent with your employees and tell them the numbers, they will begin to generate their own. The accelerated path also includes finding an implementing a solid drawing and cutting program which produces lists and order files for cabinets you’re going to buy.

 

IMPORTANCE OF OUTSOURCING AND FRUGALITY

 

Looking back, when I was at this phase I wish I would have considered outsourcing for just about everything other than design and sales. Today, with our world being as connected as it is, there are many niche providers of outsourcing that exist for things like: drawers, doors, and box components. It’s hard not to consider using outsourcing as your primary means of manufacturing.

 

Be very frugal. I learned this from Warren Buffet in his book The Snowball. Buffet recounts that at the start of his first business he evaluated every dollar as if it were ten. A dollar invested now is going to be worth ten in the future. If done correctly, this is how you get on the path to 'The Snowball' with your business.

 

Learning to be frugal with a small budget teaches you and your employees the value of efficiency and sets the groundwork for good practices so that when you have a large budget you know that your company will be responsible with it.

 

Alongside this line of thinking: Be debt averse and risk heavy. Hoard what little cash you have an watch it grow with you. This stage is very important and you might experience times where it doesn’t feel like you’re growing. But always remember: 

 

Don’t give up! 

 

It’s okay to let your company simmer as you learn the lessons on how to control growth in a healthy manner and implement good business strategies. You are still early on in the business journey so don’t underestimate the power of standard operating procedures (SOPs) in your company. Quality SOPs are important every time you make a new transition.

 

INVEST IN YOUR BRAND

 

Start working on your business and not just in it. I wish I would have learned these lessons 10 years earlier because they have huge effects. Carve out some time in the week where you’re not working on the shop floor, not producing product, you’re working on something that can make your business stronger. Whether that’s accounting procedure, SOPs, efficiency standards, whatever it is, set aside a few hours a week for working on your business and it will pay huge dividends later on.

 

The stage is called brute force and awkwardness for a reason. You just have to power through and learn as much as possible to set your business up for years to come.

 

So take your time, find the lessons, and watch your company grow.

 

from https://www.woodworkingnetwork.com/management/taking-cabinet-shop-250k-500k

Taking a cabinet shop from $0 to $250K

About 20 years ago, I started my journey into learning how to build cabinets. It began in a very small shop right behind my house. The building was about 25 x 40 feet and I created a ton of products out of that little shop before moving to a larger space. 

 

Our first year however, was spent in that small shop and we blew through the first few thresholds of growth in no time.

 

Growing Pains

 

I specifically remember my journey from starting with nothing to hitting the $250,000 mark on an annual basis. Although it was a rather quick journey, as we hit this threshold at about the four-month mark of being in business, initially it was a tough time.

 

Looking back, we had zero systems in place and it was only by brute force and awkwardness that we got product out. During each job, we learned through mistakes. At the time there was not a single person that worked with us who understood how to build cabinets efficiently or effectively. Our cabinets had no consistent quality, we were just focused on banging out orders as fast as they came in.

 

Owner duties were split between myself and my partner. I handled the sales, drawings, and cutting the plywood. He handled the back-end of assembly, doors, outfitting, drawers, and other tasks. It was a tough time! 

 

The Normal Path

 

Normally, when you’re growing through this phase, one of the first things you learn to set up correctly is your books. Then you begin to look for a drawing software that can handle your cut list; because up to this point you’ve been doing most everything manually. In fact, you might not even be drawing your cabinets on a software.

 

One of the downfalls of the normal path is the ‘yes man’ mentality.

 

By this I mean that you’re a person who says yes to any project that’s even close to what you’re doing. As long as there’s some semblance of the project resembling a cabinet, you say yes to doing it. Even going so far as to saying yes to anything that has to do with wood!

 

We all understand, you have to do what you can to pay the bills, to grow your business, and to get your name out there. But the yes man phase is definitely something I do not miss!

 

Many people also refer to this threshold as the ‘friends and family network’.

 

If you’re starting your business from scratch then you definitely know what I mean. During this time you lean on support from your family and friends who may have a project going and allow you to come in and do the work for much less than you would like to charge. However, that’s one of the normal parts of growing in this business, doing work because it seems familiar.

 

The Accelerated Path

 

What’s more important to focus on is the accelerated path. The goal I have in mind is to get you through these thresholds as quickly as possible, in order to position your company in a strong way to handle the next threshold or project that comes your way. My hope is that this becomes a snowball effect, and that your company grows from a strong position, to one that’s even stronger.

 

On the accelerated path, you need to start by identifying standard procedures. Companies don’t normally spend a lot of time on their SOPs at the start. Often they’re handwritten, fluid, and change on a daily basis.

 

This is fine for the start, however, you should get in the habit of identifying a process that needs to be standardized so that you set your company up for success in the long run. Standard procedures may not last very long and change with your ever growing company and for this reason you shouldn’t spend an extended amount of time creating them.

 

BUILD YOUR TEAM

 

Start regularly posting ads for holes that your company needs to fill. Positions like: a new operator, draftsman, or laborer. Whatever the job may be make sure you’re posting in advance so that you’re ahead of the game when the time comes.

 

Even if you don’t need to fill roles immediately, make sure that you’re collecting people’s names and information in a spreadsheet. That way, when the time comes that you need to be making hires, you’re not scrambling around for new applications, rather you already have a pool of people to contact.

 

COMPILE THE QUESTIONS

 

Pay very close attention in this phase to the questions that customers are asking about your product. Questions like: What are the current design trends? What are the materials you use? There will always be redundant questions which you’ll hear time and time again on every project. At this phase, you won’t be doing too much with these questions, but you need to make sure that you have a solid answer for each of these questions. I suggest that you collect the most frequently asked questions in some kind of google document or sheet so that you can refer to them later when you begin to create marketing materials to send to customers.

 

PLAY TO YOUR FORTE

 

In the early stages, identify what your strong suit is. Try to focus your efforts on that particular task or product as much as possible. In the normal path, we have the ‘yes man’ mentality that I referred to earlier, however that’s the brute force and awkwardness method.

 

Instead, identify what you want to focus on early so that you can move your company toward that niche. Picture that strong suit as your specific island and move in that direction. It doesn’t mean that you can’t take projects outside your niche, just don’t lose focus of the ultimate goal.

 

In the early stages, identify what your strong suit is.

 

SALES

 

Start changing your mindset away from: I only need to sell when it gets slow. On the accelerated path, you have to make sure it’s a continuous effort to be successful. During the busy times as well as the slow times, you have to be continually selling in order to be successful.

 

I hope you’ve enjoyed the journey from $0 - $250k and I’d love to hear some comments on what you endured to get through this phase of business. It can be an exciting time as often we’re just running on adrenaline!

 

 

from https://www.woodworkingnetwork.com/management/taking-cabinet-shop-0-250k

Positive self-talk boosts cabinet shop's profits

I fell for it.

 

I am not talking about being duped, I’m talking about tricks I play on myself to work smarter not just harder.

 

Matt sells custom kitchen cabinets. He has a retail showroom, and his own shop. He often gets so busy he has to sub out work.

 

When he subs out work it’s still profitable but he gets grief from his foreman who wants everything to go through their shop. Sound familiar?

 

Matt and I are working together because he wants to get more in control of his business and stop it from running him.

 

One of his frustrations is that the people around him are telling him to stay small, think small, and be small. 

 

Ugh.

 

In one of our last meetings, I reminded Matt of the reality of a manufacturing-based business – that all of us have an unlimited capacity to sell, but a limited capacity to produce.

 

As business owners we have to think a little bit differently because we’re looking for different results. We’re trying to work smarter not harder. We need to find profitable jobs and keep our crew working. And we need to take care of our families who rely on us to do that.

 

That’s why I say to myself and the people I work with "I need to play mental tricks on myself …and fall for them every time."

 

Here are some mental tricks for success. When you see another business owner getting the kind of results you want, it’s good to know that this is what’s going on in the background. 

 

People often ask me for the “Secret Sauce”, or the “Silver bullet”… well - this is it.

 

It starts with “My Thoughts”.  How I think is where it all starts.  It’s the same for a pro athlete- if they don’t believe they can make that play or take that shot it’ll never happen. A little trick I use is to say this to myself... "What I say to myself when no one is listening his what the world sees when everyone is watching."

 

Matt was being influenced by his foreman, who was looking at the world through his own lens. He wanted Matt to think small, stay small, and be small so that their shop did all of the work.

 

My thoughts directly impact "My Feelings". You might call this going with your gut. That’s why the things I say to myself are so important. You probably hear about positive self talk for athletes and it’s the same for us in business – what we think impacts how we feel about things.

 

If Matt listens to his foreman, who wants him to stay small, and keep the shop running at 75- 80 percent then he’ll never be able to see a world that looks any different.

 

So this leads us to "My Actions".  Now we’re at a place where what I say to myself (positive self-talk), and how I feel about things (going with my gut) has an impact on my success.

 

In Matt's case, his action was to stop the feast or famine of up and down of estimating/not estimating based on how busy his shop is. 

 

Now, Matt's actions and his language line up with... "I’m going to keep selling, and we’ll figure out the best way to deliver profitable deals."

 

You might have seen people who have lined up their feelings, thoughts, and actions in the negative. They see the world in a negative way, they take negative actions, make bad choices, and they get failure as a result. Tragically, you probably see some of the guys in your shop doing this in their lives all the time.

 

The same holds true when my thoughts, feelings, and actions line up positively. Positive self-talk leads to positive gut feelings leads to me taking actions that lineup for success.

 

Matt checked his language. He also checked what he was hearing from his foreman. Matt’s job is to keep the shop busy, the guys busy, and keep the profits coming in.  

 

His foreman’s job is to keep his job- so they see the world in a different way.

 

Results? Matt had his strongest July and August ever, he’s got bookings through to January, his shop is full, and he’s subbing out overflow work.  In just two months he’s $140,000 over his profit projections.

 

All of that by working smarter not just harder.

 

---

Author Dominic Rubino is a professional business coach focused on wood product companies. He also hosts the Cabinet Maker Profit System Podcast. Learn more about Dom here:  https://www.bizstratplan.com/

 

 

from https://www.woodworkingnetwork.com/management/positive-self-talk-boosts-cabinet-shops-profits

How to make it in the cabinet industry: Part 3 - Delegate or Die

See Part 1 and Part 2.

 

Something was wrong.

 

I was literally going crazy about three or four years ago when I decided I needed a change.

 

I could never seem to move forward in the cabinet business for the constant moving backwards. One step forward, two steps back.

 

I had realized a year or so earlier that I had fallen prey to the viscous sales cycle. Upon this realization, I tried to analyze what I was doing incorrectly as an owner and could not seem to come up with the solution.  

 

The problem is: You don't know what you don't know. 

 

I then made what I consider to be the finest business decision I have ever made.

 

After listening to some Tony Robbins podcasts, one of them by a business coach, I immediately got on Google and searched for “business coaches." I never knew such a thing existed.

 

After interviewing about three coaches, I found the one for me and he is still my coach to this day. Finding someone with manufacturing experience was a must so I didn't have to spend half our sessions explaining what the term table saw means.

 

My coach Martin Holland helped and continues to help my business get aligned with our vision.

 

DEFINING THE PROBLEM

 

As we looked into my business, Martin helped point out that a lot of this problem I was sensing actually lied with me.

 

How could this be?

 

I had all the skills to kill it on the floor, bang out some drawings, sell to customers, and balance the books...and that was before lunch.

 

The fact that I was knocking out all of those tasks was precisely the problem.

 

This was my introduction to delegate or die.

 

I learned that it was not only possible for my operation to function without me having to be the battering ram behind everything that happened, but it would actually be much better off that way.

 

DELEGATE OR DIE

 

Why do I need to delegate? Why can't I just keep doing what I am doing?

 

You can certainly keep doing what you are doing, but if you want time to finally work on your business, instead of just in your business, take my advice.

 

If you are eager to better your business and grow beyond just your personal capabilities, you’ll pay attention. After all, you know what the other option is…

 

DELEGATION DONE RIGHT

 

Let’s lay a little ground work.  

 

Delegation is not just, “He runs the saw while a take a couple phone calls” or “Hey! Make this delivery because I have a doctor appointment.”

 

Delegation done right is removing something from your plate that is not moving the business in a positive direction and instead having a qualified person do it for you.  

 

Here are the basics of delegation:

 

Start small (unlike me)

 

Start with something to get an easy win. Why not find someone to set you up a weekly maintenance plan and write it down? That person's responsibility is to make a maintenance plan for the entire shop and execute it on a weekly basis.  

 

After a successful month, give that person a raise because he just freed you up, even if just a little, to work on your business.  

 

Then, make a list of things to delegate over time. If an item on the list is too big, break it down into its individual activities and delegate the activities.

 

If you are still having trouble, round the crew up and talk to them. Ask them what they think you should delegate out to most help the business. Trust me, you will get a response. You may even find a sleeper in the group that surprises you.

 

Move on up

 

Now that you have down an easy one, let's move on to something bigger. Now may be a good time to list the things that you do on a normal basis that are not making the business better and helping the business to grow. From that list, pick the one that will be the quickest and easiest to implement.

 

This is not an overnight change. Remember, this is changing the course of your business, so don't get frustrated. Remember that the discomfort you feel now, if you push through, will be worth it when you get there.

 

Hire better

 

Make your hiring process more than hiring a heartbeat. Make a process of asking increasingly more telling questions. Questions that don't sound like anything, but the answers can reveal what they are really like.

 

The main point is don’t settle. If a person is not moving your business towards the goal then replace and try again. Get people that want to be on the bus, not knocking it off course. This will give you employees you can trust to delegate to.

 

DELEGATION FOR THE WIN

 

What does it all mean?

 

In short, it means you, your business, your employees and your customers win.

 

You will finally be doing what you were meant to do, working on your business, not in it. You will be amazed at the doors that open from that simple change.

 

What has it done for my company?

 

By delegating things like daily production, sales, design, accounting, customer selections, delivery, install, we are on a course that is aligned with our vision of becoming the most efficient cabinet component manufacturer in the world.  

 

Delegation has afforded me the time to solely work on my business. My time now is filled with improving sales methods, marketing strategy and writing awesome content like this!

 

THE COST OF DELEGATION

 

If your first instinct is to say. “I can’t afford it”, I will tell you, without a doubt, that you can’t afford not to.  

 

How you like them apples?

 

You can’t afford not to do this if you want to grow your business and create value for your employees, customers and your own family.

 

You have earned it.

 

DELEGATING PRODUCTION

 

Thinking outside the delegation box: What if you delegated your entire production process to an outsource supplier?

 

How could buying your cabinet components simplify your business process and streamline growth?

 

Now that you know how to delegate, don’t forget the previous key strategy, outsourcing.

 

 

from https://www.woodworkingnetwork.com/management/how-make-it-cabinet-industry-part-3-delegate-or-die