Happy Friday Lizards.
I want to share some recent experiences in our shop that I hope not only gives some insight to how business works but also helps you learn what to expect if you are ever in this situation. I will always be transparent when I can. I talk about some wins in here and I will also share with you some “walk away” cases. A loss if you would like to call it that. I don’t really like to call it a loss as its always a learning in our shop. Could call it a “not a good fit”.
Over the last 9 months I shifted my business from DTC to B2B. You guys know that as I talk about it a lot. I have experienced 2 cases where James and I met with very large companies and they had interesting outcomes that I would like to share. Being that B2B is new for us, it was a fabulous learning and gave two engineers a lot to analyze and think about. I am also going to bet there are many other seasoned lizards in here whom have experienced the same exact thing.
We were fronted with 2 cases of, where we going to “Sell vs. Sell Out”. Both resulted in walking away.
Case 1) A very large award/screen print company in Texas. We met a buyer for this company as they came to our tent at a large venue in College Station, TX. As discussions progressed, we had a meeting with the 2nd in charge at their offices less than 3 weeks after. We were flattered to even have caught their eye and had our game on as we entered the building. First thing he said, “You know that you are our competition don’t you.” How’s that for an ice breaker. As the conversation continued, we came to a place where there were liked two areas that Pate Ranch could benefit them.
- Specialty items for clients upon request that we often make in our shop. These would be if a client wanted something unique that they don’t offer and we did. Reality is that we would likely never see this request going forward but it was a nice way to say we liked some things you make.
- Job shop for laser engraved items that they don’t have time to do. AKA quick turn jobs at a low profit. No thank you. This doesn’t fit my business model.
I did get to see all 4 of their Epilogs running. Surprised they let me see their shop like that but they did. Interesting enough, their largest engraved items are pet urns. This keeps their lasers running non-stop. They really were more interested in us catching stuff thrown over the wall as they didn’t have the time to engrave it. It would also be very quick turns and they expected to be priority over any other business we had. As we walked away and unpacked the experience over some BBQ and beer, we saw that although flattering to even get invited in talk, it wasn’t what we have in our desired business model or strategic plan for our company. We knew we would be just a pure job shop for them. We were not interested in that at all. What they really needed was more lasers to run their orders. I didn’t want that to be my shop so we walked away. If you live in College Station, TX you can probably figure out what the company is pretty easy.
Case 2) James met with a large well known boot company this week also in Texas. We have been knocking on this door a bit and it opened. We sent in our samples and they LOVED them. A meeting was set up with the lead buyer. We came in with our numbers and James and I talked about there being some wiggle room but we did have our no go below number as well. The company was very complementary to our products and when we started talking numbers we were just way too far off. They wanted American made but China prices. I am talking way off by $70 a unit. As James and I again unpacked this experience we came out of it with two things. One is that we were proud that we actually got through the door. Second, we didn’t “Sell Out” to stay inside. We are sticking to our business model even if it staying smaller with a larger profit margin vs higher volume and less margin. I don’t want to work my ass off to give it away so another can make bank. That isn’t a good business model for my shop. Sometimes and more often it just isn’t a good fit and it’s ok to walk away.
In summary, a few things pop out of these experiences. First, we have a defined business plan and we are sticking with it. We often have to tell each other that this isn’t what we want to do with our shop when we start to stray. We have room to flex when needed but we are not going into things without talking about what is also good for US vs what is good for a potential client. Has to be a win-win that aligns with our business plan. Example: do I want to be in my shop making 1000 widgets a day for pennies. Nope. Second, you need to be realistic and also value the items that you hand craft. Don’t over value it but most certainly don’t under value it. You will eventually find the right buyer/client for your item. Thirdly, take all experiences and learn from them and keep on knocking on doors. It is all a part of the maker journey and can actually be a little fun along the way. You must find the “win-win” relationships that align with your business model and plan. If we hadn’t had earlier discussions and defined these two things it would be very easy to go down the rabbit trails. We weekly remind ourselves how we want to operate and live like with this business.
Keep hustling and working your plan lizards. Happy Friday.
