CWB March 2003
An important decision every owner must make: Will I or will I not become an employer?
By Anthony Noel
A few months back, this column warned of the ease with which many woodworkers are seduced by their early creative successes, until they look up one day to notice that years have passed - years of poor profitability brought on by an unrealistic, yet unfailing, belief that "next year" would be better. But things don't just "get better" on their own. I said then that old habits - usually centered on charging too little for one's work, coupled with a refusal to do the analysis necessary to understand why one's prices are too low - have to be changed.
If you have had a chance to talk to fellow shop owners, be they across town or across the country, you can likely verify this. For some reason, many woodworkers seem to think that they are just too good at what they do not to succeed; some almost seem to believe that success is something they are owed rather than something they must earn.
But let's assume for a moment that you have "done the work." You have painstakingly analyzed every facet of each operation performed in your shop. You have instituted an ongoing system for job costing that allows you to see, on a job-by-job basis, how your estimates are holding up, thus enabling you to adapt your future estimates based on real productivity values.
Good for you. You have cleared the biggest hurdle on the way to consistent productivity and profitability. But you now have a choice to make, and it won't wait. You have to decide: Will I or will I not become an employer? As you might imagine, your answer to this question, be it "yes" or "no," opens up a host of other questions. But before we look at the question itself, let's consider another one: Why must you choose?
Life is a series of experiences. Some we have control over, many more we do not. But how we structure our own business is something we can directly influence, for better or worse. Whether it will be better or worse than whatever we have done about work up until now is highly dependent on whether we are running our businesses as we had pictured doing.
I have always believed that there is a kind of magic, some might call it power or momentum, associated with starting a business. It is a chance to get a clear mental picture of what that business will look like. And it is no coincidence that people who consider their businesses successful tend to take advantage of that chance. They paint the clearest, most detailed picture they possibly can and then set about making it real.
So, one reason you must choose to employ or not to employ is that it is a critical element of that picture of what your business will look like. Do you picture doing work that you can do pretty much singlehandedly? If so, do you also foresee contentment with the solitude and demands of that? Or do you picture a high-output shop where five, 10 or 20 employees keep machines humming, with work lined up at the loading dock for delivery? (And don't think that's not demanding!) Maybe you picture something in between.
The other reason you must make a conscious choice is less esoteric and dream-oriented: Namely, the minute you become an employer, you risk ceasing to be a woodworker.
It's not that your skills begin to fail you. It's just that you will not have time to apply them, unless you are absolutely sure of what you want and extremely vigilant about getting it. That is because when you choose to become an employer, there is another choice you have to make (although many owners don't realize it): Will your first employee be a woodworker or a business manager?
Many shop owners automatically assume that hanging up the hammer is a given when they become employers. They figure that since they own the business, they must also run the business-oriented parts of it, like sales, marketing, estimating, cost accounting, design, purchasing, whatever. But that is no more true than is the opposite idea, that in order to continue to work in the shop, you have to remain a one-man show.
It is absolutely true that the vast majority of owners who choose to hire people move into the office themselves. It is in many ways the logical progression, and I am not suggesting here that it is the wrong way to go, by any means. In fact, for shop owners who have been one-man operations for some time and are considering making their first hire, it makes a lot more sense to hire a woodworker with shop leadership qualities (and aspirations) and to focus your own efforts on those business-oriented tasks.
After all, you know your customers; you have established a rapport. It would be foolish, assuming you can accept a seriously diminished amount of bench time, to train someone to service and sell to a customer base you already know like the back of your hand. Again, this is the "normal" (if there is such a thing) progression of woodworking businesses. They tend to start as owner-operated, one-man (or -woman) operations. Sometimes the "to employ or not to employ" question doesn't surface for years.
But what if you can't accept leaving your beloved bench? What if you just hate all that business-type stuff? Maybe you are even starting a new shop which is capitalized sufficiently, be it through loans, partnerships, years of personal savings or a combination of these resources, that you have a choice, from day one, about what role you will play in it.
In any of these cases, choosing your contribution and working to make that picture a reality remains key. And remember: The minute you become an employer, whether it happens right at the start or evolves over time, it's like you have added two employees, and you are now one of them.
Whether you choose to work in production or in the office, somebody is going to have to devote 90 percent of his day to getting work to come in the front door in order to keep that other somebody occupied GÃ‡Ã´ and to keep both of them paid.
To employ or not to employ? It is not such an easy question. We will think about it in greater depth next month.
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