Go Broke Selling Profitable Products?!
Vložit
- čas přidán 10. 07. 2024
- Here is the Grizzly tool chest I feature in the video:
bcns.ai/pdOSub
I embark on a poignant journey back into the heart of my workspace, reflecting on the challenges and triumphs of running a woodworking business. This video not only showcases my passion for craftsmanship but also delves deep into the strategic and financial aspects of managing a production space.
In a moment of nostalgia, I realized I was wearing the same hat from my very first CZcams appearance, leading to a meaningful flashback that underscores the growth and evolution of my journey. I discuss the tumultuous period of producing pencil making fences, a time marked by stress due to shop disruptions and juggling multiple projects.
Going back to earlier this year, I delve into the extensive production work that was on my plate, with a special focus on twin turbo vise jaws and bench dog tops. This part of the video addresses a critical question: Why did I, after mastering outsourcing, decide to take on more production work myself? The answer lies not only in the value of hands-on experience but also in a strategic move to improve cash flow, a key lesson from my MBA.
I share insights on managing cash flow challenges while launching new products, drawing parallels from the story of Nike's growth as detailed in "Shoe Dog." Opting out of the traditional debt-financed growth path, I found a more suitable approach for my business through in-house production.
As the video progresses, I discuss the transition to long-term planning and the importance of balancing immediate production needs with future profitability. In an exciting development, I also share how Grizzly, my go-to brand for large machinery, stepped in to provide storage solutions, significantly aiding in the organization of my shop.
The community aspect of my journey is highlighted through the introduction of my neighbor's son, an enthusiastic young woodworker. His involvement in the shop not only aids in production but also represents the spirit of collaboration and mutual growth.
This video is more than just a narrative of reclaiming my shop; it's a testament to the resilience, strategic thinking, and community building that goes into sustaining and growing a craft-based business. Thanks for watching, and I hope you find both inspiration and practical insights in this episode.
Join this channel to get access to perks:
/ @andrewkleinww - Věda a technologie
As a former college business instructor and newbie woodworker, your analysis of your production experience is refreshing. Great ideas/products will not always lead to financial success. Creating the proper balance between cash flow, gross margins and expenses is the only way to be financially successful. You are well on your way. Congratulations!
Thanks, thats good to hear and glad you like the video
I really appreciate you pulling back the curtain a bit for our benefit. It's not a flashy video, and certainly won't be something viral or incredibly popular, but the honesty and advice is invaluable.
It's important info, and I admire that you're willing to go through the effort to give it knowing that it won't be given the time and attention that it truly deserves.
A short, but noble video.
Just thought you should know that someone out here in the aether respects what you make, both in the shop and out of it.
I appreciate this comment, the production footage sat on my drive for quite a while before I figured out what story I wanted to tell with it, you are right that I don't expect it to be a viral video, but its part of my journey so I wanted to share it.
@@AndrewKleinWW I much prefer the thoughtful insight over a time-lapse of panning shots and royalty-free music in this instance, haha. Don't get me wrong, I love putting the latter up on my screen while at work, but concise details with use of the relevant footage was a good combo.
Really highlights the humanity behind the scenes with the mundane/backbreaking grind and the unflattering difficulties of maintaining a business, something that is kept hidden from view by most content creators trying to paint a fantasy version of what really goes into making it work.
Frankly, the juxtaposition between the fancy videos and the gritty, dusty, sweaty and reality make them both fantastic types of videos in their own rights, haha.
Keep up the amazing work, and I hope it continues to bring you joy. Thank you again for sharing this with us.
I gotta say your content is so complex. As an industrial designer, maker channels provide great entertainment, but your content is so deep and technical I have to stop everything I do and pay attention. You not only inspire me but also provide thought seeds that go beyond design. You have such a "big picture" thought process that sometimes I find myself having to replay the video. Thank you for your content! 👍🏽
Thank you, I appreciate the comment and glad this video inspired it, as I've said in several other replies I sat on the footage of production earlier this year for so long because I wasn't sure what story it was going to use it to tell. Based on the performance and comments out of the gate seem I got it more or less right this time.
Andy, I'm glad you pointed out how inventory can train wreck a business (big or small). I'm just an analyst for a nearly 100M company locally, but our biggest problem, even at nearly 20 years, is inventory management. Several of the statements you made about your business are the story of many other businesses. Well done in persevering through the pencil making project. Take a break once the holiday season slows down if you can. God bless.
I'll do that for sure, glad you like a bit of a different video from me
This is truly awesome. I liked the coffee mug comment quite a bit, because I can regret not getting an MBA a whole lot less now. Several others said things that I'd second/ third/fourth: thanks for pulling back the curtain here, because you clearly KNOW what you're doing and talking about. So many people on YT... well, I should say, who were on YT, aren't anymore because they failed to consider the 2nd and 3rd order effects of scaling a business.
In industrial engineering this is exactly the principle behind minimizing inventory. The more frequent, smaller shipments you can convince your suppliers to bring, the less money you have stuck in inventory that is unable to be utilized elsewhere. Covid highlighted how many companies didn't actually know what they were doing though, as a key part of this idea is to allow space/money to keep backup inventories of specific parts (like computer chips) that represent supply chain weaknesses.
Great discussion of profit, inventory, cash management thank you always interesting
Glad you enjoyed a bit of a different topic
Great video Andrew. I'm glad you discussed cash flow and how you are overcoming the hurtle "bootstrap" wise. Even if your hours aren't compensated to your liking, it is a way to capitalize your company. Your hard work = more internal capital. The small batches does several positive things not the least helping alleviate burnout. Wish you much success.
We nearly went out of business this year, only partially because my industry is in its biggest slump in over 20 years. Our inventory is twice what it should be. All my cash is stuck on shelves in the warehouse. And for the first time in our history we owe the bank significant sums.
Sadly, we don't have any ways to significantly reduce the cost of our production; our answer is to improve our sales and marketing. However, we are about to introduce our first 3D printed product, which is a little ominous. We don't have to keep any inventory of these, we could almost make them to order. They will never be a significant part of our business, but it was so gratifying to make something I didn't have to produce 500 of before selling the first one.
Hope the 3D printed product does well, that certainly could improve the cash flow position, very similar thought process to this video
Great show Andy. You do an awesome "cut" above! Love it❤
Thanks so much!
Very interesting indeed, Andrew! 😊
But yeah, business is hard... I've been building houses for renting for the last... probably 6 years... But the last 2 almost broke me.
I'm still paying lots of debt, but things are going to get better soon... But, either way, I'm going to stop this sh*t for now. 😬
Save some money and, when I can, buy property that needs at most a small refurbished... It's definitely not a good time for construction!
Anyway, I'm happy things are working out for you! Keep the videos coming! 😊
Stay safe there with your family! 🖖😊
I'll do that, you as well, thanks for always following along and commenting
That is a great video! Thanks and keep them coming, please 💪
Have you considered selling templates for making the vise jaw? Being able to pattern route the jaw would be a cool option. Not sure what something like that would sell for. 🍻
The business end of woodworking has many twists and turns and production is a controllable lever so long as you remain healthy. So the saying goes you make hay while sun shines. But if you watch the weather yo will never cut the hay.
I've talked to a few maker content creators and they really don't have a grasp on the economics beyond a surface level understanding. I work in finance and i can't comprehend not knowing your P&L per video, per product line, etc.
Seeing an NYC laptop repair company grow from a 4ish work station shop to moving to an +8 station location, if anyone could have done this >2x growth, they could have. But clearly after a year of expanding their operations, they need to scale back costs (and thus move again).
Their model worked for them because how dense their small location was but when you cannot grow your revenue to match (assuming similar profit margins), then the move cripped them.
Certainly the right kind of growth is hard to find (for I doubt there is a correct formula as well)
Money talks. I love it. Post more.
Finally, a woodworker who knows something about business, talking about business. I too have an MBA and listening to you tuber woodworkers telling about how much profit that made selling something they made out of a pallet is a little annoying. Cash flow is not profit...Grrrrr
PS I learned in my MBA courses just what you stated, although not intuitive, growing too fast can put you out of business.
Its one of a few key, non-intuitive, truths that have stuck with me, like I said, I use it almost as much as that mug! Thanks for your comments and for following along, glad you liked the video.
@@AndrewKleinWW I would definitely keep it up with this type of content. First, it is my understanding that financial content pays better with CZcams, but most importantly, many newbs watching CZcams dream of making money woodworking and are getting some very bad business advice.
I always wondered if gifting the table to Adam Savage- at great expense- was worth it, and whether you got sales from it. I would have bought one if I’d had the space.
Not that this is any of my business of course…
You make many good observations and commentary in this video, but I can't help but wonder who it is intended for. You're in a very unique situation as a CZcams content creator/seller of woodworking accessories. Most people who watch woodworking videos are neither of those things and therefore can't relate to content like this as well as we can to content about woodworking.
This is Buffett's secret. Good management, good product, poor liquidity. Time to get in.
Sounds like a tough problem to have.
Its a reality of this type of business