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Honest Money Answers Please

7/14/18       
John Bishop  Member

Website: selectwoodworking.net

Hello Everyone I just closed up a shop I owned for (33) years. Way too many reasons to talk about. Mostly a no pay to the amount of 350K. I am no ashamed someone took advantage of me. The mistakes I made are just endless, I am starting to feel better about myself and my situation and I am ready to go again.

I have always been jealous of other businesses that had minority access to contracts. My wife is a very smart lady and we have formed a new business specifically with the intend of doing woman owned business set aside work. I cannot do the front end stuff anymore it has changed me as a person I am sad to say. My wife will manage day to day operations and I will run the shop and manage projects. We will share in the sales responsibilities. I will most likely call on clients I have a relationship with and she will handle all new work especially government contracts.

We have been working on this for (5) months with a projected open date of 11-15-2018. Than a start doing business date of 1-1-2019. I wonder how much folks on this board are willing to share? To be honest I must be business person out there because at no time in my (33) year career have I ever come close to making the type of profit some folks on this board speak about. On my best years I was a 15-18% guy and got my ass kicked during the recession like everyone else.

I am also very curious about commercial case goods. Itís very odd around here in Cincinnati no one really admits to doing this type of work but there is just a ton of it out there so someone is doing it or a bunch of someoneís. I have done a fair amount of it but never made much of an effort to tune our process up to refine this type of work to be productive at it. I think my staff treated it like it was beneath us and they probably got that from me. I treated it badly; I believe this was my ignorance and ego neither of which you can pay bills with.

We did frameless boxes by cutting on a very nice vertical panel saw. No splitter I made a habit of just buying a bunch of quality blades and keep them sharp and put a new one on every job. We could cut two sides melamine or hardwood plywoodís clean both sides fairly easily. We applied edge tape with a small veritus hot air edge bander. It did the heavy lifting and we had to do hand work to the edges to clean them up. A skilled person can do this very quickly. We stapled boxes and then screwed typical. No joints just box construction with applied backs. Finished ends are rare but dealt with by pocket screwing from inside.

Are you folks out there doing this type of work tooled up differently? Dowel drilling and insertion machines and case clamps? If so how much time savings do you believe you achieve? Overall do you feel making commercial case goods can be a nice profit stream assuming you are tooled correctly and jobs are bid properly?

I know itís a long post, I am going to do it properly the second time around. I am 50 years old and figure I have about (15) years of work left in me. I am eager to do it the right way. I never paid attention to the numbers as I should have and I am certain that was part of my demise. I would have seen the no pay coming had I been on top of my office game. I was always obsessed with the shop.

I would also like to visit some other folks shops to see how they operate if there is anyone out there who feels it would not be a conflict of interest and is say within (5) hourís drive time one way from Cincinnati Ohio. I would love to see how others are doing it. I also would like to talk some hardcore numbers, is that done much on this board or is that a bit too much?

Thanks a bunch for everyoneís

7/15/18       #2: Honest Money Answers Please ...
james e mcgrew Member

Website: mcgrewwoodwork.com

You are more than Welcome to visit my shop. I am in Columbia SC and it makes my day when We grow in it. I stopped doing houses in any way in 2008, 1) economy 2) better specs (Yet not perfect) in Commercial, terms are stronger with established and professionals.

If i had to add one thing to your mix it would be a good Glue pot edgebander. my step up from hot air (1997) was a kd54 brandt, i leased it and while it was a rough start (and a payment i did not want) it made the shop grow a bit, freed up man hours and made money. eventually You will go CNC and the time will tell you when.

once you are in commercial you will be asked to do reception desk and curvy things, don't fret just call or come here. I love woodweb, been here since 96-7 and asked the same questions then.

We are larger now yet not so big i cannot recoil some if the recession were to rear its ugly head again. the original bander is still in my shop and is relegated to back up as we have a much larger one now.

Good luck, feel free to call ( I may have to ask to call back) We are Swamp ass busy and so far it looks like that may last thru next year. There is a lot of work, catch a niche, make some good relationships, always deliver, Most of All "Do the good work and the Kings will find you"


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View higher quality, full size image (800 X 450)


View higher quality, full size image (800 X 450)

7/15/18       #3: Honest Money Answers Please ...
rich c.

Just a couple of observations. If you never paid much attention to numbers, that isn't just part of your demise. Secondly, very gutsy asking your competition if you can stop by and see how they have their shop set up and then have a serious talk about the P&L statement? All within a convenient driving distance for you! Amazing!

7/15/18       #4: Honest Money Answers Please ...
Charles Member

I have to agree with rich c. on one thing. Actually I agree with all of it. But, asking folks to help that are within a convenient 5 hour driving range for you just does not set well with me. No offense, but I suggest you continue reading...

If you really want the advice from a successful businessman in this line of work, driving a thousand miles, or maybe more, should not be a deterrent. Asking your future direct competitors is not a great way to do it. It may work, but I would not be opening my doors to someone so close. My business and my family's income is something I guard carefully.

During the early years of my business, I joined a trade organization comprised of similar, like-minded owners across the country. I drove, and flew, many miles to visit other member shops. A day's drive, a hotel night or two, then the drive home is a very small cost for the knowledge that can be gained.

During those may trips, I learned a lot of what to do, and what not to do. I also made some life-long friends in the process.

I attended the national trade shows for my business. For professional woodworking shops that means IWF (Atlanta) and AWFS (Las Vegas). There are a lot of training opportunities at the shows. Yes, it will mean travel expenses. But, you can meet with the manufacturer's of the products, equipment, and services we use in this field.

I also used the SBA's SBDC resource to learn more about the business side of the equation. SBA = Small Business Association. SBDC = Small Business Development Center. They are typically located in universities around the country. They offer free business counseling, some free and some low-cost seminars and training sessions. Once you are in their system, you can regularly meet with a trained business counselor (one who has actually owned their own business). During the seminars you get to meet with local business folks. They most likely will not be in your line of business. However, the majority of business issues seem to be present in any type of business. Talking with your peers (fellow business owners) can be invaluable.

Getting back to the 5 hour driving limit... You may have some logistical issues and personal obligations that you think will prevent you from traveling further. But, you need to ask yourself: "Am I serious about learning how to really succeed? Am I willing to do what it takes?" If so, you will find a way to do so. If not, you may be doomed to repeat the mistakes of the past.

Do not take this post as a personal attack. I've made my share of mistakes too. I prefer not to keep making mistakes. And, I hope you can avoid them as well.

Best of luck!

7/16/18       #5: Honest Money Answers Please ...
james e mcgrew Member

Website: mcgrewwoodwork.com

Have you considered Joining the AWI ?

I just looked at your website, That portfolio is substantial. with this volume and work level just what was the problem, In 2004 i got sued by a crook. (long Story) he just sued a lot to get you to settle, I did not, we went a good year of motions and such till i was to get him in a courtroom and he settled, still cost me far more than him but he did not get all he wanted. i was really perplexed at how this could happen when we did everything right, how could someone be so twisted. at the end my lawyer told me there would be a lesson in it soon enough. He was right, I got better at contracts, billing schedules, documentation, staying ahead of it. strange as it sounds it paid off and the lawyer is right, as for the old man that sued me, his kids took the grand kids and moved away, wife left him and he, Well it just gets sad from here.

Always take the lesson, There is Value in it.

7/16/18       #6: Honest Money Answers Please ...
John Bishop  Member

Website: selectwoodworking.net

I am just not that guy Rich C. and to imply I am does in fact straight piss me off. If I was so desperate to come on this board and troll around for local shops to travel and steal work I would have much bigger problems than my current challenges.

Charles your tone was a bit softer but still accusatory. I have in fact connected with every single contact you mentioned. God blessed me I am the best wood person I know there is nothing I cannot build that was never the problem. The problem was me and my shitty business practices. The definition of insanity is to keep doing the same thing over and over again expecting a different result. Iím pretty goofy but not that stupid. I have realized all my mistakes and know I will be successful going forwards. In case you missed the (33) year thing I am not a rookie Iím a very experienced owner who made a few mistakes and made a decision to change my ways and go forwards in a different arena. I can always go back to high end residential if I want, it will always be there for a skilled guy like me but that is not where I want to go. I want to enter the big boy market; I did several large projects in my career one at 1.3 million and another at 1.45 million. I enjoyed the work and felt I was very good at the organization required to play at that level many folks cannot do that. High end residential in my area is for cowboyís period. Itís a shit show with every single builder shooting from the hip, no loyalty and no chance of building serious relationships. I was good at it and had relationships but all of them would slit my throat for a dollar if they could.

Still a bit irritated you would imply I would do such a slimy thing. I am a person of great faith and itís just not in my build. I am sure you are good people protecting what you have worked hard for but you could have worded it differently I think.

The reason for the short ride is I have a crippled hip I am getting ready to have fixed itís totaled no chance of flying and such right now. Hell a day trip in the truck would cause me problems. I would not expect anyone to know this but that is how it is. My momma is sick and I was waiting to get her settled back into her house which happened recently and I can plug back into my hip surgery and then be capable of more serious travel.

I will not mention the name of my no pay but letís say he was a billionaire with a ďBĒ. At the time this happened my attorney told me he had (36) active legal issues in several states courts systems. (3) Were with his own momma. My attorney told me anyone willing to sue their own momma might not be someone I want to wrestle with in court. It was a large no pay at 350K but thatís small potatoes when you start paying serious litigators, I have done it before and itís a horrible process would not wish it on anyone.

We can do commercial case goods no problem my question was if I need to be tooled up more do larger scale work ongoing. As for talking about serious numbers I made a mistake and realized its probably taboo topic and will not go there again.

DJB

7/16/18       #7: Honest Money Answers Please ...
Charles Member

John,
No, the 33 years was not lost on me. Your website does showcase great work. My point about getting outside counseling is something that you just mentioned you have already done. Great!

Your understanding of the definition of insanity is valid. Maybe remembering that will keep you from going back into the same market (high end residential) that has a lot of issues. Using your skills and 33 years of experience, and applying them in a different market, may be exactly the right approach.

Take James' advice and learn the lessons from past mistakes. Take corrective action to prevent them from re-occurring. We have all made mistakes. Hopefully, we learn how to avoid them in the future.

However, I was not accusing you of being "slimy" in only seeking reasonably local shops to visit. My point was that THEY might see you as competition and not be honest with you. In fact, there may be some of them that might try to mislead you and try to cause you to fail by giving bad advice.

Personally, I would not knowingly give anyone bad advice. But, there are a number of topics that I would not be willing to discuss with someone in close proximity to my geographic market. So, if you were close, and even if I thought I could be helpful, I would still probably decline to meet rather than risk my family's source of income. Nothing personal ever meant toward you, or anyone else.

Sorry about the current issues making travel difficult. I sincerely hope they all get resolved positively.

Still wishing you the best of luck!

7/16/18       #8: Honest Money Answers Please ...
rich c.

You're not what kind of guy? All I called you was gutsy. That pissed you off? I didn't insinuate you would steal work. Didn't you want them to open their books and give you a shop tour so you could understand how they make the profit margin that eluded you in your first business. That is what you were asking for, right? What is your goal with doing that, except to use their methods to improve your next business. What do you call that? With your glowing appraisal of your own business sense in your two posts, "The problem was me and my shitty business practices", and "I never paid attention to the numbers as I should have", why would you consider starting another business? I realized after 8 years that I was not a businessman, and never ran a sole proprietorship again. I did work as a professional woodworker for another 18 years after I closed my business. Dirty Harry spoke the perfect line in the movie Magnum Force to describe my decision. I suggest you consider it as well.

7/17/18       #9: Honest Money Answers Please ...
Puzzleman Member

What I am reading here is that you are looking for a way to operate your business. You are an accomplished woodworker as seen by your portfolio. Since you have health issues preventing traveling very far, I have a couple of suggestions.

First. You don't need to look at only woodworking businesses. You understand the wood. You need help with the business side. Talk with other businesses (larger, smaller, your size) to learn how they operate. What KPI's (Key Performance Indicators) do they watch on a regular basis? How do they determine what to watch? How does their information flow? What do they consider their keys to success?

Second. Look for a business coach. There are organizations such as TAB and VISTA that are small groups of business owners getting together to discuss issues and discuss their business and solicit ideas. I am a member of a chapter and it has been very helpful. I have to make monthly promises of what I will accomplish by the next month and the rest of the group holds you to it. If you don't accomplish your promise, you are grilled as to why

Third. Read and learn. I constantly am looking for new ideas to use and to learn what other people do in their business. Books I would suggest: Traction, and the followup book Get A Grip. Both are very good and discuss the EOS (Entrepreneurial Operating System). I had to read them a few times to get the full picture but they have helped me in understanding the business side, how to work on it, how to track it and how to work on the business instead of in it. Another book is 2 Second Lean. This book helped me to understand how to organize and optimize my shop and employees to achieve maximum efficiency, sometimes by slowing things down. Another book is Work The System. It helped me to understand more of the mechanics of business and lays them out like my shop is laid out. There is a procedure for everything and a way to track the KPI's that are most important to the business.

These are a few of my suggestions. You should not have to travel far to find the information that you want. It is all within your area.

7/19/18       #10: Honest Money Answers Please ...
Scott

I would agree with some of the other thoughts here about maybe getting a business coach or a silent partner who is business savvy.

The next thing I will say is the commercial side although a different type of work is even more critical when it comes to the business side. Depending on where you work and who you work for you will need to do estimates, supply material and labour bonds, do progress draws, supply statutory declarations, supplied more detailed scheduling, spend more time in mtgs, have more demands when it comes to health and safety and in commercial wait longer for your money as a lot of big companies take 45-90 days to pay. There is also a chance of not getting paid for your work in commercial, the same people as your billionaire example own commercial companies and may decide to not pay for a various scope of reasons, anywhere from not meeting the schedule to not cleaning up properly, they will back charge you to death.

I would say one advantage to commercial is the quality of work can be a little lower as usually the people doing the inspections are more reasonable than Mrs Smith who looks at her kitchen with a magnifying glass. However the commercial will have holdbacks of around 15% of which you will not see until all your deficiencies are met.

As for equipment the best way to produce like you were talking about is using big equipment, Items you will need are a beam saw to do your cutting, cnc to do all your machining, a good edgebander, a dowel machine and a case clamp. You will be able to crank out the boxes like a rock star, this is good for really big contracts with lots of casework, but if you do lots of fancy reception counters like James has shown you will need lots of floor space and good tradesman to lay them out, build false walls, build a few cabinets in them and do lots of laminate work.
Another piece of equipment that is handy is a hot press, you will run into a lot of jobs with p/lam doors, so will do tons of laminating. If you get into the big commercial veneer jobs that is a whole new can of worms when it comes to equipment.

Generally the sky is the limit and I wish you the best.

7/19/18       #11: Honest Money Answers Please ...
Jso

You may be the best fisherman in the world, but if your boat leaks, you have to fix it before you can go fishing.
What your talking about canít be easily fixed. You are a tools guy. Go work for someone else.

7/24/18       #12: Honest Money Answers Please ...
Larry

JSO has a point.
You can't run a business w/o knowing your costs. Commercial work, the only thing we do has lots of gotchas. Slow pay, constant changes in delivery schedules, and designer/architects that can be worse than Ms. house wife. Our niche has always been lots of curved work and things that anyone with any brains would avoid. There are lots of risks. We now have a good group of contractors that are willing to pay more ( a little more) for what we offer in terms of service.

As for equipment and processes nothing out of the ordinary but do stick to a system. An excellent beam saw but I don't think I'd go that route again. A 2nd CNC would probably be better. Definitely would do the conveyor system again, beats carts by a mile. We have an 8' CNC bore & insert machine with 3 drilling units because of the odd ball work we specialize in, not a requirement for normal folks. A fast, no setup case clamp where we put work in from one side and it gets taken out the back side. It will clamp 900mm deep cases up to 4 x 8'. Curved work is assembled with Confirmats on 3 hydraulic benches. Final assembly is done on another hydraulic bench. These benches help in handling the odd large work.

A 5x10 vacuum table and some bags helps with all the curved work. Laminate work area with a large spray booth takes care of the curved laminating.

Solid surface curves are done with the CNC and a 3x8' oven for more curved work and miter folding.

Lots of things devoted to our curved niche work. We do curved & straight wood moldings. There is no secret but there have been lots of learning.

4/9/19       #13: Honest Money Answers Please ...
Ethan Scott Member

Had some similar queries. Thanks for the inputs, everyone! Some were really helpful.

 

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