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Business of Machining - Episode 19
253 Plays8 years ago
What a shame! In a hotel, sometimes the only place with decent WiFi is beside the pool in beautiful weather. Today marks day 1 of Blade Show 2017 in Atlanta, GA. This week is full of productivity, positivity, and new considerations.
Saunders hones his communication skills, grows the SMW roster, and shares an official result of negotiations spanning several months.
Grimsmo's week has been full of rask parts, fidget spinners, shipping, and family time. Serious questions and a fresh perspective on an old cliche' precipitates discussion about his next business move.
Although coming up with excuses is easy, Saunders holds Grimsmo's feet to the fire. It's time to put a plan in action. Join in to find out what's on the horizon!
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Transcript
Introduction and Setting the Scene
00:00:01
Speaker
Good morning folks. It is a beautiful day Friday, June 2nd. Welcome to the business of machining episode 19. My name is John Saunders and I am in my normal office in Zanesville, Ohio. And my name is John Grimsmo and it is a beautiful day because I'm sitting outside at the pool in Atlanta at the Marriott Hotel because Eric and I are here for Blade Show 2017.
00:00:27
Speaker
We started this with a video and we turned the video off because of the hotel Wi-Fi, but I was like, where are you, Grimsmo? And he's like at the hotel pool because it's the only, what'd you say? It's the only place in the hotel that doesn't have like elevated music or other people sleeping or whatever. So Eric's in my room, so I can't do it in there.
00:00:46
Speaker
But yeah, this is good. I'm in the outdoor pool right now. There's a bit of a background noise from like every single air conditioner in the building that I can hear the wind noise from. So the audio might sound a little bit different, but yeah, excited to be here.
Blade Show Excitement and Preparations
00:00:59
Speaker
Awesome, so yeah, this is your Super Bowl, right? This is your big event of the year? Yeah, this is the only knife show we go to now. We used to go to a couple others, but this is the biggest, the best. It's like you get everything in in three days and four days. And yeah, it's been amazing so far. Today's day one, so you haven't even started yet?
00:01:18
Speaker
Today is the first day of the show, but yesterday there was a lot going on, too. Ah, gotcha. Yeah, yes, I'll get into that in a bit. Yeah, I mean, dude, I had such a crazy, awesome, amazing week. Yeah? Like, over the weekend, I came into the shop a couple times, ran the machines, made some bunch of rasp parts, made a bunch of spinner buttons, because I wanted to bring a ton of spinners to Blade Show. This is like the market for high-end spinners, is all the guys coming here. Oh.
00:01:47
Speaker
It's funny. Yeah. Yeah, so I made a bunch of that stuff, went great, even brought Claire into the shop and had her making some spinner buttons for me. And then, let's see, Monday, we basically, Monday we assembled spinners, got them ready to ship. We got everything ready to ship when we got it out the door. Sent it to Keybar Mike, actually.
00:02:11
Speaker
Oh, yeah. Yeah. So because he lives a couple hours away, so we could ship it all to him. And then he brought it to the show. And then Tuesday, Tuesday was making knife parts, shipped off a gigantic batch of things to DLC to get coated black again. I think we did almost 30 knives, almost 30 knives off to DLC. So with any luck, they will do a good job on most of them and not scrap too many parts again.
00:02:36
Speaker
And actually, I printed off a photo collage of nine different problems that they've had before. So I'm like, don't do this. This is the benchmark of what not to do. Yeah, we've had a crazy week and it's been awesome. And I have been on the phone and doing so much paperwork. And I share that not for people to tell me, oh, welcome to entrepreneurship or welcome to
Effective Communication and Business News
00:03:00
Speaker
business. I know what that's like. I share it because it's real and it's something you have to accept.
00:03:06
Speaker
but we've been pushing, we've been opening up some relationships with some new vendors, both customers and suppliers, and I have gotten even better. I've always thought I did a pretty good job at trying to communicate and negotiate, but keep deals fair. It has to be a win-win for everybody, but we're pushing into some new stuff now, and being able to communicate to a vendor what you wanna do, why you wanna do it, that you know what you're talking about, and then shut up,
00:03:34
Speaker
Keep it brief. I don't like it when people waste my time, so I don't want to waste their time. And I'll tell you, the responses have been awesome. I can in 30 seconds convey something to somebody about something, and they realize, okay, this guy is determined. He knows what he's talking about. He knows what he doesn't know, and that's why he's talking to me, and that means it's a potential relationship. I think it makes me really happy.
00:04:00
Speaker
Yeah, that's a very important skill, and it's something we hone constantly over time, but I think a lot of people take it for granted or just don't do it well, you know? Yeah. Oh, on that note, we can now share publicly. This is really exciting. So we are, I'm not sure how to say this, representing Clickspring in the US. So we are acting as his sort of US, well, and one way to put it is fulfillment. So we are now,
00:04:30
Speaker
manufacturing and fulfilling his first product in the US which is his fire piston is the compression piece that when you push it down it creates a little fire. So we actually didn't machine, I don't think we machined any of the ones that are getting shipped. We helped a lot along the way. We sourced the machining in the US but it's not a machine
00:04:53
Speaker
It's not a machine to part, it's a complete product. There's multiple parts to it, there's assembly, there's fulfillment, there's the whole back end database of how we receive orders, process them out. And so this has been really four, six months in the works, a lot of back and forth, a lot of little hiccups and headaches and the usual stuff, nothing unusual. And so it's really exciting and we've been fulfilling orders in the last four days, I think, and they've been going really well.
00:05:18
Speaker
That's fantastic. Yeah, you showed me the one at the open house, and it was just an amazing piece. It's really awesome that Clickspring can finally have US fulfillment, basically. Right. And it's been great. He's appreciated. I learned a lot of lessons back in the strike mark days getting products when you send out 1,000 of something, and it has to be material and cut and saw cut and anodized or water jet or laser or formed or fab. We went through all of that, and luckily, I
00:05:45
Speaker
remembered a lot of those lessons. And this was the first time I've gone from making 10 of something to ordering a large quantity right away. So the drawings were so important. Having conversations with your suppliers is so important to make sure you don't want to end up with the wrong thing. That's perfect. Anyway, so you sent some lean images to your DLC supplier showing what not to do.
00:06:13
Speaker
Yeah, with a printed out piece of paper with my letterhead on it. Because one time they got a bunch of my parts and they didn't know who they were from. Even though it says right on the box. And they thought they were from somebody else.
00:06:25
Speaker
Like some other knife guy. And I'm like, dude. Anyway. Anyway, yeah. So you try to be as clear as possible. And hopefully it'll go out pretty well. So they're getting coded while we're here at the show. And hopefully we'll get them sometime next week, which would be great. Cool. And then Wednesday, Clara and I, my daughter, took the day off.
Personal Stories and Managing Stress
00:06:46
Speaker
We went to Toronto. We went to a big Blue Jays baseball game with her whole class, her grade one class.
00:06:53
Speaker
So that was a lot of fun, even though neither one of us are really sports fans. So we kind of cut out halfway through, but it was a fun experience nonetheless. And then we're like, well, we're in Toronto. Let's not go home because we left early. Let's do something else. So we hoofed it down to the middle of town where my brother-in-law is the director of paleontology at the museum. So we saw the dinosaur exhibit.
00:07:18
Speaker
which was amazing and then he also took us back to his private lab and his library of dinosaur bones and showed us how they prepare all the dinosaur bones and all the tools that they use and how they move them for casting and get them ready for casting.
00:07:36
Speaker
wrap them in plaster from the field and bring them in and all this cool stuff. Like it's always amazing going in. And we got to bring some friends, friends of ours who are scientists and teachers and academics. And they were just like beside themselves the whole time, you know, giddy with excitement to come back to this private lab. And it's like the back workings of a museum. So that was really fun. That's really cool. Yeah. Yeah. So Claire and I had a big, big, big day in the city.
00:08:04
Speaker
Right, and then yesterday, you flew to Atlanta, right? Yeah, yesterday was the travel day, so we flew down here. Excellent flight. I read more of the E-Myth, actually, which was, it was good. I've been putting that off for a while. You've read it before, right? I don't think I've ever actually finished it through. Got it. So I'm reading it fairly solid straight through now, or at least, you know, doing as much as I can. And I read a bunch of sections yesterday that was like, it was like, what would you,
00:08:34
Speaker
What would you want your funeral to look like? What would you want the voice memo of your life? If you could narrate your life now to be played at your funeral, what would you want it to say to everybody? So it's like thinking backwards from the end. Where do you want to be in two years, 10 years, 20 years, at the end of your life? And actually answering those questions, not just reading it and moving on in the book, but actually trying to figure out what you want everything to look like.
00:09:02
Speaker
So a lot of deep, thoughtful questions. It's too funny you mention that, because I wrote down in my notes to talk to you this morning the phrase, and it's one of the most cliched phrases in Western civilization, but be who you want to be. But what I mean by that is not what most people mean, which has to do with a career or a vocation. I mean in the moment. And this is something I actually really need you to help me with or push me on, because
00:09:29
Speaker
And do you want to be stressed? Let yourself be stressed. If you want to be frantic, let yourself be frantic. I too often, as an entrepreneur, will turn, you know, I'll take, you know, take this morning. I've got accounting runs, the check runs, I've got to publish another podcast, I've got to respond to YouTube comments, I've got a banker coming who wants to say hi and I don't want to say no to it. I've got all these things going on and if you let yourself get into that whirlwind mode, you'll be frantic.
00:09:57
Speaker
Or you can just not be frantic. The other thing is, if you want to be rich, be rich. That's a priority to you. That's something you want to focus on. For me, it's like, I'm really a goal of mine. But what is a goal is creating a company that generates income. So I think about, are we creating the right amount of revenue that makes me happy, that is fulfilling? Are we spending enough money, too much money?
00:10:23
Speaker
but we actually hired another intern this week. So we have two summer interns now, which is super exciting to me. I think about that in terms of paying it forward, giving them experience, and then helping us with what we're trying to do, that it's more work, it's more paperwork, it's more payroll, it's more, you know, if they get idle, they don't necessarily even know what to do, and we've gotten lucky finding, so far, pretty good kids, so they're not the kind of kids, when they're idle, they're just gonna pick up their iPhone
00:10:52
Speaker
look at Instagram, they want stuff to do. That is amazing. Sorry, I know that was a lot. No, that's what this podcast is all about.
00:11:04
Speaker
No, but I let myself get stressed too much, and it's usually not legitimate reasons. If I stop and think, I'm like, hey, this day can end well. Nothing is, nothing drastically bad has happened that would affect my reputation or my mood or financially. So it's kind of like, just chill, Saunders. Just chill, you know?
00:11:23
Speaker
let the day play out as it wants to be, or, you know, turn around and change it. Yeah. And as you have more people around you, you've got to be conscious of the mood that you put off. Oh, absolutely. You know, I've got Eric and Barry around me now, and I am already absolutely conscious of the mood that I put off too, because it rubs off off of them.
00:11:41
Speaker
They butt heads more often than I would like to admit, so I have to moderate the thing. I would like to bring more people into the shop. It's something I've been thinking a lot about over the past few weeks, and as you know, over the past year, I've probably brought it up 50 times to you.
00:12:01
Speaker
But especially the past few weeks since we've been talking, and I've been thinking and everything, and I'm like, dude, I'm going crazy trying to do everything that I do myself, and I'm not being effective at all, you know? So hearing you hire people freely, and it's inspiring, and it's getting me to think. It is very time for me to start bringing on some people, or at least one person to
Internship and Mentoring Insights
00:12:27
Speaker
fulfill some roles.
00:12:29
Speaker
Well, let's make, why can't we make that a plan? You know, get back from Blade, catch up on rasks. Now you can have the ability to generate some more cash flow and you can start finding someone who's a good fit to come in for an internship or something. Yep, yep. No, serious, is that, can we do that? I think so. Yeah. That wasn't, that was not the Grimmsman talking until I like to see. Well, there's, I don't know, I'm just going to give bad excuses here.
00:12:58
Speaker
Good, throw them out so I can knock them down. Yeah, exactly, because every entrepreneur is going to have these similar bad excuses for whatever things they're trying to do but not doing. All right, cash flow thing. As of today, I could not pay another person, I don't think. Sure.
00:13:15
Speaker
But there's the whole catch-twenty-two argument. That can change, right? That can change. If they come on, they will generate their own income within the business. No, I respectfully disagree with that. But my point is, once you catch up on rasks, you can sell new knives that's new cash that means you should have a more... If you don't have a sustainable business model, then we've got to talk about
00:13:38
Speaker
Some bigger changes. Absolutely, yeah. So being caught up on the rasks is priority number one. Can't have anybody else on board while that is still over our heads. It's just not financially sustainable. Right. But yeah, once we're at that point, which should be throughout the month of June,
00:13:58
Speaker
We'll be caught up there. And then, as you said, we can make other knives. We're making the spinners now. We just have to make more of them. And yeah, the cash flow is coming, absolutely. Part of me doesn't know what that's going to look like or what that's, you know, what kind of cash flow that's actually going to be. I can forecast and guess and stuff, but it's been so long of trying to catch up and struggle and squeak by that I don't know what to expect when we start bringing in actual good money.
00:14:29
Speaker
Yeah, I would say, and I know, well, you should plan. The future will be kind to me before I intend to invent it. You have the ability to understand what's a reasonable number of products that you could sell per week, or look at it another way. Look at it and say, hey, I need to make payments on these two machines. I need to pay my rent. And then I need to pay these few people. How many do I have to sell to break even on that? What's my break even threshold? And see how reasonable that is.
00:14:57
Speaker
and make sure that that quota happens regardless every single week.
00:15:03
Speaker
Yeah. Yeah. And I would really encourage to start paying yourself. And I don't mean John Grimson, but I mean paying yourself as in put some money aside because I cannot tell you and emphasize it enough. And life is so much better when you have a buffer. Yes, absolutely. And funny side note on that is, you know, we've mentioned Dave Ramsey several times throughout the podcast. Meg actually got his book from the library the other day. And over the course of the weekend, I've read probably three quarters of it.
00:15:33
Speaker
And it's eye-opening. I mean, on one hand, he purposely talks to the simple people of America. And he dumbs it all down and keeps it, you know, he's talking to the guy that works at Walmart or whatever. But I'm trying to apply that same theory to business and his practices and his money management strategies and being debt free and having cash on hand and all that stuff. I think it's an area that I want to move towards for sure. You know, get rid of debt completely.
00:16:03
Speaker
and run the business off of cash and do really well like that. And I know we can.
Financial Management in Business
00:16:10
Speaker
It's exciting to think about. And look, I love Dave Ramsey. I listen to him. I think he's wrong on a few things. And I think he's kind of like the Paul Aker's lean guy where it's like, well, easy for you to say now that you've got it all figured out or you're worth a bunch of money. Look, I have debt.
00:16:28
Speaker
I have debt on the building that I'm in. The difference is that the debt on my building has a tenant that's a credit long-term tenant that matches that obligation. I'm not a fan of debt. I would like to avoid it. I don't believe that debt should be something you use to buy something you can't afford.
00:16:45
Speaker
To take an extreme example, this is a little bit ridiculous, but if General Electric came to you with a 10-year contract to produce widgets, and those were well within your skill set, could you borrow money to buy the machine to do that? That is very much a potential yes.
00:17:05
Speaker
Now, what I'd like to see you do is crush it after you get these machines paid, your machines paid off, and I think you can crush it enough to buy the next machine with either cash or very little debt. Right, or the next shop or whatever it takes. Yeah, exactly. Yeah, absolutely.
00:17:20
Speaker
Yeah, the danger becomes when a business, you know, having a mortgage or a shop or something like that, that's, you know, big gigantic expense that is hard to pay for in cash, of course. So to have a mortgage in that is almost okay. But, you know, when businesses are, you know, leasing 15 machines and maxing out all credit cards and, you know, borrowing way too much money that they could ever pay back. That's when it starts to become a gigantic problem. Right.
00:17:50
Speaker
It's just a mindset. Is it okay? That's the thing, like reading the book gives you perspective of a different mindset and just, you know, a bunch of case study, a bunch of stories, like just a bunch of tips and tricks that you put into your arsenal and reframe your own mind and you throw some stuff out the door and you listen to some other stuff and you just kind of put it all together into the package that works best for you. But yeah, I think a lot of his theories
00:18:17
Speaker
make a lot of sense to me, you know, having basically heard them for the first time now. Yeah, it was funny too, because I think, you know, you and I had, I think very similar, we didn't know each other in high school, but you know, I wasn't super popular, I wasn't an athlete or anything like that, and I was very happy, I loved what I did, you know, I nerded out on computer stuff for the most part, and I think
00:18:39
Speaker
Being able to shirk that pressure to spend money on toys and gadgets and clothes and meal, like I know one of the reasons I did well in New York City was I didn't care about the expensive restaurants and partying and going out to clubs and whatever they call them, clubs and bars and stuff. I went out, but to me I was back in my shop playing with my little tag and saving money. I don't say that in a patronizing way. I mean it like,
00:19:06
Speaker
are like, this is so much more fun to me. So if anyone who's listening to this is younger, I would say life is gonna be a lot better in 10, 15 years if you do what makes you happy. If owning something truly makes you happy, go buy it if you can afford it. But most, I can't think of much that I bought, or, you know what I mean? I love what I do now.
00:19:33
Speaker
which is very much the experience of making stuff and running this business, not possessing certain things. Right, right. Yeah, and I'm the same way. I get to do exactly what I love, and I get to create the life that I want. I just have to manage it in a way that is not just fun, but also profitable. It's so easy to just go into the shop and R&D, but R&D makes no money. Production makes money. Right.
00:20:00
Speaker
So in a sense, I need to hire a production machinist so that I can R&D and make money and run a business. Right. This is a really interesting inflection point. I'd love to help you look at those numbers. I know you've got Barry, who's a very qualified accountant. But understanding what your future is going to look like is something I feel like you should have a better picture on. Yes. And I agree, and I would welcome that. Yeah.
00:20:31
Speaker
Cool. Hey, somebody asked me, are you doing a CMTS meetup, or can you? Yeah, I haven't even thought about it, but yeah, that'd be great. Good. I'll leave that in your court. I assume that's the Canadian IMTS? Yes. It's about one tenth of the size of IMTS, but still fantastic. And way more maple syrup. Yes, maple syrup everywhere. The machines run on maple syrup, actually, not Weyloo boil. That's amazing.
00:20:59
Speaker
Yeah, I guess that'll be in September. I don't know exactly when, but yeah, that'll be good. Awesome. I actually have a quasi not fun day ahead of me, which is probably a mistake. I'm pushing myself to get a job shop job done, and there's no reason I should, because why create that false? If you get it done, good. If not, wanting it to get done is not the right attitude that's going to result in it getting done.
00:21:27
Speaker
I should probably run and start getting that job set up. Okay. Anything else you want to talk about? Stuff happened in your week?
00:21:38
Speaker
Good grief, yeah, I mean, we hired two, we had one intern start, I interviewed and hired another one who starts next week, and just banging through paperwork, new vendors, oh, we, you know, this stinks. Well, lesson learned. We shipped two of our larger Tormach fixture plates, 1100 plates, arrived damaged at customers, when the customers got them, so.
00:22:03
Speaker
Big bummer. The short answer is we have custom boxes that are arriving like next week. So we were using makeshift temporary boxes and they weren't packed well enough is the easy answer. You can talk about all you want. They just weren't packed well enough. So that was a big bummer because I feel like I've let my customers down. On the flip side, it was an easy chance to shine. Both those customers had emails back within 20 minutes of their emails
00:22:29
Speaker
including a tracking number with a replacement plate that went out right away. So there's something to be said for customers appreciating that response. It doesn't mean it's a good outcome because look when I get something that's damaged and I'm like come on company I bought this from Uno to ship it better and now I've got to deal with the hassle. I'm out the product for a few more days or week.
00:22:52
Speaker
It's not still not a great outcome, but we know it's getting better and we had a chance to show customers that we care about customer service and timely responses, so making the most of it. That's awesome. Yeah, and a similar story with my spinners that I sent out a couple weeks ago. Customers started getting them.
00:23:10
Speaker
And, you know, new product, a lot of detail goes into it, and there were some issues that we didn't foresee coming, and I actually want to do a YouTube video of this. So we're using a flanged bearing, so it's got a little lip on the top, and we're gluing them into the spinner. And the glue, this Loctite 608 or something that we're using, little did we know, over the course of about a week, the glue expands and lifted the flange up about five or six thou.
00:23:39
Speaker
And that caused my tight tolerances, of course. I only left 5,000 for clearance on the buttons. So it caused one of the buttons to rub completely so that it doesn't spin in one direction. If you flip it over, it spins. But if you do it one way, it doesn't spin. So we had a couple of complaints from customers. And I'm like, holy crap, I didn't even expect this to happen. Of course, I'm going to fix it. But how many are bad? I don't know.
00:24:03
Speaker
I cannot emphasize that enough. I've launched, I probably launched, well, a lot
Product Launch Challenges and Technical Projects
00:24:10
Speaker
of products. I would say 15 or 20 products in the past 10 years. I cannot emphasize it enough. You want to keep it close to your, it's your baby, you want to keep it close to your chest, you want to have this beautiful public launch where you initially sell so many the first day and everyone's happy. No, send them out as early as you possibly can.
00:24:29
Speaker
You're gonna learn so much when other people touch it when other people feel it when you ship it other people's reactions feedback I mean I got a feedback on a new product this morning from somebody totally unforeseen Change and I'm frustrated because I was gonna start machining one in a couple hours and guess what? It doesn't matter what I wanted to do. This is absolutely the right decision. So timeout hands down. Let's make that change
00:24:51
Speaker
Yep, yep, absolutely. Yeah, and there were a couple other things too, like just little things, like we're using these four brass weights that gets pressed into the end, and we're measuring them all for diameter to make sure that they all press in with the same, you know, force, but we never thought to weigh them all.
00:25:07
Speaker
And some of the spinners might be lopsided on one side and weigh, I don't know, a tiny, tiny amount different, but it causes a poorer spin time. So we just ordered a microgram scale or a milligram scale from Amazon for like 30 bucks. And we're going to start weighing all the weights and kind of grind them down with a Dremel real quick to get to a nominal weight size so that we can match weights. All this little stuff adds up, right? Like you don't even get it.
00:25:35
Speaker
Obviously, that should not be what you do. You should build an automatic Arduino sorting device that puts them into tiered buckets of weight. OMG, I never even thought about that.
00:25:45
Speaker
Actually would be if there's the second in the second intern we hired as an Arduino guy because there's so many projects that I want to do and I just don't have the time to spend Three hours, you know playing with Arduino these days. Yeah, which is you know, you can tell me okay, but then John Why do you do what you do? I'm okay with what I'm doing. We're doing we're doing a bunch of things, right? We maybe do a couple things wrong, but we're doing a lot more, right? But you could not live your life
00:26:09
Speaker
making stuff and playing with Arduinos. Like running a business is part of who you are. That's a good point. But this is fine. I have the vision for the project. I have the technical skills to help somebody when they get stuck. And then I let them learn. I let them play. I let them run. And it's great.
00:26:27
Speaker
That's something I want to get to in the next few years, is having people around me that can tackle those projects. I want to have the idea. I might even design it. And I want them to do the time-consuming work, because I have a lot of stuff to do in my life. Running the business and buying stuff and making sure everybody's paid and designing things and innovating and coming up with new products. Nobody else in the business is ever going to do that. That's my job.
00:26:52
Speaker
It's pretty weird when you sit down with two or three people that are on your team and that you say, hey, here's what we're doing. You machine the parts, you do the fixtures, and you do the code. Let's huddle back in three days and see where you're all at. That's crazy. That's so cool. Yeah.
00:27:10
Speaker
Dude, crushed it at Blade today.
Recognition at Blade Show
00:27:12
Speaker
I hope it was an awesome time. Yeah, we're going to have a fantastic day. I mean, yesterday we already met a ton of people. People are coming up to us in the restaurant parking lot. It's like, oh my God, your junk room is full. I have one of your Norseman knives. I have a tattoo of one, even though I don't own one. Yeah, that's crazy.
00:27:33
Speaker
Do not forget, it's so easy. Don't forget to post a few Instagrams throughout the time. Okay, I am filming for YouTube. I edited my video last night. Sweet. So day one will be edited, but yeah, Instagram is a good idea to not forget. Right. Perfect. So yeah, awesome. I will see you bud. Take care. Sounds good. Take care. Bye.