Embracing Growth
Our Journey to a New Facility
Hello and welcome back! This week, I am excited to share with you some significant developments at our company. We are growing and making some strategic changes that I believe hold valuable lessons for anyone looking to expand their own business. Let me take you through the journey of our growth, the challenges we faced, and the smart decisions we made to ensure a sustainable future.
The Challenge of Expansion
One of the most apparent issues in today's market is the difficulty and high cost of building new structures. Acquiring land, especially in our area, comes at a steep price. We found that even expanding on our own property would be prohibitively expensive. For example, we initially considered putting up a large structure on our farm. However, the cost of just flattening the ground and adding a necessary concrete pad for forklift operations was going to be around $125,000 for a mere 50 by 100 footprint. This figure, before even adding a structure or utilities, was too high for us to manage.
Our area presents another challenge: a scarcity of available commercial properties. Moving the company to a city was not an option, as it would mean sacrificing our dedicated team. Our team, with their expertise and work ethic, is the backbone of our operations and they had to remain a priority.
A Strategic Solution
Given these limitations, we decided against pursuing a highly risky large loan to purchase a massive property. When we found faults, such as mold, in the buildings we assessed, the risk outweighed the potential benefits. Instead, we focused on growing incrementally, reinvesting wisely without incurring significant debt.
Finding the Perfect Fit
Our solution was to purchase a smaller commercial building in town - an old American Legion Hall, which was more suitable for our current needs. Although it is not perfect, it provides a good working space that can accommodate our business for the next few years. The building has unique features like a bar, a commercial kitchen, and a large walk-in cooler, which are advantageous for our operations. The basement, with a bit of work, promises to be a perfect spot for bulb forcing, thanks to its stable, underground temperature.
We opted for this building because it posed less risk and allowed us greater flexibility. It's a space where we can either grow or comfortably maintain our current size. The decision to invest in a smaller, more manageable property helps ensure that we are not overwhelmed by debt.
Setting Up for Success
Purchasing the property outright with our profits from the year positioned us to obtain a mortgage or line of credit far more easily if we want to follow up with that after the cash sale. This setup provides us with a financial buffer for potential improvements down the line.
Additionally, we set up a new LLC, named after the property's address: 11 McCrea Street LLC. This LLC owns the building, protecting the asset from potential lawsuits against our main business. This move was recommended by our accountants and provides an extra layer of security. The bulb company will rent space from this LLC, which helps spread our expenses while shielding our assets.
The Importance of Expert Advice
I cannot stress enough the importance of working with an experienced accounting firm. Their guidance helped us navigate these complex decisions smoothly. Having a trusted accountant made it easy to discuss strategies, receive advice, and implement solutions quickly and effectively.
Looking Ahead
We are excited about this new chapter and the opportunities it brings. We'll bring you behind the scenes and share our progress with the American Legion Hall. Your support has been instrumental in our growth, and we're looking forward to what the future holds together.
Please let me know if you have any questions or if there's anything specific you'd like to see in our updates. Thank you for being a part of our journey!