Business Tips for the One-Man Cabinet Shop
I know it seems like I am crying about business, but I would like some advice from someone else that has tried it by themselves and what I can do to build a better business. I have a good reputation locally. I usually give up opportunities for other jobs because I can not do them. Most customers around here want there cabinets within 3-4 weeks. I am losing business because I have no help. Any advice is appreciated.
From the original questioner:
I have just started trying to hire out of the family this past year. How long do you give a new employee to be able turn a profit for you? I tried for a month on one employee and he did not even pay his own wages, let alone any other expense that comes with business. I tried another employee and he was a lot better than the first when it comes to working, but he could not be left alone for more than 20 minutes at a time. He would mess up more parts before you could catch it. I lost $3000 during the two months that I had him.
How can you run a business without being out of shop a couple days a week to be able to get other jobs? How does anyone else handle employees when it comes to training them in to be able to turn a profit?
From contributor D:
I would suggest raising your prices, and two things will happen:
1. You'll make more money for the work you do - that is, more per hour. This will be clear profit since (assumed) your costs are already covered at your current rates. Play with the idea of an extra 15% on each job, and think of how you could save/invest it for equipment, training, etc.
2. You won't have to pass up jobs. You don't want to be in a situation where you have to say no. If they can't afford you, that is not your problem. It implies that they should raise their standards.
Rapid fire deadlines are the most stressful type of work there is. You will also have more time to selectively interview and hire and train the best person you can find. Do not settle for less. You also need to decide what you want - one or two man shop or bigger, then make a plan and work towards it. Work the business, don't let it work you.
If you are a custom cabinetmaker, present yourself as such. Pricing, design, delivery and service should all match up. If you are trying to compete with box factories, then go back and reread all the postings around here discussing the importance of determining your market and marketability, then adapt accordingly.
From contributor C:
I would think about out-sourcing more of your parts, and maybe some of the installing as well.
From contributor P:
To the original questioner: I agree with what Contributor T said. Regarding employees, the trick is to move them in and out quick. If after one day it is obvious that they are not going to work out, get rid of them. The most I give anyone ever (and I really regret the few times I gave more time) is three months and then only if they are pretty good.
You’re not doing them a favor to keep them longer because after that they feel they have made it and you’re pulling the rug out from under them if you wait longer. Think of it this way - you pay the guy once to do the work, again to undo it, and again to do it right.
Do your work and organize as you go. Make sure to have a more efficient way of moving material, training your guys, better machinery, etc. If you don't your situation will remain the same and then your business will shrink.
From contributor R:
The one thing that has helped me more than any other is outsourcing parts (doors, drawers, etc.) It has helped me grow, without growing in employees - it is just me and my wife doing the books. I am making a lot more money and I don't have to pass up jobs.
The one thing is you must be organized. It took me a long time to try outsourcing, because I took such pride in the fact that everything was made by me in my shop. However, to be quite honest the outsourcing improved the quality of my product. Also, I have begun bidding different grade cabinets - in that I'll give somebody three different prices for their cabinets - an economy custom (comparable to a good stock in quality, but a custom product), a custom line, and a high-end line.
I explain the differences in each product, and more or less say - "I'm willing to give you the absolute best product you want to budget for". Then I know I am not missing out on bids or under bidding myself because I will hold true and give the customer exactly what they are willing to pay for.
From contributor X:
When you as a business person are doing business all by yourself, you have to wear all kinds of different hats - a salesperson, book-keeper, woodworker, deliveryman, janitor, and so forth. Each one takes time, and time to you is precious, for you must manage your time effectively.
Consider hiring part time a janitor whose basic job is to clean and possibly assist you doing errands/or whatever else. Your training for this job is easy and you have saved time, precious time.
Do the same with a bookkeeper. One that takes care of the books part time. Keep track of how you spend your time, keep a log. You will see a pattern of where you spend your time, where you duplicate patterns. Once you learn to manage yourself effectively, you should be able to manage others also. The key is to manage your time - start small and grow big.
From contributor J:
Every person has 24 hours in a day and seven days in a week. What you choose to focus your attention on will greatly affect your bottom line and it is real easy to get lost in the little things.
I agree with Contributor R’s solution. Learn to outsource parts and installation. You can still monitor quality control, but with less investment of your time.
You need to decide if you want to concentrate on producing your product or selling your product - you can't do both for very long. If you are worried about a shop employee messing something up, then you either have to hire someone who is better qualified to produce (more money), or you have to do it yourself (more time away from running your business) or like most, you will spend a lot more time educating and training an employee to work to your standards and your other tasks will have to wait.
I would suggest following Roscoe’s advice and your solution should be real simple. Outsource as much of the construction and installation that you can live with, and spend the extra time that magically becomes available to get your business in order and then hire someone to sell your product. Then and only then can you go back to doing what you want to do, which is spending time in the shop.
From contributor L:
Long ago and far way when it was just my wife and I, I was running like crazy and not making a decent living. I finally started to keep careful time and cost records to see if there was something I should not do and 50% of the work I was doing was paying poorly when all the lost time was added up. I stopped doing those jobs, and in some cases just raised my prices. Now I have 16 employees and out-source what I can buy less expensive than I can make.
From contributor M:
To the original questioner: Do you have standard procedures for every step on the shop floor in writing? The only way to be able to leave management of shop operations is to have standard operating procedures for every single step in writing.
When I say everything, I mean everything. Employees should have it in a book and located at each individual workstation. The other major component to making the shop work without your direct involvement is to have flawless drawings, specs, and cut-lists.
It doesn’t matter how long it takes to make sure all the paperwork is correct going out to the floor. If you aren’t doing computer aided drawings, I would cut-list and then hire someone to do it, or learn yourself. It took me almost 3 years to get everything in place, but I now rarely go to the shop more than one day a week. That is usually to have a meeting to review plans and just show my face. The rest of my time is paperwork and sales which I do at my home office.
I recommend the three books below, although there are tons out there.
“The E Myth” by Michael Gerber.
I did not read them in that order; although looking back that is the order I wish I had. Take a few nights and weekends to read these than put pencil to paper, or finger to keyboard and start your plan for a business that can and will be able to operate profitably without your direct involvement. At first it will seem a daunting task, and the hardest part is starting the transformation. However, you will see results immediately both in how fast things get accomplished and in how your attitude will change for the better.
From contributor H:
I didn't start doing well until I teamed up with a designer. I would suggest finding one and reaching out to them, but don't work cheap. In fact, raise your prices 20%. They are brilliant salespeople and will mark up your stuff 20% too, no problem. You will learn a lot from them and that's what will help your future.
Get a part-time helper to clean up and do simple stuff two or three days a week, but stay one-man. Also, make sure to build a work schedule for him/her. You should only be doing skilled work in the shop. Don't let the helper use dangerous machinery unless they show some interest and skill and you have insurance for them.
Do a lot more work "at your desk". My grandfather told me I could make more money at my desk than in the shop. You should know how much money you have always. How much you will have in three months and even further. Also know how much time each project takes and how much of each project is spent drawing, cutting, planning, shaping, assembling, sanding, finishing, wrapping, delivering, installing, etc. Use all these figures to estimate new jobs.
Installations always cost me. When you present an estimate that seems high, hold your ground. If you lose the job, at least you know it wouldn't be worth it for less money. A new job is right around the corner. Hang in there.
Also know how much time the business takes per day, month and year. Most of us average only six hours a day on the actual project. These are called billable hours, and they need to be supported and maximized. Focus on making them efficient. Try new ideas to speed up slow tasks. Sometimes screws are faster than clamps - pull the screws out later. Water-based stains and finishes sped up finishing for me. Cordless nailers, fast grab construction adhesives, bigger sanders, air sanders, and etc.
If you have relatives or friends who are good business people, work for less in exchange for help from them. That's how I got my website and tons of valuable advice. The advice will be more valuable as time goes on. Good business people are excellent net workers. Get plugged in to there network. In fact, join a business network group and attend their meetings. Beware of the vultures out there who feed on desperate business people. I learned the hard way – I paid for advertising that was useless.
Lastly, do the best work you possibly can. Each job should be better than the last. Build up a reputation for highest quality. More than half of this is in the finishes. Make sure to become a good finisher. And remember - after about ten years, most of us become very good at what we are doing.
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