Growing Pains

Expanding a business is not a given. Here are a few important considerations.

As a first-generation business owner, growth is almost always on my mind. The idea can quickly become overwhelming. There are so many aspects to consider: current and future economic conditions, my budget, what equipment to buy, when to buy it, who to hire, when to hire. The list goes on.

Growth largely comes down to how comfortable each of us is with risk. Some people throw caution to the wind and go with their gut, while others may be a bit slower and deliberate in their decision-making. Different strokes for different folks, right?

Decisions related to growth are particularly critical for a budding business. What might seem like a minor move for a larger company could make or break a small shop. Regardless of the size of the business, there are never any guarantees of success. So what exactly should a shop consider when contemplating growth? Here are four suggestions:

1. Growing your customer base. As a mechanical engineer, I tend to take a logical approach toward just about everything. Consequently, a great deal of my shop’s growth has logically stemmed from the need to meet the demands of existing customers. Maybe you are trying to attract a potential customer that is much larger than any you currently have, or maybe you are still trying to get a feel for a new customer’s needs. Although no one likes turning down work or saying no to any customer, good problems are still problems, and there are still other factors to consider before you make that decision to expand.

2. Expanding your plant/adding equipment. The most important goal of any business is throughput, and two of the most important commitments are capital equipment purchases and investments in personnel. Efficiency is critical, as we have only a limited number of hours in each day. So what is the best approach? Is it purchasing a new piece of equipment or software? Is it acquiring more space in which to expand and operate more efficiently? Is it adding an additional shift or employee to help process more work in a shorter time frame? No matter which approach you ultimately choose, it should not be only to satisfy your immediate needs. If you do your job right, over time, your company will grow into any new resources.

3. Finding a niche. Identifying a niche for your products or services is important for securing a competitive advantage. It may not be something that you establish overnight. In fact, it will probably take years, a lot of trial and error, and maybe even some luck before you do find your niche. In many ways, it will be dictated by the equipment you buy.

One of the first major purchases I made for my shop was a lathe so we could add turning to our in-house capabilities. Although I could see the long-term value of adding more than just a two-axis lathe, buying more machine than I needed at the time was a risk. Because I planned to be in this business for the long haul, however, I decided it was a risk worth taking, and I ultimately added a lathe with live tooling, a subspindle and a bar feeder. Now, years later, I couldn’t imagine life without it.

We have since purchased a few pieces of equipment specifically for a particular job or customer. In each case, these machines eventually also helped us grow into new segments of manufacturing, including five-axis and horizontal machining. My point is: If you are going to invest in a piece of equipment, make sure it’s also a smart investment in your overall business.

4. Investing in employees. The other day, I saw a piece of motivational wall art that read, “Teamwork: Divides the task and multiplies the success.” To me, the message is: If you don’t have qualified help, your equipment is basically useless. 

Where can you find this help? At the risk of sounding cliché, I suggest thinking outside the box. I’d hire someone who is genuinely interested in the trade and has no formal experience but seems mechanically inclined, demonstrates a strong desire to learn, has a good work ethic and is someone I believe I can trust. Formal education looks good on a resume but can be misleading. Generally speaking, a trade is not something a person does just because he has been educated on the work, but because he is passionate about the work.

It is often very difficult to judge a person’s character and work ethic during a 45-minute interview, but my advice is to trust your gut. Hire someone you like right off the bat. If you are suspicious about a behavior that someone exhibits within those first 45 minutes or something that person says, it likely is not a good fit. Include someone you trust in the interview to get a second opinion on the candidate.

So how much growth is enough? I used to think that everyone would want to grow their companies to be as big and profitable as possible, but we all have different ideas about what is manageable and sustainable, and about where we see ourselves in the mix. Some people start a business because they like the idea of working for themselves, others to provide a solution to a specific problem.

Much like life, the economy and the manufacturing marketplace are dynamic, and regardless of the size at which you see your business as sustainable, you have to be willing to adapt to the ever-changing business landscape.

So how comfortable are you with growth?

Albert Raczynski is the owner of Machined Concepts LLC, a Chicago-area production CNC machine shop. More at