{"product_id":"boss-life-isbn-9780399185298","title":"Boss Life","description":"\u003cb\u003e**A Forbes Best Business Book of the Year, 2015\u003cb\u003e**\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e\u003cb\u003e**\u003c\/b\u003eWinner of the 2015\u003ci\u003e 800-CEO-READ Business Book Award in Entrepreneurship\u003cb\u003e**\u003c\/b\u003e\u003c\/i\u003e\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e When columnist Paul Downs was approached by \u003ci\u003eThe New York Times \u003c\/i\u003eto write for their “You’re the Boss” blog, he had been running his custom furniture business for twenty-four years strong. or mostly strong. Now, in his first book, Downs paints an honest portrait of a real business, with a real boss, a real set of employees, and the real challenges they face.\u003cbr\u003e             Fresh out of college in 1986, Downs opened his first  business, a small company that builds custom furniture. In 1987, he hired his first employee. That’s when things got complicated. As his enterprise began to grow, he had to learn about management, cash flow, taxes, and so much more. But despite any obstacles, Downs always remained keenly aware that every small business, no matter the product it makes or the service it provides, starts with people. He writes with tremendous insight about hiring employees, providing motivation to get the best out of them, and the difficult decisions he’s made to let some of them go. Downs also looks outward, to his dealings with vendors and to providing each client with exemplary customer service from first sales pitch to final delivery. With honesty and conviction, he tells the true story behind building and sustaining a successful company in an ever-evolving economy, often airing his own failures and shortcomings to reveal the difficulties that arise from being a boss and a businessperson. Countless employees have told the story of their experience with managers—\u003ci\u003eBoss Life \u003c\/i\u003etells the other side of that story.\"A memoir—not a manual—about life as a small business owner, complete with honest reflections on failures and shortcomings.\"—\u003ci\u003e\u003cb\u003eForbes\u003c\/b\u003e\u003c\/i\u003e\u003cbr\u003e\u003cbr\u003e“In this eye-opening debut…Downs drills down into the ins and outs of running a small business, focusing on sales, operations, money, and the personal demands of being a boss….this frank accounting will be a godsend to any small-company owners wondering if they’re the only ones constantly second-guessing themselves—or on the verge of going out of business. An honest look at a usually overlooked demographic.”—\u003ci\u003e\u003cb\u003ePublishers Weekly\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e\u003c\/i\u003e“[A] large-hearted memoir… Refreshingly absent of bulleted lists and sidebars, this is a welcome addition to the literature of business ownership.”—\u003ci\u003e\u003cb\u003eKirkus Reviews\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e\u003c\/i\u003e“[A] day-to-day, minute-to-minute tour of the intricacies of running a business, from dealing with employees to negotiating with vendors, the roller-coaster ride of sales, and the headaches of customer service. This is an invaluable look into operational details for anyone considering starting a business or caught up in the struggle of owning and running one.”—\u003ci\u003e\u003cb\u003eBooklist\u003c\/b\u003e\u003c\/i\u003e\u003cbr\u003e\u003cbr\u003e“This book is ostensibly about a year in the life of a small business owner, but it is actually a fascinating peek behind the scenes of a small Pennsylvania furniture factory….The combination of a humorous, self-deprecating, jargon-free writing style and content that mixes business fundamentals (cash flow, salesmanship, HR issues) with day-to-day events on the shop floor makes for a truly immersive narrative….A great read for those who wish to understand what running a small factory or business entails, as well as anyone interested in woodworking and craftsmanship.”—\u003ci\u003e\u003cb\u003eLibrary Journal\u003c\/b\u003e\u003cbr\u003e\u003c\/i\u003e\u003cbr\u003e\"My husband and I own a small book store in Memphis, TN. I read a review of your new book somewhere, thought it sounded intriguing, got a copy in and started it a few days ago. Before I even finish it I think I want to thank you for writing it. FINALLY someone being totally honest about running a small (tiny) business! I have felt so much better in the past few days knowing that someone else has experienced the same things we have—no cash, employee struggles, family life and business life merging into each other, cars breaking down, etc. I think we are all hesitant to talk about the struggles because we might be perceived as failures. I plan to recommend this book to all small business people. \"—\u003cb\u003eCheryl Mesler, Burke's Book Store, Memphis TN\u003c\/b\u003e\u003cb\u003ePaul Downs\u003c\/b\u003e started making custom furniture in 1986, shortly after graduating from the University of Pennsylvania with a degree in engineering. Downs has only one line on his résumé but he has a wide variety of skills gained in twenty-four years of running his business. His clients range from individuals and small businesses to Fortune 500 companies, all branches of the military, and foreign governments. Downs lives with his wife and three sons outside of Philadelphia.\u003cp\u003e\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003ePreface\u003c\/p\u003e\u003cp\u003eI’ve been living the boss life since 1986. I own a small company that builds custom furniture. I started fresh out of college, with no experience. Ever since, my business has been my life, my education, and my struggle.\u003c\/p\u003e\u003cp\u003eWhen I began, I had no training as a businessman and no mentors to help me. I just wanted to make stuff and have fun. I found that I was good at designing products and making sales, and the business started to grow. In 1987, I hired my first employee, and soon found myself struggling with management, cash flow, taxes, and all the other details required to keep a business running. After globalization and the Internet brought new competition and new opportunity, my company experienced unsustainable growth and, in 2008, a devastating crash. But we’ve endured—and even had one very profitable year. I am a survivor, but not a financial success.\u003c\/p\u003e\u003cp\u003eIn 2010, by sheer luck, I was given the chance to write about my experiences in \u003ci\u003eThe New York Times\u003c\/i\u003e for their “You’re the Boss” blog. I became a regular contributor. I’ve used that forum to describe the shabby treatment that business owners suffer at the hands of large and powerful institutions, in particular the health insurance and credit card industries. The main focus of my writing, though, has been my own company.\u003c\/p\u003e\u003cp\u003eI decided to tell the difficult parts of my story, concentrating on my deficiencies as a businessman. I have written about fighting with my former partner, struggling with cash flow and unhappy customers, firing employees, and dealing with a rapidly changing economic landscape.\u003c\/p\u003e\u003cp\u003eMany readers have written to tell me of their own struggles, and thanked me for publicly airing my many failures. Apparently a humble and honest look at small business life is rare. But I’ve found myself struggling with the limits of the blog format. Complex and sensitive situations must be oversimplified or omitted.\u003c\/p\u003e\u003cp\u003eThis book will be an opportunity to dig deeper into my experiences. It is an accurate portrait of a real business, the boss who leads it, the people who work in it, and the challenges we face. I hope that I can promote a better understanding of the factors that drive the behavior of small business owners and, by extension, show how a significant part of our economy functions. There’s a lot of chatter about “job creators” from people who have never created a job. Politicians make rules, but aren’t required to follow them. Employees complain without understanding why bosses act the way they do. And prospective entrepreneurs gamble their future without a clear picture of the challenges they will face. All these people need to know the other side of the story. This book is for them.\u003c\/p\u003e\u003cp\u003eSome disclaimers: the world of woodshops is almost entirely a male domain. I don’t know why this is, other than tradition. I have hired women whenever I found one who was qualified, but they are a very small percentage of the total workforce. In order to simplify the language of this book, I use the male form of certain common nouns, “craftsmen” and “salesmen” in particular. Please do not take this as a denigration of women who perform those roles.\u003c\/p\u003e\u003cp\u003eThe names of some people and customers have been changed, and the quoted dialogue is my best recollection of what was said at the time. That said, all the events in the book happened. If this account offends anyone, my apologies in advance.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eIntroduction\u003c\/p\u003e\u003cp\u003eIf this were a standard business book, I would tell you all the smart things I did to achieve financial success, and maybe trot out a few mistakes to show some humility. Unfortunately, I’m no business genius and I’m not rich. My story has neither tidy conclusions nor a triumphant ending. So this book will be different.\u003c\/p\u003e\u003cp\u003eI’d like to tell you what happened to my company in 2012, as we struggled to replicate profits earned in the previous year. We started strong, but then sales took a puzzling turn for the worse. The vast majority of our clients were delighted with our work, but a couple of them weren’t satisfied with reasonable efforts and cost us huge amounts of money. I presided over a very good crew, except for a couple of workers who gave me serious trouble. We made some money, then lost a whole lot more, then clawed most of it back. Meanwhile, my complicated family life couldn’t be ignored. This is real life. The triumph and tragedy of small business. The uncertainty and challenges of being the boss.\u003c\/p\u003e\u003cp\u003eWhat do I mean by “boss”? It’s commonly understood to mean someone who’s in charge of others, but that could be a middle manager in a big corporation. Instead, I’m talking about bosses who both own and run their businesses—small companies with fewer than twenty employees. More than seven million American businesses, employing nearly thirty million people, are in this category. These bosses answer to nobody and are responsible for everybody. Their own money is at risk. Every problem goes straight to them, and they have to come up with the solution, figure out how to pay for it, and then implement it. The position guarantees long hours, hard work, and overwhelming stress.\u003c\/p\u003e\u003cp\u003eEvery day, these bosses wear multiple hats: managing employees, keeping track of the money, dealing with bureaucrats, negotiating with the landlord—the list goes on and on. Larger companies, with more resources, can hire individuals or create whole departments to do these jobs, but a small company can’t generate enough cash to cover that expense. So these tasks land in the boss’s lap. No matter that the boss may have little or no training, and no desire to spend time on them. Done wrong, the company fails, either slowly or quickly. Done right, the boss gets to do them again. A sudden crisis—a cash shortage, or an equipment breakdown, or a personnel crisis—requires even greater effort. Even if the business survives, there is never a guarantee of easy sailing ahead. The situation goes back only to the routine level of toil and stress.\u003c\/p\u003e\u003cp\u003eThat’s not to say that being the boss is relentlessly terrible. Inventing the processes that enable successful operations is like solving an intricate puzzle. It’s highly satisfying to see your business running well, delivering the product or service that inspired its creation. There is no thrill like receiving payment from a satisfied client. Most workers try hard to do a good job, and most people are good to work with. Consistently meeting a payroll is a real accomplishment. A business can provide for the security and growth of both boss and employees. It might be able to expand and enter markets all over the world. It might even make a healthy profit. The boss can take delight in each small victory and, over the course of a career, be proud of all that has been accomplished, whether it added up to fabulous wealth or not.\u003c\/p\u003e\u003cp\u003eEvery business has a dual nature: the real-life version with its countless imperfections, and the ideal theoretical business the boss imagined when he started, where everything works as it should and money is made. Good money. Steady money. Maybe even outrageous money.\u003c\/p\u003e\u003cp\u003eMoney is the unavoidable scorecard. Any business can be great at making a product, great with its employees, great with the customers, but if it doesn’t make profits, it isn’t considered a success.\u003c\/p\u003e\u003cp\u003eWhile recounting the events of 2012, I’ll concentrate on four subjects: \u003ci\u003eSales\u003c\/i\u003e focuses on how my very small company interacts with a wide variety of clients, from enormous institutions to individuals. \u003ci\u003eOperations\u003c\/i\u003e is about how my company makes its products, how I manage the people I employ, and my attempts to move our workshop from a nineteenth-century model to the twenty-first-century version. This transition is an incredibly complex problem and the solutions we find (or fail to find) have implications for the whole economy. The third theme, \u003ci\u003eMoney\u003c\/i\u003e, describes how cash flow, or lack thereof, affects my decision making. And finally, I’ll describe how I exercise my \u003ci\u003ePowers as boss\u003c\/i\u003e, balancing those demands with my duties as a father and husband. The details of this story are particular to my company and my life. The lessons, I hope, are useful to everyone.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eThe shop floor from the southeast corner.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eThe Company S table on the shop floor for final inspection.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eThe Downs family: Hugh, Paul, Henry, Peter, and Nancy.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003ePaul Downs with a set of chairs he made in 2013.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eThe table that started it all, built in 1999.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003ePaul on a shop walk, inspecting the base of a scissoring table.\u003c\/p\u003e\u003cp\u003e\u003c\/p\u003e\u003cp\u003eJANUARY\u003c\/p\u003e\u003cp\u003eDATE: MONDAY, JANUARY 2, 2012\u003c\/p\u003e\u003cp\u003eSTARTING BANK BALANCE: $137,154.32\u003c\/p\u003e\u003cp\u003eCASH RELATIVE TO START OF YEAR (“NET CASH”): $0\u003c\/p\u003e\u003cp\u003eNEW-CONTRACT VALUE, YEAR-TO-DATE: $0\u003c\/p\u003e\u003cp\u003eNine a.m., January 2. Paul Downs Cabinetmakers, custom boardroom table maker, starts its twenty-sixth year with a meeting. We are on the fourth floor of an old factory in Bridgeport, Pennsylvania. I stand at a battered table, returned to us for storage when our client, a New York bank, downsized in 2008. Thirteen sleepy workers, sitting, wait for me to speak.\u003c\/p\u003e\u003cp\u003eWe meet every week at this time. The usual agenda is a review of our progress toward meeting monthly and yearly sales goals, a review of projects in progress, and a report on our cash reserves. I’ll get to all that, but start with a surprise: good news—2011 has ended on a high note. We have a record amount of cash on hand and a full order book to take us through the next two months. I confidently state that we have achieved success at last. The business has finally done more than build tables. It has also made good money.\u003c\/p\u003e\u003cp\u003eTwo years ago, as 2010 began, I was not so confident. A decade of my incompetent stewardship, capped by two brutal years of recession, had left the company at death’s door. We had shrunk from twenty-three employees to six, and I had just $16,239 in the bank—enough to operate for three days. A small business lives or dies on cash. It is the fuel that pays the rent, buys the materials, funds the ads, and makes the payroll. If I ran out, the shop, the tools, the Web site, the trained employees, the catalogue of designs: all would sit idle. The business would be dead.\u003c\/p\u003e\u003cp\u003eI desperately needed clients with cash in hand. This is the perennial cry of the incompetent boss—if we just had more sales, everything would be great! But for me it was true. Before 2008, I had been very bad at cash management. Then, as the world slid into recession, buyers disappeared. My partner and I fought about the money we had left, and one night he took our cash reserves and paid down our line of credit. Eighty-eight thousand dollars of the $105,000 I had on hand was gone. I immediately laid off half my people. With a shrinking order book, a demoralized workforce, and a hundred thousand dollars in past-due bills, I had one question: how soon would I have to shut the doors? QuickBooks couldn’t tell me, so I wrote a spreadsheet that gave me a running bank balance, taking into account all income and expenses, for as far forward as I cared to look. I could move transactions from one day to another to see how delaying or accelerating payments affected my bank balance. As long as it never went below zero, I was in business. My sheet was a new way to see my cash situation. Unfortunately, it showed that I’d go broke in three weeks.\u003c\/p\u003e\u003cp\u003eI barely survived the terrible year 2009. Customers purchase our product, custom conference tables, when a business moves or expands. As 2008 ended, we still got a few orders from projects initiated before the crash, but sales volume soon took a huge drop. I took any job I could find, but I had to lay off five of my eleven remaining employees. I cut all my workers’ pay by 15 percent and set my own salary at just $36,000 a year. I rarely had more than a week’s worth of cash on hand. The stress of wondering whether I would have to close the doors was relentless. I experienced shooting chest pains and sleepless nights. But I never quite failed. By juggling incoming and outgoing payments, I managed to pay off my vendors and survive to see another year. The year 2010 started with no relief—in January, I came within a day of running out of money. But in February, buyers started calling. By March 2010, with orders appearing at a sustainable rate, I was able to restore everyone’s pay to previous levels and rehire some laid-off workers. By year’s end, I had ten employees and a bank balance of $106,777.\u003c\/p\u003e\u003cp\u003eThe favorable trend continued in 2011. I added more people and completed more jobs. At the end of the year, we got a large order that generated a huge payment. Our bank balance topped out at $303,834, and I was able to distribute big bonuses to my workers and to myself, totaling $166,680. I was a happy man. I had survived the worst of the recession and learned how to manage cash flow. In three years, I had gone from nearly bankrupt to reasonably secure, paid off a pile of vendor debt, and was looking forward to further growth in 2012.\u003c\/p\u003e\u003cp\u003eDoes compressing three years of disaster and regeneration into dollars communicate what it was like? Do those numbers really depict my own stress, my workers’ fear for their jobs, and my debtors’ doubts that I would pay them back? Definitely not. But those balances are an objective measure of the success or failure of a business. In the end it has to be about the money. Numbers don’t lie.\u003c\/p\u003e\u003cp\u003eBack to my meeting. On this day I have $137,154 on hand, but my other numbers get reset. Inquiries, sales, profits: all zero. Every year I start from scratch, worrying that this time the phone won’t ring, orders will stop, and my cash will dry up. I don’t believe that the things we do to generate sales will suddenly stop working, but I’ve been through bad times and it’s hard to have faith in the future.\u003c\/p\u003e\u003cp\u003e—\u003c\/p\u003e\u003cp\u003eTHE NUMBERS THAT TRACK our expenses also start at zero, but increase with every passing minute. Rent, electricity, and equipment leases never stop. Payroll and material costs start the instant someone shows up to work. It all adds up. Operating the shop, including pay for fifteen workers and a decent salary for myself, costs about $9,000 a day.\u003c\/p\u003e\u003cp\u003eWe generate cash to cover those costs in two ways: write new orders, or ship product. Our usual terms are to get half of the money on order placement, 35 percent before we ship, and 15 percent within ten days of delivery. If we sell and produce at a steady pace, we receive many payments each week. Our goal is to take in more than we spend, but every table we make generates significant costs. So even when things go smoothly on the shop floor, most of our cash is paid out to cover the rent, materials, payroll, and other expenses. Our plan is to have a little bit left over and to steadily accumulate that surplus over the course of the year. This is known as “positive cash flow.”\u003c\/p\u003e\u003cp\u003eYou might assume that that is the same thing as profits. Not so. You can have positive cash flow without profits, and profits without positive cash flow. How? Profit, for a manufacturer, is a technical term that describes a particular situation: when the value of product shipped exceeds the costs incurred during a given time period. “Sales” does not mean what you think it does, either. Again, the accounting definition, as it applies to a factory like mine, is that a sale occurs when finished product is delivered to the client. That thing where the client signed our quote and gave us a big deposit? Not a sale. As far as our accountant is concerned, the client just loaned us some cash, which we can repay by delivering a finished table. When it arrives, the deposit and preship payments become ours to keep, the value of the table is added to our income statement as a sale, and any amounts outstanding are added to our list of assets, even though we don’t have them in hand and can’t use them to cover expenses.\u003c\/p\u003e\u003cp\u003eYou can have profits without positive cash flow: we might make and ship tables and pay for the costs of production, but not get paid by the client. If our costs are lower than the value of delivered product for a given period, we are making a profit, even though we don’t have the money in hand. Without cash on hand to buy materials and pay the workers, operations will eventually stop. Moral of story: get paid. Profits don’t mean much otherwise.\u003c\/p\u003e\u003cp\u003eAnd positive cash flow without profit? If we ink a bunch of deals, we might suddenly get a lot of deposit payments. During that same time, our factory may not be operating efficiently, and the costs of making goods might exceed the value of the products we deliver. We have cash, but we aren’t making profits. This can easily happen if a company has effective marketing but poorly managed production. This is how I operated for many years. We were growing a little faster than we were failing. Money from new clients compensated for the losses incurred as we produced furniture for the old clients. Everyone got the product they ordered, but hiccups in sales resulted in cash shortfalls, and I had to dip into my own pocket to cover expenses.\u003c\/p\u003e\u003cp\u003eThere’s a third way to bring in cash: borrow it. Income, raised by whatever means, counts in cash-flow calculations. The problem with borrowed money is that eventually it needs to be paid back. Or not, if you can find a fool to lend to you. In my own company, that fool would be me. When I covered cash shortfalls from my own savings, as I often did, I was loaning money to the company. I always intended to pay myself back right away, but the bad management that got me into trouble in the first place prevented me from making sufficient profits for a payback. Over the course of twenty-six years, I have loaned Paul Downs Cabinetmakers $508,774 and managed to pay back $121,676. I am still owed $387,098. Am I a rich man who has half a million lying around to keep my company going? No. The money came out of the company to me as salary and went back in as loans, over and over. Not very smart, as every dollar that took this trip was subject to payroll taxes as it went out of the company.\u003c\/p\u003e\u003cp\u003e—\u003c\/p\u003e\u003cp\u003eI AIM TO HAVE positive cash flow at all times. Unfortunately, it doesn’t happen that way. We have a regular rhythm to our expenses: rent at the beginning of the month, payroll every other Tuesday, two credit card due dates, and the ongoing purchases of materials and other items. Income is much more erratic. Some days we get lots of cash; some days we get nothing. This is why I want to have a healthy bank balance: to cover the days or weeks when cash flow is negative. The $137,154 that I start the year with is fifteen days of working capital. I can use it to pay bills and make payroll. If I want to, I can spend some of it on projects that might enhance the business, like more advertising or a new machine. But if we spend $9,000 a day, a conservative estimate, I have three weeks to figure out what to do if the money stops coming in.\u003c\/p\u003e\u003cp\u003eI already know what to do: sign new contracts, ship finished product. The magic number for 2012 is $200,000. That’s my monthly target for both incoming orders and outgoing shipments. This will produce a steady cash flow of $200,000 a month. If expenses are at $9,000 per day, and the work year consists of 250 workdays, we will have positive cash flow of $150,000 over the course of the year.\u003c\/p\u003e\u003cp\u003eSell $200,000, ship $200,000. We will have to build a lot of tables. Not a trivial task—far beyond the capabilities of any one person. In small woodshops, a ratio of employees to sales of $120,000 per worker is good, $150,000 per worker is excellent. I have fourteen people to meet a goal of $2,400,000, which means output of $171,428 per worker in the next year. We will need to be very efficient.\u003c\/p\u003e\u003cp\u003e—\u003c\/p\u003e\u003cp\u003eWHAT WILL WE DO to meet that goal? You might picture everyone at a workbench, cutting wood. But building the tables is only one step in our process. A manufacturing business must perform six major functions to stay alive: Design, Marketing, Production, Logistics, Warranty Service, and Administration. \u003ci\u003eDesign\u003c\/i\u003e operates at both the conceptual level, which in my case is the decision to make furniture, and at the individual level, which is the specific design of each table we make. \u003ci\u003eMarketing\u003c\/i\u003e attracts paying customers to your door by describing to the world the goods that you have available. It includes sales. \u003ci\u003eProduction\u003c\/i\u003e is the actual making of the product, including setup of the factory, acquisition of materials, hiring and management of labor, and design of the work processes that lead to finished goods. \u003ci\u003eLogistics\u003c\/i\u003e is the process of moving your finished goods to the customer: packaging, shipping, and installation. \u003ci\u003eWarranty Service\u003c\/i\u003e, which might be considered a form of Marketing or Production, is in my mind a separate function. It consists of responding to customer issues and communicating them back up the function chain to improve the overall performance of the organization. \u003ci\u003eAdministration\u003c\/i\u003e keeps track of all the other functions, and includes bookkeeping, accounting, dealing with government regulations, and human resource duties.\u003c\/p\u003e\u003cp\u003eNote that the six functions are all connected, not just in a linear progression but also through feedback loops from one function to each of the others. For instance, Design must respond to the expectations of potential customers (Marketing), to the capabilities of the factory (Production), to the problem of shipping and delivery (Logistics), and to issues encountered in the real world (Warranty). Changing the nature and capacity of one function has implications for the entire operation.\u003c\/p\u003e\u003cp\u003eIt is entirely possible to break out any of these functions and have them performed by others. This is called “outsourcing,” and it often makes perfect sense. If you are not competent at one of the functions, hire someone who is. Managing that vendor takes money and time and drastically interferes with effective feedback loops. But it allows access to expertise that can be very difficult to develop in-house. Note, also, that in an extremely small company, one person can perform all these functions, and probably will when the company is starting up. In that case, the feedback loops are instant and so continual that their existence might not even be noticed. This can be good or bad, depending on whether the feedback loops lead to changes in behavior.\u003c\/p\u003e\u003cp\u003eIt is worth mentioning the difference between a hobby and a real business. It is commonly believed that it’s easy to step from one to the other, but that underestimates the difficulty of establishing all six functions. A hobbyist needs to perform only two: Design and Production. Marketing is not required, as the client is the hobbyist. Logistics might be an issue, but usually a trivial one, as the item is produced very close to where it will be used. Warranty issues are easily handled—there is no paying customer, and the hobbyist’s response will depend on how he feels at the moment. Administration is insignificant. Being a hobbyist is much, much simpler than being a business. There are far fewer problems to solve, and almost all the time and effort can be spent on the fun stuff.\u003c\/p\u003e\u003cp\u003eMy constant challenge has been to perform all six functions competently using the limited resources of a small company. In 1986, I had a desire to make furniture but no experience. Of necessity, I first mastered Design and Production, working alone as I taught myself my trade. Eventually I learned to perform all six functions, some just well enough to stay in business. Production has been the pipeline through which new people enter the company. I hire people to work at the bench, and move some into other jobs.\u003c\/p\u003e\u003cp\u003eAt the beginning of 2012, we have thirteen full-time employees, a part-time bookkeeper, and one temporary worker. Six of us work in the office: myself; Emma Watson, the admin; Dan Smolen and Nick Rothman, who, along with me, are the sales force; Andy Stahl, the engineer; and Pam Potter, the bookkeeper. Nine work on the shop floor building tables: Steve Maturin, shop foreman, accompanied by Ron Dedrick; Sean Slovinski, Tyler Powell, Will Krieger, and Eduardo Lopez, cabinetmakers; Dave Violi, who does the finishing; Bob Foote, our shipping manager; and Jésus Moreno, the temporary worker.\u003c\/p\u003e\u003cp\u003eWith the exception of Emma and Jésus, all my workers are craftsmen who have worked in shops for years. Woodworkers have a calm and quietly confident demeanor, grounded in their ability to build things well and quickly. The best ones have what I call “good hands”: they can make things without undue fuss, at high speed, without sacrificing quality. They can visualize how to break a complex project into discrete steps, recover when things go wrong, and always keep moving toward the final goal. In my experience, this talent is very rare. At the same time, it is present in every culture. In any group of humans, some have a special ability to manipulate materials to produce useful things. A few craftsmen have done spectacular work that ends up in museums. But most make ordinary items that serve their purpose and then are discarded. That is the kind of work we produce, the kind of workers we are: not in it for fame and fortune. The opportunity to make good things is a satisfaction in itself.\u003c\/p\u003e\u003cp\u003eBuilding things out of wood is a cumulative process. You need each step to go well before you can move on to the next. Lots of things can go wrong: difficult wood, malfunctioning machines, and mistakes in design or construction. Error, in the form of small deviations from specifications, accumulates as a piece passes through production. At the same time, clients expect us to deliver what the salesman sold them. Bench workers can’t change the design.\u003c\/p\u003e\u003cp\u003eGiven the need to manage small errors and the occasional disaster, my workers place great value in predictability. They are masters of execution. Their special skill is understanding the nature of the material they work with, the exact behavior of the tools they use, and the precise execution of production processes. They want each step to succeed. They understand that we get paid only once for a table, even if things go wrong on the shop floor and we end up remaking it. So they are suspicious of innovation, whether it is a new design, material, machine, or process. “New” often means “unreliable,” so they are inherently conservative.\u003c\/p\u003e\u003cp\u003eUnfortunately, new marketing methods, technologies, and competition arrive every day. Buyers will order from the company that offers the coolest products at the lowest price. We need to be creative, to be on constant lookout for better ways to do things, or we will be out of business. So one of my biggest challenges is how to be innovative when my company is composed of non-innovators.\u003c\/p\u003e\u003cp\u003e—\u003c\/p\u003e\u003cp\u003eBEFORE THE MONDAY MEETING became a weekly event, in 2010, I’d never established any formal, regular communication with my employees. For more than twenty-three years, my preferred method of\u003c\/p\u003e","brand":"Blue Rider Press","offers":[{"title":"Default Title","offer_id":46300935160037,"sku":"NP9780399185298","price":17.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780399185298.jpg?v=1767722975","url":"https:\/\/k12savings.com\/products\/boss-life-isbn-9780399185298","provider":"K12savings","version":"1.0","type":"link"}