Jarin Smoker has always enjoyed woodworking, and likes to see projects and how they are built from start to finish.
Starting his own business presented challenges that he described in a special presentation, “Surviving and thriving as a small shop”, during Wood Pro Expo Lancaster Live.
WPE Live was a free webinar featuring three of the speakers who were scheduled to present at the Warehouse at the Nook in Lancaster, Pennsylvania. The special presentation, with the underlying theme, “Adjusting to the Times,” represents a collaborative effort of Woodworking Network and the Cabinet Makers Association (CMA).
Smoker founded Seven Trees Woodworking in New Holland, Pennsylvania, in 2009. The ability to design, manufacture and install a diverse range of products, including interior and exterior doors, kitchen cabinets, reception desks and retail displays has been integral to the company’s continuing success. Smoker discussed how his company has managed to stay busy amid a global pandemic in an interview with Amanda Conger of the Cabinet Makers Association.
Also at the online event, Danushka Nanayakkara-Skillington, assistant vice president for forecasting and analysis of the National Association of Home Builders, provided an update on the overall U.S. economy, overview of the U.S. housing market, and NAHB's forecast for the U.S. housing market including regional trends.
Nanayakkara-Skillington expects the economy to recover, but it is difficult to forecast because of the unusual nature of the decline. Existing single-family home sales are stronger, and the new home inventory is only 3.3 months, with sales at record levels.
Builder confidence is high, and lumber prices are much higher, although down a bit from the September peak. NAHB changed its housing forecast for 2020 to be 6 percent higher, then 2021 up 3 percent and 2022 up 2 percent. Residential remodeling has grown more than expected and more than forecast. There is no housing bubble, Nanayakkara-Skillington said, and price increases are driven by difference in supply and demand.
Also speaking during WPE Live was Massimo Giliberti, founder of Studio5y, a New York City consulting firm. Giliberti talked about how woodworking businesses can maximize their output and quality by implementing lean continuous improvement techniques.
Giliberti spelled out differences between batchwork and lean methods, described the 5S system for making workstations as lean as possible, and discussed the principles of Kanban, push vs. pull, and takt time.
In his presentation, Smoker said that his business philosophy includes good decision making and deciding where to focus. Seven Trees went from residential to commercial work, and decided not to compete in the kitchen market as much as they had. Today, they are doing more restaurant work, lobbies and offices, with less competition and better profit margins in that market.
A significant challenge for the company was learning to price their work correctly. Smoker’s wife pushed him to “charge what we’re worth.”
Money was tight for a while as they started the business. Smoker said they were not charging enough, and were sloppy with billing enough on change orders.
A Small Business Administration program helped the company learn more about gross margins, and it helped having someone outside looking at their numbers and making sure they were charging enough.
Smoker also hired an estimator full time who helped determine the profit margin and spelled out what they have to charge.
Changing into commercial work also expanded the geographic area. Mostly they do their own installations.
Another challenge for Smoker has been learning to delegate and letting go, a frequent issue for small business owners. A new operations manager has taken some of the pressure off Smoker.
Smoker said Seven Trees has also hired well. Smoker will do an initial interview, and then take the prospective employee out to lunch with two employees, who provide feedback. Many hires are from someone that an employee in the shop has known.
Now that they have more people, they can hire someone with a good attitude over skills, since they can be trained by other employees.
Moving into a larger shop helped them create a more efficient layout. They now have 22 employees, and gained seven employees when bought another business in the same city. They bought this business, but it took a year to complete the sale of the building and business. The company also had to shut down for four weeks due to covid.
Wood Pro Expo will return October 14-15, 2021 to the Warehouse at the Nook. See https://www.woodworkingnetwork.com/events/wood-pro-expo-lancaster
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