Vargo's ability to tap into a network of smaller shops makes Professional Millwork an overachieving, four-man, 2,500-square-foot shop. "I know a lot of guys who have started their own business, who are working out of their garages, and I can use them to outsource and side-job the projects," he says. "I've been fortunate in keeping relationships, and networking has really paid off."
Another advantage of this approach is that Vargo can juggle several jobs without jeopardizing the four- to six-week deadlines the commercial market requires. "Deadlines are the most critical part of the job," he says, "and managing deadlines is my biggest challenge."
Vargo built his network during his career working at several large Chicago-area architectural millwork companies. He started as a draftsman, then moved on to project management, sales and supervisory positions. On his own time, he began taking on small jobs that helped him develop the shop skills he needed to strike out on his own.
"I always wanted to start my own business," he says. "When I was 19 and started drafting, I was looking at the guy I worked for and said, That's the guy I want to be.' "
He polled customers to see if they'd support his business. "I got a pretty good response from most of them, and most of them have stayed with me," Vargo says. "That took out a lot of the What If?' factor for me as far as who pays well, who doesn't."
In 2001, he started Professional Millwork Inc. in his garage. "I kept my overhead very small," he says. "I was very lean and mean in the beginning." He moved to two other buildings before settling into his current west suburban Chicago location, which is centrally located to work and suppliers, in May. He has three shop employees, with his wife Lisa handling the bookkeeping (see sidebar).
His direct customers are a dozen or so general contractors, who request bids on commercial projects ranging from hospitals and hotels to businesses and schools. About 60 percent of his projects are in Chicago proper; the rest are in the suburbs.
Vargo identifies the in-shop and outsourcing work when he reviews the specs prior to making a bid. He'll use any specified material and produce anything, from doors and moulding to cabinets and wall panels, but he also recognizes quantity limits. For example, if the job requires a lot of moulding, he knows he'll outsource it rather than try to make it. "I know who the big shops use for large moulding runs and who's out there that's top notch," he says.
"You do what you know you can do fast, the things you know you're profitable doing," Vargo says about working in his shop. For example, he'll order laminated panels already laid up rather than trying to lay them up in the shop. "I can get my boards laid up cheaper than I can buy the material," he says.
Two years ago he hired a "very good" employee, and added two others since then. "As time goes on, our product is getting better, the punch lists are getting smaller and the jobs are getting larger." The employees also step up to meet deadlines. "I'm fortunate that my employees are available for overtime when necessary," he says.
Once he's awarded the bid, he and the contractor agree on a time frame and payment. Vargo then generates the shop drawings and, if needed, sample sheets for the veneer, laminate and finishes.
"I do have Cabinet Vision software, which I will be implementing soon," Vargo says. "My original background was drafting, so I should be able to do that without any problem."
Once the customer approves the drawings, he orders materials, starts production and coordinates with the job superintendent to gain access to the site.
The cabinets are then fabricated. "One thing we really excel at is the fabrication of boxes," Vargo says. He outsources custom veneer lay-ups to one of three shops; he'll often tweak the panels before machining and assembly. When the job is complete, installation is scheduled.
Vargo handles installations whenever possible. "I would prefer to do my own installs because then I know it's in my guys' hands rather than someone else's," he says. "It's tough to get someone to care as much as the people who built it or have an interest in the company."
Key equipment includes a Striebig vertical panel saw, a Brandt edgebander and a Toola double line boring machine.
Vargo says his background sets him apart from other architectural millwork shops. "Most of the smaller shops I've seen have been started by guys from the shop," he says. "So I think I have a little bit of an advantage coming from an office background for the larger shop and knowing what the market bears."
His long-term plans include owning a building for his business. In the short term, he'd like to buy a dust collection system and a horizontal panel saw.
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