“It was the best of times; it was the worst of times”. Charles Dickens could not be any righter. Owning Metal Pros for the past 6 years was a polarizing world. A world with never-ending cycles of structure and chaos. Great successes full of epic failures. Dreams come true and recurring nightmares. Experiences that gave me outmost confidence in myself while humbling me right to my core. With every problem solved and process perfected, came new imperfections, new mistakes, and problems …more complex than before… seemingly impossible to crack.
Is this what success feels like? Is that what me and Julie signed up for when starting Metal Pros? Deceptively yes. I recently read a quote which aligned very well with my experiences: “Success is the ability to move from one failure to another without loss of enthusiasm”. I would like to explain the quote as I understand it, using the following story.
Little Roger set himself a goal of becoming the greatest tennis player in the world. He was a naïve 8 years old, had no concept of understanding the implications of being the greatest at anything let alone the highly competitive game of tennis, but was passionate, had been playing tennis for 2 years, and loved it!
Like any other kid athlete driven to succeed, little Roger wanted to play those who were better than him, even if it meant losing. Losing sucked big time for little Roger but it also allowed him to improve his tennis game at an accelerated pace. With loses came renewed restlessness and passion to win, each time giving little Roger greater maturity and “thicker skin” needed to overcome obstacles at higher levels by making him a better competitor. He knew he had to jump over big hurdles to become the best, but he also knew that others would have to jump through the same hurdles and if he kept jumping while others stopped, he would advance further.
What little Roger did is jump from one failure to another failure resulting from his successes… and he did so without any loss of enthusiasm. Not because he enjoyed losing but because he wanted to be the greatest tennis player, and this was the only way he could achieve his goal. And that is my interpretation of the quote. Understanding it put a perspective on the past 6 years of owning Metal Pros and the road leading up to it from the time when I was an 8-year-old little Mike.
What I now know is that we can’t experience real successes without new failures revealing themselves. We can’t advance without becoming stronger and we can’t become stronger without battling increasingly tougher challenges. It’s a vicious cycle and that’s why success is so hard and why the past 6 years have been so polarizing. The challenge of winning can be so euphoric that it convinces us to keep pushing ourselves to higher levels where we start losing again. We want bigger successes which makes us vulnerable to greater failures.
In the world of tennis there are points and sets and matches, we know how to identify and quantify small wins like a single point or big wins like a tournament. If we win a match, we are guaranteed to move up to the next round and if we win the finals, we are guaranteed to win the tournament.
In business, there are no guarantees. The line where a round ends and the next round begins is blurry. There are many moving parts and wins are much harder to define, quantify and thus strive towards. Also, in business, a win always comes at a cost, usually in a form of time or money spent.
The ultimate success from a pure business perspective is realized by increased profit but there is a more complete formula which incorporates the human element. Profit is re-assessed against effort, stress/health, passion/love of what we do and “Alternative Forgone”.
“Alternative forgone” are things me and Julie miss out on because of the time and effort we spend running our business, whether it’s having a baby, travelling, hobbies, or devoting more time to friends and family. Equally important, “Alternative forgone” are opportunities our employees miss on from a career perspective by working at Metal Pros rather than an alternative occupation. When weighting our business successes, we needed to take all these elements into consideration and re-assess.
Being logical and risk avert, I had to convince myself of my abilities to succeed in such a business. If I was to go to war, I had to have the right arsenal in order to win and I knew that my looks could only take me so far. I realized I would be moving from a 9 to 5 job to a 5 to 9 job, but I also knew I possessed the energy and temperament for such an experience as working in intense 80-hour week environments was not new to me.
I was a problem solver with many years of experience in process improvement and business analysis supporting many departments within large corporations. I created and implemented processes from beginning to end and witnessed the level of detail required to build a business from the ground up the right way. I understood why businesses fail and how to make sure this does not happen to us. I applied the 80/20 rule, 80% of what I needed to know applied to all businesses while only 20% applied specifically to selling small quantity metals. I was very good at the 80%.
Assume you are a passionate and very talented cook and you love everything about the culinary experience. Your signature meal is an elaborate dinner you prepare for your family every Thanksgiving and everyone loves it. You spend two days preparing the meal and plan it down to the very last detail. Everyone you know urges you to open a restaurant and that idea becomes your obsession.
Then you open a restaurant and you fail miserably. Not because of the food, the food is great and not because of bad luck, bad luck is just an excuse for bad planning or a false explanation for what you don’t know. It is because preparing good food is only 20% of what it takes to run a profitable restaurant. The remaining 80% is knowing everything else, and you failed because you did not consider the 80% when deciding to get into the restaurant business.
Even as it relates to food, you need to work out how to prepare your favorite recipes in less than 20 minutes…forcing you to cross off the menu your best 5 dishes. Once you finalize the menu, you must find food and non-food suppliers, determine the logistics of purchasing ingredients in an optimal quantity to minimize wastage but also avoid shortages. You need to find ways to reduce the costs of ingredients and the effort of making each dish without compromising the quality, so the price is affordable, and profits are realized. You must keep track of food expiration dates, adjust dishes and prices periodically to account for popularity, costs and other considerations.
Beyond the food, you have employees to manage both in the kitchen and customer facing. You need to market your restaurant, handle the accounting, keep your cash flow positive, the place clean, get your liquor license, deal with food inspectors, make sure your operation abides by all regulations and much more. None of this mattered when you were preparing your Thanksgiving feast, but it matters now that you are running your own restaurant.
Eventually, you realize that cooking is no longer the fun relaxed experience you once had. You learn that cooking for a living feels more like an assembly line than an art, more like a job than a hobby. Your wife is unhappy, you barely see your kids and your friends forgot you even exist.
Restaurants fail because most are great at the 20% but incompetent at the 80%. This is also true for many other professions and especially for trades. A welder owning his own business may spend as little as 20% of his working hours welding while 80% of the time struggling with selling, quoting, travelling, accounting and other administrative tasks, purchasing material…etc. So even though a welder may charge $80 an hour, the real hourly wage is a mere $20.
Reducing time in half to accomplish the 80%, is a realistic goal, I have done it many times in my career with every new job. Even a reduction from 80% to 60%, can double the capacity for welding and thus double the revenue potential and as much as triple the profits. But that requires a completely different set of skills welders need to possess. They need to become problem solvers and they need to make sure they like wearing the many hats required to run a business, not just the welding hat. They need to start looking at time as a form of currency, track it as diligently as money and spend equal amount of mental energy on creating and saving time as they would spend on generating revenues and reducing costs.
For Julie and me, the road to entrepreneurship started long before we registered our business. For me, it all started early in my career when I decided to eliminate the notion that problems I was faced with, were not my responsibility to address. I discovered, learned and practiced the use of tools required to solve problems. I was involved in the solution process from beginning to end. I took initiatives when others wouldn’t. I knew that once I became an employer, this will become a critical part of my work and I wanted to be great at it.
As an owner of a small quantity metal business, I did not know anything about the 20% but I had vast amount of experience with the 80%. Sales/ procurement/accounting/ process improvement/ change management/ marketing/ business analyses/IT/IS are all disciplines I gained expertise in the 10+ years career leading up to Metal Pros. I worked for multiple companies in various industries and roles, and always made sure to absorb as much knowledge as possible and stick my nose in as many areas of business as I could.
I was determined to learn because I was a problem solver, curious by nature and eager to be challenged. If I set myself to solve every problem no matter how big and complex, accelerated self-learning will always follow. Self-learning does not rely on others and therefore is limited only by my own ambition. It allowed me to discover things by way of solving problems rather than having solutions dictated. It’s a much more effective method of acquiring knowledge and ability.
Having outsiders teach us how to run or create aspects of our business seems like an obvious choice for how to do business, after all that is what the educational system represents and what most large companies do. My experience tells me otherwise. Every aspect of the business I excelled at was self-taught. Even parts of the business that related to my postsecondary education were rediscovered as if I never learned it in the first place. After all, how can a lecture from 20 years ago, of which 80% of information I forgotten within the first week, have any significant contribution to the business I run today?
All successful entrepreneurs I know that were the founders of their respective businesses were for most part self-thought on a journey to self-discovery. It doesn’t mean they did not go to school, but when it came to truly understand aspects of their business, their first steps were to tackle the problems, and find solutions through critical thinking and self-learning rather than enrolling in courses or hiring someone to fill in the knowledge gap. Self-learning may have been harder 30 years ago but today, most information is readily available on the internet. All we need to do is acquire the ability to search and learn how to apply our findings.
Delegating and hiring to reduce work for the owners is a critical aspect of running a successful small business but should be slowly and carefully introduced into the mix once processes have matured and owners fully understand the tasks that they are transitioning over. Learning how to run a small business should start long before starting the small business. If you plan to open a small business in the future and you are in your early 20’s right now, be more aware and take more responsibility of what goes on at your current job beyond your immediate position. Start learning now or you will struggle later.
McDonald’s founder eventually created the greatest franchise in history but even before opening his first location, he observed the industry and learned everything about it for 25 years working as a travelling salesman. When Ray Kroc opened his first McDonald's, first steps were to improve everything about it before opening more. He was involved in all aspect of the business. He would even come in early every morning and sweep the floors. Once the one location was approaching perfect from both financial and operational perspective and all the kinks have been worked out, he would then use this location to display the potential for future franchises. Only then would he start selling franchises with built in controls that ensured each franchisee follows the exact recipe for success that made the original location successful.
At Metal Pros, inside sales, procurement, warehouse management and many other aspects of the business have been transitioned for most part to our employees but not before processes were perfected and matured. Our employees were part of the creative process from day one which sped up the transition process. All brainstorming sessions, decisions and subsequent actions have been transparent and made with everyone’s buy in. Supervision, control and feedback were a continuous part of the transition.
No process was ever carved in stone. I often asked new team members not to get too used to how things are being done right now as they will change again in a few months… for the better off course. Continuous improvement meant that we wanted change to be implemented quickly so rather than holding back on ideas until they are fully hashed out, we wanted to be able to test out ideas and roll them out as they came. A good analogy would be when ordering food at a restaurant. We wanted the waiter to bring each item as it was ready rather than bringing everything out at once.
There were many changes made at Metal Pros, after all, our culture was centered around continuous improvement which translated to having constant changes. I was conscious of the fact that change is hard because I knew how hard change would be on me.
Good routines turn conscious decisions into subconscious one’s. We love to work in a subconscious state, as it is the cruise control condition of our mind. In this mode, we are relaxed as decisions don’t need to be made, they are instinctual. In basketball they call this “being in the zone”. Changing routine brings the subconscious back to consciousness. We must start thinking again about our actions and concentrate more in order to avoid mistakes. As a result, we become more stressed and that effects many other aspects of our jobs and our lives.
When possible, our brains try to avoid taking something that has become subconscious and changing it even if the new action itself is in the long run better for us. After all, we need to be able to perform as many actions intuitively or subconsciously, so our brain can have the capacity to help us make all the tough conscious problem-solving decisions without overwhelming us.
The full impact of a process change should not be judged by the end users until the new routine is repeated enough times to the point it becomes subconscious. The early negative assessment of good changes has more to do with the fact that a routine has been broken than the fact that the change itself is bad.
The silver lining behind any good change is that just like stopping to smoke, it is very hard at first but slowly it becomes easier. We must push ourselves at the beginning knowing that eventually it will become a subconscious action that will put our minds back in cruise control.
Continuous change allowed for continuous learning which we took complete charge of. To date, the only money we paid an outsider was $5 at fiverr.com to create our logo. Otherwise, we learned to set up our ERP system, built our own website, did our own bookkeeping, hired our own employees and took ownership of our own marketing. It took thousands of hours of learning, of which me and Julie got a head start long before starting Metal Pros. The knowledge is in house and what we were able to create ourselves far exceeded any potential benefit of outsourcing.
Working out of a 2,500 square foot warehouse with only 4 employees, we were able to achieve in a short period of time what publicly traded companies in our industry could not achieve in decades. Our website has the #1 position on Google when searching for “metal supplier Canada”. We get orders from across Canada and pay $0 in advertising costs. We are approaching 5,000 businesses that we sold to including about 2 dozen colleges and Universities and many municipalities and Government Agencies.
We customized our ERP system extensively based on our needs allowing us to access any information in about 5 seconds. We generated reports that saved us many hours each week and reduced the amount of time it takes to create quotes by half. We were some of the early users of our ERP system, now used most notably by Toyota. We found ways to link our ERP system to our website displaying prices and live inventory for over 5,500 products and 3,000 offcuts. We have a customized tracking tool (check list) linked to our ERP system that keeps track of the progress for each order (similar to what McDonald’s and Tim Horton’s have but customized for the Metal Industry) accessible by 10 devices at our shop and home office including tablets on each saw, smart phones and 5 computers.
None of this would have been possible if we did not take ownership of learning and building our own business rather than outsource. We are the only company in our industry that keeps live online publicly accessible inventory and pricing of all our sheets and plate offcuts (over 3,000 pieces). We are the only company that keeps live tracking of order completions by line item, accessible by phones/tablets/desktops. We are the only company we know of in our industry that has sold over 5,000 unique products out of a 2,500 square foot location.
Metal Pros is the only business I ever came across where “everyone does everything”. I am the only business owner in our industry that can plan the workday on my phone every morning while sitting on the toilet. By using one finger, I can tag employees for jobs, tag incoming material for orders, tag orders to be delivered as well as sequencing all orders to be performed. We don’t have cameras in our store, but with our technology, I can be on a beach in Cancun and have full visibility on my phone into what has been done, what needs to be done and what everyone is working on.
The sweet spot in achieving business wins is to have new time created internally via efficiencies and that was my bread and butter going into Metal Pros. Instead of money, I invested lump sum time into time saving initiatives, collecting the time saved and allocating it to other aspects of the business we did not have time to do before. Unlike the stock market, most of these returns were guaranteed and the time returned on investment was formidable.
To use an example, I had a 20-hour one-time investment that returned 2 hours of net savings per day for the past 5 years. My return on 20-hour time invested was 2500 hours. To convert that into money, if our shop cost is at $60/hr, the $1,200 investment returned daily dividends $120/day. in 5 years, the returns added up to $150,000. And that is one of over 100+ efficiency initiatives that we tackled in the last 6 years leading to our ability to accomplish far more with far less.
Allocating more time allowed us to increase our capacity for revenues which meant that we could increase our sales AND improve our service. It also allowed us to keep our costs the same while revenues were increasing by keeping our team small and well paid and keeping our warehouse and other fixed costs the same.
Metal Pros formula for generating revenue was as follows: “be cheaper than our competitors while providing what customers want when they want it while attracting the best employees by paying higher than market wages and providing them with opportunities that will advance their abilities and increase their value and “career worth” within Metal Pros and any future career endeavors”. Without good employees, the formula is destined to fail, without competitive pricing revenues will decrease and if customers don’t get what they want when they want it, they will go elsewhere to get it.
Our strategy to success as managers was something completely different than most. It had a lot more to do with problem solving rather than decision making. We chose the path of learning rather than that of delegating. But we weren’t innovators. We learned from the greatest companies of our time, saw what they did best and tried mimicking them within our own capabilities and constraints. For every problem faced, we would quickly draft up a “dream solution” whether implementable or not, then we took steps back to create a plausible solution that was cost and time effective and within our ability to implement.
Our live order status checklist we replicated after McDonald’s and Tim Horton's. Our “internal Google search” which we also called “the 5 second rule” because it allowed us to find anything in under 5 seconds, we got the idea from Google. The 200 + daily hashtags we use to keep track of actions we got mimicking Twitter. Our website and the idea of a “one click find” allowing customers to find most individual products with one click, we got by stealing the idea from Amazons “1-Click Order”. Microsoft… where do I start with them? Let’s just say that our company would never have been able to operate at the efficiency, speed and accuracy in which we operate if it wasn’t for the great Microsoft products. And finally, Toyota’s “Just in time” philosophy allowed us to sell a lot more product from much smaller space than most would think possible. We haven’t adopted much of Facebook into our business, but I have big ideas!
Believe it or not, I spent about 50 hours writing this piece. It’s not easy but it is a good exercise in self expression and something that we should all thrive to get better at. I decided to start writing because I believe there is very little content on the experiences of running small businesses. It is very hard running a small business and we can all win by sharing experiences with one another.
The Corona virus has hit hard small businesses around the world. Many businesses must shut down and those who are still running are at reduced capacity. While fixed costs are still billed to us every month, revenues have been greatly reduced and for many of us completely seized. Unfortunately, many small businesses will not make it through this turbulent time.
But there is something positive that as business owners we now have that we did not have before...we have time. We have time that if utilized properly, it can be a rare opportunity to turn a tragedy into an opportunity. So, use this time wisely and invest it in the future of your business. Make a list of everything you wanted to improve about your business that you did not have time before and start tackling that list. Sharing my experiences will hopefully help some businesses or those who inspire to become entrepreneurs to get direction, inspiration and whatever else sharing experiences may bring. If there is one underlying theme in my experience at running Metal Pros, it's that there is so much that can be done to improve our businesses which only requires time. Ultimately, it is up to us as individual business owners to do what we need to do to come out of this new and difficult reality, smarter and more capable than before.
6th year anniversary