Editor’s note: We usually report on woodworking businesses with an outside perspective. But we think this cabinet shop owner’s first-person account will resonate with readers who might have walked a similar path.
First, I’m not a writer. I’m a craftsman and owner/operator of Madison Custom Cabinets in Hutto, Texas. We service the whole Austin central Texas area. We’re a staff of 14 talented craftsmen and have sales around $1.5 million a year. We only do retail work directly with homeowners.
Dome started it all
It all started when I inherited a geodesic dome house when my dad passed away in 1996. I started to rebuild the house and had zero home construction experience. But I always liked to create and build, so I was good with DIY, learning from books. It took four years to rebuild.
My good friend Jason Lytle worked at a local mass production custom cabinet shop. Around 2002, he offered me a job as a punch/warranty guy. I started to learn the art of cabinetry, including what customers would and would not accept. I also got really tired of telling customers that it was the best I could do. After 3 years I decided to strike out on my own.
We had just had our first daughter Avery Madison Sloas, and I was scared to death to quit my job to open my own remodeling company. But I started my company Jan. 1st, 2005. I named it Madison Remodeling after my 3-month old daughter. I had a few remodel projects and called my old employer to ask if I could buy cabinets from them.
Customers would call them wanting extra cabinets but they didn’t service retail customers. They asked me if I wanted the calls. I said sure. The calls started to stack up. About 3 months into 2005 my supplier estimated 3-month lead times. That was unacceptable.
Cabinets from scratch
So I decided to open a cabinet shop. Within three weeks I had a building and was ordering all the tools. I purchased and taught myself Planit Cabinet Vision software. (My advice: Don't teach yourself. Take the classes. My stubbornness cost me three months to get it working.)
The remodeling side was also getting busy. I’d hired my friend John to manage the remodeling because I had no idea what I was doing. I had heard a phrase "fake it till you make it," so I did.
I was overwhelmed but excited. I wasn’t going to fail my family. Period.
A builder named Seth Martin with Single Stone homes told me I needed to read a book called the “E-Myth” (See sidebar on recommended reading). The one line I remember that changed my life was "If you own a business and you do most of the work yourself, you don't own a business, you own a JOB, and you work for a lunatic!"
John wanted to invest in Madison and be a 50/50 partner. This sounded great to me because I was getting buried by all the details. We did around $500,000.00 that first year.
I was still highly stressed but working less. The jobs looked good and customers were happy. I had so many orders I didn't have time to go to the bank to cash all the checks.
However, my business partner was starting to fail at completing the remodeling projects. We shuttered the remodeling biz. John was going to run the shop and manage the installs. I would sell. It sounded great to me so we were off and running.
We moved from a 2,200-square-foot shop to a 4,000-square-foot space. I was rocking, and sales were pouring in. The shop kept saying, “If you sell it we’ll get it done,” Very quickly I noticed they were too slow. I had a huge blow out fight with John. I bought him out at $60,000.
Cleaning house in the shop
I now had full control and started to "clean shop.” I’ve wasted many thousands of dollars on people who can’t or don’t want to learn how to do a job properly. We started to get really busy so I hired a business consultant. She had me hire a lot of "managers.” Quickly my payroll to production was way out of whack.
And then the economy tanked. 2009 was the worst business, financial year of my career and it almost ended in bankruptcy. I had a large staff. Sales dropped due to the economy. I held onto my staff for way too long. I’d maxed out all of my credit cards to stay a float.
Even after layoffs the money was still evaporating. I started to look at the guys in the shop to see if they where wasting material or being inefficient with their time.
I never suspected my bookkeeper. She was so sweet, nice and innocent. It was like being hit by a sniper’s bullet. On December 8, 2009 I had to lay her off because I couldn't afford her any more.
I went through the books. She’d stolen over $30,000.00 in a 6-month period. She knew I only looked over the hand written books.
She had made up a story about having a cancerous tumor. She even sent us a fake email from the doctor saying she might not make it. I tried to work with her for three months to get her to pay me back. We eventually filed charges and the police told me she never mentioned cancer to them. More than two years later, I’m finally getting restitution payments of around $150 a month or so.
Everyone on the bus
At the start of 2010 everything stated to turn around. I sold a huge remodel that got me back into the green. It allowed me to hire again. The embezzlement made me go outside my ego and comfort zone. I attended a Small Business Administration workshop taught by Clint Evans (www.digitalsuccessadvantage.com/who-we-are/),
I have worked ever since to constantly improve. I paid off the SBA loan a year early. Clint bought me the audio book “Good to Great.” It said to hire the right people for your "bus" before you try to grow.
We now have the A-Team I’ve always wanted. We’re very profitable and growing really fast. My bookkeepers have no signing authority. I have three checkpoints for the bank accounts. I track my weekly numbers and recommend you do this also.
I’m much happier in life and in business. We are known for our high quality and excellent service in the Austin, Texas area. I see us growing to whatever size we want.
Hard learned advice
My advice for any type of business is to keep an open mind and listen to constructive criticism.
Read the books on my recommended reading list: These books taught me what I needed to know to build a good company. I gained confidence I was on the right path without second guessing myself all the time.
If someone is not the right person for the job let them go right away. You’re wasting their time and your money. Find good people that love what they do and let them help you grow the company.
You can never be great by yourself. It takes a team.
Have something to say? Share your thoughts with us in the comments below.