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Last week, I read a page-turner. I spent hours reading instead of getting my work done. I forgot to eat lunch. I may have forgotten to change my clothes. (We'll leave that one at a maybe!)
The book wasn't written in beautiful prose. The author isn't seasoned and hard at work on his 15th novel. But the story did have a lot of twists and turns. I waited with bated breath to see how it would all turn out.
In many ways, I'm still waiting, because Boss Life* follows the story of a handmade business during just one year — 2012. Paul Downs has been crafting custom conference tables for 26 years – since the day he graduated college. He's grown his business to 16 employees, and it brings in 1-2 million dollars in sales each year. (* denotes affiliate link)
Does that sound like success to you? (Yeah… I thought so too.) The truth is – running and growing a profitable business is much different than simply running and growing a business. In the age of internet entrepreneurs – where profit margins are pretty much a thing of the past because of the rise of digital products – it's hard to find solid, realistic advice for what it takes to grow a business based on craftsmanship.
The overhead for a handmade business is astronomical – especially one like Paul's that requires expensive machinery and skilled craftsmen. The stress of managing so many employees, sales, customers, and moving parts is enough to drive a person insane.
But thankfully, for us, Paul Downs isn't insane. Well, he's just insane enough to write a book that is so mind-blowingly transparent you'll be shocked at the words you're reading on the page. Thank you, Paul Downs, for your brief moments of insanity that have allowed us to peer into your business. I've never read anything like it, and because of the humility and honesty required to write a book like this, I doubt I'll ever read anything like it again.
This unusually written book sucked me in – not with mountaintop highs and inspirational pull-quotes, but with sheer grit, honesty, and struggle. After reading Boss Life, there are several things I know for sure.
Transparency is a strength. After weathering a failed business partnership in which the partner told Paul that he should not share the company's financial struggles with his employees, Paul decided that from then on, he would do just the opposite. He hated keeping secrets from the men (and one woman) whose lives depended on his business. So he started holding weekly meetings.
Every Monday morning Paul shares with his staff the figures for the week – how many sales have come in, how many orders are being shipped, and, most surprisingly of all, how much money is in the business bank account! When sales are low and money is tight, Paul tells his employees, in very blunt terms: “We have enough funds to keep operating for just 10 days…unless something changes.” You would think with this level of honesty that all his employees would leave when things got tough, but that's not the case. Paul keeps many loyal employees, and I can't help but think that they stick around because he's open and honest.
Profits don't mean anything without cash flow. It's easy to equate sales numbers with business success, but when you counter sales with business expenses, overhead, and late payments, a booming business can still be in a precarious position if their bank account simply doesn't have enough cash. A payment that's expected “any day now” is no help to a business who needs money to operate today. Paul uses a detailed spreadsheet to track every dollar going in and out of his business and to calculate how many working days they have left before collapse. (I don't mean to give you the wrong impression – sometimes the business is doing great and there are many, many days ahead with no risk of collapse!)
You don't have to be eloquent to be a good leader. In the internet age, it seems like the perfect CEO gives TED Talks, speaks on college campuses, and writes a neatly packaged memoir. Paul Downs does none of these things. His writing style is incredibly blunt – free from any measure of loveliness or charisma. But, I was drawn to him nevertheless. He's just so honest! As a reader, I never worried that Paul Downs was telling me anything other than exactly what he was thinking at that moment in time. And, as his employee, I think I'd feel the same way. There's something incredibly charming about raw honesty.
Mistakes are where the learning happens. I learned more from Paul Downs business story than I have from 20 best-selling business books. It's easy to talk about success and act like the path there is clear cut. “Follow these steps,” or “all I did was x, y, z…that's it. ” No, that's not it. Success isn't that simple. Paul Downs shares many mistakes: Mistakes in hiring the wrong person, in partnering with a business that wasted his time, in not seeking consulting help soon enough, in not refining his ad campaigns in the right way, and many more.
A business isn't run with inspirational quotes. I love inspirational quotes as much as the next person. They can serve as a great reminder to me to keep going; to work with passion! But at the end of the day, any CEO or entrepreneur is going to need a whole lot more than some inspiration on their walls to be successful. A business is run through trial and error, through learning and adapting, and through meticulously crunching the numbers day in and day out to reach profitability.
Millions in sales does not a millionaire make. This lesson surprised me! We've all heard the Shark Tank success stories of hitting a million dollars in sales… and we've even seen the Sharks eyes widen when a peppy entrepreneur reveals those stats in the hot seat. But millions in sales does not necessarily make one a millionaire. It all comes back to profits…cutting overhead expenses and the cost to produce a product while increasing sales. This is so much easier said than done. Profitability is tough when it comes to growing a handmade business.
Taking care of your employees is the right thing to do. (And it turns out – it's profitable too.) Paul Downs has maintained many loyal, skilled craftsmen for years because he treats them well. They're paid slightly more than what they might make elsewhere. They're given good benefits. They're given complete honesty and transparency from their boss. When the business is suffering, its Downs who takes a major pay cut – or no pay check at all! And, when they come to Downs with an idea, he listens and makes changes. In one case, a varnisher came to Paul with a suggestion to buy a machine that cost $30,000! He thought for sure that Downs would say no. Instead, Paul crunched the numbers and realized the return on his investment would save him more than twice that number in a year. He listened, analyzed, and took action. That employee gained incredible respect and loyalty for his boss in the process.
Sometimes there isn't a right answer. Plod on. The most interesting parts of the book to me were peeking into Paul's decision-making process. Often, he wavered, and often, even after making a decision, he had doubts as to whether or not it was the right one. This is true life as a CEO. Try something, measure results, tweak, and plod on.
Asking for help is a great idea (even after 25 years in the biz.) When Paul's sales dropped significantly during part of 2012, he wasn't above asking for help. He reached out to his business connections and found a consultant recommended by another CEO. Paul forked out quite a bit of money to work with this man, but the sales training he and his staff received as a result improved the business immensely. It's ok to “say Uncle” and ask for help. Humility is a strength.
Running a handmade business is insanely challenging work. I can't get over all of the working parts Paul Downs is in charge of each day – maintaining the shop floor and machinery, renting a huge space, acquiring lumber and shipping supplies, shipping logistics for huge pieces of furniture, advertising and sales for a small business, managing 16 employees with various trade skills, customer service and managing late payments, health care and benefits for his employees, and a host of other departments I've failed to mention. I left Boss Life* with more respect and awe for handmade business owners, and also greater fear at the thought of ever truly growing a handmade business.
I wonder where you'll fall in the spectrum of “making it with a handmade business” after reading this book.
~ Beth Anne