To Grow or Not To Grow is a Personal Choice

To Grow or Not To Grow is a Personal Choice

Do you ever lie awake at night thinking of just how great it would be if you had a big old shop, equipped with the best machines you could buy? One that comes to mind is that totally cool computerized beam saw shown at the Anaheim Woodworking Show a couple of years back a new point-to-point machine that will drill, rout and groove parts with the stroke of a key.

In your mind's eye you see your people on the shop floor, busy cutting, milling, assembling all working so efficiently that the place is almost running itself. You have a decent showroom, a dust-free office. You're finally making some real money for yourself; you're taking some time off, hanging with the family, riding your bike, playing some golf

On the other hand, you're finally beginning to get things dialed in these days your operation is fairly small and nimble right now. You know pretty much everything that's going on within your company: You're in touch with all of your clients, employees and suppliers. You have an intimate knowledge of pricing, your shop drawings, job details, the schedule, installation, what's on the punch list, etc.

Do you really want to get out of your comfort zone and expand? There are some shop owners who make a very adequate living out of staying small and totally in control. But, frankly, not too many. In many situations, a clear way to more profitability (not necessarily in percentages, but often in actual dollars) is by growing your company.

There are many bumps along the growth road, and if you expand your shop its size or its scope you may encounter some painful jolts in the journey. Whether you grow or not may boil down to your own personality what you feel comfortable with, what you yourself want to do.

It's a Different Animal

First off, growing a shop often means more plant space and equipment. If you do good work, you'll probably be seeing your sales gradually increase, so replacing equipment is a normal part of any shop's on-going operation. When you find yourself with more than 10 people on the floor, you're going to start looking at more automated machinery just to keep up the pace. This usually begins with a better table saw. A digital fence with a small drive motor is a great time saver, and the full-blown computerized saws have come down in price over the last few years.The point-to-point and router machinery is taking hold in many smaller shops these days. It's a substantial investment, but if you have a steady volume of work, it may be the way to go. And, most shops find themselves needing a good quality edgebander these days, as well.

You may have to consider a bigger shop space, too. And, don't forget that moving your operation can be very expensive. Not only are there costs associated with new electrical, air and dust collection systems and moving the machinery, but also perhaps more importantly many shops experience a loss of sales focus while the actual move is planned and executed.

As you grow, you personally have to move from being a technician (cabinetmaker, countertop fabricator, furniture maker, whatever you are) to being a manager. Some shop folks are okay with this. However, many are not. You're often looking after people in addition to product, and that's a different deal, and often much more stressful. There are more emotions (certainly), more meetings (probably) and more whining (inevitably).

Your team is so important in a growing shop. While it may be critical that the three walnut vanities can have no sap wood in the door panels, it may be more important how Jose deals with Mark over the process. You, as the manager, need to keep a handle on this aspect of it all now, and this may require a change in what you do on a daily basis. Keeping an eye on the process and the relationships becomes as critical as watching the quality control.

Growth may mean working on the business rather than working in the business at times. And, you may need to get out of the shop now and again to be able to focus better on the issues, especially the "strategic" stuff.

Some shop owners, when they get to more than $1,000,000 in sales (or perhaps when they have over 10 employees), create an informal "board of directors" around themselves. This could be two or three people whom they trust, though these people don't necessarily need to be connected to the shop. The group can meet every few months and be comprised of a good friend, a bigger competitor, a retired businessperson, an attorney, an accountant whoever. You need people to bounce ideas off of, should you go after more commercial work, buy more equipment, move location, build a showroom, etc.

Other ideas

If you are set on growing your operation, bear in mind a few more things. First, a sustained growth in sales volume of much over 20% per year is hard to manage. It means constantly adding people, systems and probably equipment, too. It'll put a big strain on your cash flow, your office and probably on your home life, as well. Most shops can handle a 10% growth fairly easily.

A builder friend once remarked: "It's easy to grow, much harder to shrink." Once things are in place, such as plant and equipment, it can be very inefficient to manufacture less than you're set up to do. Your shop space is usually on a lease. And, once employees are trained and in place, many shop owners have a tendency to keep people around rather than let them go.

One way to grow your shop may be to merge with, or even purchase, another operation. These moves can create their own set of problems that may be as challenging as developing your own company. But, enlarging your shop this way can get you access to other markets and clients, along with a larger workforce and perhaps additional equipment.

Bringing a partner active or silent into your company can also help you grow. Perhaps it can be a key employee who's already with you, or someone who's working for a competitor right now. Having another person who is vested in your operation can really help in expansion; there's someone else alongside you who can shoulder not only the workload but also some of the stress and responsibility of ownership.

Ultimately, in all of the discussion about growth, it's your own personality that's more important than anything else. Are you a tactical person who prefers to have control over everything and do a lot of the work yourself? Or, can you let go a little and have others do what you do? Only you can answer that question.