Woodpeckers is a privately held business manufacturing unique tools for woodworking hobbyists. Over the past 30 years the Strongsville, Ohio company has moved from the kitchen table to an 88,000 square foot facility, grown from one employee to 95, and dramatically increased annual sales of woodworking tools, accessories and products.
Woodpeckers does all their own machining, engraving, assembly and packing – and takes pride in tools truly made in the U.S.A. Rich Hummel, the president and founder of Woodpeckers, has been a member of The Alternative Board (TAB) for the past four years and credits much of his success to peer advisory groups, especially his local TAB Western Reserve chapter.
What inspired you to start your own business?
I started Woodpeckers in 1988 when I lost my “real job” in the computer industry. Woodworking was my hobby, and I was always infatuated with tools. I was importing tools from Germany to use myself or re-sell, so my wife and I decided to turn it into a business. We started out selling tools from the back porch and did some primitive manufacturing in the garage. Around the year 2000 we saw distribution getting less and less profitable, so we switched our entire business model to focus on manufacturing our own products.
What do you love most about owning your own business?
I love being in control of my own destiny. I’d say the strongest emotion that comes with owning a business is the responsibility. It’s not just about me and my family, it’s about all the employees and their families. But I enjoy that, and it doesn’t stress me out.
Why did you join the local TAB peer advisory group?
Peer groups in general are extremely helpful for small businesses. There aren’t many places you can go and talk to people in the same shoes you’re in, with everything on the line. That colors your decision-making when you could lose your house over the wrong decision.
I’ve belonged to several other peer advisory boards, but TAB is much better than most because of the infrastructure behind it, making it more organized and a better facilitated venue for sharing ideas and information.
Our local TAB group is great because it’s a roomful of other idiots like me who have everything on the line! Even though our businesses are different, our problems are all the same, so they can empathize. It shortens the learning curve when you hear other business owners’ experiences instead of making the same mistakes all over again.
What are the most important business lessons you’ve learned from the TAB group?
Wow, there’s a whole bunch! I’ve learned how important it is to let go of problem employees more quickly, and about different approaches to raising capital and funding growth, and marketing ideas. We recently heard a great presentation by a private equity firm that gave me insights on what makes a business more or less valuable for when it comes time to sell or exit. Actually, I’d say the greatest lesson I’ve learned from my TAB group has been how to improve the value of my business, not just the size of it.
Do you encourage other small business owners join TAB group?
I’ve belonged to peer groups for about 17 years – and every single person who’s helped me the most in my business has come from a peer group. TAB is one of the best. Why would you not join – when you can get an objective view from somebody’s who’s been there and done that?
Confidentiality is absolutely respected in the TAB group. There are strong personalities who don’t hesitate to share their opinions. For the most part, everybody takes away something positive. Honestly, most of us business owners, by necessity, are pig-headed. You almost have to be, just to survive. So we’re not good at taking advice. But if you can break that down in a peer group – it’s a long-term gain.
For a small business owner, how important is it to have a succession plan or exit strategy?
I think it’s a number one priority. For a lot of us, it’s a difficult subject. But this is our life’s effort – so it’s on the mind of every small business owner. My son will be taking over Woodpeckers and it’s been extremely valuable having Mark Dorman at Legacy Business Advisors coach me in effective succession planning. Mark’s really good at coaching you through that, giving feedback on what areas need improvement. Most business owners don’t want to hear that and think they know best. The fact is – we don’t.
If you’re lucky, you sell a business once in your lifetime- yet we think we’re experts. Organizations like Mark’s are involved with hundreds of businesses and deal with lots of scenarios with owners trying to sell or pass on their business – but the value is diminished because they never got professional advice while they were growing their business. That advice is vital – at the top of the list.
Even if you don’t plan on selling your business, setting it up so it’s always sell-able and at max value just creates a better-run business.
Biggest lesson learned about achieving success in a small business?
20 years into the business, I had a real turning point. I realized I spent too much time and effort listening to my customers – when I really needed to take care of the business first. Trying to make every customer happy was a path to destruction. We had to set the terms and make sure the business is sustainable and profitable, even if some customers don’t like it. “To thine own self be true.” That’s made a huge difference.
Our old mindset or business model was to “price-to-market.” With our focus on domestic manufacturing, that’s not an option. When we started doing things our way and focusing on being profitable, we started growing. We tripled our size in about five years. It was actually in a peer advisory group where I first heard that advice and was inspired to make this shift.