Fertigungsunternehmen: Wachstum durch klare Nischen-Fokussierung

0:00Unternehmer/Gast So we sell a variety of different, like, lightweight home service contractor equipment to home service contractors and industrial contractors. Family business, we've been doing it for a couple of generations now. >> Cool. We are I was going to ask a different question, but >> [snorts] >> got answered by your by your team earlier in the day. So I'm going to skip the revenue level question, just say we have two P&Ls that I have fought to very much focus our teams. We've divided and conquered. One team one One part of the team focus on one P&L. The other part of the team focus on the other P&L. Okay. Um and we're going very very deep into the niche and really niching down to who the core avatar is for each of those core product lines. Okay. Um in doing that, we have a fulfillment bottleneck that's on the horizon. Okay.

0:41>> That we have to make a call >> or one? Uh for one. So we started a plan to relocate our production facility Okay. >> to a different state during COVID cuz, you know, New York wasn't so friendly Mhm. to to manufacturing companies. Or business, yeah. Or business. It was It was ridiculous. So I moved to Texas and we moved the business to to a different state. Right. >> Um and now we have to decide if we want to continue that plan and move the other 50% of the P&L and kind of make manufacturing a center of excellence that's based out of this new state Okay.

1:10>> and recapture some of our EBITDA by consolidating the cost structure. >> do it? Uh because it's a huge distraction for the team while we're while we're really um sales and marketing constrained. So right now we need to like hack sales and marketing to take us to the next level. Uh but we have this like over the next 24 to 36 months, we have this ticking time bomb of one of our production facilities or our The building's kind of dilapidated. Lease is going to expire. >> So you're going to have a constraint basically of an upcoming constraint in 24 to 36 months that will happen with basically manufacturing procurement, whatever, right? Um but you have it today constraint of sales and marketing.

1:47>> Mhm. Now, is the constraint that you just like if you fix it, then the business will grow, but you are profitable today? What do you mean? So is it is So the one that's coming in 24 to 36 months is an existential threat, right? Cuz like if you if the building's falling apart and you have to find a new location anyways, that's an inevitable threat. Like if you don't solve that, you won't be able to continue that line of the business, right? The the constraint in terms of the short term is just I want to get bigger and the thing that's limiting me getting bigger is sales and marketing, correct?

2:17Alex So um This is definitely like Eisenhower matrix of non-urgent and important. >> Yeah. And so um this actually feels like a project that can be done. I don't normally say this, but like in parallel. Okay. Um because I do think that you'll get a lot of improvements within the business [clears throat] if the whole team is centralized. Mhm. Um and so I would I would definitely encourage that. You also have tax improvements and all that other stuff that that comes with moving to Texas. Um and the thing the reason I lean towards saying like that's probably worth doing is that let's say that let's play it out the other direction. Like if we crush marketing and sales in a good way, it's like we're just going to exacerbate how quickly that next constraint's going to come. Mhm. And so I probably lean towards like let's pull the facility in, then we can crank the hell out of this.

3:07The reason I said concurrent is like a lot of times the leaders that are going to be in charge of one are going to be very different than leaders that are in charge of the other. Mhm. Um and so it might be something that you can do at the same time. Um which again, I don't normally say it, but like you just finding, you know, basically managing the move between these two places a pain, but not like to me that's like a 12-week project. Okay. And if And if we're capital constrained in doing both any tips on that?

3:34>> constraint. That's why I asked about the profitability. >> So well we're we're profitable, but to like fund a move and like do it securely where we're not What would that represent in terms of percentage of yearly cash flow? Um from What do you mean? If you were to move, how much cash does that represent for you as a percentage of how much free cash the business generates per year? Uh 45%. >> Okay. So about half your pro- roughly about half your profit would go towards the move for 1 year. >> Conservatively. Okay, conservatively.

4:00[snorts] >> [clears throat] >> So if we were to increase marketing and sales then we could get more cash flow Mhm. and would we be able to do that without incurring the supply constraint that the existing dilapidated location would cost us sooner? Yeah. So you're saying like max out these two facilities and then use that money >> more money faster [snorts] so that we can do the move faster?

4:26Yeah, probably. Okay. Then it would be sale sales and marketing first. Mhm. Free up cash, deploy the cash as the reinvestment strategy. It's a good return on capital, so totally makes sense. Bring that in, recapture EBITDA um and then it makes sense. Okay. And take anyone who's like on the marketing and sales projects like totally off that and just have them start planning for this move. Like have someone own that now. No. I think marketing and sales first. Marketing >> Marketing sales first, free up cash flow, bring somebody else in who can project manage the move, and if they're a good project manager, you'll want to keep them long term. Okay. Cool. Thank you. Appreciate you.

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