Chad Gingrich is a remarkable entrepreneur who transitioned into the shed industry after spending years pouring concrete with his father and brothers. He co-owns Esh’s Sheds, a company they purchased from a previous owner who wanted to relocate. In this article, we summarize an interview between Chad Gingerich and Jason Graber, Shed Suite’s CEO.
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An Unexpected Journey to the Shed Industry and a Successful Transition
Chad’s entry into the shed industry was unexpected. "Six years ago, I would've told you, if somebody said, 'You're going to be in the shed industry five years from now,' I'd say, 'You're crazy,'" he shared. However, his path was guided by the desire for a more sustainable business that could potentially last generations.
His concrete work, while lucrative, involved an immense amount of physical labor and commitment. Looking ahead, they realized this business model would not be sustainable for the long term, especially if they wanted to maintain their physical health. Thus, they began searching for new opportunities and found one in Esh's Sheds.
Since purchasing Esh's Sheds in 2019, the business has grown and evolved significantly. Initially, it was an entirely new industry for Chad and his brothers, but they quickly adapted. Today, they manage multiple shops in Kentucky, continually producing and delivering high-quality sheds to their customers.
Starting in the Shed Industry: Chad's Insights and Advice
When it comes to entering the shed industry, Chad suggests that individuals interested in the business should get some hands-on experience first. "On starting one, I would say you may want to... be in that environment for a little while before you go out on your own," Chad recommends. Whether that's in sales, hauling, or as a building contractor, gaining familiarity with the various aspects of the shed business can provide invaluable insights into how all the moving parts work together.
The nature of the industry requires a diverse set of skills and roles to function effectively. Chad points out that those in sales might not have the skills to build sheds, while those who build may not be the best salespeople. Understanding these nuances and learning about the different roles in the industry can aid future shed business owners in assembling the right team. "It's just bringing all those right people to the table and each one excelling in their role," Chad says, emphasizing the importance of each individual's contribution to the success of the business.
Reflecting on his own journey in the shed business, Chad highlights two significant mistakes to avoid. The first is not comprehending the full cost of building and selling each shed model. Chad advises new shed business owners to price each shed model meticulously, taking into account all costs, including materials and labor. "Don't look at your competition and say, 'Oh, well I want to be 5% less than them.' Or, 'I'm going to be...'" Chad suggests that such an approach doesn't create a level playing field unless corners are cut on materials, which could compromise product quality.
The second significant mistake to avoid, according to Chad, is failing to manage inventory effectively. He learned the hard way that not carefully managing stock levels can seriously impact a business's cash flow. "Inventory management is very, very, very important to your cash flow," he cautions, emphasizing that having too much stock can tie up resources, leading to financial challenges. "You are exactly right. And it goes right there on your balance sheet like that too," Chad affirms, reinforcing the importance of prudent inventory management.
Building Relationships in the Shed Industry
In the shed industry, relationships with suppliers and contractors can significantly influence a business's success. Chad's advice centers on reciprocal support and loyalty. "As far as shops, I have some shops that I contract. It's just being willing to... help them in any way you can," Chad explains, emphasizing the importance of mutual assistance. He underscores that these relationships require trust and consistency. With suppliers, for example, he insists that it's crucial to assure them of your loyalty and to avoid "jumping ship" at the slightest price difference from competitors. In Chad's words, "But if you build that relationship and you know that you have their back and they have yours in a sense."
Chad shares a personal anecdote to illustrate the value of maintaining healthy relationships with suppliers. When insulated windows became hard to get, one of his suppliers ordered a thousand windows for him. When these windows arrived all at once instead of in batches, the supplier showed their support by warehousing the windows. Chad says, "They're not pushing it on me going, 'You've got to take these windows.'" This instance is a testament to the benefits of cultivating strong relationships with suppliers, highlighting that a loyal relationship can ease unexpected business challenges. According to Chad, the mutual support and understanding developed over time can make all the difference.