Mistakes are a fact of life, and that’s never truer than in the world of business. For a variety of reasons, about half of new businesses are likely to fail in their first year, according to the U.S. Bureau of Labor Statistics.
But how can a new entrepreneur be aware of the numerous pitfalls with their limited experience? Talk to industry veterans.
Shed Business Journal spoke with two long-time shed business owners to share their sage advice to industry newcomers.
LESSONS LEARNED
For those who succeed, it’s often because they’ve endured a series of difficult lessons learned, from which they’ve pivoted, adapted, and grown. No one knows this better, perhaps, than Daniel Wright, founder and CEO of Wright Sheds Co. in Kaysville, Utah. He started his shed business at just 16 years old, and over the ensuing 30 years, his company grew slowly and steadily into a $6 million a year business.
But it wasn’t without some hard knocks along the way.
For fledgling business owners, Wright offers some timely advice. At the top of the list is don’t become overly committed to one idea or product.
“Just because you’re busy doesn’t mean you’re making money,” Wright says. “Be willing to walk away from things that aren’t profitable.”
Tracking costs and knowing your profit margins are critical to the process. That was more difficult to do 30 years ago. Today, there are a variety of products available that make it possible to precisely track every component in a shed.
“There are all kinds of different tools … AI, spreadsheets, etc.,” Wright shares. “I know the cost of every building and every nail.”
Some cost variables, however, remain difficult to predict, but are nevertheless impactful. For example, if an owner’s coverage area includes a major metropolitan area, traffic delays could turn a profitable job into a costly one.
“If my crew is stuck in traffic for two hours, I don’t make money,” Wright says. “So, you’ve got to be aware of those types of things and make changes to your territory or methods.”
In turn, if a product or territory proves to be profitable, an owner must be “fully committed” to making it work.
For Wright, “trying out” new territories without being fully committed to servicing that territory usually doesn’t work in the long run.
An owner should be fully committed to their employees as well. Today, Wright has a core group of five employees who have been with the company more than a decade, but there have been a few he’s lost over the years due to higher wages. In hindsight, he would have offered them more to keep them.
“I lost one guy because he asked for a $4 an hour raise,” he shares, “but he generated me some $200,000 to $300,000 a year in new business. In the end, it would have been worth the extra $4 to keep him.
“Being too stingy with pay can hurt you. If you’re running the business right, you should be able to pay them the same amount as anyone else.”
Ultimately, running a business is a hard balance to maintain. Every day is a learning experience, even when the company is 30 years old.
“Growth is pain, and it hurts, and there are lessons to learn at every level,” Wright concludes.
THE SECRET SAUCE
Joe Bartolotta, founder of New England Outdoor in Methuen, Massachusetts, says cultivating relationships is worth more than any advertising budget.
“Relationships are the business,” he says. “We’ve been operating since 1969, and the through-line across every decade is that the customers who trust you enough to refer their neighbors are worth more than any ad campaign you’ll ever run.”
The secret sauce for building relationships? Establishing consistency in your processes.
“When every salesperson quotes the same way, follows up the same way, and sets the same expectations with customers, you stop losing deals to internal inconsistency,” Bartolotta adds. “Today, your digital presence is your first impression. A customer who can’t find clear pricing, real photos, and a responsive contact experience on your website has already started looking at your competitor.”
As with any successful business owner, he’s learned—and profited from—some hard lessons along the way.
“Early on, it’s tempting to chase every lead and discount aggressively,” Bartolotta says. “I wish someone had told me that protecting your margin and delivering an exceptional experience would compound over time far more than volume ever would.”
He warns new business owners not to confuse activity with progress. New England Outdoor has had seasons when its team was busy, but profitability remained stagnant. It forced him to concentrate more on profit margins rather than revenue.
“We got disciplined about which product lines actually drove margin, which leads were worth the energy, and where we were leaking time,” he adds.
While there’s no “one size fits all” strategy to ensure success, there are steps a new owner can take that could minimize future headaches down the road. Bartolotta suggests “starting narrow” by picking two or three product categories to sell, deliver, and service and do them exceptionally well.
“A new operator who tries to offer sheds, garages, pavilions, pergolas, and ADUs from day one usually does none of them well,” he says. “Own a geography. Be the best in your county before you worry about the next one.
“Customers will pay more for a company that shows up on time, communicates clearly, and stands behind their work. Build that reputation deliberately, document it through reviews, and let your competitors race to the bottom on price.”
Marketing your company is also critically important. On day 1, shed business owners should give high priority to their “display strategy.” A well-curated showroom, or even a few display models in a high-visibility location (such as freeway frontage or in a busy part of town), does more to sell product than any website.
“Customers want to touch the siding, open the doors, and stand inside before they commit,” Bartolotto says.
Ultimately, new owners should just use common sense.
“Most of your competitors stop at one or two follow-ups with a potential customer,” he adds, “but the customer who goes quiet in March often closes in June if you’ve stayed present.
“Also, photograph every completed job. Good site photos are your best marketing asset and cost you almost nothing. Respond to every online review, positive or negative. This signals to the next prospect that you’re paying attention. And treat your installers like the business-critical people they are. Your reputation is only as good as what shows up in the customer’s backyard.”
There are some common pitfalls to avoid along the way. At the top of the list is underpricing to win volume, then realizing the jobs aren’t profitable. There are others, including growing the product line before the operations can support it; adding a new structure category without the trained staff, manufacturer relationships, and install capacity to back it up; and neglecting technology and good SEO management.
“Also, find your mentors within the industry before you need them,” Bartolotta says. “The Shed Builder Expos have been invaluable. My son Jon has carried that torch in recent years, and it’s where we’ve continued to discover new product lines and machinery that meaningfully sped up our production. My other son Ryan runs our manufacturing facility, and having that owned internally by family has been one of the best decisions we’ve made for quality control and consistency.
“This is a long game,” he concludes. “We’ve been at it since 1969 because we never stopped treating each customer like the reputation of the next 50 years depended on them, because it does.”
