I’m Looking at an Empty Pipeline

Introduction:

This week, Lena McGuire—in her first appearance as a regular on this podcast—tells Paul Downs and Jaci Russo about her plans to turn her hobby, remodeling homes, into a real business. In just her third full-time year of building Spóca Kitchen & Bath, Lena says she has already experienced both a quick rise in revenue and then a surprising decline, a decline she attributes mostly to marketing issues. One of those issues, she says, is that she refreshed her website, and it started producing more prospects—but fewer qualified prospects. That said, Lena is off to an impressive start, having targeted a well-defined niche, having created a clear process to connect homeowners and contractors, and having demonstrated both a real need for her services and an ability to learn from her mistakes. “I don’t look at failure as failing,” she says in a conversation we recorded in late December. Plus: Paul tries to explain why his revenue surged 50 percent in 2024. Now there’s a problem we’d all like to have.

— Loren Feldman

Guests:

Lena McGuire is CEO of Spóca Kitchen & Bath.

Paul Downs is CEO of Paul Downs Cabinetmakers.

Jaci Russo is CEO of BrandRusso.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome Paul, Jaci, and especially the latest addition to our podcast team, Lena McGuire. Lena, thank you so much for joining us. It’s great to have you here.

Lena McGuire:
Thanks, Loren. I appreciate the opportunity. This is very exciting.

Loren Feldman:
Lena, you’re building a new business called Spóca Kitchen & Bath. Maybe you could start by telling us a little about your background. What led you to start this business?

Lena McGuire:
Well, I started it basically because my children begged me to: “Mommy, please don’t sell our house.” I have been serial remodeling, and it takes about five to five and a half years to remodel a house, and then I need a new project. So we sell the house and buy a new one, and they got a little tired of that when we got to house number five. So I started remodeling for other people and Spóca Kitchen & Bath was born. I love doing kitchens and baths. That’s my main focus, and this is where I am now.

Loren Feldman:
I believe Spóca has a particular focus. You don’t just do any remodel. Can you tell us about that?

Lena McGuire:
I do like to focus on people who are nearing or in actual retirement. So what I do is, I am a Certified Aging in Place Specialist. So I do take into consideration their physical and mental and wellbeing needs, as they are trying to transition into a period of time where they may spend the next 30 years in their home. Everybody wants to stay there, be healthy and happy as long as possible.

So I try to incorporate that into every project that I do, no matter how old people are. Whether they are themselves aging in their home, or they have parents or neighbors or friends who are coming in, we want to be able to live in our homes so that everybody can be accommodated. And we don’t want it to look institutional. We want it to feel like it’s very much their specific home and they are comfortable there.

Loren Feldman:
Paul, aren’t you in the process of doing precisely that?

Paul Downs:
I am. What a coincidence. Yes, we’ve been in our house for 22 years, and came to the conclusion we only want to go out feet first, and so we are adding on to the back of it and putting in an elevator and trying to do as much as possible to make it a place we can stay until the very last moment. So, yeah, it’s good timing.

Lena McGuire:
That’s great. It’s not everybody who can put an elevator in your home. That makes it so much easier.

Paul Downs:
Well, we chopped off the back third of the house and then pushed new another 15 feet or so, and that’s where the elevator is going. So we weren’t trying to snake one through an existing structure.

Lena McGuire:
That’s ideal when you can do that. Most people have to deal with stairways. Not everybody has to have a stair lift, but mostly what we’re doing is, we will take and make sure that they have doorways that are wide enough to accommodate a walker or a wheelchair if they need. They’d have that 360-degree turning area, which requires five feet, so things like that. It’s mostly about making sure, if you’re doing new construction, that your hallways are wide enough. We want to do a 42-inch hallway if you can, 36-inch doorways, so that fingers can clear when the wheelchair is pushing in.

Loren Feldman:
Do you have other things in your background that are helpful for this? Have you ever owned a business before?

Lena McGuire:
Yes, this is actually my second career. I was a graphic designer for 22 years, so I have a degree: bachelor of fine arts. So I’m very good with color theory and spatial relationships, things like that, which come in very handy for doing interior design work. So yeah, I did graphic design for 22 years. I took 15 years off to raise my children. I was very fortunate that my other business was successful, so I banked some money, and the money didn’t run out until my younger son was a junior in high school. So I almost made it to plan.

And then once they were in high school, I went back to school, got my degree in kitchen and bath design, and started working part-time a couple of jobs a year. And once I decided I was going to be a little bit more serious about this, I took a part-time job so that I would be able to finance a studio. So I worked 20 hours a week working on a grant program at a local university medical center, and that allowed me to open up my 400-square-foot studio space and put my shingle out there. So I did that for about four years, and I have been doing it full-time now. This will be my third year full-time.

Loren Feldman:
How big did the graphic design business get?

Lena McGuire:
It was just me, but I was clearing about $150,000 a year in take-home pay. So I was doing well, just little me. I was right on the cutting edge of when Macs came out. I go way back to the Apple Lisa. So I’ve been with Mac programs for a long time, and as a graphic designer, I was on the team that created for Letraset. They had a software program called Ready Set Go that was a precursor to PageMaker and Quark and all those. And I designed their manual for that—back in the days when they used to have manuals that still came out with software. Nobody does that anymore. So, yeah, I go way back.

Loren Feldman:
So you’ve been doing Spóca for about three years now. What’s its current status? How far have you gotten?

Lena McGuire:
So right now, it’s me, and I’m doing about 20 hours in the business and 20 hours on the business—I really like that. I have a 1099 employee who is an admin, and she does all of the administrative stuff: mostly the procuring, pricing, estimating, getting the invoices out, scheduling appointments, things like that. But all the creative work and the client-facing stuff, I do.

Loren Feldman:
Can you give us a sense of your business plan? How are you going to find people like Paul to help?

Lena McGuire:
The business plan! Well, I’m working with my SCORE mentor to create a business plan, because I don’t have one. So I am very new when it comes to actually running the business as a business rather than a hobby that pays well. This is the big transition for me. So 21 Hats has been really great, learning how to actually be a business owner rather than a hobbyist.

I’m working on the business plan. For marketing, I basically have been doing library seminars. They’ve been very successful for me. So I’m becoming an expert on my topic here in the local community. I am the number one organic search engine [result] when it comes to my hometown here.

Loren Feldman:
What is your hometown?

Lena McGuire:
I am in Camillus, New York, which is about six miles west of Syracuse.

Jaci Russo:
Lena, would you talk a little bit about your library series? Because I think it’s brilliant. And I think people would appreciate seeing how you’re using that tactic.

Lena McGuire:
Yeah, I love the library series. It’s a long-tail effort. It costs practically nothing. All the advertising is done through the libraries themselves. They send out to their marketing email list. So what I do is, I create a series of programs. So my most successful ones, I have two series: I do a kitchen remodeling series and a bathroom remodeling series.

Each is three parts. The first one is a remodeling 101, specific to the kitchen or the bath, and then we do a second one on budgeting, and then the third one is on tips and tricks for successful remodeling, which reinforces how it’s necessary to hire a designer to save money and to get better results. So, just trying to educate the community on how to use their resources well.

I create the PowerPoints. Each slide deck is only 20 slides. These seminars will last about 45 minutes, and then I have Q&A after that. And then I give them homework and send out reminders. And it’s been very good. When people come back to me, they’ll call me. It’s usually six months to two years later. I’ll get the call saying, “Do you remember me? I was at your library seminar, and I still have my wants and needs list, and I’m ready to go.” And they are ready to go when they call me, and they have very good knowledge about what to expect, how it works, how much it’s going to cost, and they’re just ideal clients when they come through. I would recommend it to everybody.

The publicly funded libraries have an obligation to give back to the community through community service. So the only thing you have to do is make sure it’s generic. In our case, when I’m presenting, I’m allowed to have a slide in the beginning that introduces who I am, that showcases my business, but all the content is generic. And then at the end, with the Q&A, it can get more specific. I can say things like, “You know, this is what I do in my business. It may be done differently in other businesses.” But it gives them an idea of what’s going on. But the content for that 45 minutes of education is actually generic.

Loren Feldman:
Do you have to go library by library to set that up? Or is there some kind of library network?

Lena McGuire:
No, it’s one at a time, and they are very slow to accept that this is something good for them. I have been doing one library for about five years, took the break for Covid, and we’re getting back into it. I had another library come on. And now, I have these two librarians that are willing to talk to other librarians to say, “No, this isn’t a sales pitch. This is actually community service where we’re enriching the community, giving them some knowledge.” So it can be a slow haul, depending on your relationship with your local librarians.

Loren Feldman:
So where’s your mind at, as far as the development of your business? Is there anything keeping you up at night?

Lena McGuire:
The cash flow is always the thing. My pipeline, because I didn’t market. I was very busy before Covid, and then Covid hit, and I wasn’t able to do the library seminars. So basically the pipeline went dry. And I am now finished up with the projects I had. So if I had a kitchen project, they’d call me back, and I’d do a bathroom or two. If I had a bathroom project, they’d call me back later and do a kitchen. So now all that work is dried up. So I’m sitting here looking at an empty pipeline.

So I’ve hired a marketing agency, and we’re working on the marketing. I have a strategic plan where I am approaching specific libraries with specific goals, and that seems to be working well. We’re filling up our calendar for 2025 with some library seminars. The goal is to do 12, and I have six booked, so I think I’m getting in there pretty well. And then the marketing is doing a brand refresh and getting my website updated and doing some email campaigns, as well as getting some landing page free resources, handouts, and things like that.

I also do marketing at the local home show. So we have a central New York Home and Garden Show every March, and I do take a booth there. And I usually get about four to eight jobs from that. They’re usually pretty small, but I’m seeing that the jobs are growing, so I’m moving forward—just not as quickly as I would like.

Loren Feldman:
How do you price your services?

Lena McGuire:
My services are priced flat rate because people like to know exactly what they’re going to get into. So depending on the complexity of the project and the quality level of the materials they’re looking for, we do an exploratory Phase One where they pay a flat rate to determine what it’s going to cost to do their project. We’ll find out what their goals and objectives are. We’ll talk about the quality levels that they want to achieve, and how much they want to really invest, and we can see if they’re in alignment. It’s really a reality check. So it’s a standalone Phase One that, once they have that information, they can choose to move forward, or just stop there and decide if they want to go forward with the project, or if they want to save up, or figure out how they’re going to pay for it, or if they want to downsize some of their ideas.

And if they choose to go forward, then we go into the concepts. And there’s a flat rate to do concepts and get them right through the selections, and that will get them all of their design and their product selections done. And then I work with the contractors to figure out how much labor costs are, and we combine the labor costs with the design and product costs, and that gives them their full contract price. And then they again have the opportunity to bow out or move forward, depending on what that combined price is. And then we can get it on the schedule and get to installation and construction. The process is pretty well set. I’m pretty pleased with how that’s working.

Loren Feldman:
And you end up managing the whole project all the way through, if that’s what somebody wants?

Lena McGuire:
Yeah, I started adding project-observation services about a year ago. Typically, there’s a real shortage of contractors. When you have a contractor and a homeowner and a designer in the middle, it makes it easier. So that if the contractor is unhappy with the homeowner who is there—you know, the homeowner’s telling them to do this or that, or their dog’s always in the way, there’s always an issue—if the contractor says something to the homeowner, then the homeowner gets upset and doesn’t want to pay. But if the homeowner sees something going on with the contractor, it’s like, “Oh, that backsplash tile is crooked. You need to fix it.” The contractor might get upset, and then the customer would think, “Well, if I say something, he might get upset, and he won’t come back, and then my kitchen will never be done.” So I act as kind of the middle man. It’s like, the contractor can tell me, or the customer could tell me, and I kind of do the arbitration for them, so that everybody’s happy. You know, the contractor is getting coffee served by the homeowner. The homeowner is getting a beautiful kitchen. It’s just a nice win-win.

Loren Feldman:
What are your ambitions? How big do you hope the business will be?

Lena McGuire:
Well, I would love my business to be nationwide. When I think about what my why is, why I want to have this business—because, obviously, I could work for somebody, and it would be a lot easier—but my goal is to be the boss I’ve never had. And I credit my sister with giving me that tagline there, because I grew up in a family where most of the family works in retail. And when you work in retail, your hours are never set straight. You don’t work nine to five. You can work 6 a.m. to 1 p.m. one day, and then 8 p.m. to 11 the next night, and then maybe have three days off. You can’t even schedule a dentist appointment. And then you’re not getting paid well. You’re not being treated as well as you should be.

So I would like to be the boss I never had. I want to offer employees living wages. I want to have regular schedules. I want to have the benefits that they feel that they would benefit from the most. So if they’re young and they don’t really care if they’re fully funding their retirement, they’d rather pay off their student loans, let’s give them that benefit instead. I would like to offer opportunities right here in my community to make it so that people can have dignity and work balance. And the more people I can help, the better it will be. So that means I need to grow bigger so I can help more people.

Loren Feldman:
Jaci, Paul, any questions?

Paul Downs:
It’s a pretty big journey from where you are now to rolling that all out nationally. How long do you think that would take?

Lena McGuire:
Oh, probably forever, but it’s like the starfish thing. If I can get one back into the ocean, that’ll be good. So I’m starting out small. And these are aspirational goals. I don’t know that I’ll be able to meet them, but I am going to strive to get towards them, closer every day.

Paul Downs:
Okay, and can you give us an idea of what your current revenues are? And I know that everybody’s horrified to talk numbers.

Lena McGuire:
Oh, I have no problem talking money. Money is a tool. Two years ago, my revenues were 350, and then because of the pipeline closing up, my revenues this year are 150. So I had a goal last year, thinking I was going to be able to hit 400, and that obviously didn’t happen this year. So I’m very disappointed, but it was a learning lesson.

I see the value of having to always be marketing, so now I’ve jumped on that train, and let’s see if that can get me going .Because I do know that I can hit that 350 mark. And if I can hit 350, it shouldn’t be too big of a jump to get to 500 within a couple of years. So it just needs to get back on track.

Paul Downs:
Okay, well, that’s decent numbers for a one- or one-and-a-half person operation.

Lena McGuire:
Well, the good thing is, even though the revenues are low, my profit margins are still there. So even though I’m not making as much in revenue, what I have been able to do is still maintain the profit margins that I have, so I am taking home 42 percent as profit.

Paul Downs:
Okay, you’re a service business. You don’t have to buy materials, and presumably your rent isn’t all that expensive. What are major expenses that we’re not thinking of?

Lena McGuire:
My biggest expenses would be the rent and the software that I have to use. So running the software, I have to use specialized CAD programs. And I bought the program several years ago. It was $4,000, but the upgrades now, they don’t want you to do that. You have to go to the subscription model, and you know, it’s six, seven, eight hundred dollars a month. And then I have probably seven or eight different softwares that I run on a regular basis every day. So the software costs, the subscription costs, are a pretty big chunk.

Paul Downs:
Yep, I gotta pay a few of those too. Are you enjoying it so far?

Lena McGuire:
Oh, I love it. I play for a living. I couldn’t ask for better work. And I’m learning that since I’ve divided the business into doing 20 hours a week of design work, and 20 hours of getting the business together, I’m really enjoying that part of it. It’s a nice balance for me.

Loren Feldman:
Have you thought about what would trigger the hiring of your first employee, full-time?

Lena McGuire:
Yes, I plan to open a showroom, a retail location, so I’ll be moving out of my—I’m in a professional building right now. I have a 400-square-foot studio space that I use as an office and a mini showroom. I have my cabinet displays and my countertop displays and other types of things that I sell, so a lot of tile and paint chips and things like that. It’s getting very crowded, so I’m looking for a space. I’m looking at several in the area—maybe 12- to 1,800-square-foot space.

So I’ll be signing a lease in the first quarter of ‘25, and then when I have that, I will be no longer working out of my home. Because I typically work from home and then just go into the studio space when I need to make selections with a customer, or if I’m signing documents. So when I have a showroom, I’m going to be in the showroom every day, and while I’m out with customers, I’m going to need somebody to be in the showroom, because I don’t want to just lock the door and have a “comeback later” sign. So I will hire somebody to help me with kitchen design work and keeping the showroom up and running. That’s going to be very soon, so that’s pretty scary.

Paul Downs:
Have you ever had employees before? I’m sorry, I can’t remember in the graphic design whether you did or not.

Lena McGuire:
No, I have never had an employee.

Paul Downs:
Oh-kay! [Laughter]

Lena McGuire:
So that’s the scary part, yeah.

Loren Feldman:
What could go wrong, Paul?

Paul Downs:
What could go wrong? You want an answer?

Loren Feldman:
Well, you’ve shared a number of answers over the years here.

Lena McGuire:
Yeah, I’ve heard the horror stories, and I’ve learned that hiring for values rather than skills is the way to go. So yes, so looking at that, I can teach people how to do something. I can set up a training program. I actually have someone who is a training person. She can set up training programs so she’s on speed dial, so that when this happens, once I have the studio space or the showroom space leased, I will be contacting her about how to set up the training programs for the first hire, because they are going to need to come on board. And I’m going to have to have a plan of how to assimilate them into the business and teach them the process so they can hit the ground running within three to six months.

Paul Downs:
Well, one of the challenges of having your first employee is just realizing that you’ve got to give them tasks to fill their whole day, and so your job becomes much more about communicating than just doing things. But if you’re already spending 20 hours a week on just working on the business, at least you’ve got some time to do it.

I think a lot of people end up hiring an employee when they’re drowning. And so, not only do they think they’ve found the solution, but they’ve just found the beginning of the path to a solution, and it requires even more work than just doing the job. So if you can avoid that, I would say, that’s number one. And then the other thing is just making sure that you understand all the legal ramifications of what you can do and not do, and telling yourself you will never miss a payroll, ever, ever, ever. That’s important.

Lena McGuire:
Yeah, to do that, I am taking a capital influx where I’ve talked with my husband, and we’ve decided to invest in my own business here. So we’re going to have that cushion so I don’t have that cash flow problem, because the rent has to be paid and the employee has to be paid. So I’m putting $100,000 of my own money into the business just to make sure that I have that safety net.

Paul Downs:
That sounds about right. I generally like to have a month’s worth of cash on hand. And I’ve heard people say three months or six months, and in a lot of businesses, that’s just not possible.

Lena McGuire:
Yeah, nice if you can do it, right?

Paul Downs:
Well, if you could do that, then chances are good you’re not buying something you should be buying, or you’ve just hit an insanely profitable business. But a lot of times people have cash because they don’t think about the thing they should have bought with it, like insurance or bookkeeping or whatever. And they’re like, “Oh, I got all this money.” But they’re really on the razor’s edge, and they just don’t understand how vulnerable they are.

Lena McGuire:
No, I use the Profit First system, so I actually have seven different bank accounts. I can see what my profit is. I can see what my owner’s equity is. I can see what my cost of goods is and my operating cost, because each balance is named by what the account is—and that’s not all my money. You know, the profit is the business’s money. The owner’s equity is my money.

Paul Downs:
Well, it sounds like you’re well prepared for what’s about to happen. Congratulations.

Lena McGuire:
Well, thank you. I’ve been using that 20 hours a week all during Covid and last year, trying to get my act together.

Loren Feldman:
And it seems like there must be a vast market out there. I mean, we hear all the time about the aging population in this country. Do you know: Are there other people who specialize in the area that you’re focusing on?

Lena McGuire:
Yeah, there’s local competition. Everybody has people on staff who either work with aging in place or universal design, so it’s not unique to me. What’s unique to me is that my process requires a partnership with my clients, so I meet with them in their home each week as we progress through the project. It’s a side-by-side collaboration, where most of the other companies who are doing what I do, they are contractors who just want to get the job done. They’re not really designers. So it’s, “Bring me your plans and I’ll build it.” Or you go to a design firm, and it’s, “I’m going to present you with the one or two best solutions,” instead of working side by side to create the solutions. So that’s pretty much my differentiator.

I do take eight weeks to complete a design, and it is done in their home so that they can see. We can get right up from the dining room table. And when we’re talking about putting a cabinet in, and we’re talking about, “Should it be 15 inches or 18 inches,” we can go into their existing kitchen with a tape measure and say, “Well, this is a 15-inch cabinet. This is an 18-inch cabinet. Can you fit the silverware in this drawer?” And that helps them visualize so, basically, they’re saying yes to every design decision as we go along. So they’re creating ownership of the project before it’s even built, and then by the time it’s installed, they already have that vision. And they know what to expect, and they feel good about it. And the other companies, I haven’t seen anybody else that’s doing it that way, so that’s how I set myself apart.

Paul Downs:
Well, that’s reasonable, speaking as one who is going through this. There are a million decisions, and it often takes some thought to understand the difference between a 15-inch and an 18-inch drawer. Or how deep they should be. Or whether you want drawers at all. I mean, one of the things that I’ve found as I’m doing my age-in-place is trying to design everything so I never have to kneel down. Things like the height of a dryer or my bugaboo, which is no cabinets below countertop level, all drawers. So we don’t have to ever look into something. But there’s bound to be more. And if you can provide that insight to people who know they got a problem but don’t know the solution, then, yeah, that’s a business.

Lena McGuire:
Yeah, that’s how we do it. So I insist that they have one week between meetings so that they can digest it. So once we get past the rough sketches, and we get into the 3D software that shows them visually what it looks like, we work on one work zone at a time. So if the kitchen has four walls, and you’re going to do an L-shaped kitchen, you have two walls that we’re working on. So we’ll work on one wall one week and one wall the next week. And that allows them to look at each individual cabinet working with the drawers. And I’m always talking about using drawers instead of doors with rollouts. That’s just double-duty work. Drawers are much better.

So we work on that, and then I’ll email them the drawings so that they can pencil in what goes in each drawer. And then they realize, when we come back next week, we talk for five or 10 minutes about last week’s work to see, and, “Did you want to make any changes?” “Well, yeah, this pasta pot I have isn’t going to fit in this drawer. I need to find a place to put it.” So then we can make some revisions to that.

Or they’ll say, “I have more spices than I thought I did. I’m going to need a bigger place, or additional places, to store the bigger spices versus the smaller spices.” So having that one week of time in between for them to wrap their heads around the decisions they made while I was there, it gives them time to think about it and really internalize it. I give them the homework of doing that, and then we come back and we revisit it.

And then when we’re all finished with the entire kitchen, we’ll come back and do one more overview of everything. The whole meeting is just to review the kitchen as a whole, to see if they had any other thoughts before we really get into doing the pricing of everything and making selections. The whole time we’re making those decisions, you’ll hear them come up and they’ll say, “Well, are we going to do shaker cabinets, or can I have a blue island?” It’s like, “Well, we’ll talk about those decisions when we get to the selections. Right now, we’re talking about the form and the functions. We’re still staying in our black and white drawings.” And they’re like, “Oh, okay, yeah, I’m getting ahead of myself.” So it’s helpful for them to know what to expect each week and to be able to make some changes each week.

Loren Feldman:
Have you had any customer disasters?

Lena McGuire:
I lost a job once when I was working for somebody else because of a disaster. I worked at Lowe’s as a project specialist, and we had contractors back then that were assigned by Lowe’s, and they did not pull a permit, and the neighbor across the street saw the construction going on and didn’t see a permit sign in the window. And that job came to a screeching halt, and they were without a permit for maybe five or six weeks. And then I lost my job because of that, because they said that I should have known that, and somebody had to be held accountable for this. They couldn’t find another contractor, but they could find another designer. So I lost my job, so I started my own business after that.

Even the clients came in and we’re talking to the store manager that they wanted me to continue on. And they were saying how it wasn’t my fault, but it’s the real world. And when you have the territory and managers coming in, they have to show that they did something about this big problem we had. So they came right out and told me I was going to be the scapegoat on this.

Paul Downs:
That’s too bad. So that brings up something, which is, is the constraint in your business not you or customers, but the availability of contractors?

Lena McGuire:
Hugely. It is an extremely big problem. So I am not a design/build firm. I am a design dealer. So I sell cabinets and countertops, and I do design work. I am an interior designer who specializes in kitchens and baths. I am not a contractor who installs, but my customers think I am, because I have a lot of construction knowledge. My husband’s in the construction business. I’ve been reading blueprints since we were dating 40 years ago. So I know construction inside out. Like I said, I’ve built remodeled houses. I’m in house number five or six now. So they come to me and everybody wants that design/build, and it’s hard to find people who do that, that they can trust.

So the design/build are usually the contractors who are building new construction or very large remodels who are doing additions. If you just have somebody who has a small, $50,000 kitchen project, those people don’t want to take them on. So they come to me. They trust me. And it becomes an issue when they don’t have a contractor, or the contractor has problems and doesn’t show up. They call me, which is why I instituted that project-observation segment, because they think that I’m the contractor, even though they sign a third-party contract with the contractor. I’m not involved with that. My name’s not on it. They still think, “Oh, it’s your contractor.” It’s like, “No, here’s a list of people that I recommend. I’ve used them before. You can interview them and hire them.” It always comes back to “your guy.”

So it’s an issue, and there aren’t a lot of contractors. Currently in our market, there is anywhere from a six- to 18-month wait to get somebody to do your work. So if you have an emergency situation where your tub is leaking, and you want your bathroom remodeled, it’s really a desperate situation. So basically, you can get a plumber out there in a week or two to stop the leak, but to repair the bathroom, it could take you a year before somebody gets in.

Paul Downs:
Why? What’s going on? Is the overall economy in the Syracuse area just not that attractive? Or what’s going on?

Lena McGuire:
It feels like we’re the new Detroit. We have a lot of blue-collar workers here. You can still buy a home for $200,000 to $300,000 for a starter home. So, it’s still affordable here, but it’s an aging market. [During] Covid, we saw so many people, if they didn’t die, they moved away. They retired. I used to have six contractors that I used on a regular basis. I’m down to one, and he told me just last week he’s retiring in April. Fortunately, I’ve been out there marketing and asking people for recommendations, so I have four new contractors that I have worked with that I’m bringing on board. But it’s rough.

Paul Downs:
How old are they?

Lena McGuire:
And they are in their 50s also. So I just got a notice from my favorite plumber has merged with another company. I’m sure it’s his exit plan. My electrician left a year ago. He sold the business to his number one guy from inside the business. So it’s still the same business, but my number one plumber, my number one electrician, the main owners have moved on. So now they have different ownership. My contractors are gone, and it’s really hard to replace them.

And I’m in the business. I know a lot of people, so, you know, for a homeowner to try to find somebody that will come in—and, you know, they call me. It’s like, “Can you come out next week?” Like, “No. I can come out in six months.” I can help them with their design work, but I can’t get it installed right away.

Loren Feldman:
What will you do, Lena, when you try to expand beyond your region and you go into areas where you don’t have contacts with tradespeople?

Lena McGuire:
Well, that’s what I’m doing now. So I am a member of BrainTrust down in Nashville, Tennessee. My son lives down there, so I travel down there once a month for our meetings.

Loren Feldman:
What’s BrainTrust?

Lena McGuire:
I like to think of it as a women’s accelerator. It’s kind of like a mastermind group. They set you up in a vault—there are seven women in a vault—and you work on your business together. So it’s very experiential. The vault I’m in, it’s to get you from where you are to $1 million and then you graduate to Key Club. So In vault, and I go down there, and what I’m doing is I’m laying the groundwork for when I open my studio down there.

So I’m meeting all these women and networking and communicating and connecting. And I’m learning about the different towns, the different physical areas, the demographics, who’s available to do what type of work. And so I’m just laying the groundwork there. I’m hoping to open a studio down there, maybe at the end of 2025. Because I do travel down there, and I will be spending about half my time down there once my husband retires in June. So the idea is to be able to live in both areas and have a studio in one and a showroom in the other. But networking and getting to know the area is really helpful. I don’t know that I could go to an area where I don’t have those connections. It would be very hard. It’d be like starting over again.

Loren Feldman:
But you do anticipate doing that eventually?

Lena McGuire:
Yes, I do. So the goal is to have something here in the Syracuse-Camillus area and then have something in the Nashville area. Anything beyond that would be gravy. But because I’ll be living in both states, I do want to have work in both states, because I don’t plan on retiring. There’s no reason to. I love what I’m doing. It’s fun. I get up every day, and I just love what I do. So why would I stop?

Paul Downs:
I’m just curious about, if the constraint is really the contractors, no matter where you go—and it probably is—what are you bringing to the local market? I presume one way to do it would be to find someone like you who’s in, whatever, Des Moines, Iowa. Do you find someone who’s great at maintaining relationships and needs business help? I’m just thinking about the expansion path. What is the value of teaming up with you?

Lena McGuire:
Yeah, with a contractor, the value is in having it all tied up in a nice little package with a bow on it, hand delivered. So when I work with a contractor, if they bring me a customer, then what I do is, I help them get all the designs together. They make all the selections. We get all the materials together, and then the contractor can get the pricing together based on all the decisions that have already been made. It’s a complete package that he can price.

And then when it’s priced and the customer signs the contract, then—I do all the procurement—all the products are delivered on the day he wants. So we usually deliver three days before the pre-construction meeting, so that everything can acclimate. So if you’re bringing in your cabinets and your hardwood floors and things like that, we want everything to be acclimated to the climate conditions of the new job site.

So they don’t have to deal with Mrs. Smith, who doesn’t know what faucet she wants, and the plumber is going to be there tomorrow, but now we have to wait a week because the faucet she wants isn’t in stock. So everything is there ready to go when he’s ready to break ground. So they don’t have to deal with the hassle of figuring out what the client wants, what the products are, when the products are going to be delivered. It’s all figured out and ready to go when they need it.

Jaci Russo:
To Lena’s point, I’ve done two massive house remodels, the first with just a contractor. And it did not look as good as it could have. And there were a lot of stops and starts along the way, and some overall frustration. The second time, we started with the designer. She brought in the contractor and some of the subs, and really managed the project for us. I mean, we still had a GC, because that’s what the contractor did. But it looked better, it felt better, it was on time, it was on budget. When I got frustrated, she stepped in and helped make it happen. I think what Lena is doing is invaluable.

Lena McGuire:
Thank you, because that’s exactly what I do. So what I do is I try to make it so that my clients can sleep at night, and I make it so that the contractors are profitable, because every time a decision isn’t made, and they’re losing time, and they have to reschedule subs, they’re losing money. Time is money when you’re a contractor, and it’s rough.

So I do my best to partner with them. I pay them very quickly. If I’m hiring wallpaper hangers, I’ll hire installers, and they go through my business. The job is done. I get visuals of the work being done. They send me the invoice. I pay it the same day or the next day, because I want to keep them happy. Good trades people are really hard to find, so I try to treat them like the kings they are.

Loren Feldman:
Lena, it sounds to me like you’re extremely well prepared for this and off to a great start, even if it was a bit of a difficult year this past year. And I’m really looking forward to following along as you build this going forward. So thanks again for joining us.

Paul Downs:
Yeah, likewise. I think that you’re one of the better prepared newbies that we’ve run into.

Lena McGuire:
Thank you.

Jaci Russo:
Hey, I was a newbie before her!

Paul Downs:
No knock. You’re not really a newbie. You’re just a “bee,” because you’ve been around. [Laughter] For someone who’s starting a business, you’re very prepared.

Jaci Russo:
All right, I’ll allow it. I’ll allow it.

Lena McGuire:
So this is an exciting adventure. And I plan to do like they say, you know, go out sliding into first base. They’re all used up when my time comes. So I’m just going to make the most of it and do what I can. And I’ve got the people here on 21 Hats: great inspiration, lots of people with wonderful ideas, and the willingness to share the experiences, the failures. I call that the education you get from the school of hard knocks. That’s the tuition you pay. A failure is always the education. So I don’t look at failure as failing. I look at it as an educational opportunity. And that’s what that particular class cost me that day.

Jaci Russo:
It’s not a loss, it’s a lesson.

Paul Downs:
What do you want from us today? I mean, is there something? Here we are.

Lena McGuire:
I’m very nervous—I’m in awe of everybody’s success, and I feel like I am so far down the road. I have a long way to go. And I look up to you, and I feel like you have been very generous with your conversations that you’ve been having on this podcast, that I just feel very welcome and safe. And to me, that’s the world, because it’s very hard to find people to talk with about things that are business.

I mean, I could talk to my husband, but he’s not a business owner. He’s the spouse of a business owner, and it’s very hard to have somebody who’s been there, done that, learned the mistakes, and is willing to share the experiences. So just being welcomed to this group is incredible. It’s a wonderful opportunity, and I’m very grateful.

Paul Downs:
Well put. That’s sort of the feeling I had for decades before I met Loren. It’s just like, my wife’s friends are lovely, but they don’t know anything about my world. So it was hard to find support, someone to talk to. So welcome aboard. All right, Loren, you got the master plan. What are we doing next?

Jaci Russo:
Wait, hold on. I want to jump into what Lena just said real quick. One: Lena, welcome. We’re glad to have you. I think you’re going to be a perfect addition to our merry little band. But the second thing is, from where you’re sitting, I think you feel behind because you’re looking so far ahead, but if you turned around and looked behind you to the people who are still working for somebody else in a toxic company, miserable, dreaming of the day they go out on their own, or look at the people who may have started and stopped or started and not been able to keep going because of health or economy or a lack of marketing understanding or not being an expert at their craft, you are exactly where you need to be. And you’re light years ahead of where you were, and you just keep moving forward.

Lena McGuire:
That’s true. That’s really good to be reflective on that, because the one thing I can say positively is I am happy every day, even if I’m suffering with the flu or I didn’t get that account, I’m still happy. And there’s a lot to be said for that.

Loren Feldman:
All right, we only have a little bit of time left before we go. I’ve been asking everybody about what kind of year they’ve had. I already hit you, Jaci. Paul, what kind of year did you have in 2024?

Paul Downs:
We had a great year after a pretty scary year last year. So we had sales running way ahead, 50 percent ahead of 2023 throughout the entire year. And we’re going to end up at just under $6 million in sales this year, and we did $4.1 million in sales last year, and $5.1 the year before that. So it was kind of a weird whipsaw in 24 months.

But, yeah, I mean, it’s been good. We’ve been running steady. We’ve completed some very cool projects. I have the same number of people that I did at the beginning of the year, but we lost a few older ones and replaced them with younger ones. So now a quarter of my company is under 30, which is very unusual in the trades, as we just heard.

And honestly, I just hope it’s as good as this next year, because it’s been fantastic. And I have really no explanation for why the big difference between the two years, because we did more or less the same things for marketing, had a similar number of people contact us. It’s just the way it goes. Sometimes people feel spendy.

Loren Feldman:
You had the same number of people contact you, but you closed more of the sales?

Paul Downs:
Yeah, so we keep track of how many calls we get. And in 2022 we got 1,254, and in 2023 we got 1,239, and as of today, we’re at 1,263 for now, and 1,299 projected for the year. So not a huge difference in the number of people calling us, just a big difference in who was putting their money down. And I can’t give you an easy answer as to why it varies so much, because I can’t see one from any of the data that I’ve got.

Lena McGuire:
I can make a suggestion, because I changed my website, and I found out that the website I had prior was acting as a gatekeeper for me. And when I got a phone call from my old website, they were much more qualified buyers. They had a better indication in their own minds of what they were purchasing from me, and they were buying higher-ticket items and spending more money.

When I changed my website to make it more mobile-friendly, I did a quick, down and dirty kind of job and just got the website up. It is no longer functioning as a gatekeeper. I’m getting more phone calls, but they’re like, “Do you sell vanities?” And it’s not a full-house project. So the quality of the people that are calling has decreased. I’m working with my new marketing agency to get back to that quality website I had, because the phone calls even though you’re counting the numbers of inquiries you’re getting, the people who are self-selecting are not of the same caliber. At least that was my experience.

Paul Downs:
Well, that’s a good observation for many people. But we’ve already been through that particular set of experiments about 15 years ago. I mean, I’ve been running a website for a long time, and now we have a lot of metrics that we’re tracking on the websites. Now, we did introduce a second website last year that was designed for a different audience, but I wouldn’t say that it has produced a 50-percent increase in the jobs, because the people who were supposed to be looking at the new site were not the ones who were buying more. And so I think that your advice is excellent for most people, which is: Pay very careful attention to whether you’re getting qualified leads from whatever your source is, and that having a qualification step in your process is pretty important.

Now, we do it a different way. I would rather everybody on Earth call me, and then we sort out who we want to deal with, as opposed to necessarily putting some kind of step in front of our interaction with a person. But different businesses are different. So some people want to set up ecommerce. You just put in your credit card. Your business is probably more similar to mine, in that you need to talk to the person to figure out whether they’re any good or not, and part of that is just dealing with the number of people who want a bathroom vanity. And so hopefully, what you have is some very scripted response to every call that allows you to pretty quickly sort through and not get all busted up if you’re not a good fit for somebody. Because that’s what we came to, we developed that process too to quickly send away people who aren’t a good fit for us.

Lena McGuire:
Yeah, we even call it “the good-fit call.” And I tell customers when we’re talking, “The purpose of this is just to see if we’re a good fit.”

Paul Downs:
That’s exactly what we say.

Lena McGuire:
Can I do what you’re asking me to do? Can I fit it in my schedule? Is it in your price range? That’s basically it.

Paul Downs:
That’s right.

Lena McGuire:
Well, maybe you’re getting more referrals.

Paul Downs:
Not necessarily. I think, if I had to hazard a guess, I would say that the economy is just doing well, honestly. We deal with pretty much everybody everywhere, and so that when people are feeling confident, they do the kind of thing that leads to them using me, which is moving a facility or expanding their business or government budgets are healthy.

I would say that the last year, aside from all the drama around the election, that people were basically acting as if they were feeling confident, even if you couldn’t get them to say that. And now that the election’s over—I mean, usually election years have been very bad. They’ve been down years for me. And this one was just unusual, not being that. And now I’ll see whether it happens next year when whatever actually rolls out of Washington arrives on Main Street all over the country. But we’ll see. I don’t know.

Loren Feldman:
Paul, has the bouncing around of your revenues the last few years, does that make it more difficult for you to budget for 2025?

Paul Downs:
Not really. Actually, I’ve been bounced around so many times that I don’t budget the way other people budget. What I have is a very good idea of what normal looks like. But I haven’t set up an account for my finishing department to say: Here’s the amount of money, use it or don’t use it. We just don’t do that. I just kind of watch what comes in.

And one thing that I’ve found is that you can make a pretty good prediction about how an entire year goes from the first three months. That’s what my data shows, that the projected annual sales or revenues by March 31 are pretty much where you’re going to be—with the exception of Covid year, which was a surprise in March. But all the other years, you kind of get off to whatever pace you’re going to be on, and then you can tell what you’re heading for. So that makes it easier to make decisions, but I wouldn’t call it budgeting. I know what it takes to run at $4 million a year and at $6 million a year and keep track of things as we go along.

Loren Feldman:
All right. Well, thank you all. Lena, you will be coming back, I hope? We haven’t scared you away?

Lena McGuire:
No, this is fun, actually. Thank you.

Loren Feldman:
Excellent. Well, my thanks to Paul Downs, Lena McGuire, and Jaci Russo. This is the last episode that we are recording in 2024. I’ll see all of you next year.