Help me brainstorm buying a business...

Antihero said:

Do you want something that you are working in or something where you provide money and others do the work?

Definitely not a passive investor. But I want employees I can trust and not have to babysit. 

Honestly, I think you've got a pretty solid proposal with the cabinet door company. They have the expertise and the product, they just don't know how to market it. Come up with a way to package them and ship for predictable prices and it could be a real winner. For a bonus, set up a standard product such as alternative doors for the standardized IKEA cabinets in real wood. Cross reference to the IKEA part numbers and boom. 

In reply to Eurotrash_Ranch :

That's a good word.

I should note, I definitely have very little interest in cabinet doors. I'm interested in the CNC capacity.  Doors just pay the bills. 

In reply to Purple Frog :

Similar, but I have always been a small operation, mostly just solo. 32 years swinging a hammer and I'm still a few years shy of 50. Brief 18 month foray with one legit employee (comp/disability/etc), but wasn't worth the hassle for the market I target. 48% remodeling/48% kitchens (shop made carcasses, outsource doors and drawers) 4% new/additions. Half my time in the shop, half my time on site. No advertising, repeat clients/word of mouth only, and slammed year-round. Just gotta up my rate, lol.

electroplating and casting have always fascinated me.
 

Specialty stuff IMO is where it's at.. not "production" work where you can be underbid by foreign production facilities with untouchable cost structures.

Whatever you do.. If you want to grow it beyond what stellar word of mouth produces (and that alone may lead to great success)... mix in some social media savvy and win.
 

So many social media influencers (and the practical side of me despises the existence of that term) are making bank while less social media savvy folks actually do better work.. without fanfare. Be an expert and make it known. Then profit. 

Purple Frog said:

You said you have been making sawdust for 40 years...

Maybe shift gears.  At forty years i ditched all the employees and went into a one man custom business.  So much less hassle.  Focus on doing high end work for folks that appreciate it and can afford it.  I found in a short time, only through word of mouth, i have too much business.  No employees, no advertising, happy customers, set my own schedule, and get to do really neat things.

Curious: what do you make, and how? Friend of mine has two tire mold shops full of machines and nearly all the tire mold work left for China, India, Indonesia, etc. They diversified with some serious CNC machines but it sounds like times are getting very hard. 

Years ago, I was a quality woodworking inspector. I was in high end woodworking shops throughout the Southeast. 
 

One business in particular has stuck in my head. I've wanted to repeat his business model ever since. 
 

It was a small shop. Maybe a dozen employees. They did beautiful custom work. But one thing confused me...

Most of the commercial shops had CNC's.   That was pretty normal. But this one had an incredible brand new top of the line 5 axis. That was much more machine than any shop this small should be able to afford.
 

I asked the owner about it. I asked him how he afforded equipment like that. He said, "That's easy. We make perforated soffit panels.  For Wehrhauser."

WTF?  That's ridiculously basic work. 
 

He told me at the end of every day, they turned off the lights and shut things down. Except for the CNC. He had a 2nd shift crew that came in and fed plywood into that CNC all night. They didn't know how to do anything other then press the "Go" button, and feed the machine. 
 

When they came back in the morning, there would be several pallets full of completed soffit panel. The soffit panels made the payments on the machine. 
 

Then the custom design crew had access to the best machine on the market, already paid for. 
 

I thought it was a brilliant business plan. THAT is what I'd like to replicate. 

If you get into the chrome & casting side, please let me know.  I have a couple projects I would be interested to talk to someone about.  Specifically, getting new chrome bumpers for a car that's hard to find parts for (77 Celica).

SVreX said:

Years ago, I was a quality woodworking inspector. I was in high end woodworking shops throughout the Southeast. 
 

One business in particular has stuck in my head. I've wanted to repeat his business model ever since. 
 

It was a small shop. Maybe a dozen employees. They did beautiful custom work. But one thing confused me...

 

I worked for a custom shop not unlike what you describe, but even smaller.

There were 5 of us working out of a 2-car garage.  We did custom anything, but usually what paid the bills was custom design and fabrication for new retail.  The last job we did was for a new retail store for Quartermaster Supply.  Big online presence for first-responder stuff; fire suits, tactical uniforms, safety gear, boots, scrubs.  They decided to go physical location because so many of their products were tough to know the right fit.  A firefighter really needs a suit that fits well, not just "let's try XL."

They contracted us to design the whole look for their stores, and build the prototype fixtures for the flagship/initial store in Vegas.  We built it all, then took it to Vegas and installed it.  We made lots.

The 2-car garage was part of a commercial lofts property that had originally been an 1850s mission, and had most recently been a mortuary.  The garage was the crematory.  SInce it had a monster 4" gas line, the boss installed two big ceramic kilns.  At night, his wife would give ceramics classes in the shop.  Similar deal; the kilns made more money than they cost, and the classes were additional revenue. 

In reply to Curtis73 :

I think there is a bit of a "subversive" nature to most successful businesses...

I know a guy with a patent on a successful book publishing method- but his ace in the hole is that he also owns a print shop. Movies make far more money at distribution than at ticket sales. Authors who write books so that they can get credibility, but they make their living doing speaking engagements. 
 

Even Ray Kroc (founder of McDonalds) said he was not in the hamburger business. He is a commercial real estate investor, with an ownership stake in the best commercial street corners in almost every city in the entire country. 
 

If businesses were only what can be seen on the surface, it would be really easy for their competitors to duplicate and steal their business.

In reply to SVreX :

Would you move to FL If you bought that business? Or plan on being an absentee owner? 

In reply to dyintorace :

Not sure. 
 

I wouldn't be absentee long term. Either I'd move, or move the business. 
 

But for the first year, absentee is possible. I'd probably hire my daughter as a managing operator, and come down for a few days per month. 

SVreX said:

But I want employees I can trust and not have to babysit. 

In my 35 years of having employees i achieved your goal only when I paid them what they were worth. $$$  Too many small businesses cut employee benefits to the bone, then complain about turnover and lack of quality.

In reply to Purple Frog :

Yep. You're right. Me too. 
 

Interested to see what you come up with.

I have always been interested in finding the collector market, stuff that isn't made anymore. Like be the generator guy for any 1920s American car. People send you generators, you refurb, and send back.

But that would be a one-man operation, hobby business.

Purple Frog said:

SVreX said:

But I want employees I can trust and not have to babysit. 

In my 35 years of having employees i achieved your goal only when I paid them what they were worth. $$$  Too many small businesses cut employee benefits to the bone, then complain about turnover and lack of quality.

My years running auto repair shops were the same way.  You either pay for the good techs, or you pay for the warranty returns.

During one of my tenures as a shop manager, the owner went to jail for putting the profits up his nose.  Some lawyer sold the business for him.  When the new owner came in, he asked what we paid the techs.  We had been paying them a flat 14/hr from the timeclock.... but I told him we pay $25 per book/flag hour.  He didn't bat an eye.

After he left I had an oh-E36 M3 10 minute meeting with my techs that basically went like this:  Congrats, I nearly doubled your pay... if you can prove that you're a kick-butt tech.  Anyone who doesn't prove that they can beat the clock and make more hours than they work by the end of 30 days gets axed.  Then I grabbed a mini-sledge out of my lead tech's box and smashed the time clock to an eruption of cheers.

Then I went back in the office with my smug self and looked at my wet-behind-the-ears service writers and thought "oh crap, I gotta educate these people."

We made a killing and I didn't have to fire a single tech.  I gave the service writers the option of 10% of their gross sales or 20% of their profits.  They all chose the 20% which is the harder goal.  Money motivates.

Pay for the good ones.

I do have an idea for you!

How about a company that manufactures specialized building materials? Then use your unique knowledge of what exists, what works, what doesn't, what saves time, and what customers like to make niche products for the building industry.

You should be able to find someone very similar to the cabinet shop that does gutter covers or vinyl shingles or metal ceiling tiles or carbon fiber entry doors, or whatever. Then use that leverage to start making the stuff you wish you could buy now. Could be green products, luxury products, whatever.

I know of a few products off the top of my head that I would be very interested in producing, because I wish I could've bought something similar!

-Solar chimneys to install in place of standard roof vents

-Preformed siding panels to make thermosiphon walls a snap

-smart HVAC grates to control both air out but also return air in

-space saving "in wall" shelves, use the space between 2x4s for interesting stuff

-or something that isn't gimmicky and is actually necessary 

In reply to Robbie :

Good ideas!  Thanks!

Curious... other than thermosiphon, what would be the application of smart HVAC grates?  HVAC systems have independent supply and return ducting- how would the grates change this?

SVreX said:

In reply to Robbie :

Good ideas!  Thanks!

Curious... other than thermosiphon, what would be the application of smart HVAC grates?  HVAC systems have independent supply and return ducting- how would the grates change this?

Heat independent rooms on a single zone system, pull cool air from downstairs and use the fan to make it come out in the upstairs rooms before cycling the AC (or in between cycles), automatic summer/winter (heat/cool) settings for where you pull the air from and where you prioritize the delivery.

Theoretically you could even build intakes and vents at the top and bottom of different spaces to put hot air in the bottom and cool air in the top while pulling return air intelligently too.

With smart thermostats becoming ubiquitous, the house could just follow the occupants around and prioritize HVAC on that space only.

In reply to Purple Frog :

We're at the lower end of the pay scale.  Only get hired through 90 days of temp service.  Turnover and absenteeism is chronic.  Attitudes suck and we are always shipping our E36 M3 late.  Everyone gripes at the pay and we can't get people in the door.  A few guys live locally with DUI's so they can't really go far for a job.  Good people come and leave and tell us we're berkeleyed up.

We are owned by a private equity firm.  

In reply to Robbie :

I get it, but I don't think a standard system would have the motor controls to accomplish that. 
 

Duct systems are designed to handle specific air flows.
 

If all the vents but one on a system closed down because only 1 room was occupied, the ducts would be over-pressurized, and whistle loudly. This could potentially eventually damaged the motors and circulating fans. 
 

I think it would also require advanced motor controls which could reduce the airflow delivery.

Am I missing something?

Robbie said:

With smart thermostats becoming ubiquitous, the house could just follow the occupants around and prioritize HVAC on that space only.

The thermostat is the easy part, it's the rest of the HVAC that's hard. It would need to be setup like a commercial building with a damper on every vent and a variable fan to deal with it. A little spendy for most for modest savings (likely)

SVRex I have a million questions about your intentions and goals, but the big things are:

Do you want to make THINGS or MONEY?

Do you want employees or are people a burden?

Do you want to work twice as much for a little now and maybe a big payout later?

You have a product/customer segment in mind? 

Retail sales, online only, mix?

How do you get customers? 

What do you have now (in your mind or assets) that are valuable to kickstart things?

In reply to SVreX :

Aww come on the computer system could handle that. Especially with new fans that can reduce speed/cfm and actually reduce power used. 

Furnaces and ac AC units may struggle to work at less than full throttle, but in those situations the main control should know the capacity of the system and the size of each of it's controlled and uncontrolled vents. So it wouldn't shut down more than it should or create more out than in or something.

I think it would be pretty easy to teach the main control the rules for vents and cfm and each smart vent could report back it's size to the main unit. Maybe even it's current airflow, but I doubt that's needed.

I know there's more to it than just vent size, but if you only knew vent sizes and numbers and in or out you could get pretty close, probably close enough as long as the system was good to begin with.

It's just one idea. But automatically sucking cold air from my basement in the summer and putting it upstairs is something I'd really love to do. Also helps keep finished basements less stale, and the humidity even across the floors. I should be able to put my thermostat into summer mode where it first tries to cool with basement air, and if that gets out of a range then go to the AC unit.

In reply to Robbie :

I don't disagree that it's possible with newer systems.  But the average age of an HVAC system in the US is 12-13 years.

And most owners would not want to tamper with programming on brand new systems that could affect warranty.