The gray area

Most business owners want to see their businesses grow. The key is in deciding just how big you want to get.

Running a one-man shop is pretty easy when it comes to things like keeping track of books, inventory, job flow, etc. Even with an employee or two, things are pretty easy to keep track of. Large shops with many employees typically have enough personnel to create dedicated positions for specific tasks, such as a receptionist, general manager, shop foreman, delivery and installation crew, assemblers, finishers, and so on.

Somewhere in between lies a gray area where there are too many people for the shop owner to supervise, too many jobs for one person to do, and not enough people to prevent overlap where the guy who assembles casework on one day might have to be the guy who is finishing it the next.

This can be an extremely difficult time for a growing shop and is where most of the shops that don’t make it find themselves crashing into the wall. It has often seemed to me that it would be better to either remain small or go borrow a bunch of money to try and leapfrog over that gray area.

D.D.

COMMENTS

  1. Jeff Scott wrote:

    I have just downsized my company after spending 15 years struggling in the “grey Area”. We went from an 8 person shop down to myself, an on-call helper, and a contract installer. My wife does the books and manages sales. We are booked 4 months in advance in an area that sees 1 cabinet shop going out of business every 2 weeks. We are getting premium dollars for what we do. Our customer service has never been better…in fact…we were just awarded a Business excellence award for Customer Service by our local Chamber of Commerce. Never could say that before.

    Most importantly…we are showing a very solid profit after a decade of hit or miss….mostly miss. I should have done this years ago.

    All in all…it has been the single best business move I’ve ever made…second only to buying a CNC Router 6 years ago.

  2. Aaron Sikes wrote:

    Jeff, it sounds like you found the Goldilocks Zone. :)

    Small = manageable. I don’t ever want to be in a scenario where I’m like those professional chefs you hear about. Never setting foot behind the stove anymore because they’re too busy planning menus, ordering produce and meat, and checking the books to make sure the dishwasher isn’t walking off with 2 lbs of rib-eye after closing up.

  3. Kelli wrote:

    I have been keeping track of inventory for taz purposes once a year for many years. Our shop has grown from 2 people to 19. I am trying to figure out if I am inventory correctly? and if it is the most efficient way of doing it. I have always just done the raw materials. I do not include the cabinets that are in process? How is the proper way to inventory for a cabinet shop with raw and completed materials?
    Thanks in advance

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