In a recent column for Inc. Magazine I interviewed Birthing of Giants graduate and guest speaker, Shlomo Birnbaum. Shlomo heads up Single Serve Beverage Distribution, a New Jersey based consumer products company specializing in marketing and delivery of single serve coffee and tea pods to business locations across the country and in Europe. SSBD is one of the fastest growing companies in the nation, and even received 11th ranking on Inc. 5000’s 2017 list. With that kind of growth Shlomo has two big problems: space needs and rising labor costs. We sat down together to find answers. I was able to spot two very typical entrepreneur mistakes that I’ve seen time and again.
Entrepreneur Mistakes 101 – Overestimated Growth, Underestimated Space
SSBD has seen the kind of growth that makes most entrepreneurs drool – 13,739% between 2015 and 2017! Business is booming, and they’re running out of space.
“Because we’re growing so fast, we need more space. Right now, we have 25,000 square feet between two floors.”
Shlomo estimates that they need an additional 35,000 square feet, but I cautioned him to do thorough research on how more space he actually needs. It’s an interesting mistake that I’ve seen a lot of business owners make. They overestimate their growth while at the same time, underestimate how much space they’ll need. It’s an easily solved problem, and best figured out before you sign on a new facility. But that’s not all that Shlomo was dealing with.
To Move or Not to Move
An increase in their product line and a big rise in business has proportionally increased their labor needs – an expense that is daunting enough for Shlomo to consider moving his facility out of New Jersey entirely.
“With labor costs going up, the question is whether staying in New Jersey is the best option.”
That’s a fair question, though here’s where I spotted the second mistake that I see a lot with business owners planning for growth. As the owner of a chain of fast casual restaurants in New York City, I understand the need to keep labor costs down. We accomplished this in my restaurants by bringing in some automation equipment and outsourcing some functions, like delivery. A lot of business owners don’t know much about automation. Then again, they often didn’t know much about their own business when they got started. Not knowing isn’t a problem. Here’s what you do: Ask an expert! When you need information about a tool that could save your business money and increase efficiency, reach out to the businesses that sell it. They’ll happily educate you.
After doing his due diligence, Shlomo may still decide the time is right to move to a new location in a different state. I’m confident that this time, whatever he decides will be the right fit for his fast growing company.
Find out more about how Birthing of Giants helped Shlomo Birnbaum make his company the 11th fastest growing company in the nation, according to Inc. Magazine!
You can read my article in its original form at Inc. Magazine’s website.