I'd like to share some things about a few people I know in the CMA. Last month, I was in South Florida and had the pleasure of sharing a meal with Harold Morantz. Harold and I had talked before on the phone and exchanged some brief e-mails, but we'd never met face to face.
Harold owns a small shop that serves a niche market, not unlike many others in the CMA. Its just him and another person or two that make his operation work. He told me about a call he had received a few weeks ago from Oklahoma City. You see, Harold's an orthodox Jew and specializes in building kosher kitchens. And he knows his stuff to a tee on both the religious and woodworking sides.
The call was from a lady in OKC who had just bought a house there. She wanted the existing kitchen entirely remodeled to become kosher, and her local cabinetmaker didn't know where to start or what to do. She had heard of Harold through some networking he had done, and wanted his suggestions and help.
So Harold arranged for the local cabinet shop to furnish him site dimensions, and between the local shop and the new homeowner, Harold designed the new kitchen meeting both sets of expectations. He furnished his finished drawings to the local shop so they could immediately begin construction. Harold collected his design fee, the local shop did the work and the lady couldn’t be happier with the process.
Then there’s Brian Dirks. I met Brian about six years ago, first in the CMA members forums, then face to face in Atlanta at IWF. Brian was then a young, struggling shop owner in the dead center of the U.S. who was blaming some of lack of success on his age and lack of respect he got from his clients. He was in his mid twenties at the time.
He felt that although he was a pretty good cabinet maker, he just wasn’t getting the jobs needed to run a successful business. And once he had paid his expenses on the jobs he was getting, there was less than nothing left for his efforts.
At the International Woodworking Fair tradeshow, Brian rode along on the CMA shop tour the day before the big show. What he saw and heard during that tour began to change his life. Not only did he tour some other woodworking shops from well outside his market, but he networked with the other 60 or so CMA member shop owners on the tour.
Brian got to see how others had set up their operations, and talked freely with other owners and shared his story. Among the things he learned was that he was not alone, that others had been where he was, and that they freely shared advice on how they overcame the same obstacles Brian was facing.
The biggest lesson Brian said he learned was that he was under pricing his work to the point where he had zero chance of earning a living, much less earning a profit after he had paid himself. Where it drove that point home for Brian was in a CMA seminar he attended on pricing custom woodwork. That seminar was developed and delivered by CMA member Sean Benetin.
Brian, like many others who start a new woodworking business, had never had a formal education on owning and running a manufacturing business, let alone how to price one’s own work. He’d left out most of his overhead expenses in his pricing scheme, was overly optimistic in how long it would take to get things done and how much he’d have invested in materials and supplies.
All that meant he wasn’t covering his cost of producing the projects he had done. It’s not all that unusual for others to fall into the same trap. But Brian knew he needed to change or face closing his fledgling business. He was hemorrhaging money on every project he did.
So Brian began to raise his prices, slowly at first. Over a fairly short time period, an amazing thing happened. As Brian began to get his costs and overhead expenses incorporated into his pricing scheme, and adding a profit to each job after he had paid himself a salary, there was actually money left when he completed a job.
He didn’t get the jobs that would have cost him more to complete than what he had invested in time and materials, but he began to get the ones where he needed to be. He said that he knew he had a problem, he wasn’t finding the help he needed and without joining the CMA and taking advantage of its members and resources, he would have not been in business today.
Have something to say? Share your thoughts with us in the comments below.