Building Success in the Shed Industry: Insights and Advice from Entrepreneur Chad Gingrich

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.

Innovation and Modernization in the Shed Industry

Innovations and advancements are critical in every industry, and the shed industry is no exception. As Chad mentioned, "The shed industry I think it could use more" innovation. He is particularly keen on integrating modern design elements into traditional shed styles. As he stated, "I think more of a modern twist to it is becoming more of a thing." By doing so, he believes it could appeal to the younger generation. Looking ahead, Chad envisions expanding into other areas, such as hinge roofs and three-piece horse barns. Although these concepts are not new, integrating them into their offerings is part of the innovation he foresees.

To stay competitive, Chad emphasizes the importance of being receptive to customers' feedback and being willing to adapt to their needs. "I think we need to listen to what our customers are saying," he said. He believes that this receptiveness to change and adaptation is essential for continued success in the industry. He cautioned, "To be just in a rut, 'Nope, I'm not going to do anything different.' Is going to take us out of work way sooner than what we think. That's going to hurt us in the long run."

Tools, Technologies, and Processes in Shed Building

In terms of tools and technologies, Chad's shed building operation employs a range of equipment, from truss presses and door presses to three-head saws. He mentioned a particular machine that cuts a "bird's beak" - an essential tool for producing a certain style of utility trusses efficiently. He also makes use of lift technologies in the shops to aid in wall construction, describing one such device: "It's electric. And you screw it to the wall. And then when you screw to a floor and then put it against your wall and you got one on either side and you've got a remote and it just raises that wall right up. It works really good for a shop that doesn't have a lot of manpower maybe."

When discussing shop organization and worker pay structures, Chad explained that he uses both a bay model and an assembly line model in different shops. He utilizes piece rate payments for some workers and hourly payments for others, depending on the tasks at hand. As he put it, "We have framers. They frame it up, OSB it. And then send it over on down the line where it gets siding and it gets all the fascia, all the aluminum." He believes this system allows his operation to output a high volume of sheds. However, managing this system takes consistency and vigilance, as Chad admitted, "You're fighting it all the time with hourly and what you pay them hourly and keeping them on it." Despite this, he views the challenge as worth it for the quality it ensures in their sheds.

Of course, Chad also uses Shed Suite, the best platform for managing your shed business. Streamline everything from lead generation to delivery. Learn more about Shed Suite here.

Servant-based Leadership and Empowerment

Chad asserts the importance of servant-based leadership in running a successful business. He draws a parallel with Jesus and his disciples, noting that effective leadership often entails teaching, showing, and leading by example. He emphasizes that leaders should not expect perfection from their team members, but rather work with them and help them learn and grow. This approach promotes teamwork and mutual growth within the organization.

Moreover, Chad speaks to the concept of empowerment, which he sees as an integral part of leadership. By giving employees the responsibility and autonomy to do their jobs well, they end up owning their roles, which leads to increased job satisfaction and performance. Chad notes that instilling the core values and principles of the company into team members is vital for this process. By doing so, employees can represent the company to customers, vendors, and other stakeholders, promoting the company's values and mission in the same way the leader would. He insists that this fosters confidence in the leader, knowing that employees are upholding and promoting the company's core values and mission.

Balancing Business and Personal Life

When asked about balancing the demands of business with personal and family life, Chad admits that he hasn't always been successful in this regard. He asserts that each individual needs to determine what they can handle personally and how much time their personal life requires. This includes considering the involvement in church work, community activities, or other non-work related commitments.

Chad discusses the risk of burnout and stresses the importance of delegating tasks and not trying to do everything oneself. According to him, good leadership involves teaching and leading others, which can free up personal time. He acknowledges the difficulty of letting go and entrusting others with tasks, but assures that finding the right people and empowering them can help. He refers to his personal experience and mentions that hiring the right people, even when it seems financially challenging, can pay off by making operations smoother and more efficient.

Hiring to Buy Back Time

In this section, Chad and Jason discuss the concept of hiring to buy back one's time. They highlight the constraints that come with being a business owner - specifically the finite amount of time one has. Chad mentions that while a business owner might be capable of doing everything, scaling the business beyond a certain level by oneself is "physically humanly impossible."

The solution, as per Chad, lies in empowering employees to take ownership of their positions and tasks. In doing so, the business owner buys back their own time, enabling them to focus on other critical areas of the business. However, he notes that if a business owner is content with the current level of their business and doesn't wish to expand further, that's perfectly fine. The key, he suggests, is understanding one's limitations and not becoming frustrated when growth hits a ceiling.

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Chad Gingrich's journey through the shed industry is not just a story of success, but also a roadmap for others looking to venture into similar territories. His straightforward advice on managing costs and maintaining strong relationships provides valuable insights. His emphasis on the importance of adapting to changing customer needs and maintaining a strong, empowered team serves as a testament to his business acumen. Gingrich's experiences underline the fact that the path to success in any industry, not just the shed business, is about hard work, innovation, and thoughtful leadership. In essence, his story is a practical guide that resonates beyond the shed industry.