How to Start a $1.2M/Year Manufacturing Business

we're projecting to do just under 3 million that's insane every year we feed our projections by about 300 percent yeah instagram has been a huge thing for us once we meet on site we know 80 of the time we're closing the deal taking that leap is a scary proposition i really want to see can i take this to a 20 30 40 50 million dollar company on this episode we're here with anthony who started an outdoor office building company that now generates more than a million dollars a year anthony's gonna share his strategies to manufacturing delivering office spaces finding clients marketing designing all these wonderful beautiful spaces and the tools you guys need to start a successful manufacturing company [Music] all right well we're here at the portland expo let's go talk to anthony about all things manufacturing and make sure you guys succeed this is the man how you doing anthony nice nice to meet you let's dive into this interview tell us when and why you started outdoor office uh pretty simple i was a home inspector by trade needed a place for work from home much like people do today and uh one thing led to another and created a business out of it being a home inspector i was working on my kitchen table i did that for about a year and a half needed something quiet i have two boys at home and started looking around couldn't find a shed that worked for me so i decided to build one for myself and my wife took some pictures and that's there you have it yeah so the office inside the house didn't work for you uh well my office was a kitchen table so we didn't have anywhere to eat for a year and a half so that made her pushing me outside a little bit easier your business took off like a wildfire during the pandemic what did you do to adjust for that extra demand how did you scale and what changes did you make yeah it was uh almost literally overnight i mean within two weeks we went from four orders to 18. scalability is a challenge absolutely i don't know if we were prepared for it so finding new space was a priority and has been a priority right away one of the first things we had to do was start getting some people on board you know we started out two three people and you know even today we don't have enough but that's a whole other issue i think that's probably step two three and four we finally feel we've solved step one by moving into our new facility you know you can maybe get more space but if you don't have the people to match up that right or i could get more people but i don't have the space to put them or i can try to manufacture faster but i have nowhere to store our supplies so everything ultimately always came down to finding the space to get everything in one spot then from there being able to push forward and really meet the demand as far as speed timeliness and production [Music] let's talk numbers real quick 20 20 21 22. uh what did you do what did you project so 2020 we did just over 500 000. it was kind of a growing year uh 15 units okay 2021 we finished just over a million 1.2 million and that was 26 units so you can see the price increase of the buildings themselves that's insane 2022 right now we're projecting to do just under 3 million that's with our current projections as i stand here every day that projection seems to climb so hopefully i'm not one to necessarily be like oh i want to get to this point i live more in the reality of where i think we're going to be and that reality has been shattered every year as a home inspector you're a one-man team now that you have a company that does more than a million dollars you've got a team so what skills did you feel like you needed to learn to be an effective team leader owner etc yeah so kind of going back i think looking at your individual raid what worked what didn't i think being smart about understanding putting yourself in other people's shoes what they're looking for how to drive them individually i think as a business we needed to grow so i needed to understand my skill set can only take me so far i need to start replacing what i'm good at with other people what they're good at so that i can focus more about what my job's going to be so the transition has been difficult for sure i think any business owner who starts out on their own i think you kind of want to not give up as much control some people naturally they just want to give it up right away that's not my style so we have five people right now we're looking at tripling that basically in the next three months let's talk about your first customer and for somebody who is starting out in a manufacturing business doesn't have a huge budget for advertising what can they do to get their first customers use whatever resource you can find so our first customer was actually through our church directory where we just listed our business name and someone saw outdoor office and they said oh well i actually need a place to work there you go and that was our first paid customer we ever had instagram's been a huge thing for us so social media posting pictures of just the process people love to kind of see that and it gives them some insight on what it is and kind of how you do it that alone honestly we probably ran our first year and a half just off social media did you do any campaigns or like this that to sort of boost your posts or no we created a hashtag called build your space which is kind of our logo it's our motto and that kind of started out really just as a thought to be like you know what if we could build your space for you so that's actually our online builder tool site too as well it's called build your space and there you go perfect walk us through the basic must-have equipment from manufacturing whatever your whatever you're doing let's skip the heavy stuff yeah yeah i mean for us you know a lot of it's going to be your typical construction tools okay you know we have a lot of saws larger saws table saws we can pump out buildings so a lot of what we're doing is we're pre-manufacturing walls and then we'll be able to put them together so you're gonna have your nail and equipment your compressors you know a lot of the big general things the thing is we just have more of them how many employees do you have but on average what do you pay them when you look to hire more yeah so we have five current full-time right now we're going to be offering more of our office staff and more manufacturing leads project managers stuff like that our average person right now is making between 28 and 35 an hour i think that will probably start to escalate sooner than later i think a lot of is because just i need to find right people and if you find the right people you pay them that's right [Music] what were the biggest challenges uh when you were faced with you know the extra demand and the fast growth two things one scaling i think that's always been a big problem and then two is tracking everybody you know going from maybe five to ten people a month to 60 people a month okay it drastically changes our ability to monitor who's being followed up on and then on top of all that is who's actually in our queue who's in the pipeline have you found a solution or are you still struggling with that same issue i think it's an ongoing struggle i think anybody is always going to kind of look into it and figure out ways to be more efficient i would say our biggest step along with our builder tool part of that requirement was to be able to have a lead tracking system inside of that okay well before you share what that is uh why don't we wait for later on in the video to share that with you guys so keep watching why don't we just do a quick walk around what does this unit cost and what are the highlights that you want to point to us yeah so in this build itself this is going to be more of our standard products you know it's going to be an off the shelf in a sense gotcha something like this all in a 10 by 12 is going to run you around a 40 000 mark and that includes your foundations your permitting and all of that included so in this one we have a few extra highlights you know we have our shiplap wall that's always kind of a nice addition it looks great by the way yeah it's a nice little feel gives it a little more of a warm touch i think breaks up the drywall uh obviously we have our pine tongue and groove ceiling as well we leave it raw because i just frankly like the look of wood i think it also provides a little bit more of that natural balance between the floor and the ceiling kind of ties everything together and you don't really need to stain it too because it's just the benefits no absolutely you can leave it as is i just prefer like wood i like how it smells too it kind of gives it a nice fresh cut but yeah inside here everything comes standard with wall heat our most popular upgrade is actually a ductless mini split system so that will include ac it's going to mount on your wall much like the tv or much like a picture frame will so that kind of gives you that nice option from hot summers around here yeah it's going to get hot in here yeah so everything is included though everything you see the flooring we have a selection of flooring choices all the trim window wraps baseboards windows these are all standard the french doors are all standard so these are all things that you can kind of pick and plug and play what makes sense for you but a customer or client can basically ask for anything and you will deliver essentially in terms of build yeah we're able to pick and choose we've had everything from clients who are running their business out of it from home psychologists right who we've built a lobby and then they've had their office on the other end of a wall on the interior we've had people build basically like a little bnb for themselves and i think our most popular is a combination of offense slash workout room right you know in this continuous setup it's more relaxing but yeah people working out from home has been a popular choice too [Music] before you advertise how many quotes were you getting per year and how many of those convert to business and what do you expect that to be for 2022 that you're advertising now yeah i think we did just over 55 quotes we probably contacted 75 to 80 people in total converted into about 55 quotes we would sell about 80 of those so last year we sold 41 builds in total what do you think that would be for 2022 now that you're advertising even more now that we have the builder tool alone it's the third week of february i have 41 quotes already oh wow uh we've got a million dollars in quotes sitting in my inbox as i sit here right now that i haven't even contacted and then how long have you been here at the convention so far four hours four hours and you've got so many quotes [Music] so the the eight thousand dollar investment into parking here for four days is well worth it yeah it's uh turning around very quickly [Music] who handles your website as well so right now it's myself you're looking at the internet and web team which is uh i wouldn't say the strongest by any stretch but that is in process for 2022 as well we're going to be revamping our site to bring it more modern with how our buildings feel a lot of it originally i'll be totally blunt it was just go to wix.com and cost me 20 bucks and what you see today is what i had sometimes you just have to do what you have to do to get the buildings going and then worry about the back end stuff but exactly yeah well if you guys need help with your website our new sponsor fiverr has incredible website designers and developers they have graphic designers and everything you need to create the right brand and the perfect website they're gonna give our viewers 10 off so make sure you click the link in the description below and use the code up flip 10.

so you have a fixed build and then you also do customs walk me through the advantage or why you have that and then where are the profits higher yeah so good question on the custom side of things those are generally one-offs takes more time invested on our end time investing on the client's end so profitability is going to be slightly lower but it's going to be more of a marketable tool our manufacturing side which is kind of what you see behind us here right here allows us to build different sizes different variants with different layouts but we're all predetermined so as a client you're able to kind of pick and choose what you want all we have to do is pull stuff out of our warehouse and assemble it much faster equals higher income on the back end so where are your profit margins numbers wise on the fixed versus custom to your target yeah our fixed build used to be somewhere around 40 okay the downside is market pricing has changed a lot so we're covering right around 28 profitability right on the custom side you're somewhere around 20 to 25 would be our best estimate gotcha [Music] specifically what are you doing to handle all the leads and then convert them into clients one just having a consolidated space to have the leads you know what used to be pen and paper now is all in a computer generated system so we're debating between a couple different software tools the builder tool is where it's kind of funneling now but that only kind of does one step it just kind of puts them in a spot the follow-up is where i really want to start going into so we're looking into some new software systems that will kind of help not only myself but anyone who's going to be on our sales team moving forward they'll be able to have that information as well so that's for the future but what are you doing now specifically anthony yeah so what we're doing right now is basically when a 48 hour policy is to follow up with them directly at this point they've already built a quote so we already know they want it they already know what their design is now it's about taking that next step which for us is meeting them on site once we meet on-site we know eighty percent of the time we're closing the deal on-site they show up to your warehouse is that what you mean no we actually show it to their home i see yeah so we need to take measurements photos we need to make sure their design is going to fit in their space so for what you're doing specifically you know manufacturing general you don't need to do much sales because like you said once they create that space they pretty much want it already yeah we kind of know that by the time they've done their research they've already kind of found us and by the time they give us a call or they use that builder tool most of the time they already know they want this thing they want it now it's a matter of will the design and will the price match up to what they're looking for and if they do it's kind of a perfect marriage [Music] the shed view builder tool on your website is quite a neat feature yeah talk to us about why that's important in your business and how that changes the interaction with the customer yeah before i think what a lot of people don't understand is it was all myself or someone from my crew who would have to interact from the very beginning so you're talking 9 10 12 hours of work just to get a quote pushed out the door that's a lot all that's for your costs you know for us or our clients we just view that as part of the service in the hopes that they're still going to sign in the end and then you get the design right so we're trying to figure out a way to consolidate that down and that's where our shed tool has allowed us to allow the client in one place to do all of those things without interaction it's more freedom it's less pressure they don't feel like they have to be committed one way or the other but what we find is the people who use it they're adding more things than they would have if i was sitting there saying well i would recommend this and people look at dollars and cents so the option was kind of like building a car online you're able to add all those little features and inevitably it's easier to sell those if i'm not having to do anything they just plug it in and say well i want that i want that i want that and in the end they have a bigger price than they would have if i would have done it myself [Music] let's check out the outside yeah absolutely the pitched roof is that similar for all designs yeah so this is going to be our standard this is its simplicity frankly the peak style roof has been less popular over the years even though most of the main homes have it i think a lot of people like the fact that here you can have a bigger set of windows door framing and all that and i think they i think they like that because most people aren't looking at the back anyways so i think that's what's provided there again on the exteriors we use all a fiber cement product you know which is a really nice durable product it works in a lot of environments that's what people are going to find on their main house so that's what you should have here and power can you show yeah absolutely yeah over here like yeah so obviously on the interior as well you're going to have all the plugs just like your main house would you have an exterior plug on its own dedicated outlet so a lot of people like to hook up barbecues they like to hook up lights on the outside power different things here so part of our process we've been more or less stealing pages to try to figure out what works we used to originally hardwire the buildings in but as a portable building doesn't make sense to have something that's hard and stationary right right so for us we started to use the rv world which is here's a 30 amp rv plug twist lock and that's how we handle that system right there so we have your main panel on the back side just like you would in your house but it's all powered right through here and we just connect that back into the main home so what's your standard of practice for the builds right can you walk us through the process of hearing from the customer first to the finished build when it's installed yeah so for us a lot of it's going to come from the builder tool and or a quote that's a custom side so that will help generate a lot of what it is that we're going to need as far as materials going through walking through that we have a little meeting that says hey here's our next steps for that particular project you know a lot of it is the checks and balances each stage has its process that needs to go through we check that off we sign it off on the list through our build sheets that we create and then from there as we kind of keep generating each build we kind of keep improving that process what are you subbing out like the delivery uh process is that your trucks your guys or is that something yes yeah i mean fair question i think for us what makes us different is we do everything in-house because as a client i don't want them to be a general contractor or to question every day well whose company is this showing up on my doorstep so knowing that it's always an outdoor office employee who's going to be there or is working on it i think sets us apart for sure as far as the delivery go well i don't own multiple cranes nor do i want to so that's how we deliver a lot of our buildings so getting a crane company to do that for us i think helps streamline that process it is more expensive but i think that's just something that's kind of built into the price what's what's the cost to deliver it on average it's about a thousand dollars an hour we average about three to four hour time frame wow so a couple grand at least for delivery it's expensive quick what else have you learned when it comes to you know getting these waves of demands in terms of as a business owner watching right now yeah to be prepared to be able to scale quickly if you need to yeah instead of just shutting doors one i think one of the lessons we've learned is kind of always have something in reserve just in case you have to move quick right i think for us we have no debt we have no loans we have anything we've been a cash business so money comes in we reinvest it i see so the hard part's been is that when you have this flood of orders that roll in you don't even have the materials yet to meet those orders so then you have to buy the materials and then you got to figure out in bulk and storage yeah you do that anthony yeah so we do that now for sure we used to have to do it in mid level scale i guess where our demand has always been higher than what we can produce i think now what we're trying to do is we can take our backlog back and get us down to a much more manageable four-week time frame and i think that's where we're really going to find our sweet spot where our order comes in we can meet that demand and get it out which means income comes in faster at a much better rate [Music] anthony what are your major competitors at this point and what makes outdoor office stand out from the rest yeah our biggest competitors are actually online kit builders so they're in a few different states around the west we're the only ones that i know of currently who do this in person in a warehouse and build it completed as you see it most everyone else will build in a kit they'll ship you the kit it arrives on your driveway and it's up to you to put it together uh-oh yeah not everyone's good with that and you're different in what way so from beginning to end we handle everything so we're a one-stop shop so from your foundation to your planning to your design all of that's included on the front end then the actual manufacturing obviously and then the deliveries all handled as well so we handle your permitting your electrical all those kind of things that are entailed into the whole project we're able to combine all that into one service seems like an obvious thing that other companies should probably implement i'm wondering what made you go that direction bill you know what we'll do a to z yeah is it just a stand out or did you see a benefit in that i mean what else can you highlight on yeah so for me originally going back to how it all started those were the hiccups that i found i did not want to have my clients go through the same process that i did most people don't want to be a general contractor they just want the product you know i use the joke they don't want the labor pains they want the baby so i figured out a way to deliver the baby in a much more efficient way nice yeah [Music] tell us how you found your new space 26 000 square feet there's no joke what factors were involved in you deciding for that particular location and so on so our space before this was 5 000 square feet so obviously making a big leap you know i don't think we had intended to do that i think originally we were hovering around that 15 000 mark and it just wasn't available so we said are we willing to take that bigger leap and said okay let's go for it so what are you paying for uh for the space now and anything else that's important you can share yeah so right now we're paying just under 18 000 a month that will escalate over a five year stretch to just under 22 000 so that is a large leap considering we are paying 3 500 a month in our prior space wow and so is that one of the biggest overheads per month uh currently yeah i think as we add people labor will start to you know that will give a big uptick there but yeah as far as our warehouse goes we knew that what we do our space required more and it's just kind of i think how our cost of doing business is where maybe we save in other areas like marketing and advertising some people are real heavy in that we found we don't have to be as heavy in that so we'll redirect that into actually the business which is useful space [Music] let's talk about after build support i buy you office space and if something breaks what do you provide as far as support afterwards warranty yeah so we have a one year build warranty so almost all of our materials that we use almost all of them have a minimum 25 year warranty on them so from our siding to our roofing to our flooring all of these things are all going to be under the manufacturer warranty which is great so we make sure we tell people that and we can be a facilitator between that but as far as like the build the structure the foundation anything goes wrong there's a leak we'll certainly cover a lot of that for up to a year which is standard in most building practices okay have you had like a couple scenarios where just things just hit the fan and you have to really own up to it yeah sure yeah i mean there's been a couple times especially when do like interior closets you know like a client pulled too hard and they literally rip the closet door right off okay you know and then we'll get a call like oh well you know rather than arguing with them just fix it it's it's really very inexpensive and they're going to remember that and they're going to go tell their friends oh yeah i totally screwed up or maybe it did fall off i don't know absolutely but it's kind of one of those that you know that kind of stuff i think goes a long ways [Music] so being an inspector for many years how has that experience helped you start outdoor office can you share anything in terms of manufacturing and kind of seeing the build process has that helped you in some way 100 being an inspector for the state oregon doing real estate inspections you find a lot of what not to do frankly you see a lot of carpenters you see a lot of builds of things that have gone wrong as a result of either poor construction or poor materials so what we try to do is start right from the get-go say look we're going to do things the way they're supposed to be done so meaning as far as construction of the actual build itself to the materials we're using so you know building it like a main home is how we feel you should have a outdoor space you want it to last you want the value out of it you can go get a shed and it will probably fall apart in seven to ten years these are built for 30 40 50 years wow [Music] any tips advice on finding talented employees i know that's an issue for all businesses right now especially but what's the experience been for you yeah i think finding people with the right personality who can fit into the team environment i think training people most obviously there's going to be your basic requirements but we have different levels of hiring we have apprentice levels we have very high end carpenter levels finnish people and then we've got very technical jobs right so i think when you get into those positions you're trying to find that specific person i think you just pay them what they deserve and i think they'll be appreciative of that but that only takes it so far you really have to be a company that's going to design yourself around them and their position and their capabilities and i think being able to position ourselves that allow them to succeed have input allow them to continue to grow so it doesn't become stagnant yeah and i think as a company it's a very dynamic company as far as our agility to move and position ourselves where we need to go having people that are on board with that makes a big difference absolutely what is the most challenging thing for you anthony right now um as a business leader you know we've gone through some terminus times and looks like it's not over yet unfortunately but what are you struggling with right now yeah well the good news is every time as far as our business there's a economy downturn or a pandemic downturn we seem to increase in business the downside of that is every time there's an increase in business we're trying to keep up with that so either having an influx of money since we don't have any loans or we don't have any investors you know sometimes it can be difficult to get the materials we need to meet the demand so that is for sure a big challenge running on cash which is great the downside is you you limit yourself sometimes and i think if we really want to take that really next step i think maybe i need to be more open to having outside investment into the business absolutely that'll help with scalability guys if you're struggling with something we'd love to hear from you comment below what are you struggling with as a business leader in these times let's talk about advertising you mentioned that you never spent a penny on advertising but you just recently started to so why do you think it's a good time and what made you make that decision yeah i think if you're going to take that next step the next evolution of a business taking it and we talked about you know from small time if you will to medium time or even big time i think you have to start announcing to the world what it is that you do i think we've gotten away with it because so many people just were desperate to have an outdoor office or an outdoor space and it just so happens to be our name is outdoor office but i think for a lot of it is that we really want to try to test the waters to see how far we can take this and if we've done this we've done over a million dollars a year with no advertising and marketing what happens when we turn that switch on 2022 we're looking at just around three million dollars just shy that's with our projections now to be fair every year we've beat our projections by about 300 percent yeah so you know what that means i don't know yet but we'll find out we'll have to do a follow-up with you yeah all right a quick blitz thanks you guys for submitting your questions anthony let's just jump into it what's your favorite business book uh winning the war in your mind we need to warn you mine okay i'm gonna check that one out what car do you drive toyota tundra now at the stage of success what advice would you give your younger self be patient when you're not running a business what would we find you doing on a golf course okay if you could win a lottery today and earn a fortune for the lifetime would you give up this business today absolutely not i'd invest in it all right this is deleting asking you how you build trust with customers when your products are new to the market tell your story give them your background people will invest in you probably before the product awesome and then last question from wc who are your primary customers and how do you find them and is it people with homes without an office that buy out that's what interests me as well people who are now working from home who were forced into it i would say a lot of people now are really trying to find a solution without having to move [Music] you mentioned something in terms of is this a side hustle or is this an actual business that you're creating and building yeah what can you say on on that note how do you go from yes it's a side hustle man to a 10 20 30 million dollar business yeah i think anyone who starts a small business there's always a bit of a wild card with them and their personality i think you got to be a risk taker no matter what i think in us in my situation personally you know being a home inspector who was very successful i was doing over 200 inspections a year and you know i had made a great living by myself you know i think if you're going to really kind of take your risk level and assess where you really want to go sometimes you're going to have to take that leap you know and i think taking that leap is a scary proposition absolutely no matter if it's a small leap or it's a big leap the numbers in percentage-wise still probably equal the same thing inside of you right and i think for us you know i really want to see can i take this to a 20 30 40 50 million dollar company i'm never going to do that by sitting on the sideline and continuing down the path we are now there's nothing wrong with staying yeah but that's not where i want to be we want you guys to take that leap it's well worth it [Music] what else are you doing to create an exceptional customer experience yeah i think what's unique about our business is we get to work one-on-one with our clients in a retail setting you don't have to get a lot to know about their backgrounds their personal things what they're using it for we directly ask them because it's going to help us in our design in our manufacturing of it but not only that it's going to take it one step further to where if they're using it like a home gym so do we need to reinforce the floor if they're doing weights are we going to need to have extra insulation or soundproofing if they're going to be a podcaster or if they're going to be a musician right so all these little things we've learned over the years we try to implant that back into our current clients so then they feel hey this is really individual and personal for me and i think that's what they love they fall in love with the idea that this is my space so you've been featured in some publication shed builder magazine some other one as well did they come to you or did you seek them out and how did that help your business yeah i mean abroad oddly i think a lot of people through social media they've seen some posts and either a producer or an editor or someone along the lines said you know hey would you like to do a story sure why not you know so some of those stories the first one we did was in home and garden magazine we were actually the centerfold picture for it oh wow didn't even know they knew existed that was very early in our process and then from there it sort of spurred into the next one said hey we saw this and kind of one thing led to another you know i think if you're gonna tell people you know hey here's our story don't be afraid to put it out there did it help your business do they bring new customers yeah absolutely i think we was one when we were the cover story for a couple of them i think people do read that i'm always questioning is this actually legitimate or not but i think a lot of people what they've done is they'll open up they'll read it they'll save it you know even on our local paper there was a paper that we did three years ago i still hear about this article today oh i read your story in this and we fell in love with it it was a local family business and i'm amazed at how much we generate just from those at all you know it doesn't take a whole lot i think in terms of licenses requirements that you need to be a manufacturing company yeah what can you share on that is it pretty basic or what else stands out yeah i mean in oregon you know we do have some pretty strict laws as far as having your licensing bonding insurance requirements that's going to be us and it's the same in a general contractor in most industries around here i have an advantage because i also have a home inspection license which gives me even more in-depth studies of how things are put together the way things are supposed to be so my requirements for me as a business actually benefit me to have more than the standard person maybe would but like anyone with a manufacturing business or who wants to start you're saying other than typical licenses that are kind of the same throughout the states there's nothing else to it right you know each state's going to be a little different here and there generally speaking but as far as us doing our manufacturing side we're still considered a construction business i see okay so you know there hasn't been any real big sway and as far as that goes we don't really operate any real heavy equipment or machinery we still do things in a semi-traditional way but our package and how we put it all together is going to be different [Music] you're not national yet no do you have plans to to go national we've had a lot of demand you know i would say at least once a week i get calls from florida new jersey texas louisiana you know california so what's the struggle there i think a lot of it is just the fact to ship a building fully completed is going to cost you twenty thousand dollars you know so i think what we're actually looking at doing is keeping our warehouse here and then building satellite locations where we can make our own kit ship our kit to our local facility be the local provider for that area and then all they have to do is do the finishing touches i think that would go a long ways where we can still be your local you know outdoor office awesome well anthony i enjoyed it thank you very much thank you so much you bet well i hope you guys enjoyed this incredible episode with anthony the owner of outdoor office what a cool product it's beautiful well made hope you guys enjoyed it and learned a lot about manufacturing we appreciate your support take a second to like subscribe and hit that bell so that you don't miss any of our videos thank you for watching

2022-03-22 17:33

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