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EPISODE 0021 - JUN 12, 2018 Small Business

You Need Less Than You Think

with Athina Wang, Florence Shin, Luke Saunders, and Adam Huber
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Who needs a fancy office when you can work out of a dingy food court? Who needs fancy equipment when you can buy what you need at Walmart? Who needs to hire an SEO specialist? What does an SEO specialist do, anyway? (A question for another episode, or maybe another podcast altogether.) On this episode, three very different companies—a fashion brand, a company that sells fresh salads from vending machines, and an auto detailing shop—discuss their humble beginnings and offer practical advice about being resourceful and staying lean.

Transcript

(00:00:00) Broken By Design by Clip Art plays.

Wailin: (00:00:01) Welcome to REWORK, a podcast by Basecamp about the better way to work and run your business. I’m Wailin Wong.

Shaun: (00:00:07) And I’m Shaun Hildner. Wailin, when we started podcasting, was there anything that you thought we just couldn’t live without?

Wailin: (00:00:15) Um, yes and I’ve been asking for it ever since. A shock jock soundboard so we can play an air horn.

Shaun: (00:00:21) Buh buh buh buuuuh. [makes airhorn sound]

Wailin: (00:00:21) I guess we don’t need one if you can do one so well.

Shaun: (00:00:25) Well, in REWORK the book, there’s a chapter called You Need Less Than You Think. And there’s one story I’ve heard about Basecamp that we started selling Basecamp the product without any way to actually bill for it because we knew we were doing a one-month free trial. So we decided, oh, you know, well now we have a month to build out that billing feature.

Wailin: (00:00:46) Right. You need less than you think, including a way to collect money from your customers.

Shaun: (00:00:49) Exactly.

Wailin: (00:00:50) The company rented space in friends’ offices before getting its own office and I think Jason used to answer customer support emails all by himself.

Shaun: (00:01:01) I heard that.

Wailin: (00:01:01) And up until recently, I believe we were still using an accountant who was just a friend of Jason’s mom, who would do accounting for small businesses. And it was only until very recently that our finances as a company got too complicated that we had to hire a fancy accounting firm.

Shaun: (00:01:20) That’s pretty adorable.

Wailin: (00:01:21) Yeah.

Shaun: (00:01:22) This is an episode about scrappy beginnings, making smart tradeoffs and knowing what you can do without. We talked to three very different businesses about all the ways they’ve been resourceful, whether it’s using off the shelf software instead of building something custom, working out of a gross food court or starting a business with a few hundred dollars of equipment from Walmart.

Wailin: (00:01:38) Our first conversation is with Athina Wang and Florence Shin. They’re two friends from New York who founded Covry, a sunglasses company. Here’s Florence.

Florence: (00:01:48) The both of us, um, struggled with being able to find eyewear that fit us because we have very low nose bridges, high cheekbones, just, diverse facial features that the industry necessarily didn’t cater to at the time. So, we created our own fit called elevated fit, which is then found in all of our frames.

Wailin: (00:02:06) Where does the name come from?

Florence: (00:02:08) So Covry actually comes from the word cove, and we kind of wanted to make up our own word. But, we really like being at a cove, like it’s very calm, tranquil, but it’s this very diverse, environment with the water and the land. And we wanted to make it into our own word because we read somewhere that it’s much easier to trademark. So we turned it into Covry.

Wailin: (00:02:32) I was wondering if you could bring me back to the start of your business and what you decided were the bare essentials that you needed in order to launch your business. Do you remember?

Athina: (00:02:43) Well, from the very, very beginning, we launched a Kickstarter campaign just to see if there was a customer base for this because we, I mean, as foreign said, we are initially created it for ourselves and then we just want to see if like anyone else needed this. And also, production is quite expensive, so we needed to raise money to put everything into production.

Wailin: (00:03:06) How did you spread the word about your Kickstarter campaign? Because your Kickstarter campaign was—you hit your stretch goal, right? Like it was oversubscribed. So, how did you get such a following on Kickstarter?

Florence: (00:03:17) So we did a few things. Before we launched the Kickstarter campaign, like before we hit click, we already had lists set up that both of us had prepared that we were going to email. So, like lists of our friends, family. And, we also had lists of editors that we really wanted to target. And I think as a Kickstarter campaign, it’s hard to get press, but if you can find the right people that would genuinely be interested in your product, and you share that story and you can share a sample with them, I think they would be intrigued. And we got lucky and you know, we found some people that were genuinely interested and felt passionate about the product.

Wailin: (00:03:58) So, you’ve got some press mentions during the Kickstarter campaign?

Florence: (00:04:02) Yeah. But the first few weeks were really difficult. It was really, really hard. But towards the end it started to pick up. Um, and we were both really encouraged by that.

Wailin: (00:04:10) Athina and Florence tripled their Kickstarter goal. Then they had to build a website.

Florence: (00:04:15) So, we started our website on Shopify, which has been really helpful. I know like we have a lot of friends that are also in design or we meet a lot of people who have their own brands, and I think a lot of them struggle to be on ecommerce because they’re told that they need to hire a web developer and it’s going to be thousands of dollars and all this stuff. But, like Shopify is super easy to use. It has like so much good data and analytics for us and it’s really cheap and it’s really easy. We set everything of ourselves, like, the entire website, we set up ourselves. We definitely didn’t need a web developer or anything for that.

Wailin: (00:04:55) And how did you make your prototype? Did you have a few prototypes made at the time of your Kickstarter campaign so you would have something to photograph and put in the video?

Athina: (00:05:03) e sampled for about a year, just going back and forth to perfect the fit. Then we had prototypes that we used for the Kickstarter campaign. And then, after it was funded, we actually made the production.

Wailin: (00:05:16) Covry has its frames made in China and they find manufacturing partners at trade shows in the US rather than flying all the way overseas.

Athina: (00:05:24) It’s a lot harder when you’re doing it over working with someone overseas because you have to like go there and fly there and meet with them. And China’s a huge place, so it’s kind of difficult. But at these expos and trade shows, they’re all there at one place, so it’s really, really convenient for us.

Florence: (00:05:47) You can literally go from booth to booth and compare, ask the same questions and really get to meet the people that you’re going to be working with. So, you can kind of go with your gut and you’ll know as an entrepreneur. You know what feels good. You can compare, and you can actually see and touch and feel their products. So, that’s a really great way to do research and find a good manufacturer.

Athina: (00:06:09) When you go to, for example, the eyewear expo, there’s ones that are lower price point factories, there’s higher price point factories and there’s factories from like different parts of Asia. So, we like start from the bat, we eliminated, we didn’t even bother going to look at like any of the lower price point factories, which is like a huge portion of the show.

(00:06:30) So, that helped eliminate, I guess depending on what type of product you want to make. And also… So, for example, some parts of… Say, for example, Taiwan, they specialize in sports, like, sportswear eyewear, which we don’t do. So, that also eliminates another category for us.

Wailin: (00:06:52) What was your plan at the beginning for how you wanted to market and merchandise your sunglasses? Did you always—were you thinking like, we want a physical store, but maybe we can’t afford one right now? Or were you thinking we’ll sell them online exclusively?

Florence: (00:07:07) Yeah, so we originally launched with the idea of just online because we obviously couldn’t afford a brick and mortar space, especially here in New York City. But as we started, like, a few months in, we met with a lot of different brands that were pretty much on the same journey as us in terms of not necessarily being able to afford a space on our own, but, we really want to try it out, test it with popups.

(00:07:35) So, what we ended up doing was collaborating with a few different brands, on weekend popups and eventually on longer short-term popups. So, we did four months in Brooklyn where we partnered with two other brands and we split the cost of the rent. And, not only did that help us lower our overall costs, but that helped us to cross-promote. So, we all brought in customers, and that helped each other as well.

Wailin: (00:08:01) And then how many sunglasses were able to make that first time out?

Florence: (00:08:04) So, we did three styles in three different colors each, and that was really the most that we could afford, really, with our budget. So, we definitely started lean and I think that also helped us. And, not offering such a broad assortment and having to invest so much in inventory. So, with that we were able to keep our costs down as well.

Athina: (00:08:28) We try to pick three very classic shapes just so they could appeal to more wider range of people. And then, once we actually launched our website, we started making kind of like funkier shapes, or more fashion colors and things like that.

Wailin: (00:08:46) When did you start to feel more comfortable? Like your business was at a place where you could start to expand or think about things like, oh, be nice to like spend a little money on this or have this thing that maybe you had been putting off purchasing or investing in because you weren’t sure where it was going at the beginning.

Athina: (00:09:04) I would say we’ve—we’re still very wary of how we spend our money, just because it is… I mean we’re lucky that we’ve never had to… We’ve never been in debt or anything like that, but we’re very, very, practical with how we spend our money. And like with everything, like we either build it ourselves. We carry and lug everything ourselves, we ship everything ourselves. And so it’s, we, we cut a lot of costs that way.

Florence: (00:09:38) hen we have photo shoots, especially in the beginning and we still do this. We try to lower the cost a lot by offering trade. So, if it’s with a photographer or a model, sometimes we’ll find models on Instagram and we’ll just DM them and work with them that way. Or ask friends if they know anyone that is looking to build their portfolio. So we’ll try to work with them versus always having to go through an agency and having to pay those extra fees.

Wailin: (00:10:03) Have you been surprised by anything where you thought, oh, you know, we’ll definitely need this. Or, as a fashion brand, like all these other fashion brands have this thing and we’ll definitely need that. And then you found that you didn’t?

Florence: (00:10:17) I would say like SEO kind of thing… was really… So, we met with some people and it’s very important when we do need it and we do use it. But just the amount of money that they were, asking us to spend a month on online marketing—

Athina: (00:10:37) [crosstalk]

Florence: (00:10:37) —or Google ads and things like that. Sometimes you spend a lot and there is not much, like, there isn’t much of a ROI on that.

Athina: (00:10:49) Yeah. And I think as a small brand, it’s just like if you would have to put so much money into it to even see a tiny percentage of return on that. So, we kind of just stopped doing that and we just do Google SEO stuff.

Florence: (00:11:06) As I say, also, we just opened up a showroom. But, for the first few years we were, we had a little office in the warehouse in New Jersey. We were coming into the city for meetings or we’d work at a cafe or work from home sometimes. And even now we share our showroom with another emerging brand.

Wailin: (00:11:24) In the fashion startup world or the world of emerging fashion brands, that kind of thing, is there a lot of pressure to always look like you have like a bajillion dollars at your disposal?

Florence: (00:11:35) On social media or in business magazines do you see all these young tech startups, fashion tech startups that have a lot of investing, like a lot of money around them? And they look like they just grow super-fast and they have a team of 50, 100, they have these beautiful offices. So, I definitely think there is that pressure. But, I mean with us, we’ve always been very frugal with our money and that’s the most important thing, is to not—to be profitable. Versus, you know, making it seem like we have all this money and we actually are in debt.

(00:12:09) Broken By Design by Clip Art plays.

Wailin: (00:12:11) Athina and Florence at Covry had to figure out how to manufacture and distribute a physical product on a shoe-string budget. Now, what about selling something perishable, like a fresh salad? And that’s the challenge facing the next person we talked to.

Luke: (00:12:30) I’m Luke Saunders. I’m the founder and CEO of Farmer’s Fridge. So, what a consumer sees is basically a really fancy vending machine, full of fresh salads, bowls, breakfast items, snacks. Some machines have drinks, but yeah, it’s basically a very fancy vending machine.

Wailin: (00:12:47) Before starting Farmer’s Fridge in Chicago in 2013, Luke was a traveling salesman for a metals finishing company.

Luke: (00:12:54) And in doing that job, my biggest gripe was that I couldn’t get good fresh meals on the road.

Wailin: (00:12:59) Luke wanted something that was convenient, like packaged food but fresh like a restaurant, while also being healthy.

Luke: (00:13:06) Originally realized that in order to compete against a restaurant but not be a restaurant, things that I could do… if it was automated, I wouldn’t need people there so I could sell food 24 hours a day. I could make it smaller so it could fit anywhere. Like why do I need all this back of house? Uh, there was starting to be restaurants at the time that were actually selling food where you’d walk into the restaurant and order on a touch screen. So, like, okay, well this is like, what do you need a restaurant for if you are ordering on a touch screen.

Wailin: (00:13:35) What Luke initially thought he needed with some kind of custom equipment.

Luke: (00:13:38) And actually, when I was getting started, was so not thinking vending machine that I went and interviewed a bunch of industrial engineering firms and got quotes to build like this—a custom machine that could sell food. But not be a vending machine. And I got the first couple of quotes, they’re like $1 million, and I went home. I was like, I don’t think I’m going to be able to make this work.

Wailin: (00:14:01) What did their designs look like? I’m trying to picture it.

Luke: (00:14:04) I mean mostly it was, just like a quote on a piece of paper. Like, I would go in and explain what I wanted to do. I was like, I want to, I’m going to make all the food here and I’m going to deliver it and I need this, you know, a box that could dispense it and keep it cold and make it look really special so people would be willing to put it in like the lobby of an office building. You know. And they would come back and give me like 10 sheets of paper that said, like, here’s why it’ll cost you $1 million for us to design this for you. And it may not work when we’re done. So let us know if you want help. And I actually was sort of, okay, I guess this will never happen.

(00:14:42) And my father-in-law was like, why don’t you just see if you can modify a vending machine to do what you want? And I was like, that’s an interesting idea. So, I went to the vending show and we ended up, kind of mashing together different technologies.

Wailin: (00:14:55) What was your plan for where you would make the food?

Luke: (00:14:59) So, at the beginning I had no idea. I didn’t have a food background. So I went to a local cafe and I actually offered the owner of the café… I offered to pay her to let me work there. So, I was like $15 an hour. I was like, I just want to be able to ask questions. I will work, but I’m not going to be the best employee because I would, like, stop and ask you things. And so, she agreed to do that. And one of the things that she explained is, you don’t actually need to start in your own kitchen. The way I got started was in a shared kitchen. So, I looked up the rules and regulations in Chicago and there was a shared kitchen here called a Kitchen Chicago. So we started in there. I rented a table by the hour, it was like $10 or $15. And that’s how we got off the ground.

(00:15:46) We started with a company called Testa Produce. We weren’t big enough to get them to deliver the food, so I had to drive down to the south side of Chicago and wait in my Subaru for them to come out. And then I had to load up the back of my Subaru and drive it back to the shared kitchen.

Wailin: (00:16:00) Was this at like four in the morning? Because I know these wholesalers start their day really early.

Luke: (00:16:03) Yeah. Actually, we were really committed to this idea that we were going to get fresh produce in every day, prep that product, and give it to consumers and like have this really short shelf life of the product. And so yeah, we literally would be there at like three in the morning waiting for them to open the door and give us the produce. And then I’d get to the kitchen around 4:00 or 5:00 AM and then we’d make food until like eight or nine, and then we’d go and deliver it to the one machine.

Wailin: (00:16:30) Farmer’s Fridges are upscale-looking and the solids come packaged in colorful layers and clear plastic jars. Today, the company has 150 machines in Chicago and Milwaukee in places like office building lobbies, hospitals and universities. But that first fridge opened for business and a dingy food court in downtown Chicago.

Luke: (00:16:49) So, the first ever Farmer’s Fridge was in what is objectively—was the worst food court in Chicago. It doesn’t exist anymore. It was called the Garvey food court. You know, the food… it smelled like a lot of… there was a ribs place in there and so kind of had this rib smell through the whole food court. But it was perfect for us, actually. One of the reasons… so it was the only place in Chicago that would actually take us.

(00:17:15) I went to everywhere you’d think to go first, like the Merchandise Mart and French Market. And they all basically said, you’re crazy. This’ll never work. And by the way, we lease space to restaurants, not vending machines. And then I found this food court and they were so desperate for the rent money that they were willing to put us right in the middle of the food court.

(00:17:32) So, there’s this is awesome photo where you can take it from the top of the stairs and catch McDonald’s, Subway, and Dunkin donuts all wrapped around our little machine with this reclaimed wood and plants on top and astro turf in front. Like, I worked out of that food court, so I would sit there and watch the machine.

Wailin: (00:17:51) In the really bad food court?

Luke: (00:17:51) Yeah, exactly. So…

Wailin: (00:17:52) Just at a sticky table?

Luke: (00:17:53) Yeah, it was great. I’d even, like, I would conduct job interviews in there and it was a good screener because if somebody came into the food court and you were like, this is our office, what do you think? And they didn’t want to work there, it was a good first sign that it wasn’t the right fit.

Wailin: (00:18:08) I love that. When did you move into an office of your own?

Luke: (00:18:11) January of 2017. So, we actually went four years without an office.

Wailin: (00:18:19) Where’d you go after the food court closed, though?

Luke: (00:18:19) So, after the food court closed, we started working out of the shared kitchen. Essentially what had happened… at the beginning, the machine kind of never worked right, cause it was basically mashed together.

Wailin: (00:18:33) Had you taken an old vending machine and retrofitted it?

Luke: (00:18:35) Yeah, exactly. And so, there was a lot of issues, and we would constantly have to be there fixing things. We—it used to happen every day basically, and we’d, we’d do stuff like, um, you know, we’d give away all the food to make it look like it wasn’t broken. We just sold at all. But we needed to be in that food court. Once we had stabilized the machine and the way that it worked and it wasn’t failing so much and the network started to grow a little bit. Uh, we moved and started working out of the kitchen because that started to be where we needed to keep an eye on things.

(00:19:09) So, making sure that as the team grew, we were making everything properly and following all the food safety and quality regulations. And then, we did end up with like, we kind of had like a cubby in that space, but it’s an event space too. So we all just worked at big open tables in this big beautiful room. And it was really only a problem on Fridays because they’d come to set up a wedding and we’d all get kicked out. And then, finally, we moved into our own production space. We had a little bit of office space there, but we had actually let the other company keep it. And so we were working on the loading dock for a while. It just, ‘cause they were willing to cut the rent if we did that deal.

Wailin: (00:19:49) You’re just like sitting on like a folding chair in the loading dock or something?

Luke: (00:19:51) Yeah, exactly. And that was actually a big step up, ‘cause at least we didn’t have to deal with all the other people in the shared kitchen coming in and out of our space. And then, finally, our COO convinced me that we needed an office at the beginning of last year as we started to really scale up the team. So, we have an office. We don’t have any conference rooms or any… it’s still very bare bones. We didn’t actually have air conditioning until August of last summer. So there’s this whole group of people in the office who are like Farmer’s Fridge before air conditioning and Farmer’s Fridge after air conditioning. And then it’ll be now like Farmer’s Fridge before conference rooms, Farmer’s Fridge after conference rooms.

Wailin: (00:20:32) Right, but I guess you didn’t need them necessarily early on? In that office. Or you figured out a way around it.

Luke: (00:20:35) No, because like we didn’t even have meetings. I mean, we would… it was like, what did you need? You ask the person sitting next to you. And then now obviously we have lots of meetings and you need space. So, we kind of have grown and evolved. Even the air conditioning, um… probably waited a little too long on that, but it was something we didn’t need it because it was cold and the building had heat. And then, we kind of like when we went to go schedule it, they’re like, well, we’re busy all summer. We can’t install this until August. So, we actually made it a little too long on that one. But it was the same idea. It was like we didn’t actually need it because it was winter.

Wailin: (00:21:15) For the first year or so. Luke and his team tweaked their food selection based on talking to customers and seeing what sold. It wasn’t until later that they conducted more formal market research, although they were still pretty frugal about it.

Luke: (00:21:27) Even when we did the market research, it was really interesting because we knew there was a lot we didn’t know and we have a unique business where we actually don’t get to see or talk to a lot of our customers. So, we were searching for answers and it was another example… I went out and I got a couple of quotes from market research and market research is very expensive. Like, quarter of a million dollars, expensive. And I was blown away, I couldn’t believe. And we were actually considering it. We’re like, this is like all of our money, but maybe it’s what we need to get to the next level. And ultimately we were able to find a freelancer who used to work for one of those companies that charges you a quarter of a million dollars. And she’s like, yeah, I’ll just do it on my own time for like 10. And it worked really well. It was foundational. And so you can find people that will do it for much less.

Wailin: (00:22:19) Yeah, I love that. When did you start making your own machines? When were you able to transition from the retrofitting old vending machines?

Luke: (00:22:26) Yeah, so we… we kind of went through two cycles. At the beginning we were still making a lot of parts of it. We actually partnered with a couple of carpenters based in Batavia to do the reclaimed wood part, and all that was our design. And even the graphics and the user interface look and feel. But we were partnered on the electromechanical components and the software. We started to do our own software about 2016. So, we actually went about a year and a half on someone else’s platform and it was very clear it wouldn’t scale and no joke… it, we literally moved everything over to our own platform like a week before they went bankrupt and then disappeared. So, yeah, it was something once we finally had a budget to build some software we did. And then, I would say we started manufacturing everything in house about two years ago.

Wailin: (00:23:23) In his five years running Farmer’s Fridge. Luke has gone from thinking he could do everything himself to hiring a team and raising investment, but the funding hasn’t meant a blank check to do whatever he wants.

Luke: (00:23:33) There’s a story that I tell people, just about when I was getting started and how much, I didn’t know what I was getting into. But, I actually didn’t want to hire any employees. I thought I could do everything. Like, I was going to chop the lettuce, deliver it, then like take a nap and come back and do it the next day.

Wailin: (00:23:51) And have to pick up the stuff at the end of the day, too.

Luke: (00:23:52) Yeah. Like just do it all. And, I did get talked into hiring a couple of cooks to help me at the beginning. But then what I quickly realized is like, we needed to automate some things as we were growing. And so I really wanted a conveyor belt and I remember having this big fight with our, investors. Like, I need a conveyor belt. There’s no way I can keep up with this demand.

(00:24:15) And they were like, absolutely no way. You do not need this. And so we didn’t get it. And it ended up being much better because we continued to iterate on the process and actually made it a lot more efficient. So, there’s a lot of examples like that where it’s just like I went from one extreme to the other, like, I need nothing and I can do this all to like, oh, I need this really expensive thing or I’m not going to be able to be successful. And you kind of get pushed back in both directions and usually somewhere in the middle.

(00:24:43) Broken By Design by Clip Art plays.

Wailin: (00:24:43) The next business owner we talk to, you also started out doing everything himself. His name is Adam Huber, and he an auto detailing business in Sioux Falls, South Dakota.

Adam: (00:25:01) It really all started when I was 16 and one day I was going to go on a date with a girl. So, of course, you want to get your car all cleaned up and looking nice. And so I started researching compounds, polishes, waxes and all these other things. And so, I got my vehicle all detailed up and looking good. And my dad told me, he’s like, you know, you should really do this on the side to earn some extra cash or whatever. And, so I kind of did for summer. And that was kinda my first go at owning, you know, at “owning a small business.”

Wailin: (00:25:31) As a teenager, just trying to earn some extra money, Adam didn’t have his own shop and he couldn’t do the detailing in his house.

Adam: (00:25:38) Where I lived, we were on a one mile stretch of gravel road, 10 miles outside in the country. And, you know, someone’s not going to get their car detailed and then drive on gravel for a mile afterwards. It just doesn’t make any sense. So, I kind of looked at my supplies and I said, you know, I can take all this, load up in the back end of my vehicle and then go to their house and do it there because everyone’s got an outlet. Everyone’s got a water spigot hookup. And so that’s kind of what I did for summer.

(00:26:10) Fast forward to May of 2015. Me and my wife, we were trying to find some ways to pay down some debt that we had, you know, student loans and stuff like that. And I said, you know, I used to do car detailing back in the day and I could earn a hundred bucks a pop.

(00:26:24) So, we decided to take $500, $700 out of the savings account and went to Walmart and I just bought some of the basics. You know, soap, a wash mitt, a bucket, some spray wax, a vacuum and all these other things. And every single time I would get finished with the car, I would post on Facebook saying, hey, you know, I just detailed this car. Is anybody else interested in it? And within a one-month period, I was very quickly pulling 40 hours a week at my full-time job and then pulling 40 hours a week doing car detailing.

Wailin: (00:27:01) I was wondering if you could bring me back to when you took that first $500 to $700 out of your savings account. When you went to Walmart, did you have an idea of what you wanted to get and did you have to make some decisions about this would be a nice to have, but I’m not going to let myself buy it until I’m a little bit more established? Were there some decisions like that?

Adam: (00:27:22) Yeah, that’s a great question. One of the things that I didn’t buy right away was, what’s called a polisher. You put a pad onto it and then you can polish the paint to get an even greater shine out of it. Once we had made a couple of hundred dollars, I bought myself a polisher and then that allowed me to polish out scratches and marks on the paint and all this other stuff. And then, once we had that then, and I’d made a couple of extra hundred dollars, I realized that the vacuum that I was using wasn’t really sufficient for what I was trying to do. And I was spending too much time. I was wasting too much time on interiors because it wasn’t powerful enough. So, then I would buy a bigger vacuum and it’s just a big, endless repeating cycle.

(00:28:07) And now in 2018, I’m switched from mobile detailing to detailing in a 3,000 square foot shop. And I have two full-time employees as of right now and two part-time employees.

Wailin: (00:28:22) Can you walk me through your decision-making process on going from mobile to a brick and mortar business where you are going to commit to a permanent space and all that stuff?

Adam: (00:28:34) In South Dakota, we get some pretty brutal winters. It’s very common to get down to negative 20 or so. And so in doing mobile detailing, one of the things that I had to overcome was detailing a car in a cold garage. You know, it’s really hard to clean, to wash a car when the water just freezes. Rakes the paint.

Wailin: (00:28:56) Oh God, I’ll never complain about a Chicago winter again.

Adam: (00:29:00) Well, I went through one winter like that and I was like, okay, this kind of sucked. I sat down and I figured out, okay, if I own a shop, what is the minimum amount of cars that I want to do, what’s the minimum amount space and everything like that. And I quickly figured out that I wanted a shop to where I could have three bays of cars going at all times. And, I thought that would be the best setup. And I luckily found these brand new shops that were getting put up right in the middle of town. Now here we are, we’re doing easily six to seven cars a day before five o’clock. And we could probably, at, like, absolute full capacity, do 10 to 15 cars a day, if need be. So, it’s been a big step up in just the last year, going from three cars a day, max. To 10 to 15 cars a day as a possibility.

Wailin: (00:29:59) When you committed to that 3,000 square foot space, was it also the plan from the get go to then hire additional employees and so you knew you would have three bays going at once?

Adam: (00:30:08) Yup. From the get-go, we knew that when it got busy that the only way that it made sense, a shop that size was to hire on people.

Wailin: (00:30:20) Have you needed to expand your advertising and marketing efforts beyond Facebook and word of mouth or have you been able to grow at a pace that is comfortable for you? Just the way you’ve been doing so far?

Adam: (00:30:34) It’s one of the great things about the business is, because we get slow in the winter time, I get to start tinkering with how to build a website, you know, how to do my own SEO, how to do Facebook ads, how to do Instagram and Snapchat. And so, I started tinkering with all these things in the wintertime. And then when it comes to springtime, you know, it’s just like I planted a seed in the wintertime, and then it comes to fruition in the springtime and summertime and it just pays off dividends. So, very quickly, I’ve learned how to do Facebook ads and I know how to do marketing really well with Facebook. Email marketing and all these other things. And so, it’s been totally digital from the get-go. Now, with the volume of cars that we’re doing and then training new employees and all these other things, I brought on a friend of mine who is just a… He’s a younger kid, but he’s a brilliant person when it comes to marketing. And so I brought him on and said, I just need help having someone keeping accountable to taking pictures of cars, doing Facebook ads, and all these other things.

(00:31:35) So, before, my marketing budget was basically just Facebook and it was about a thousand dollars a year and I was grossing, last year I grow is probably about $62,000 or $65,000 something like that. So it was a pretty good return on investment. This year, we’re looking at, you know, I’m going to be paying him $500 a month along with, I’ve been running about $200 in ads on Facebook every month. And the only reason why is because now because of the volume that we’re at, we’re doing about 28 cars a week on average. And so, I just need to keep that volume up. And so, then, of course, you know, the marketing budget goes up a little bit, which I’m fine with because it pays off.

(00:32:19) Broken By Design by Clip Art plays.

Adam: (00:32:20) In Sioux Falls we have a very budding small business scene and entrepreneurial scene here, which most people might not think is a thing in South Dakota, but there’s just a lot of people starting up small businesses here. And, one thing that I have found is that it seems like tech businesses get a lot of the glamor, right now, in South Dakota. And what I find funny is that a lot of the times these tech businesses need funding to start. So, you’re immediately starting a business negative. And with a lot of service-based businesses you can cashflow almost everything. As long as you’re patient enough to wait for it. I always just found that interesting that, you know, service-based businesses, for the most part right now, just are kind of looked down upon, and it’s never really quite made quite made sense to me.

Shaun: (00:33:19) REWORK is produced by Wailin Wong and me, Shaun Hildner. Our theme music is Broken By Design by Clip Art. Special thanks to Khrista Rypl for her help with this episode.

Wailin: (00:33:26) You can find Covry at ShopCovry.com that’s spelled C-O-V-R-Y. They’re also on Facebook, Instagram, and Twitter @shopCovry. Farmer’s Fridge is at farmersfridge.com and on Facebook, Instagram, and Twitter, as farmersfridge. And you can find Adam Huber at AdamHubersDetailing.com that’s Huber, H-U-B-E-R. And you can see photos of his work on Facebook and Instagram at AdamHubersDetailing.

Shaun: (00:33:57) You can find us on Twitter @reworkpodcast. And our website is rework.fm where you can find show notes for this and every episode of REWORK.

Wailin: (00:34:16) Do your Air Horn again.

Shaun: (00:34:16) A buh buh buh buuuuuh. [Makes airhorn noise.] Muh muh muh MUHHH. I don’t know how it goes.

Wailin: (00:34:26) We should work out of a gross food court.

Shaun: (00:34:28) We kind of do. We go to McDonald’s a lot.

Wailin: (00:34:30) Well, it’s true. Okay. We’ll have to cut that part.

Shaun: (00:34:37) Absolutely not.

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