Dr. Steve Eckhardt- Owner,
I love sharing client Success Case Studies with you. I personally find it very helpful to learn from the experiences of other business owners.
In a recent Mastermind, I walked one of my clients, Dr. Steve Eckhardt, through a review of his first 8 months in coaching. We captured a recording and Steve agreed we could share it here with you. Enjoy!
Steve, tell us about your business.
We design and manufacture custom camera lenses. The business was founded in 2009. Our target customer is a design engineer who doesn’t specialize in optics. There are a lot of mechanical and electronic engineers out there who need some optics in their system but don’t know a thing about it. Our unique offering combines my strength in lens design with convenience.
At the start of coaching…
For the first time ever, we hit $200,000 in sales last year. The company was profitable, assuming I made a sub-market salary. Greg Crabtree in his book Simple Numbers, Straight Talk, Big Profits insists you need to be paying yourself a competitive salary. I wasn’t doing that. If I were to have done that, my business would have lost money.
When I started coaching, I was working too hard. It was me doing all the work. I wanted to figure out how to grow. My vision was to get the business up to $2 million in sales in 3-5 years with 6-8 employees.
8 months into coaching…
This year I am going to come a lot closer to paying myself a competitive salary. I’ve given myself a raise, and I will be giving myself another raise this month. At that point, I will have doubled my salary from 8 months ago. Profitability has not changed a huge amount since I am paying down debt.
I am still working hard, but I just hired my son as a full-time marketer and technician.
Sales will be up 50-100% this year. At this point, I am anticipating sales in 2017 between $2 million and $10 million. It’s quite a spread. It represents between 5X and 20X growth.
My vision has changed substantially. My vision now includes rapid prototyping of lenses. From the time I get the order, to the time they receive the finished lenses, I am aiming for a 3-week turnaround. Given the sales growth for next year, $50 million in sales is achievable in 3-5 years.
What changed in the last 8 months? What has Sabrina helped me with?
I now turn away customers who do not fit my Ideal Customer Profile. My customer base has grown significantly and I’ve got much larger opportunities. Right now, I am looking at 3 opportunities, each of which is over $1 million. My projection for sales between $2 million and $10 million is very conservative. It could be even higher than that.
Sabrina’s consistent encouragement to work on the business and not just in it has been huge for me. I now have an Organizational Chart for what the business is going to look like when it hits $10 million in sales. It’s just a matter of filling out the org chart with names. Right now, it’s all my name. In a few weeks, it will have my son’s name in a few of those slots. Onwards and upwards from there! That’s been a big thing.
One of the most important things Sabrina had me do was to interview my top customers. I always had the gut feeling people wanted lenses faster, but sitting down with some of my Ideal Clients and asking, “What would really make a huge difference for you?” and hearing every single one of them saying, “You need to give us lenses faster” really gelled my vision for where I need to take the company. In the long-term, that is what is going to make it huge. In the short-term, that’s not what is making it huge. It is that I am getting more and bigger opportunities.
I’ve realized I have to start pricing based on gross margin. I had not been saying consciously, “I need 40% gross margin.” I won’t hit 10% profit without that. Without that awareness, I would have left thousands on the table and never gotten to the point of paying myself a market-based salary. Plus, if I am not bringing enough money into the business, I am always going to be short on cash, borrowing money at every little bit. For me, focusing on gross margin has made a huge difference in finances.
Steve’s reading list from the last 8 months:
- The Pumpkin Plan and Profit First by Mike Michalowicz
- How to Hire the Best by Dr. Sabrina Starling
- Simple Numbers, Straight Talk, Big Profits by Greg Crabtree
- Scaling Up by Verne Harnish
- E-Myth Revisited by Michael Gerber
I am more prepared than I was 8 months ago. As General Schwarzkopf says, “Luck favors the prepared.”
Would you like our help being more prepared as you grow your business? Click here to apply for a Profit Maximizer Consultation with a member of our team.