Will Sampson talks about the important role that financing can play in the growth of a woodworking business. Then he does an interview with Blair Chandler, finance and leasing consultant for SCM Group and a recent honoree in the Woodworking Network 40 Under 40 program.
This episode of the Woodworking Network podcast was sponsored by the Executive Briefing Conference. It’s really easy for woodworkers to stay stuck inside, focused on their shops and production. But over the last couple of years, the pandemic has forced them be even more isolated than usual. And it’s even harder if what you want is to network with the top-level executives in the industry. Where and how can you do that? The answer is the Executive Briefing Conference coming this September at the spectacular Broadmoor in Colorado Springs. This is an unparalleled opportunity to boost your business with intelligence on techniques, tools, and technology and to feed on inspiration from real leaders in the industry. Not to mention take in all the high-altitude hospitality, beauty and recreation offered by the Broadmoor. Learn more at ExecutiveBriefingConference.com. See you there.
Woodworking Network is a home for professional woodworkers, presenting technology, supplies, education, inspiration, and community, from small business entrepreneurs to corporate managers at large automated plants.
You can find all of our podcasts at WoodworkingNetwork.com/podcasts and in popular podcast channels. Be sure to subscribe so you don’t miss an episode. Thanks again to today’s sponsor, Wood Pro Expo. If you have a comment or topic you’d like us to explore, contact me at will.sampson@woodworkingnetwork.com. And we would really appreciate it if you fill out the survey at woodworking network.com/podcast-survey. Thanks for listening.
Intro music courtesy of Anthony Monson.
It’s fascinating how woodworking shops grow. Often, it’s an organic process typically started as a one-person operation, maybe as side jobs or a hobby at first. Original tools and equipment might be personal acquisitions enough to power a small garage workshop.
As business expands, most shops finance their own growth through increasingly bigger jobs. A common line of reasoning is, “If I get the Smith job, then that should pay for that table saw upgrade I’ve been looking at.” Over time, the shop and tools grow, and maybe helpers become employees, and equipment and space needs outgrow the garage.
Almost never is this growth planned or seriously calculated. There isn’t a calendar of goals with benchmarks to reach and capital improvement plans to fuel that growth. The business just hobbles along, job to job, month to month until one day the needs are greater than what can be purchased out of the profits from one new job. Maybe the shop needs to consider financing new machinery.
This is a potentially eye-opening opportunity for the business and its owner. A really common example for a growing cabinet shop is the purchase of the shop’s first production edgebander. Whether the shop has been getting by with a little tabletop bander or even just ironing on the banding, they know there has got to be a better way. But those production edgebanders are just so darned expensive, even the so-called entry-level units. The shop has never spent that much money on a machine before. How can it be justified?
But the shop owner sharpens his pencil and does some calculations. Maybe the bookkeeper or CPA is involved. Finally, there’s the trip to a machinery dealer or a big trade show. Then that scary moment, when the shop owner signs on the dotted line and commits to spending all that money.
And you know what usually happens? Soon after the new machinery is up and running, the owner and all the workers in the shop are shaking their heads and asking, “Why didn’t we do this sooner?”
One successful capital financing operation often leads to more and signals some serious growth for a company. Well-managed and carefully planned expansions can be very profitable, especially in a period of booming demand and major challenges in hiring more employees. Sometimes machinery can boost production without as many bodies required.
The old saying is it takes money to make money. Sometimes the money it takes is borrowed from a bank or other lender. But you can’t just throw money at machines willy-nilly and hope for the best. You need to do your homework, make serious calculations, and talk to as many advisors and experts who will take your questions.
This is how hobby shops transition to full-scale businesses. This is how businesses expand and explore new markets. This is how business owners learn to stop chasing their tails from one job to the next and start planning for a future of growth. We are nearing the biggest trade show of the year. Are you ready to take advantage of the opportunity or are you still stuck at one job at a time?
Before we get to our chat with Blair Chandler, let’s pause for a word from our sponsor.
It’s really easy for woodworkers to stay stuck inside, focused on their shops and production. But over the last couple of years, the pandemic has forced them be even more isolated than usual. And it’s even harder if what you want is to network with the top-level executives in the industry. Where and how can you do that? The answer is the Executive Briefing Conference coming this September at the spectacular Broadmoor in Colorado Springs. This is an unparalleled opportunity to boost your business with intelligence on techniques, tools, and technology and to feed on inspiration from real leaders in the industry. Not to mention take in all the high-altitude hospitality, beauty and recreation offered by the Broadmoor. Learn more at ExecutiveBriefingConference.com. See you there.