I remember this stage of growth very well. We were still in our small backyard shop, just getting to the point of looking to hire another employee. But then we bid off a job that there was no way that we could handle!

 

It was a 62 duplex project in a town that was about an hour and a half drive from our shop. We thought we should bid it and much to our surprise we won the contract! All of a sudden, we had way more work than we could have possibly imagined; it was an adrenaline rush.

 

This phase of growth was totally brute force and awkwardness. Looking back we could have made our life easier if we would have done several things differently.

 

 

On the normal path to breaking through this threshold, your business starts to acquire recurring customers outside of friends and family. These customers may be builders, architects, or a developer that you’re working for who is feeding you some recurring jobs because you’ve built up a level of trust with them.

 

Meanwhile, monthly volume has increased to about $30-$50k a month and you’re starting to find out that it’s enough work to consider hiring some extra help around the shop so that everything gets done. At this point, you’re considering buying some machinery or equipment to help in the production process. Additionally, you may be looking at finding and leasing a space of your own.

 

It seems at this phase that you’re growing faster than you’re learning. Mistakes are common on almost every job that you send out from the shop which can be a frustrating process. Unfortunately, this is the point where most smaller businesses fizzle out because it can be such a frustrating time as you aren’t able to learn at the rate you’re growing your business.

 

 

The most important thing that separates a business from the normal path is learning to be transparent with your numbers.

 

This is a hard thing to do without coming across as either: we’re making a killing or we’re going out of business. But you have to find a way to convey the right numbers to your employees so that they have an understanding of how the finances of the business are working.

 

If you aren’t transparent with your employees and tell them the numbers, they will begin to generate their own. The accelerated path also includes finding an implementing a solid drawing and cutting program which produces lists and order files for cabinets you’re going to buy.

 

IMPORTANCE OF OUTSOURCING AND FRUGALITY

 

Looking back, when I was at this phase I wish I would have considered outsourcing for just about everything other than design and sales. Today, with our world being as connected as it is, there are many niche providers of outsourcing that exist for things like: drawers, doors, and box components. It’s hard not to consider using outsourcing as your primary means of manufacturing.

 

Be very frugal. I learned this from Warren Buffet in his book The Snowball. Buffet recounts that at the start of his first business he evaluated every dollar as if it were ten. A dollar invested now is going to be worth ten in the future. If done correctly, this is how you get on the path to 'The Snowball' with your business.

 

Learning to be frugal with a small budget teaches you and your employees the value of efficiency and sets the groundwork for good practices so that when you have a large budget you know that your company will be responsible with it.

 

Alongside this line of thinking: Be debt averse and risk heavy. Hoard what little cash you have an watch it grow with you. This stage is very important and you might experience times where it doesn’t feel like you’re growing. But always remember: 

 

Don’t give up! 

 

It’s okay to let your company simmer as you learn the lessons on how to control growth in a healthy manner and implement good business strategies. You are still early on in the business journey so don’t underestimate the power of standard operating procedures (SOPs) in your company. Quality SOPs are important every time you make a new transition.

 

INVEST IN YOUR BRAND

 

Start working on your business and not just in it. I wish I would have learned these lessons 10 years earlier because they have huge effects. Carve out some time in the week where you’re not working on the shop floor, not producing product, you’re working on something that can make your business stronger. Whether that’s accounting procedure, SOPs, efficiency standards, whatever it is, set aside a few hours a week for working on your business and it will pay huge dividends later on.

 

The stage is called brute force and awkwardness for a reason. You just have to power through and learn as much as possible to set your business up for years to come.

 

So take your time, find the lessons, and watch your company grow.