Capacity Ep.4 - Scott Hartrick of Dynamic Metal Innovations
After several successful years in corporate America, Scott Hartrick stumbled upon a business opportunity when making his wife metal flowers out of cheap steel spoons. What began as a craft became Aluma Flowers, Hartrick’s first business.
One thing led to the next, and Hartrick started taking on local odd jobs for metal fabrication, seeing more and more of a need for high-quality, quick turnaround parts. After 3 years of flowers, Hartrick began Dynamic Metal Innovations, a full-service shop focused on sheet metal fabrication.
Today, Hartrick still leads both companies alongside his business partner, Mark, and continues to look for new ways to grow the company. Listen on your favorite platform to hear the full story.
Sunny: Welcome to the Fulcrum Podcast. Today we're talking with Scott Harrick of Dynamic Metal Innovations outside Philadelphia. They are a full-service shop that focuses on sheet metal fabrication. They can laser cut, they can bend, they can weld, they can powder coat. Scott started the business himself, initially building ornamental flowers, learning more and more about manufacturing, and slowly, quickly becoming the full-service shop they are today. Welcome Scott.
Scott: Thanks, thanks for having me.
Sunny: So, we love hearing about people's origin stories. Tell me about the moment you decided to quit your six-figure job and start a business that you didn't know very much about.
Scott: Yeah, so, by trade, I'm an electrical engineer for the power company. I got hired by them pretty young. I was still in college at the time, and they brought me on full-time, paid for the rest of my schooling. I was 20 when I was hired with them, so I worked with them. Great job, corporate America, paying well. But seven years in, started getting a little bit of an itch and looking to do something different.
I started dating my now wife, and when we first started dating, she said, don't ever buy me flowers. I don't like that they die. I said that's fine. Flowers are expensive. I don't like buying 'em either. So it was a win. And at a hobby level, I've done fabricating on cars, Fox Body Mustang I've done a lot of work on over the years. And, so I knew my way around, you know, bending metal and by hand and welding mig welding and just simple, simple fab type stuff. So I decided that I was gonna make her a bouquet of flowers out of stainless steel spoons that I bought online and bent them and welded 'em together and, um, shoved them in a vase with some marbles. And I gave her a dozen stainless steel roses for her first anniversary.
Sunny: And you bought like the worst spoons, right?
Sunny: Cause they're easier to bend.
Scott: Yeah, I was looking for spoons on Amazon with the worst reviews. Um, so if it would fail the, you know, fail the ice cream test, just solid ice cream just bend, that was a perfect spoon. Um, so yeah, just terrible spoons. Um, make really great flowers though. So, um, I did that. And then fast forward a few years later, I made the centerpieces for our wedding when we got married. And they were pretty unique, still made outta spoons. Um, even the staff at the venue was like, these are the coolest centerpieces we've ever seen. And so I kind of decided to make a little side hustle with making some metal flowers. And I decided to make the jump to aluminum cause it's easier to form, um, but harder to weld. And I didn't know how to take weld. I didn't have a take welder.
So I bought, um, I just bought a entry level AC/DC TIG machine, with a little bit of YouTube university, learned how to weld and, uh, kind of threw myself in the deep end with just jumping in the welding and aluminum with tig cuz it's, it's not the easiest thing. Aluminum's very gummy and melts very strangely and, uh, is not forgiving. And at one point I was like, I don't think I can do any of this. Cause I was just melting, you know, aluminum all over the place, but got good at it.
Sunny: How long did it take?
Scott: It took a couple months before I was like, had a product that I could make without, you know, wanting to throw it against the wall. And, um, something that looked good and worked. And, I wound up creating my own flat patterns in AutoCAD for the flowers. And I had a couple of laser shops that were, were helping me out with, you know,getting some prototypes cut and, um, and then, you know, production level runs. Um, I was just doing this all outta my, outta my house. Um, I decided to powdercoat the flowers, so I set up a powder coating booth in my basement, which was just a, a little box with a box fan attached to the back of it. And it blew out of the egress window in our, our basement, uh, for ventilation small oven, which is a converted, uh, smoker.
Sunny: (Sarcastically) Super OSHA compliant.
Scott: Yes, this was all fully legal in my HOA controlled townhouse. So I got it done though. We created a little website, and just started selling some of these, it was just roses at the time, started selling them and, you know, sales started picking up and happening and, um, you know, fast forward a bit...
Sunny: You're still working full-time at this stage, still working full-time at the power company.
Scott: Yeah, I, you know, after about, oh, probably about eight months, um, I kind of started talking to, you know, talking about you maybe leaving, um, and, you know, pursuing the, the metal art business full time. Um, cuz it was starting to create a little bit of an income and I was like, you know, it's not like what I was making, but so we could probably make it, make it work. So I was still dating my wife at the time, she was my fiance. And, um, we had gotten married in, um, August of 2016, and it was in October of 2016 I put in my notice with the power company, um, gave him three months notice that I was gonna be leaving. Cause the type of work we did, it would be kind of cruel to just be like, two weeks, see ya, uh, had a lot of, you know, responsibility and, um, territories and stuff. But, um, so I gave that notice. And then January of 2017 is when I officially left the power company and I was on my own with, uh, Aluma Flowers, name of the flower company. Just, just me and my flowers and my, uh, my new wife.
Sunny: How did you feel?
Scott: It was good. I think, you know, looking back, you, you kind of like, you're kind of in this like honeymoon phase of business where you're just starting it. You have no idea what you're doing. I cashed out my 401k from the power company to live off of for that first year. Uh, that was kind of my, my financial safety net. So I didn't have the pressure of finances affecting, you know, trying to start this business. Um, but, you know, you're, you're doing your thing and, um, making stuff and it, it was, it was pretty calm looking back at it. Um, I think ignorantly calm.
Sunny: What'd your wife think about the whole thing?
Scott: She was excited about it. Um, cause I was excited about it and, uh, you know, she's not as much of a risk taker as I am, so there was kind of a little bit of, you know, are you gonna be able to make this work and you know, we're gonna be okay. And again, I wanna make sure we're okay. Um, one thing I did do six to eight months after I started, um, the power company hired me back part-time as a consultant to do work for them.
Sunny: I see.
Scott: So I was able to kind of use that and, um, to plug in, you know, some financial gaps and do some work and, uh, was able, I left on good terms to be able to come back and, you know, do some work for them. Um, but I was well on my way with Aluma flowers. I wound up moving outta my house to a very small storage garage, 800 square foot. It was literally a storage facility. There wasn't even running water in the building. Um, so we built a little office and, uh, I was able to get the landlord to put in a water line to a, a slop sink in the corner of the shop. And, uh, it just drained outside just a hole in the wall. Um, that was my, that was my number one bathroom, um, when I needed it. So otherwise I had to go up the street to the gas station to go to the bathroom. Um, but yeah, those were just kind of the beginning times. And I wound up, um, hiring one local guy to help me. Uh, his name is Shawn. And, um, you know, he helped me with just forming and just running things and, um, it was kind of just me and him for, for a while.
Sunny: What did it feel like when you felt like you needed to hire someone?
Scott: It was interesting because I kind of started doing the, you do a little bit of the entrepreneur math where you're like, okay, if I make X amount of flowers, it takes me this long to make one. I can, like, if I'm working eight hours a day, 10 hours a day, I can only make this much money.
Scott: You know, you can only do so much physically. And when I'm making everything and powder coating everything and doing verything, you're limited. And that was kind of like, all right, this is going to be it for me. Let's get somebody here to help me form them. I made my own tooling and processes to make these flowers. The goal was to be able to have somebody with no fabricating experience make these flowers. So I used some arbor press tooling, cut, bent and welded stuff that could almost like stamp these flowers out, the basic shapes. And we still use those tools today. My wife can make entire flowers herself, and it worked out pretty well.
I came up with a way that the heads of the flowers screwed onto the stems. I welded an aluminum bolt to a quarter-inch rod and then a rivet nut that assembled the flower. So I could make stems, powder-coat stems green, keep them in a bin, make flowers, powder coat them different colors, keep those in a bin. And if I get an order for, you know, a green stem, red flower, just go to the bin, screw them together, and ship it out. This approach allowed a piecemeal way of making the product, and that's what made it scalable.
Sunny: Makeshift Kanban.
Scott: Exactly, that was the key because I can't have a product here that only I can make. And that's what started things.
Sunny: And you were able to convince Sean to pee in the corner sink of a storage unit.
Scott: I gave him privacy. It was around the corner. So he knew to come to work with an empty tank. Shawn was great. He was a good find, still with us today, and he's kind of our main right-hand man as far as dynamic metal goes. He does a lot and I can get into that too. We were just in that storage facility and then kind of started outgrowing that a bit.
Sunny: And this entire time there were no aspirations to be a sheet metal fabricator. It was primarily still about the flowers.
Scott: No, the only other thing that I did is because there were some other tenants in this interesting location where we were. There was a hydraulic company in another unit, more of a garage with lifts and stuff. I did some welding repairs for them too because they would come in with plows that had things broken off. I wasn't certified in any kind of welding processes, but I picked up welding pretty quickly and they had me doing repairs for them.
And so there was a bit of that random stuff where it's like, oh, this guy makes flowers, but he can also do stuff with metal. Since we powder coated, I had bought a bit of a larger oven in the new shop, like a six-foot by four-foot by four-foot oven, and a booth, and a real gun had an actual, like legit secondhand used gema gun. So we had kind of a legit powder coating set up for small, small batch stuff. It became kind of a little bit of a local powder coder doing random things for people too, automotive stuff and just the most random things. So that's kind of where it started to become a little bit more than flowers. But there was no intention of starting the sheet metal business and fabricate stuff. What started happening was, as the company got bigger, I was really bad at managing my inventory. You know, you just have laser cut flats and a bin on a shelf, and I would go into a bin and there's two pieces left.
Sunny: And you're not laser cutting yourself yet?
Scott: No, I had a couple vendors, actually, I had vendors in Alabama. I had a buddy of mine that has a machine shop down there. He had some laser cutting vendors because they were way cheaper than getting them down outside the Philly area. However, they had lead time. So when I would run out of products, I would reach out to them to make more, and they said, sure, it's just going to be four weeks. I said, "crap, I need them now though."
So, it became clear that maybe it makes more sense for me to figure out a way to make these patterns myself. What I actually wound up doing was I got a very small, two by two plasma table from Lang Mirror Systems. They had just come out with it, it was brand new. But it was perfect because I just bought a Hypertherm plasma cutter and mounted it to this table, CNC table. I used that to prototype my flowers. So, I was just plasma cutting 40 aluminum. I didn't have to wait for vendors to do it, especially when I was creating new types of flowers and experimenting.
And then, when I confirmed that my flat patterns were good, I would send it to the laser cutting vendors. But I started thinking, maybe there's a way I can cut this stuff myself. And I didn't want to plasma cut, I don't want to get a big plasma cutter and plasma aluminum because it's just messy. The laser cut parts were just so nice.
So, I started doing some research and I wound up talking to my now business partner, Mark. We went to college together at Penn State and I said, "Hey, you know, I have this flower business, maybe we can do something more with it." And I kind of presented my ideas and that's when it became about figuring out if we can start a shop. At that time, import lasers were becoming a thing. There were companies within the US, with US-based support, where you could buy an imported laser at a pretty affordable price compared to your big five, like Mitsubishi, Mazaks, and Trumps.
I wound up doing some research, found a 1500 watt laser, which cost a hundred thousand bucks, which was still a massive chunk of money, especially when not even making that much a year in revenue.
Sunny: And the flower business was still growing.
Scott: Yeah it was, but that wasn't enough to justify buying a laser.
Sunny: I see.
Scott: Aluma Flowers was two years old at this point, so this was in 2019. We had some track record of being an actual business, and that allowed us to get financing on the laser. I put 10% down, financed the rest of it, and wound up moving to the shop that we now rent out a small space in. I remember the rent was $1900 a month, and that was a big number for me. I was like "1900 a month?!". Cause I was paying $600 a month in my storage garage. Yeah, but it was a big space...
Sunny: And it had a bathroom.
Scott: It did, it did. Running water, bathroom. The water was heated too.
Sunny: Oh wow.
Scott: We were living, it's very nice. Living a life.
So we decided to kind of make that leap and we signed a lease on this bigger space and coordinated; it kind of worked out well. We signed a lease and then the laser was delivered a month later. We got that set up and we're like, all right, here we are. We have a laser, we gotta get some business for it, because you can't really, we had talked about it, you know, we had probably two months we knew that laser was coming, but you can't go to shops and be like, we can make parts for you in two months.
Scott: We're gonna be like, all right, come back to us when you can make parts. So we kind of just had a, you know, you put the cart before the horse a little bit and get the equipment and then get it to start making money. So what I did is I just went on Facebook marketplace, created a post for laser cut parts and worded it carefully that it avoided Facebook's algorithms to catch, you know, business advertising. Mm-hmm.
And I got dozens of responses from people locally that, you know, from the people that just wanted to punish her skull for their garage to guys that worked at legitimate, you know, big machine shops and other fabrication shops. And they would say, Hey, my boss would really be interested in this. We're we're driving an hour and a half, two hours to get our laser cut parts from, you know, another area. This could be great.
So I just kind of kept all potential leads open and we wound up drumming up some pretty decent local business. And then it quickly became, okay, we can laser cup parts, but not everything's flat. People want brackets that are bent. Mm-hmm. So we decided to pull the trigger on a cheap Bailey 35 ton press break. It was 13,000 bucks. It was an NC break. Not full, not full cnc. Very, very crude, very crude piece of equipment. But it, it works, it bent parts.
Sunny: And did you think of yourself as a manufacturer of a shop yet?
Sunny: Still not? Still just flowers with, you know, a break press and a laser.
Scott: Yeah. It's like, you know, it, it's like your supermarket that has a coffee shop in the back, you know?
Scott: But yeah, because we still didn't really know what we were doing, you know, never claimed to. But, you know, with me having, having an engineering background and then also a, you know, a hobby level fabrication background, I can make a lot of things with my hands. And, between that and Sean, and then I hired a, a full-time welder too, mainly to help me with flowers. But we had, we had enough to be dangerous and, I was like, all right, we can figure this out. So we did, I mean, we cut our teeth on. We didn't have any fancy offline programming for the press break or anything. We had to take prints from customers and come up with our own figure out bend deductions and learn it, you know, the old school way with actual math and making accurate parts.
Sunny: And was there a shop that helped you? Was there someone that toured you around, showed you how to do stuff? Was it just all YouTube and Masks?
Scott: No, it was just, just us. Yeah. Just researching, you know, there's plenty of online resources for figuring that stuff out. But yeah, it was just, just math and, you know.
Sunny: Were there any of the like super surprise lessons you learned? You thought you mathed it out, you made a part and you're like, oh, that's...
Scott: So the first, the first thing that we took for granted is the very, one of the very first like billable sold parts were for a friend of mine who worked at a shop that makes like race cars and they do like chassis and brackets and the whole thing. So we were cutting some like brackets for them, simple flat tab brackets, you weld onto a roll cage. We cut the parts on the laser and I sent it to him and he's like, the parts look amazing. They're so nice. He's like, but none of them are to tolerance. They don't like, everything's the wrong size. And I'm like, what? And so I'm trying to figure this out and you know, in hindsight it's like, we didn't even like check the parts. We just let the laser cut the DXF the customer sent. And it's embarrassing looking back on it.
But we didn't realize we had to tell the laser software to create a compensation for the curve for the laser beam. So there was no comp. So all the parts were like 15 thou, 30 thou not like a massive amount. Sure. That's a mile in sheet metal, you know, 30,000 a hole.
Sunny: Sounds like this guy was nice to you about it though.
Scott: Yeah. He was like, can you just make these accurate? Because he was a buddy of mine, so it was, that was a good thing that he was a buddy of mine. So I'm like, yeah, crap. So I called the manufacturer and they showed us how to, you know, put those comps in on that import machine. It was a little bit different. You kind of had to start from scratch and figure it all out. We did, but it was a lesson learned. You took for granted that lasers were these like magical things. You just hit the go button and everything's perfect and that's not the case. So yeah, we, we learned that one. That was an interesting one. But then we started like, okay, now we know how to make accurate parts. And that's when we started getting into just as much random stuff as we possibly could. And then that's when Mark, my business partner, he was still working full-time at his job, but he was the cold emailer.
He would just google search other companies in the area and we were just letting people know we existed. Just say, Hey, this is what we got, this is what we can do if you wanna send stuff far away. We got a lot of bites. People were, like I said, were going traveling a distance to get parts elsewhere. There wasn't a lot of laser shops in the area. Not a lot with fiber lasers because even in 2019, you still had a lot of shops that just had a lot of old CO2s that they've had around for a long time.
We were able to kind of fill a gap with our shop size and our agility. We could turn parts around really fast. A lot of shops had those four, six-week lead times, so lead times won us a lot of work because we can get these done in three days. People would ask us, "Are you charging extra for that?" We would respond, "No, we can get it done."
Sunny: I mean you would've ordered from yourself when you needed parts back then, right?
Scott: It would've bailed me out of not having any flowers to make! But yeah, so then we just took off from there and word of mouth started spreading from shop to shop that there's these guys in this little hole in the wall in Pennsylvania that can do these laser cut parts. And that's kind of where everything started and grew from.
Sunny: And that's when you thought that you were a metal fabricator?
Scott: That's when I thought we could make metal parts successfully. I'm still having a hard time, like I still have a bit of an imposter syndrome, you know, of just being a dude that worked for the power company and I got some good guys here, but we're not like this big fancy shop. We're making cool stuff. We were starting to get connected with this telecom company. We were making parts for Verizon and AT&T, stuff that was getting shipped all over the country. It was pretty wild. We did a lot of prototyping. We were very good at that, working with other shops to do those onesie twosies that were a real pain. But we got 'em done and we're working with customers to work on their drawings. I knew enough in CAD in 3D to be dangerous and manipulate 3D models and sheet metal and adjust CAD files. That was an important part of it because I still had to do and I still was doing everything. Everything was still flowing through me within the shop.
Sunny: And you asked if Mark's full-time now?
Scott: No, Mark was still working his full-time job. He was still very much just helping to bring the business in because I was focused on just making parts. The deal was, I had to make sure the shop works, make sure we're making orders. So, he was tasked with bringing the work in. He was responsible for a good portion of the work that came through the shop because I had no time to email other shops or talk to customers. The engineer side of me doesn't care for that very much either. I just wanted to make parts, but Mark was much better at customer interfacing than I was.
Then, COVID hit in 2020 and we got busier, especially due to the telecom stuff that we were doing. A lot of our industries weren't really affected. We got kind of lucky there. The only thing that we were worried about initially was when COVID initially hit and our governor declared that you had to be an essential business. For the first few days, nobody knew who was essential or who wasn't. It was like we were a speakeasy and we weren't turning the dust collector for the laser on to make too much noise in case the police would show up at our door because we were working.
But then we ended up getting a letter from, since we do work for telecom, stating that we're an essential company so we could keep working. We didn't have to stop. That was an interesting time, especially because we were a super small company. In 2020 we had like four or five employees, and we were just trying to navigate, what if somebody gets COVID, what are we going to do? At that time, there was a fear that if you got COVID, it was a death sentence. It was a very unknown thing, but we got through that and just kept pushing forward.
We were growing quickly and the discussion started about turning away a lot of work because our laser couldn't handle the thickness. With 1500 watts, you're pretty limited, about an eighth inch aluminum is about as thick as you can go. Half-inch steel, that's pushing it, and a quarter inch stainless was a bit rough on that power level. It started limiting us. We would get requests for machine chops and had to turn down work for three quarter inch plates or three 16th aluminum because it was too thick.
Then, Mark and I concluded that we might need another, bigger laser. I didn't want to do another import machine. While the price was right, there were quirks and with a machine like that you need to have an operator who can also troubleshoot at the same time, as things were changing daily. It's not necessarily the case that because it was cutting well yesterday, it would cut well today. I wanted to have a machine that we could just say go and it would cut. So, we had to start looking at the big boil lasers.
Mark looked at some of the bigger machines and reached out to Mitsubishi. They flew me out to Chicago, and I got a chance to play with some of their equipment. Long story short, we ended up pulling the trigger on a 6 KW Mitsubishi. Mitsubishi has their own financing arm. I talked to their underwriter directly and went over some business financials. They were very interested in looking at where we were and where we were going, not so much the black and white of the books because as a small company their books were not stellar, you know, very young. There was nothing impressive about our financials but we were growing. There was growth and that could be seen and Mitsubishi saw that. We got approved for an original loan amount that was something like 650k. That loan was for a laser after putting a percentage down...
Sunny: Which makes the rent seem cheap.
Scott: Yeah, it made the rent seem very cheap. The laser payment was 11 grand a month and that was a lot. That was kind of a, "oh crap, this is, you're creating a mouse to feed now" situation, because that payment is going to hit every month whether you want it to or not. It's tied to an interlock on the machine so if you don't pay it the machine gets shut down. But we took a risk on that. Mitsubishi took a risk on us and they even said, "It's the worst case scenario, you don't pay, we come get the machine, refurbish it and resell it." That's how it works. I said, "well let's just do it."
So then yeah, we grabbed that Mitsubishi and then a little bit before that we had also upgraded our press brake too to a used seven-axis, server, electric brake small break from a Finnish company called Coast One. We picked that up in Michigan and that opened up a lot of doors for us too because now we had that break, we got offline programming for it and that was a game changer, the offline programming. So now we're not doing any manual bend deductions. We can take on way more complex parts because we can simulate the bends. That was a big thing on the original press break. We bend ourselves in the corners a lot. You know, you have a part with eight bends and you get to bend seven, you're like, "Oh no we can't do this. We're stuck." So you're there with like pieces of paper and you're folding them up and trying to make sure you can bend parts and now we just throw the step in the offline programming and it tells us if we can do it and how to sequence it and what tooling to use and do we need different tooling to do it. It calculated all of our bend deductions for us. We were making really accurate parts and the break was programmed from the office, gets sent over our network and it's ready to go.
So that stepped up the bending game a lot because that was the biggest pain point was bending. It took a lot effort to bend on that little Bailey break. But ironically enough thanks to Covid and supply chain, we sold that Bailey break for more than we bought it for a few years prior. So it's nice to sell equipment for more after you got a few years use out of it. But yeah, between that new break and then the Mitsubishi laser, we were kind of off to the races with starting to become a legitimate fabrication shop.
Sunny: And that's when you finally called yourself a fabrication shop maybe?
Scott: Yeah, maybe. Yeah.
Sunny: Maybe still not yet.
Scott: Yeah. At that point. Yeah.
Sunny: What about you do you think motivated you to keep getting better, to keep upgrading equipment? Plenty of other people would've been fine with a little operation that they had, you know, maybe paid off their equipment, made a little bit more money. Most of that falls to the bottom line. Like what, what inside you pushes you to continue to get better.
Scott: Part of it stemmed from the selfishness of okay, I can't be the only one that can make parts on these machines. And I learned quickly that you really do get what you pay for when it comes to manufacturing equipment and the easier the equipment is to use, the more we're gonna be able to A) make better parts and B) bring on people that can help make those parts. Because prior to that, between the laser and the original press break, you know, I was involved with everything because they were quirky. And when you have quirky pieces of equipment, you know, I'm sure you've seen it in older shops that have, you know, big old presses and you know, only only Joe can run that press, nobody else can run that press cause it's too dangerous. The only Joe can do it.
That's kind of how the shop was. Well only Scott can run this or that. And I was like, I'm never gonna, it kind of came back to, you know, making all the metal flowers myself. It's like I can only do so much. So it was the desire just to get more advanced equipment that was A) safer, B) easier to use and that allowed us to scale a little bit. And it was always that fine line of, yeah, alright, now we're taking on, you know, another loan for this piece of equipment, another loan for that. And it, it, it was a lot. It created, you know, a lot of overhead.
But then it also, it attracted more customers. Especially when we got that Mitsubishi, you know, we had kind of a machine to be proud of, you know, and posted on our website and customers come in and see that perspective customers and they're like, wow, that, that's really cool. That's, that's a machine. And it kind of just made us a little bit more substantial to have that, that equipment, which made a difference.
And I like the technical end of things. I think technology, it seems that in sheet metal technology seems to lag a little bit with older shops and kind of sticking in their ways and you know, I said I want to get like if this stuff exists, this offline programming software and you know, this more advanced equipment, I said I want to get it and I want to utilize it and put it to work. And you know, I don't want a bunch of old, old crap that we have to worry about breaking down. I just want stuff that just works. And we've had that mid laser for two and a half years now and it just works. It just cuts parts. It's a workhorse and I think that's what we needed. And last, just last year we got a, we replaced our smaller press break with a Mitsubishi 150 US ton break. And that's been another kind of game changer too cuz that previous break had some quirks that my operator could deal with and put up with and work through. But now with the new break, it just bends parts and very intuitive control, different offline programming software. But parts come through the shop and you know, they, they just get made. And having the state-of-the-art equipment has been a huge, huge part of that. So, I'm much more looking at when buying equipment, what can it do for us? Not so much the initial, that initial sticker shock. You kinda learn the kinda learn to get over that cuz you can see the value of what the equipment can provide and how much easier it can make my own life of just being able to entrust my operators and staff to, to run it and maintain it. And, it's made all the difference in the world.
And you know, even just down the welders, you know, having, you know, advanced welding equipment, um, you know, we have an IPG laser welder, handheld laser welder, so we do laser welding. That's not something that is very, very common, but it allows us to do some very, very intricate welding on thin gauge material that TIG would just turn it into a pretzel but we can laser weld it and it looks great and doesn't distort. And it's little things like that, um, that make such a huge difference.
Sunny: Yeah. So all these, I mean, you're on the other side of this growth curve, but most people in their story when they're starting something, there's always this valley of I might not make it. I'm I'm, I'm almost gonna die. Yeah. Did you avoid that? Did you have one of those? If you, if you didn't avoid it, how did it feel when, when you were there?
Scott: There were many of those. Um, there were many of those dips and valleys and um, yeah there was, you know, with having a number of employees, um, it creates a payroll and um, with having customers that pay net 30 or or beyond, it creates cashflow issues.
Scott: And that was always a struggle.
Sunny: More Entrepreneur math, right. How many dollars coming in this week and how much payroll is...
Scott: Yeah. Yep. Yeah. And, you know, making sure I get my people paid was, that was always the number one thing is I always paid my guys first. Um, I hadn't paid myself for a number of years, um, just enough to, you know, keep, keep the bills paid, but there was never a salary, um, or a consistent income. It was just, okay, my mortgage is due. I'm just gonna take this outta the business to pay my mortgage.
But there were times when the math didn't work out in our favor and I had to leverage, you know, personal credit cards to keep payroll going and pay my guys. And so I would, you know, throw, pull 10 K off my discover card, send it into the business so we can make sure my guys got paid. Because at no point could I allow them to think there was any potential issues in the business because I, I knew it was an acute time of stress and that we were gonna get through it. The money's coming in, it's there, it's just not physically there. And um, there was never a point where it's like, I don't think this is gonna work. We're gonna fail. It was just, this just sucks right now. We have to get through this and then we'll be okay for the next one. Um, but there was a lot of living, you know, I call it living invoice to invoice as a business. Um, there's a lot of that and um, as we continued to grow, cashflow still became a problem because now, right, we're getting bigger jobs, bigger contracts, um, bigger dollar value projects, but that also means bigger material orders, you know, um, money that was flowing out is much bigger chunks. It's coming in in bigger chunks, but it's going out in bigger chunks. So, um, it's always a, you know, chicken or the egg type of thing with the cashflow and, uh, and this business cash is king and it's, it's easier said than done sometimes to make sure that that gets maintained.
Sunny: It's a counterintuitive thing to learn, right? That it actually costs cash to grow.
Sunny: Always think growing is gonna spit out more cash maybe eventually, but eventually growing fast is expensive.
Scott: Yeah. And it's that, that fast growth is a double-edged sword. And I, you know, I've heard of companies growing so fast that they grow themselves outta business. Mm-hmm. And I can see, I could see blatantly how that's very possible to do easily. Um, you know, you start slipping on lead times, broken promises to customers. Um, they only want to hear that so many times that, you know, I'm sorry I'm gonna miss this date. Well that's what you told us a week ago. And um, when you start getting into that kind of trouble, um, we just kind of had a lesson in that somewhat recently in the past few months of, we got a lot of quotes went out and a lot of pos came back and hit at the same time that we didn't expect. Some lead times that we had to maintain were not met, and we got caught with our pants down. It was a ton of work, but there was no way to get it done. We just didn't have enough people, and hiring is not a fast process in fabrication.
Sunny: Well, unless if you want to do it well it isn't a fast process.
Scott: Correct. If you want people that are going to stick around and not cause more headaches, it's not a fast process.
That's when Mark had to go on some damage control crusades. We owed 50 of these enclosures and we weren't going to get them done. We had to ask our clients how many they really needed, like the bare minimum quantities that were absolutely essential. If they said they needed five, we'd commit to delivering five, asking for more time to finish the remaining 45. It was a lot of that kind of negotiation, which is what Mark is really good at and what I'm not so proficient in.
He was good with being a little more proactive, like saying, "Hey, this job's due in a month, but I don't think we're going to get it done in a month." So he'd reach out a month ahead of a due date, not a day ahead of it. This strategy saved us on a lot of over commitments that we had made. It was a big lesson in lead times because you always want to promise your customer the best lead times. Sometimes in your mind, you know it's not realistic, but you want to get the work so you still say, "We can get it done." We try to figure it out, but it doesn't always end well.
The growth of the company is always a good and bad thing at the same time. It's a strange sensation to have the positivity of growing the company but then also the negativity of growing the company. It's very different.
Sunny: So you've obviously grown since you started the company. If you were to compare yourself to when you started or if you could talk to yourself back then, what would you say has changed the most and what advice would you give yourself to help the most?
Scott: I think the biggest thing, if I were to do something different, is to try to warn myself of what was coming. I would advise myself to figure out sooner how to get some better systems in place to allow the business to run with the people in it and not through me. Because I held on for a very long time of everything running through me. It was that sort of control freak engineering side of me that needs everything to be perfect and I have to have my eyes on everything. And if it's not exactly the way I want it done, it's wrong. I held onto that for a long time and that took its toll, it took its toll on me and my wife.
As a new business, you kind of have to put in that time, you don't have a choice. Working 16-hour days, weekends, it was all about work, work, work. It comes with the territory of running a new business, but then a few years in, you have to start trying to let that go. I would've liked to have tried to let that go sooner, understanding that if the team can get it to 90% of how you would do it, it's going to be fine because the customer doesn't care about that extra 10%. They're not going to see it. To me, it was always the most important thing, but in reality, it wasn't as big of a deal. It wasn't until I could let stuff go and just say, okay, let's just let the guys do what they do. There were no complaints from customers, no issues, no return parts. I was like, oh this is okay. We're fine. I think that's the hardest thing for any business owner because most people that start a business do so because they're technically very good at what they do.
And that's why you start the business cause you're like, I do this well, I should do it for a living. But then it becomes bigger than you and as long as you have the right people in place, I think it can thrive very well. And then it becomes about creating procedures if I want something done a certain way. I need to let the guys know, hey, look for this, this and this. Then that stuff works itself out. We have certain customers with certain requirements for scratches or others who don't care about gouges in their parts.
Just trying to make sure that's all documented, like this customer needs perfect, white glove service, the most beautiful parts. If you look at the part wrong, the customer's going to reject it. We have customers like that and that's fine. It just has to be noted, and the guys just need to know, hey, don't scratch this. It comes down to handling any part that has certain secondary processes, like if it's getting anodized, don't let there be scratches all over it. It's got to look good and clear anodized on aluminum.
So that just comes down to making sure they know how to handle the part. As an owner, just making sure the staff knows what they're doing, empowering them to do it makes life a lot easier. It just took me four years to realize that, but I think now, this year, it's the first year, four years in, that there is a little bit of breathing room and it's not just work, work, work, work, work.
Allowing us some peace makes it more fun again. It goes from initially fun when you're making parts and the business is very small, you and two other guys, to just insanity. This business is like a runaway freight train and you're just trying to keep it on the tracks. You're thinking, "what have I got myself into now?" I have all these personally guaranteed loans and I'm stuck. It feels like there's no coming out of this on a different end. But then we got systems in place and things are going fine. Being able to go on vacation without worrying about the place burning itself down holds a lot of value now.
With my business partner, Mark, being on full time since August of last year and that was a huge game changer. Having him on board and running some more of the operations, taking some of that off my plate, training our new operations manager, and having people that are keeping a pulse on everything going on, so I don't have to, is really good. Mistakes still happen. Things still get missed that I could have caught, but I can't get mad at anybody. There's still some tribal knowledge from older projects. A customer might come back two years later and want more of a certain product, but two years ago we didn't have what we have in place now like Fulcrum. We can't just bring up a sales order and have all the data in there from when we did it two years ago, it's on some paperwork that's probably been thrown out a long time ago. So, there are still some areas where I'm the only one that knows what we did, things to keep in mind, and if the guys don't realize that, things are going to get missed. We are still dealing with that a bit, but that's on our end to clean up that mess a little bit.
Sunny: So everybody's having a hard time hiring, especially younger folks, but your team is younger.
Scott: We are. Yeah.
Sunny: I think you said the average age is in the low thirties. You're also putting out good parts and people are showing up for work, they stay around and they're happy, and your team works well together. Why, what's in the water outside of Philly or what are you doing differently that other people aren't?
Scott: We have, you know, like you said, our youngest employee is 22, our oldest is 42. So we are a younger crew. I'm 36, my partner's 36. We have a lot of guys in their late twenties, early thirties. And I think that just creates a hungry crew that all kind of have the same mindset and same desire to grow the business and see it move forward. We all get excited when, you know, new work comes in. We're very transparent with dollar values. Some people don't want their employees knowing how much these parts are worth. And I'm running around being like, this is a 300,000 job guys, this is good work. And they're like, oh that's great. It's great for the company. I think we just, you know, the culture that we have, I think just keeping it lower key, a little more flexible, kind of treating people like adults with, we have core hours, you know, we tell the guys start times are between six and 9:00 AM just have a consistent start time in that window and you're good.
So we have guys that start at six. We have guys that start at nine, guys that start at 8:30. And then, you know, they can work 10 hour days if they want four tens get Friday off, or eight hour days. We keep things very flexible. And I think they appreciate that. We just let them be responsible for, you know, Hey, just make sure you come in. We do have processes, you know, if you're not gonna come in you need to send an email and, don't just don't show up. For a little bit it was that we didn't have anything. Just a text message at noon. "Oh, I drank too much the night before. I'm not coming in."" Well it's noon. I knew you weren't coming in because you were supposed to start at eight.
But so we nailed that down a little bit. You know, with, with 15 people you have to get a little bit more formal with some HR type stuff now. Yeah. We're seeing some of that for the first time, you know, employees, you know, kind of clashing here and there personality wise and having to deal with that a little bit. Just different personality types. But you know, all in all, when we're interviewing, we get a pretty good feel for just the person. I think we know, like Mark and I in the first 30 seconds, if they're gonna be a fit regardless of technical abilities or not.
Just the way they act and you know, we, we've turned some people down that were very technically very good, but we agreed that they're not gonna like working with the rest of the crew here. Because we're all laid back. Everybody who right now in the shop part of the team, they're the type of people, you know, you'll have beers with and you know, we have holiday parties and we have a blast. You know, and, I think that's super important and still having that delineation of Kim's still the boss, not necessarily your friend, but we can coexist nicely. And that's been a big, big part of it.
I still come down on people when, you know, I hold 'em pretty high standards and they make silly mistakes. I'm just like, you know, you know better than this. Like, and I know you know better than this. And I'm like, yeah, I know. Make this better going forward. And that's when we're trying to get more, a little more formal with, you know, some of the NCRs and CAPA procedures and okay, let's document this and not just be like, okay, you screwed up. Don't do it again. Let's figure out why.
So, one thing we're working on more of is just being better at making our people better. It's becoming more and more important and, you know, grooming them to just continue learning and growing too. We're all learning throughout this process. I still don't claim to know what I'm doing. We make good parts and we make parts for some really big companies and that's good. But, you know, I think if you ever get to the point where you feel like you're an expert, you lose out on the desire to keep getting better and to grow. So, I think what we do well is just staying hungry and continuously wanting to improve, all of us. As an owner, I am working on doing more owner things and growing the company that way. I am also trying to get away from some of the day-to-day stuff that holds us back from pushing the company forward. I think that's part of one of the bigger struggles of any small business with owners that you get wrapped up in the nuances of the day and you can't get back to bigger picture things. But we're getting there with that, little by little.
Sunny: Most people, you know, they learn manufacturing from working at a different shop, from inheriting a business maybe, or from buying one. You started from scratch, learned a bunch of things from the outside in and successfully make amazing parts without the baggage, if you will, of knowing how things are done elsewhere. So, what's your perspective on manufacturing? What's most surprising about the industry that you didn't know before, good or bad? And where do you think everything is going?
Scott: I would say the most surprising is the disparity. There are cutting edge shops that have really cutting edge equipment and there are shops that are still using equipment that's 50, 60 years old, and they're still getting the job done. And I think that's the amazing thing to me. There are a lot of ways to approach manufacturing, but it does seem a bit antiquated in the sense that new equipment is expensive and companies that have owners that have been doing it for a while don't want to have new loans, which I understand. The idea is just to get rid of debt as fast as possible.
But it was always interesting to see other shops or even customers that we do work for, and they have World War II era pieces of equipment and it's like, this looks dangerous. Seeing the difference between the way different shops approach manufacturing, I'm always in awe of things that I don't understand or companies that make parts that are just so vastly different than what we do. I think that stuff is really cool that they come up with these ways to make their niche type parts. It's kind of awe-inspiring that they figure that out and do it. You understand what goes into making very specialized components and doing things certain ways. We see parts come across that we're just like, man, there's no way we can make that with certain features. But somebody can. It's interesting to me to find out, okay, how would a shop make these parts? Because somebody's going to make them somewhere.
I think like with a lot of industries now, I came from the utility industry that was very antiquated, very outdated. Both with their way they do business, but then also the equipment in the field. You know, being 50, 60 years old. Now utilities are scrambling to upgrade their grids to get things more modern because of all these electrical infrastructure happening. It seems like it's almost similar with manufacturing. I think we're probably seems like we're on that cusp now of things turning the tide with some of the tech coming out is really crazy with cobots.
Automating is the future as staffing continues to become a problem. It's harder and harder to find the right people. I can see companies turning to automate as much as possible. You still need people to tame that automation and run it. I'm not saying robots are going to replace everybody anytime soon, but I think the cobots and working side by side with them is going to become more of a thing. And that's something that I think is really cool to have these robots become more attainable. You don't have to spend a quarter million dollars on a robot now to have it do what you need it to do.
So to be able to have that tech that can do the stuff that like people don't want to do, like very repetitive things that are just boring for anybody, to find a way to have technology help get that done, I think is really cool. I think it's pretty exciting to see that start to happen. It's good just to stay up on the tech and Fabtech and all these other shows to see what these companies are coming up with. It's a pretty exciting time. I think there's a lot going on.
Sunny: Well, if culture's important to you, which sounds like it is, it's harder to scale a team and keep your culture when you're at 200 people.
Sunny: But if you can have a cobot increase the output of each individual person, you can keep the team relatively smaller and do a lot more work.
Scott: That's a big thing too is you know, as the company grows, you know, not letting stuff get too corporate and it's like you have to ride that line. You have to have policies and procedures and people have to follow rules, but you don't want it to be so tightly wound that nobody can enjoy themselves and have a good time while they're working. So I think that's the biggest thing is just you have to have fun doing it.
And I think we have people that truly enjoy what they do and you know, my wife will comment, she works in an area that's close to where our weld shop is and we have five full-time welders and she always comments that it sounds like it's a party every day back there in welding because they're getting a ton of work done, but they're just laughing and having fun. And I'll say that's what it's about. You know, like they have to enjoy it and poking fun at each other.
We have fun, we have a lot of fun and which is very important. We have a rule in the shop too. It's not formally in our handbook, it probably should be, but anytime it's somebody's birthday, they have to bring donuts in for the whole shop. And that actually came from my days at the power company. That was kind of an unwritten rule with our work group. If it's your birthday, you bring in the donuts and they can't be Dunking Donuts. They have to be one of the good local donut shops that make really good donuts. So they've embraced that. Everybody's always brought donuts in and you know, we just, little things like that, we just, you know, try to have fun.
You just have to have fun. It's so easy to get caught up in the seriousness of business and a lot of times it is serious, but at the end of the day, I think I'm very lucky to have found something that I really like doing that I'm good at.
I remember being a kid, I wanted to go to MIT to be a car mechanic when I was really young. And I remember my uncle saying, my uncle, very smart, very smart guy. And he's like, well, he's like, you don't go to MIT to become a car mechanic. You go to MIT to design the cars. That kind of stuck with me a bit and I'm like, oh yeah, that's a good point. But I liked working with my hands and stuff. So that was always kind of the trajectory of doing something with engineering to some extent.
Just having to find myself in the utility industry, which I love too, but that set me up well to be able to break away from that and kind of take a big risk at 29 30 to do something. Cause I, I kind of said to myself too, you know, I'm not dead at 30 if this doesn't work and I fail, like there's plenty of options. But it worked so far. It's working.
It's been fun, you know, there's been a lot of lows, a lot of dark times with the pressures of running the business and the financial squeezes. The stress of just making things work is heavy. Business is such a living, breathing thing that even listening to podcasts with some very large business owners that own nine-figure companies can be insightful. They'll say too, they have a deep-set fear that they just wake up one morning and it's all gone. You feel that too as a small business owner and you're like, okay, so that never goes away.
Sunny: And the world's changing faster and faster every day.
Scott: And you always have to adapt and change is the scary part of it. It's not just like, it doesn't fully run on autopilot. You have to keep nurturing it. It is like a very high-maintenance little child at all times.
Despite that, the golden handcuff situation at the power company, I could never see myself going back to doing work like that. Or working in corporate America. As lucky as I was to have that job so young, no regrets, I owe them a lot. I'd much rather have the masochistic experience of owning a business because life's just way more interesting. And that's kind of how I like it.
Sunny: You drive fast cars and motorcycles, you like the rush.
Scott: Yes, that too. Yeah, I checked off a lot of those boxes too.
Sunny: You're probably about to take out even more loans and buy more machines and cobots, but what would you want to tell your future self if this was a time capsule five years from now? What do you want to say to that version of Scott?
Scott: I think it would be kind of echoing what I just had a little bit of, enjoy the ride a little bit more, and just slow down, you're talking about going fast. Just slow things down a little bit and let the growth be sustainable and something that you can do without losing your mind in the process. Because like in this industry, the work's out there, like we have more work at our doorstep than we could ever get done. Like we're never, I don't see us ever being slow. We know where to go to get more work. It's always there so we can grow as quickly as we want to, but again, that's a lot easier said than done to grow the company. So just, you know, instead of having that growth be our first year of business from year one, year two, we five Xed revenue from year two to year three, we over 2X revenue. And then from year three to year four, there was a like 50% increase in revenue. That 5X and 2X is just, it's insanity. Like, it's just absolute insanity and it's not fun. That's where it's like, okay, don't do that again. No more of that. So like, you know, 10, 20% growth is real growth. It's good growth. And accepting that, alright, let's not grow much more than that and just let things expand and just enjoy the different phases. Because I think as the company does get bigger, you know, I'll kind of look back and revel in these smaller days.
I look back and revel in the days when I was in the storage garage with my sink bathroom and you kind of look back at that like times were simple, you know. Just trying to keep that simplicity to some degree holding onto that as we grow. But you know, with the, I have an 18-month-old son now that reframes a lot in terms of life and priorities and what's important and business is incredibly important. But being there for my son is more important now cause we're only having one.
So, I only get to do this once with him. So there's only gonna be one time where, you know, he hits milestones and I want to make sure I'm there and I don't want to be that dad that has the stories of, you know, never being home for his son and seeing him grow up. So, you know, that's where, you know, life just, you know, you're able to reframe where your priorities are and you know, be able to kind of do all the different things at once.
Sunny: Awesome. Well congratulations on all the success.
Scott: Thank you.
Sunny: We did research and your customers think the world of you. You're doing amazing work, having only been in this field for a few years and I wish you all the best of luck and thank you for coming out here and talking with us.
Scott: It's been a pleasure. Thank you for having me.
Sunny: Thanks, Scott.