Boring Money
Boring Money is for the people quietly getting rich the unglamorous way. Hosted by David Heacock, founder and CEO of Filterbuy, this podcast covers boring businesses, acquisitions, cash flow, EBITDA, tax strategy, fixed income, and the real mechanics of compounding capital. Built for operators, investors, and business owners who care more about long-term wealth than hype, headlines, or status.
Boring Money
The $10M Hat Business Built on Custom Software
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Robert built Hat Launch from one embroidery machine in his garage into a $10 million custom hat business serving small businesses, blue-collar teams, and even pockets inside companies like SpaceX, Google, Amazon, Red Bull, and Bacardi.
In this episode, we break down how he found his niche, why custom work became his moat, how vertical integration and custom software helped him scale, and why AI may make this kind of business-building more accessible than ever.
We also get into the harder side of growth: merchant cash advances, capacity constraints, marketing addiction, bankability, debt, production planning, and the danger of chasing revenue faster than the business can handle.
This is a conversation about the real work of building a “boring” business: solving unsexy problems, creating systems, improving operations, and learning how to grow without losing control.
But at 10.2 million. How much profit did you show on? Roughly 8%. Robert makes $10 million a year embroidering hats. He started with one machine in his garage, and now his business is exploding.
SPEAKER_00We only want to do $12 million. Only want to do $12 million.
SPEAKER_02Only a million dollars a month. Robert is on track to bring in a million dollars a month in the next year. This is exactly how he went from a garage to $10 million a year, his secret advantage that any business can copy and the biggest weak points in his business.
SPEAKER_00After this year, we can get another $4 million.
SPEAKER_01You're making me nervous, Robert.
SPEAKER_02Whatever money that you've been offered that you haven't wanted to take and spend.
SPEAKER_00How desensitized you get to the numbers once you hit the goal. And then like the next day, we're like, oh shit. Okay, we got to keep doing that.
SPEAKER_02You're in a great spot, so just don't screw it up. So, Bobby Light or Robert, thank you for joining me on the Boring Money podcast. You're welcome. Um, you know, you and I have spoke early on when I was kind of um deciding what to do with this podcast or this venture. And um, you know, I really appreciate you being one of the one of the first people to come on, but why don't you tell us at a high level, introduce yourself and your business?
SPEAKER_00I basically started the custom headware business hatlaunch.com in my basement in 2018. Um started life as a software engineer, and I wanted to make money, more money on the side to afford cars, because that's what I do. And I before starting Hat Launch myself, I would just find like uh marketing agencies or agencies in the St. Lis area that had clients that needed like front-end dev work or needed some development work on the side, where I would take on like a side project and do like a front-end website build-out for a marketing agency for like a few grand. And I would do that um as much as I could. And I was like, you know what? You know, I I could build an e-commerce site. I've done it several times for other people. I want to build something for myself. And for me, I I love cars and I know the market of people that like cars. So, like to first test out selling things to car people, I uh I found a website called Teespring where you could take a graph, you could create a graphic, put it on a shirt, yeah, and then sell that through their platform where it's print on demand, they print it and ship it to the person for you, and you be like 50 cents to a dollar, depending on how you price things. I had things really low to like make sure I'd actually sell stuff, but like my first month doing it, I did like $2,500 in profit on selling these shirts because I was part of all of these Facebook groups of just like fish in the barrel of 80,000 people that like Ford Mustangs. So I'd go make a cool Mustang design, put it on the shirt, plop it in there, and then like 100 people would buy the shirt. Yeah, so I was like, oh, this is really cool, but you know, I want to do it with hats too, because there's no hats on Teespring, and I know people at the racetrack love hats and they love hats with their car on it or like a performance parts brand or something. Um, and particularly flex fit hats, like a black flex fit hat that is the like go-to hat for car people.
SPEAKER_02What is a flex fit hat?
SPEAKER_00It's just a fitted hat with no snap on it, like I'm wearing now. Okay, that's just black, and it's a really nice, comfortable hat. Yeah, and it actually was my favorite hat that I that I would wear. Now I'm wearing one of our own Kodo hats that actually fits my big head, so I can actually wear a snap back. We'll talk about Kodo later. But uh yeah, so I saw that there wasn't a website that you can do the same thing that T-Spearing was doing uh for shirts for hats, and that's where I got the idea. And we originally named ourselves lidlaunch.com until Lids sent a cease and desist and told me to change my name and then uh changed my name to Hat Launch eventually after some fun back and forth with them.
SPEAKER_02A better name, anyways, I think.
SPEAKER_00It is, and it was so annoying to try to enunciate lid launch to people like on the phone and still launch, people always think I'm saying launch, so it's like hat lunch, yeah. So actually, probably should buy that domain just in case someone goes to it. Uh yeah, hat launch. Uh SpaceX actually ordered hats from us two weeks ago, by the way. Pretty cool.
SPEAKER_02You know, one of the things I find most interesting about you like what is your niche within the hat business?
SPEAKER_00It is small business America, like literally blue-collar, grassroots, small business America. Boring business. So plumbers, electricians, uh filter by, hopefully, at some point. Um, so all your factory workers. But when you look at so SpaceX ordered hats from us, right? Yep. It's not SpaceX, the big conglomerate company ordering 200,000 hats. It's SpaceX lifting team. So the guys that lift the rockets, I think, probably while they're putting them together. Yeah, it's still several hundred people that probably work on that team. Yeah. But it's like the manager of those guys saw our ad and ordered hats for his team. Yeah. Like that's who we're, you know, it might be a big corporate company buying hats from us, but it's smaller sectors inside that, you know, buying, buying nice hats because corporate's going to give them a shitty 99 cent hat that they're never going to wear. And like, that's like what's what separates us from the crappy corporate apparel is like we're only selling good hats on our site, and we have a very limited selection of just those good hats. And that also makes it easier for the blue-collar guy to go to our site, which is very easy to use, to just check out immediately. He's probably never bought custom apparel ever. And it takes him five minutes and he gets a grade-end product. That's what's allowed us to do what we do and do it at scale.
SPEAKER_02Yeah, it makes a lot of sense. And the and I I love the niche because um like small or big businesses, you know, a hat is not going to be a big, you know, budgeted perp purchase that's going to um be scrutinized in the same way that you know, you know, larger kind of purchases would be. And so you probably can like like in your SpaceX example, can sell to them, but it's probably some guy with a credit card that has like a limit that he can spend up to a certain amount, and you're under that limit, and um you're able to harness that business.
SPEAKER_00And we we've had the exact same thing happen with Google, Amazon, Red Bull, uh Bacardi. So we have like these little pockets of people inside these companies that have bought hats from us that now we can just like communicate with, and they're just repeat customers where they just keep buying hats for their team.
SPEAKER_02And that's and the other aspect I love about it is that you're mostly vertically integrated and that you do all of your own sewing.
SPEAKER_00Yep.
SPEAKER_02So why do we do that?
SPEAKER_00I wish we were fully uh the the dream is to actually make the hats in America too at some point, but that's gonna be you know, hopefully, you know, depending on how things go, it could be quicker than five to ten years, but that's a whole other can of worms. But yeah, like uh so started the started the business in the basement, and then what I was doing initially is outsourcing all the work, and I was like, well, you know, if I'm paying them X amount of dollars to actually stitch the hats and do it for me, and I'm going there to pick them up, bringing them home and shipping out of my house. What if I just get my own machine and do it myself? You know, shout out to middleman, make more money. You know, I'm not realizing how long it actually takes to do that. Uh, but in hindsight, I learned literally every single part of the business from everything. You know, I was purchasing the blanks, I was making the sale, I was creating the artwork myself too. So I learned the digitizing, I bought the software, I did it myself. I had learned how to fix the machines, I learned how to run the machine, I learned how to properly do like make the hats myself. So when it came time to start scaling that, I already knew how to do it. I so I knew how to, and also seeing the problems and seeing what wasn't automated and what could be while I was doing all of that those parts of the process was very important too.
SPEAKER_02Well, one of the things we were talking about earlier that I find very um interesting parallel between between the two of us is you know, in Filterby, um, I basically built our ERP system from the beginning. Cool. Um, and so you know, all of our manufacturing, all of our, you know, um website, um, you know, inventory, everything is basically is custom built. Yep. Um, and you know, that that is a that's a you know, at least perceived to be unique in that like very few people talk at least about having custom-built systems. And you've um custom built software is what has enabled your business as well. And like the reason we did it was out of necessity because like there are lots of like unique things about our business model that you know a off-the-shelf software couldn't solve. Right.
SPEAKER_00Sounds like you had to had a um similar Yeah, I never even I've been in software for so long, and I've seen integrations from other platforms just oh it go so poorly in corporate America that I I never even thought, and even today it like our sales are so we have like three sales in-person salespeople. Yep, like uh, and Danny actually just used Monday to build out like a little sales CRM for them because I don't have the bandwidth and time to build it right now, yep. Internally, otherwise, I'd much rather do it myself. But to have to give him the thumbs up to go on Monday and use their platform to build something out, like at first just made my skin crawl because I'm like, we could do it so much better if we do it ourselves. Uh, but I'm always reinventing the wheel. But anytime we build the software for our needs, it ends up being, you know, without context of actually ever trying the other software, uh, it ends up fitting our purpose perfectly because we're building it to suit our needs. Yeah, they're not trying to smash a square in a round hole using someone else's CRM.
SPEAKER_02Yeah, you're building it to solve problems um rather than buying something off the shelf that was built for a generic, you know, company to solve you know generic problems, um, which oftentimes takes a lot of bandwidth to make it work for your for your business, which probably could have been better suited just building it in the first place. Right. But what I'm curious about is like I think that you know, five years ago, people would rightly say, um, well, that's all well and good, but the amount of energy that it takes to maintain and scale custom-built software, like ultimately is not you cannot justify that over time because like the the maintenance cost and then um you know you know the the change cost and whatnot starts to add up, the technical debt is the word I was looking for, starts to add up. And so you can't most big companies could not justify it, but I feel like AI is changing that. So I'm curious how have you been using AI? How has it changed how how you build software?
SPEAKER_00It's finally gotten to the point that I'm starting to turn into a believer. Where six months ago I'd have been like, it's just writing spaghetti code that you know when I look at how I worked as a developer in my day job in corporate America, literally my job was just Googling answers all day and copying and pasting and trying things until it works. AI just does that for me extremely fast. Yeah, where I would have spent all day going to 10 different Stack Overflow links trying to find the correct solution where AI will just spit out that for me. But I use Claude personally right now, but I truly think that with the rewrite that we're doing right now, it has sped up development like an insane amount where you know I'm I'm doing an entire feature in a day and a half, which would normally take me two weeks. Yep. So it's um we're super impressive.
SPEAKER_02Yeah, I mean, like part of my thesis is that like it's not that you know software engineering goes away or even that you know SaaS businesses go away. Like I don't think that that happens at all. Um, but I do think that you know the the cost of deploying software is going to go down at a at a rapid rate, and it's going to open up a lot more specific use cases for people that um you know you would not have had software built for those specific use cases.
SPEAKER_00The big SaaS conglomerates are gonna feel the pain because people are gonna build their own stuff.
SPEAKER_02Either people are gonna build their own stuff or they're gonna be niche software developers that build it for them at a much lower cost. Yeah. Um, you know, I think that there's always so much uh pushback. Oh, a plumber is never going to build their own software. Well, you manufacture has I manufacture air filters. We both built our own software before AI. So there are people, there's there are subsets of people that found um use case in this use cases before and that already existed. Well, now I think that you're gonna see a lot more people um choosing to do that because it's so much easier.
SPEAKER_00Right. Did you have any software experience when you made the decision to build it yourself?
SPEAKER_02Or you just had a bunch of money and you trusted someone and it wasn't a bunch of money, it was it came from uh I mean I completely bootstrapped, so it was without it was with without any money. Right. Um, you know, it's basically me and I had a um developer in um Kenya, um, and then ultimately a few guys in uh Belarus, and that's basically the first the first 10 years of of building software for our business. Um but you know I under but I you know since the 90s um you know have been coding at a basic level. I mean, I started doing HTML code and then JavaScript and PHP and and so it's like and once you once you uh and now our our whole platform is built on you know Python and Python related type type stuff. Um but Python um or C sharp. Yeah. You do C sharp. Yeah. Um yeah, well now but the the thing is, I mean, to me, Python is way more accessible than C sharp, at least from from my understanding of it. But yeah, um but now with AI, the thing is I don't I don't even know that it matters anymore. It doesn't. Um but but my I guess my larger point is you know I do think that like I kind of get tired of the Silicon Valley narrative of oh, a plumber is never going to build their their own software, um, and they'd laugh at that. Right. Um, and whereas I I feel like for us for me, I know I I I can tell you for a fact it's been a huge competitive advantage. You could not have built my business without that. Right.
SPEAKER_00Um my brother-in-law owns a lawn care business, and like I'm itching every day to like just build him a little CRM with like some Google Maps integrations and route planning for his guys, because I know the off-the-shelf stuff just isn't good.
SPEAKER_02And it's expensive.
SPEAKER_00Exactly. Right. That's another big thing, too, is it is expensive. Yeah. Um and same, but what what's stopping a software guy uh in like like an entry-level software engineer that just got out of college and can't find a job doing software, maybe he does start doing lawn care or uh plumbing, right? But he builds the software around doing that and then ends up building this awesome software platform and a massive plumbing business because of the software platform that he's built.
SPEAKER_02Yeah. Yeah. Well, I think that ultimately that's what's going to happen. I mean, like if I were um a uh young person that was um technically inclined, I would be looking for to solve niche problems for sure. Um, like like the lawn care problem and be the best at that, um, and you know, use AI to build the software to then sell into that at a price point that you know the kind of big generic systems can't compete with. And then that becomes your attack vector. Um, and then you can decide what you want to do with it. But I mean, I think I think that you're going to see that there's a lot more um, there's actually a lot more demand for software, a lot more demand for those software developers, but it's going, but the the price point is going to come down because they're but their cost of delivering is kind of come going to come way down, but it's gonna open up a lot more opportunity.
SPEAKER_04Right.
SPEAKER_02But I also do think that you know the the other aspect of it is that like you were describing early on how you can make a bet much better customer experience um because you're willing to do the development work rather than going with something off the shelf. Yep. Why don't you describe that for me?
SPEAKER_00Yeah, the most of the stuff that I work on now is customer facing customer experience. Um, just over the past year, we rolled out like a rewards program where you people get you get placed in a tier based upon how what your lifetime spend with us is. And depending on how much you spend, you get like 5% cash back that accrues over time, but expires within a year uh to buy hats again from us. So that allows us to reach back out through an email to say, here's your monthly rewards statement. Oh, wait, your cashback's expiring. You need to come back and buy again, or you're gonna miss out on the this money. Um, but building out stuff like that and just the the customer's journey from start to finish, making sure every single part is as frictionless as possible. Yeah, it's like when that package is delivered, they get an email that says literally thumbs up or thumbs down. You know, was it good or was it bad? If it's bad, tell me why, and let me automate the customer service flow so you don't even really have to talk to someone. You already just told us exactly what's wrong and we can make it right. If it's good, great, leave us a five-star review, automate that process. So every single thing, and like there's still a million more things that I want to do to make the customer's experience better, just comes down to time and how I allocate my time and doing things, and then also my other developer, you know, what do we focus on first? And right now, like sales are going great. We need to focus on actually delivering on those sales, which is the operation side. So we're writing the design rewrite is going to impact the customers part. Like customers are going to feel great, they see their mock-ups across everything. That's great, but that also helps customer service up and order easier where they're not hand typing in online items to say use blue here, use red here, where it's all automated. And once it gets to production, the person at the computer at the machine sees exactly what they need to do, and they don't have to fumble through reading notes. So it's like a holistic thing that's going to improve not only the customer experience, but also the production. So, and then also production capacity and competitive tracking and uh automating, you know, uh designating orders to certain abyss and machines and doing all of that is like still coming. We we have some of it in place, but it needs to be way more robust to sustain the levels of growth that we keep trying to get to. Yeah.
SPEAKER_02So let's talk about how launch the business. Yep. Um, so in 2025, how much revenue did you do? 10.2 million. 10.2 million. Yep. And how much profit did you show on that? Roughly 8%. Roughly, roughly 8%. So 800, a little over eight, 800 grand. Yep. Give or take. Um, and compared to the year before? Well, year before, I don't think we were profitable.
SPEAKER_01Yeah, but what what was your top line revenue?
SPEAKER_00Uh the year before was uh we did eight point four.
SPEAKER_02So from eight point four, so you're 20 percent. Yeah, a little over 20%. Um and what is your target for 2026?
SPEAKER_00We only want to do 12 million. Only only want to do 12 million.
SPEAKER_02Only a million only a million dollars a month. At 15,000. Or 15. That can be the YouTube title title. Um, I only sell a million, I only sell a million dollars a month um of hats.
SPEAKER_00It's crazy how desensitized you get to the numbers once you hit the goal. Like like we we did our first million dollar month, and like, yeah, that was cool. And then like the next day we're like, oh shit. Okay, we gotta keep doing that. If we want to hit our goal, and like keeping up on that too, like production-wise and all the moving parts that have to work and things that break once you do hit the new goals.
SPEAKER_02But last time we spoke, you um walked me through like you had a little bit of a debt problem, I guess, in the sense of stuck stuck on the MCA hamster wheel. Um, where don't we just just uh break up strip the band aid off? Let's why don't we talk what what an MC what an M what the MCA what an MCA is, what's the hamster wheel and why it's dangerous? Because I think that's something that a lot of like a lot of people get sucked into these MCA loans.
SPEAKER_00For sure. And I I think the easiest way to explain it to someone in like normal person terms that don't run a business is if you ever have to take a cash advance on your paycheck, and the fees on that, I've I've done it when I was in my early 20s, are are so high that at the time you get paid to pay that back on payday, you have to take another one because the fees sucked out the extra any extra money that you would have had that you're stuck in this hammer where you just have to keep doing it. It's a vicious cycle, and that's why they that's why they exist. Where MCAs are there's ways to use them, and you know, we use them to grow our business, but they very much want you to keep re-upping and basically merchant cash advance. I'm gonna take out 300 200 to $300,000 and repay, and there's different ways of repayment. It's either a weekly or a daily remittance.
SPEAKER_02Um percentage of revenue.
SPEAKER_00So most of the ones that we did were percentage of revenue, and they were through PayPal's working capital program, where we'd get $220,000, and you get to there's a slider where you say, I want to give you 10% of our revenue all the way up to 30%. And depending on where you go on that slider, your fee adjusts. So if you're giving 30% of your revenue, your fees gonna be way lower than if you only did 10%. So but at the end of the day, we would pay back a $220,000 advance at 10% of our revenue for like 18 to $20,000. So and we pay it back in three to four months. So we're basically Basically throwing away twenty thousand dollars of profit or whatever that money, wherever that money needed to go, to get this money now to either afford inventory, machines, whatever we're trying to pay for that at the time.
SPEAKER_02And if you actually did the math on the like the annualized interest rate, it's something extremely predatory, like credit card rates, like twenty, twenty or thirty percent, probably.
SPEAKER_00Right.
SPEAKER_02And every time that I've taken one, but they don't actually tell you what it is when you're when you're buying it, it's just like, oh, you're just gonna pay back a percentage of revenue, right?
SPEAKER_00Um, for and they and looking looking at eighteen thousand dollars for twenty two hundred thousand dollars, you're like, well, that seems pretty reasonable. And then realizing that you just paid it back so quickly, but also whatever that's 10% for rough math.
SPEAKER_02Um that that would be 10% if you paid back over the course of a year, and you oftentimes are paying it back in two or three months. Right. So it's closer to a 30%.
SPEAKER_00You have the other side too, where it's actually now you don't have that 10% revenue there. So if you take if you do the 30% route, you got to make sure your numbers are in line that you can actually take a 30% hit on your because if you're already in the hole and you're taking a cash advance to pay bills, like that's the worst spot you could be in. Because not only are you paying past debts with it, you are now shortening how much money you're getting every day through the repayments, and then that's where you're like, oh shit, you know, now we got to do another one while this one's still being repaid. And we did that. So in 2024, we had at the height of us being in a hole, we had three MCAs going at the same time. And I think we talked about a little bit on the last call, but we kind of had this uh this angel shine down from above through uh a venture capital fund that is partnered with the government that says, Hey, yeah, we could probably get you approved to refinance all of your business debt under one loan, and they did, and we restructured the entire all of my business debt um under one loan through them. And it was like it literally it closed and went into effect uh like basically January 1st, 2025. So it was like a great reset of the entire business and all of the debt.
SPEAKER_02Um and and how much how how how much debt was it at the time?
SPEAKER_00So in total, it's a four million dollar loan. Yep. But I have that's two properties. So two commercial pro I own two commercial properties that went into the loan, yeah. Which we're actually refinancing our big warehouse now that we just finished construction on to see what it appraises for, because I think it it very well might be a big chunk of what the entire loan balance is, plus our couple billion dollars worth of equipment that we have. So like when we look at how much we stuff we have pledged against that four million dollars, we're way ahead on what you know technically.
SPEAKER_02None at all.
SPEAKER_00It felt great. And one of the agreements with them is we can't you can't, so which is good because it can it keeps you from it's been you know the interest, you know, we could go we could go refinance our properties and use that debt to pay them off, you know, if we wanted to, because the the interest rate's like eight percent, and uh if we hit certain metrics on our cash balances and stuff, uh it basically goes at market rate. So if if interest rates drop to six percent, uh our loan would reflect that. But if only if we're hitting our uh debt service ratios that they they have in the contract, it's like 1.2, I think, is what it is, uh for debt coverage. Um and it'll go up to 10% it depending on where we're at. Yeah, right.
SPEAKER_02But they're limiting how much they were limiting if I'm if I remember our conversation, how much you are able to take out of the company. Yep.
SPEAKER_00And we just had a call about that.
SPEAKER_02Because I took too much. You took too much. Yeah, somehow that doesn't surprise me, Robert. I hate to tell you.
SPEAKER_00Yeah. So beg for forgiveness, not permission. Um uh we we did great last year, so it's like it's an awkward conversation to have. It's like you guys literally executed on every single thing that you said you would. Uh grew the business 20%, you're doing great. Business we're up 30, 35, 40 now on our revenues versus last year. Like we're gonna have a great year. It's just a matter of keeping up with the work. That's a whole other can of worms we can talk about. But um, and it's like it sucks to to work as hard as I do and do as much as I do for the business and be handcuffed to what you guys tell me I can pay myself. So, what we're doing is we're we're actually effectively rewriting my compensation structure in there to where if we hit those debt service ratios and the business has X amount of cash on hand, I can take, you know, say like a $25,000 bonus each quarter uh to make a little bit more. And I'm like, that's that's uh it's actually it's good because it forces me to be smart with the business finance and how and the things that we're doing. So they're forcing structure on you, yes, which is great. And it it it's helped, you know, it's helped me and Tyler, our CFO, level up our skills like with on the finance side, like so because we really have we have financial reports every quarter, we do monthly re statements and reports.
SPEAKER_02How long have you been doing that?
SPEAKER_00All of last year. Yeah, and like this is this year, uh, it's like actually audit financial statements through CPA, um, which we've we've had a CPA do our taxes and everything for us, but I'm still a sole proprietor LLC, and everything goes on my schedule C on the tax returns still. Yep. Um so and we talked a little bit last time and you thought uh S Corp is probably better better suited for me to be able to do that.
SPEAKER_02I'm not a tax advisor or CPA, but that that was my guess.
SPEAKER_00I'm not either, but yeah, like I don't know.
SPEAKER_02I'd be pretty surprised if it wasn't.
SPEAKER_00Yeah.
SPEAKER_01I mean we're I'm structural we're structured as an S-corp.
SPEAKER_00Yep. So uh Yeah, I think I think once once we once we do either what's really cool is like so we every two years we're put back on the table for them to give us another four million dollars. So after this year, we can get another four million dollars and use that. You're making me nervous, Robert.
SPEAKER_02You you you you there's never there's never there's never there's never money that that that you've been offered that you haven't wanted to take and spend.
SPEAKER_01Well, why wouldn't you? Sure, I'll take that. What are you gonna do with it?
SPEAKER_00Uh see that that's where we when we start talking about operations and keeping up with work, it's like my business, we've I've we've built it to be you can take a laptop and a labeler printer and run our business at any shop, any embroidery shop in America. Now, I hope they have better the newer, better equipment that we do, but we could turnkey just set up a laptop next to a machine and run jobs. So we have two partners that we work with right now. We've had we You're answering a different question than how you want to spend four million dollars. Well, I'm gonna do going a long way around it. Acquiring another shop is where I was gonna go with it. But acquiring another turnkey operation that not only has production, but maybe also has supplies to where we're vertically integrating our supply chain into when you say supplies, you're talking about hats. Uh other supplies around hats. So like the backing, the needles, the thread. Like so, one of our partners we're working with right now. Uh we've thought of the idea, and this is if they're listening to this, uh, we might want to buy you, but we don't know yet. It's kind of awkward as openly talk about that. But uh, but the thought of like acquiring someone like them, because they they sell all of the I don't know what you would call it, but the hard goods behind the all of the ancillary ancillary stuff that we're buying each month, we could get direct from the source and cut out the middleman there and have access to it. But also then we're selling the supplies to other places too. So it's another little leg of the business that's already turnkey, already doing its thing, but they also have this warehouse full of embroidery machines that equals the same amount that we have that we're currently utilizing for uh overflow. So we we learned that we have to have we have to have a solution for when revenues go up and beyond what we can actually produce. Otherwise, we get in a hole that we can never get out of. Unless we get more machines, more people.
SPEAKER_02So sorry, like you're worried, you're saying that as revenue goes up, you don't have the capacity to be able to service that revenue, and that's what you're worried about.
SPEAKER_00Yes, and that's happened every single time the business grows. So from starting from starting in our first commercial space to where we are now, we've moved five times in like five years.
SPEAKER_02And so the biggest constraint is space or machine or machine.
SPEAKER_00It's the new warehouse that we just built that I generally contracted myself, by the way, and built myself.
SPEAKER_02So man a mini hat many man of many hats in more ways than one.
SPEAKER_00Uh so basically the entire year of 2024, I was a construction worker in this building, driving a forklift through walls and building a building. Yeah. Uh while also trying to run it, and also doing all the development work. Yeah, right. So, and marketing and all that all that good stuff. So uh yeah, we finally have the space that we were growing into it and not immediately out of like we have the past four times. So now we have the space problem figured out for at least a couple years, I think, hopefully. Or there is the prospect of what if we just get a second turnkey location instead of doing it here. But we need more machines and more people, and to keep it.
SPEAKER_02So, what what what's keeping you from getting more machines and more people?
SPEAKER_00So, with the partnership now that we have, it's like we we bought last year we bought four 12-head machines and it was like $570,000. So the biggest machines we have, we have four of them now, basically took our production capacity from 100 heads of embroidery to 150. To buy more of those, we and to buy those, we had to go to the capital partner and say, hey, we need these machines because we're growing and we can't grow and not sustain the growth and get bad reviews because orders are late and all this stuff. And then we really had and it wasn't a bad exercise because we literally had to like really show them on pen and paper, here's what we're doing, this is what will happen, this is why we need them, blah, blah, blah. So it's a good exercise to do that.
SPEAKER_03Yep.
SPEAKER_00But I've always just said, I need more machines, I went and bought them. So I it took it took a process that would normally take me like a couple days to get done to a few months. Well, now we're three months behind on work because we're sitting here going back and forth and like waiting for they wanted us to try the bank first. The bank said no. And then they're like, Oh, well, let's try another bank just to see. And then we're like, four banks in, they all say no. And then I'm like, okay, well, we're going back to the leasing company who says yes, within I can send them right now, email right now, and they'll be like, okay, here you go. You know, where I could have already had these machines for three months, so it's a long, long, longer drawn-out process to get the stuff.
SPEAKER_02So why do you think the banks are saying no?
SPEAKER_00Uh, because we were unprofitable last year. Uh 2024. Yeah, where three MCAs, everything it just made everything look terrible. Um, where last year we show profitability and we show that we didn't take any MCAs and everything, like our like on our last call, you know, becoming bankable, hearing the word bankable. Like, I had never heard that word, and I'm like, bankable, like that that makes total sense. And now our bank, like I've been with the same bank that my wife worked with them for 10 years, like it's a local smaller bank. Uh now we just need to get them 2025s, they go off tax returns, so I have to give them a tax return. Yeah, I think that would be a good thing.
SPEAKER_02My guess is the audited financial statement, they they would start going after that, probably more importantly than the tax returns.
SPEAKER_00So, yeah, it's uh we just need more machines um and more people.
SPEAKER_02But to be able to have but I guess you know, you like to jump a lot of steps. And you know, I think that you know you went from I need more we need more machines and more people to we're gonna buy another business to solve that. That's a very, that's a very idea.
SPEAKER_00We haven't done that, it's an idea. Uh and it's intriguing.
SPEAKER_02But you get you get very excited talking about it. But I guess, you know, if I remember correctly, in my last homework for you, we talked a lot about net margins and focusing on that for 2026. Yep. Um, and if I remember correctly, um, you know, your you you came in and you said your dream was to get to 10% net margins. And I said that for your business that I think you should be dreaming for 20% net margins. Yep. So and I think we settled on 15. We we didn't settle. Uh we didn't split the difference. Right.
SPEAKER_00Um I uh we so since then we've we actually did have a little bit of a price increase. Uh we did it on orders of 48 or more hats. I think we raised the dollar, we raised the price like a dollar. Yeah, and we ran the analysis of like of all the orders last year, they're 48 or more. Had that already been in an effect, it would have been I think almost 300,000 something dollars extra on top of what the evido was. So it would have it would have moved the needle.
SPEAKER_02That would have been like quite three or four percent, yeah.
SPEAKER_00Right. Um, so with that that with that in place and the higher revenues that we're doing now, um, yeah, we're we're on track to do 15, I think, but we are still making changes to try and get to that 20.
SPEAKER_02Yeah, well, I mean, I agree that it's it should, I mean, it's it's we're from a different perspective, we're doing something similar within filter buy at the moment. So it's like it's something that something that realistically to do a big shift like that is a you know a 12 to 18 month process, I think, to be able to be able to make that that big of a shift.
SPEAKER_00For sure. And I think just the just what we did all of last year to get to that almost almost 10% like we did. Um those those change, like you said, those changes are still we're still seeing the rewards from that kind of growing and compounding go coming into this year.
SPEAKER_02Well, you know, it's interesting to me that you know, one of the things that I I hope to do with this podcast, and we're doing with the channel, is you know, I feel like there's this disconnect between like the coastal elites that, you know, the venture capital private equity type types, um, and then you have the um, you know, middle America type businesses that we run, um, which actually make up a lot more of the economy than than the rest, but it's just not something that that people talk about as much. But like within the private equity world, you see private private equity going in consolidating um, you know, all of these types of businesses, whether they be HVAC companies is one of the one of the big things right now, um, lawn care companies, um, you know, garage door companies I was just reading about. But it's like there's lots of um, you know, private equity consolidation. And, you know, basically what their playbook would be would be to come in, find a business from uh buy a business from Robert, um, you know, maybe, maybe say, oh, we'll take majority of it and make you roll over over 30% of it. And then what they're gonna do is basically run the playbook that I'm trying to get you to run to say, hey, we're gonna get this business to 15 to 20 percent margins. Yeah, like so, like that is the playbook that a private equity company comes in and does. And then that why then that's why they get the bad reputation of, oh, they just raise prices or they they do all these things, which like like you want to do that. Like I want to see you do that in the robber way, not the private equity way. Yeah, but the reason why I I harp on it is like that is exactly what a financial buyer is going to come in and you know look for when they're looking at a business like yours.
SPEAKER_00Right. I guess I always kind of thought like the the venture capital play would be all right, let's take this and let's scale it as you're saying venture capital.
SPEAKER_02I'm talking about private equity. Those are two two very two sides of the coin. So like I'm telling you the private equity playbook. Got it. Um the venture capital playbook is more the moonshot, um, which is not really a you know, like uh uh a hat business or an air builder business are not going to get funded by a by a by a vent by a venture capital um firm. I mean they're looking for the you know the the J curve that you know you know where one one um one investment basically pays for a hundred losses type type type thing. Right. Um the private equity model, which is what I was talking about, of rolling up these companies, is they're they're generally buying them and making them more operationally efficient, getting them up to a market type margin that these businesses can and should run at and and doing the doing the operational things that it takes to get there. Right. Um, and that's why, you know, for you, as we talked about last time, yeah, having that target and looking at all of your decisions through the lens of that target, yeah, ultimately is going to help you to you know build that structure and then also to become more and more bankable.
SPEAKER_00Right, for sure. And I think that that bankable term is like really gonna be a turning point for us. So to know to know that we need machines and know when we need machines to be able to just go to the bank and say, hey, we need these four machines, and it just be like turnkey, uh, yep, okay, here you go. You know, like that's gonna be amazing and not have to fight for it.
SPEAKER_02Which is why, you know, as hard as it is, I mean, this is something that's hard for me, but and what I still would caution you for, like you've even since we since we last talked, you've um, I mean, you've gotten yourself in a what sounds to be like a better place, um, and you're continuing that trajectory. Right. Um, what I would say is don't rush it. Like let it like you wanna you want to get excited. You get excited. I get excited. Yeah, so so do I. We all get excited. Entrepreneurs get excited. Um, and it's it can become an Achilles, Achilles heel. What I'm saying is, you know, see this process through this year, yeah. Kind of get there, um, you know, do the things like even if that means growing a little slower, yeah. Um, you know, get yourself there, get get solid, um, and then when you're ready for your next leg leg of growth, then then it will be easy. Right. Or way easy easier.
SPEAKER_00We're growing right now, though. Yeah, we're we're up 30 over 30 percent. So yeah.
SPEAKER_02But there's nothing wrong with that, but it there is something wrong with that if you're not able to keep up from a machine's financing capital perspective.
SPEAKER_00Right, and that's where we we're really really getting good at uh finding our partners to work with to help us on the operations capacity side.
SPEAKER_02So I think that's changed since last time I talked to you. So walk me through that. Like, what do you mean what do you mean by that? What does that look like?
SPEAKER_00Finding, and right now we have two somewhat local within an hour of us, an hour to two hours, uh places that we can basically outsource our work to. So we we do everything turnkey, we spoon feed them. This is exactly what needs to get done on these hats, do it for us, and then we take them back and we QA and ship them out of our building. So that's basically what it means. They're taking the actual production work, but we've done everything else around the order and given them just the production piece. So it makes it easy for us to approach a shop, like where we can say, Hey, we want a good price because we are giving you turnkey exactly everything that you need to do, spoon-fed, where all you have to do is load the file, put it on the machine, have your people your actual the only person that the only labor involved is maybe someone taking the box and putting it next to the worker, and then the worker actually running it. Yeah, so we're able to negotiate better rates. Um, but we are also finding that our customer base is small business America with an average order size of 12 to 24 hats, where these big shops, the all they do every day is contract jobs for Adidas and Nike where they're 10,000 pieces. Yeah, so we can easily we've burnt our we've we've burnt a relationship with a couple places where like we can't do your jobs, this is too hard. Yeah, like because the small stuff's hard um for them.
SPEAKER_02Yeah, I I understand. Because like your niche, your niche is that smaller run had. I mean, and your operations are built around that. Yeah, very similar, like within air filters, like we could not outsource our manufacturing to other places because of us similar problems.
SPEAKER_00Because um and that's why that's why we still at least bring everything back in-house and because we do redo a lot of stuff, because again, we we other places can't do what we do, and that's what we excel at. And we've built our, like you said, we built our processes and operations around doing it this way, and they don't they aren't like that. So that's that's what makes it hard to find a partner and to rely on a partner and feel good in growth, knowing that you know, we're only giving them less than 10% of our work, but like if that goes away tomorrow, that's 10% of our work that we have to find a solution for right now. Otherwise, we get behind, and when you're behind, you like I said. You don't get out from being behind by either outsourcing or more machines.
SPEAKER_02So how much how much what what is the percentage of revenue that you spend on marketing?
SPEAKER_00And uh basically growing from the day I started till uh last year, it was closer to 30% of our of our revenues was towards marketing efforts. Last year we did we got it down to 20% and still grew, you know, 20 plus percent uh revenues. Um we uh we're spending a little bit more right now, but it's because the ads are actually being really doing really well for us right now on on Meta. Um Meta is our our number one platform that we spend on. So like when you look at our our marketing budget uh for advertising, you know, most of it's going towards the meta platform. Yeah, then you have agency fees and then meta, Google, uh a little bit on TikTok.
SPEAKER_02I guess I guess my pushback would be like if it's going so well, why would you not dial that in a little bit to where you get a get a handle on your production? Right. And then dial it, start to slowly dial it back up as you fix your production problem.
SPEAKER_00And we did. So we pick fixed our production problem. You didn't. You can now do more, but now we need to, we actually probably should dial it back a little bit because we're getting to the we're getting to the edge of like, okay, we're gonna be in a problem if we get any more if things go any better than they are now, which it's looking like it might, then we will probably dial back.
SPEAKER_02Yeah, I just think that you're I I worry that you're at the risk of repeating your previous mistakes. For sure. 100%. And so and you know that. And so and so what what why are you so reluctant to do it differently this time?
SPEAKER_00I like money. It's it's coming in. Why would I turn it off? But it's not. I'm afraid that next month, what if it doesn't work? What if nothing works? You know, we're very reliant on the digital advertising.
SPEAKER_02But you have and I and I've made this mistake myself before, but like you've you've attached your your sense of success to your revenue rather than rather than to your bottom line. Like my guess is like if you were more emotionally attached to I'm getting there. I don't know that I see that. I know from truly I am. But I mean it's I mean it's it's still not all the way. What makes me nervous is like like last time I spoke with you on Zoom, I could tell like you had had it you gone through enough pain in 2024 and all this kind of stuff, and that you were ready for a change. Like that was the that was the impression that I got. So like we we had when we talked about that, you're like, okay, you went and and what I worry about now is you can breathe a little bit. You got yourself to a breathing room, um a little more comfortable, so you're not you're not as nervous or not as worried, and then you're starting to get that drug of growing. Oh, yeah, and and and you're like, oh I am. So addicted. You're addicted to that. And um, if you don't behave differently, you're gonna end up in that same like you may you may end up doing doing you like you said you said to me, Oh, we're only doing only gonna target for 12 million this year. Uh it's like I know we could do 15 though if you just let the ads just eat. I know there's obviously. So I was about to say, but like you're pushing it to do the 15. I know. That's really where you're you're going for that 15, even though um, you know, you say the 12, but you're really going for the 15.
SPEAKER_00But when you get to the 15, so you're telling me I need to I need to just make sure it stops at 12.
SPEAKER_02I'm not saying it needs to make sure it stops at 12. What I'm saying is that our you're gonna get to 15, and then we're gonna be sitting here next year, and you're gonna say, well, we got to 15, but it was like 2024 where our profitability basically went to zero um because we were doing all we were robbing Peter to pay Paul in every way to you know keep up with demand. And um, so it's you're gonna repeat, repeat that flywheel and do that over and over and over again. And I've made that mistake before. I've done that, I've been there, I've done it, I promise you. Um, and I'm just telling you, but I would like like if I if I could get into your head, but I would I would like to see you be happy with a 20% growth rate this year, or whatever the right growth rate is, but like putting 20% as a as a if you think you can operationally sustain it, right and say, how do I make that the most profitable 20% growth? Yep. Um, and then you know, when you plan, because you're gonna plan for 2027, because you have all this cash that you've generated and you've been able to probably redo your bank deals, then you say, Well, I'm gonna plan for 30% growth in 2027, yeah, and and go from 12 to 16 or 17. Yep. Um, but I can do that safely because now I can internalize it. I can buy those machines. Yeah, like so it's like growing a little bit slower now is what's gonna allow you to actually do that next year. But otherwise you're gonna be stuck in the cycle.
SPEAKER_01I feel like you told me that on the last call. I feel like I I feel like I did. You did. Word for word, and it's still sinking in. We write that down.
SPEAKER_02We're gonna have a video of it. We'll we'll print it out. We'll we'll we'll we'll we'll put it in repeat.
SPEAKER_00Print it out like an inspirational poster and put it on my wall. But I see it every yeah.
SPEAKER_02I think that you you know this is you you know that this is good advice for you.
SPEAKER_01Yes, for sure.
SPEAKER_02But you and but there's something that it's almost like a it's like almost like a gambler that you know is addicted to gambling, yeah. Um, you know, just does like doesn't want to be able to do that.
SPEAKER_00I've been doing it since 2018. Yeah and like when you just talk like comparing it to gambling, like buying buying the machine in the so the six-head machine that I bought at when in my house is forty-three thousand dollars. I didn't have forty-three thousand dollars to buy this machine is very much so make like and I didn't even have the business to really support that machine, yeah. But buying the machine forced me to find the business to pay for the machine. It's like I'm very much, and I think I told you this in the first call, I'm very much pressure oriented. Like, I need the fires, I need the pressure, otherwise, I'm just kind of just like, okay, now what do I do? You know, and like I'm not I'm so not complacent with just not having external pressure and not not feeling the burn, you know. I like it keeps me going.
SPEAKER_02But how about if we do something like fully get where how how how about how about how about something like okay, you hit 15% margin this year on $12 million or more of sales, you get to buy a new Lamborghini. Oh god. I I don't even want to do that.
SPEAKER_01So that doesn't that doesn't get it.
SPEAKER_02I'm trying to think like you're a car guy. Like what is that what is the carrot that gives you a lot of people?
SPEAKER_00I'm actually gonna sell one. Uh I just I want to I want to do I want to remodel my house. Like that's one of my personal goals right now.
SPEAKER_02Okay, well then can we not tie a goal to like okay, you know, you hit a certain level, then you give yourself permission to do that. Yeah, um, but if you don't hit it, then I but the reason what I'm trying to do is But then I want to do it anyway. Any either way. Yeah, you want to do it either way. I know, right? But what what I'm trying to do, what I'm trying to do is change your reward mechanism. Right. That's what I'm trying to get you to do.
SPEAKER_00I think I'm trying to do that too. You know, I I uh all parts of my life, not just business and finances, like how do I you know realign my brain and how I work and how I think about things.
SPEAKER_02So it's uh because the thing is, Robert, you but what it is is like you're sitting quite frankly on a goal mine. Like you're sitting on a you have a great you have a great business. Appreciate that. And I think that you know the fact that you're able to grow your business at 30% if you want to, yeah. Um you know, and and do it profitably if you had the right, if you had the right capital structure, which you you just don't right now because you haven't been patient enough to get it. Right. Your options are either to basically get investors to like to you know give you the um that right capital structure, or my preference for you would be slow down a little bit, yeah, build the capital structure yourself so you control your own destiny, which is what I would like to see you do, and then you go out and do these things. Yep. Um, and so you know that's really the situation you are. I just don't want to see you screw it up. It's like you may very well you may very well be fine doing like you can like live by the seat of your pants, and and like you've been you've done it before. You may very well land the plane safely. Yep. Um that's awesome. But you know, I love that. I I I worry like I would rather see you be a little safer, yeah, and not screw it up because I think you're sitting on such a great business that can be a be a real legacy legacy for you, right? Yep. Um and that that's really what my motivation is. Yeah, I'm trying to get there. But so but but what is it gonna take? That's what I don't know. I'm like, what what what what what do we have to do?
SPEAKER_00I need to finish this year and hit the goals that we set for it and be smart.
SPEAKER_02And I think but you you say that those are empty words though, because the actions you're taking, at least from what I can see, are not a hundred percent consistent with that.
SPEAKER_00Hmm. I don't know. I push back on that a little bit. Please. I think I think we we have taken great steps and we've shown better profitability and increased profitability. Yep. And we are with with me trying to uh engage with this new marketing agency, like I have so many ideas and concepts on the marketing front that I know if we execute it on could do organic or you know, organic engagement that we haven't really seen before, which would allow us to get more out of our spend that we are spending on marketing, which in our last call you said don't don't adjust what you're spending on ads, but I think we can find profitability in our ad account where where if we kept the spend where it's at, we would grow to 15 versus if we could get more out of what we're turn it down and get more return out of spending less.
SPEAKER_02Yeah, but I think it makes me nervous is I feel like we're talking about very different problems. Like you spent the first half of this conversation or most of it talking about your operational problem, not your business, not your business.
SPEAKER_00And we're working on the operational problem right now. Um kind of working on both, but that is like that is 100% our me and the leaderships team, like our operation problems are what we're tackling right now, everyone. Where me, myself, is and Tyler, this our CFO is helping me with it, but I'm doing the marketing stuff kind of on the side, but full steam.
SPEAKER_02But I guess it's like are you going to be able to solve your operation problems without those new machines?
SPEAKER_00Yes. Uh just out of production efficiencies and how we how how we assign work to the person that's there for their eight-hour shift. Yeah, uh, there's so much there that is going to get that needs to get improved and can be improved. Are you running a second shift? Yes. We were running 24-7 and realized when we got the new when we got the four new big machines, we needed people to staff them.
SPEAKER_03Yep.
SPEAKER_00And our our our our midnight shift was basically a skeleton crew. Yeah. But we took those guys who were already tired of working midnights, put those on those machines, and their output was 25%, 30% more by joining the team during the days than being there at night on midnights. But we don't operate Saturdays and Sundays, and we need to those when those machines are sitting there not doing anything, that's uh it's a problem. We need to figure out how to keep them going at least hopefully seven days a week would be great.
SPEAKER_02One advice there um that that we've done is doing um four and three. So uh a shift that works Monday through Thursday, another shift that does Saturday through Sunday. Yep. Sorry, Friday through Sun, um, Friday through Sunday. Yep. Um, that's something that we've had success in doing, and a lot of people like that because they like the four-day week and it's longer shifts.
SPEAKER_00But then so the the the three people work 12-hour days where it's 36 hours and you just pay them for 40.
SPEAKER_01Correct, yes.
SPEAKER_00We're we were thinking about that too. Uh they gotta be great because that the two two whole days of extra production, even if maybe they're a little bit lighter, is still to me.
SPEAKER_02Any like anytime we've needed to increase production, that's been the flex. And generally what I like to do is I buy I we do we do that, and we do have a second shift um that runs during the week. Um and not in all of our plants, but in but in some of our plants. And what I like to do is anytime we have to add staff to that, that's a signal to me to buy new machines. Yeah. You know, like we obviously also plan it out in a more structured way. But I mean that that's like like once you once you realize that like that that becomes the overflow. And then as that as you start digging into that, you're you're starting to add right and I to it.
SPEAKER_00With this, with this year, I'm hoping by the end of the year we have our production planning and uh operations system in place to where we really know like this is what we're holding people accountable for for getting done on a daily basis. And right now we we kind of have like a we have a feeling for what needs to get done, like how many pieces you know per hour, blah, blah, blah. Um, but we really need it has to be honed in. And what I want to have happen is I want us to have X amount of machine capacity available. So I say 10%, we're over machine, we have 10% extra machine capacity than what we actually need, and then we have 10-20% outsource capacity, then you know, if things go crazy, we can account for that. And once we start utilizing our 10% of extra machine capacity, yeah, then we can plan for hey, we're we're already using this and we're hitting outsource. This is ringing the bell that, and knowing that it's it's sustainable, it's not just a one-month thing because of X, Y, or Z happened. Like this is a sustainable thing. Uh cut off outsourcing, get two more machines in, so we're doing it back in-house, and keep repeating and growing that way. Yeah, so that's that's what I'm trying to build the operation side to towards. And we do we do production metrics and tracking down to the person and what they're doing, but there's some gaps in the data that don't allow us to really hone in on because uh with embroidery, it's how many stitches per minute are you doing, um, and how many stitches are in the design because every design is different. Yeah, one can have 2,000, one can have 15,000, and the time differences is huge. We need to know that data to be able to correlate with how much can and should be getting done. So basically, we're gonna hopefully within the this next quarter, we have it finalized to where we are filling a worker's cart full of the work they will get done that day and giving it to them to get done, and that's and we're gonna know it's possible and we're gonna know that they can do it. And once we start doing that, it's gonna really be a game changer through what we actually can output.
SPEAKER_03Yeah, right.
SPEAKER_00Right now we're like 2,000, 22, 2,000 to 2200 pieces per day is what we can produce. In the last 30 days, we sold 44,000, and we only operate Monday through Friday, so the weekends are the what kill us on keeping up with that.
SPEAKER_02So if you had any advice to give somebody who was just getting started out, what would it be?
SPEAKER_00Started out and doing what I'm doing, or just starting out in business in general.
SPEAKER_02I say starting out in business, but I actually like we can even phrase it as um you know a made-to-order manufacturing business.
SPEAKER_00It's crazy. It's funny because I think back in right when I had first started, I met this guy at a bar in Gulf Shores. We're talking, and he had owned a 500-head embroidery company warehouse in Mexico, and uh I saw him about my business, and he's like, that's really cool. And he's like, I'm gonna give you a piece of advice. Don't buy any more machines and find someone else to do that part for you, and you just do the marketing and the selling of the product, and then don't worry about anything else. So I that that was his advice to me.
SPEAKER_02Now, what made you so confident to not listen to it?
SPEAKER_00I know that that embroidery warehouse is running on no technology, it's probably been going the same way for 80 years, and I know I could do it better. And that's just me being stubborn and hard-headed, but I know I can do it better. And this industry is very archaic and in very and very much need of software and solutions that don't exist that aren't being used.
SPEAKER_02Yeah, I would argue that you have a different and in my opinion, better business model, and that you have a lot more flexibility in what you're able to um provide to your customers, and that becomes your competitive edge and value that you are uniquely bringing. So to me, that's why you have the business. I think if you I think if you followed his advice, you wouldn't have the business that you have today. Right.
SPEAKER_00A huge piece of advice is don't do custom stuff. So for like your business, like you have the subset, which I use your filters in my house, by the way. Uh just bought new filters for my house from Filterby. Um, filterby.com. They're great. Um you're just trying to increase your air time.
SPEAKER_05All right.
SPEAKER_00Uh you can run that as an ad, by the way. I won't tell you to take it down, like some other people might. Um I think you had to sign a release anyway. So I did. Dang it.
SPEAKER_05That you guys can do anything with me now.
SPEAKER_00That was a pretty lengthy release. I almost sent it to the AI to tell me how bad this was, but I signed it. I trust you. Um custom. So the less you can do custom, like not even just custom, but like minimizing niching down your product offering to just one thing and producing that. Like with us doing custom stuff, every single order is different. We're not doing the same thing twice unless it's a reorder, and that's when those just fly through the system. Like, everything's already done. Artwork set up. Like, you if you've already ordered from us, you can go place an order on our website. And in theory, if there's a machine open, we can go take that order in 30 minutes, it'd be done and out the door. But it had to be a machine open to do that, and that's not realistic. There isn't that capacity, but it could be, and that's like when we look at the orders that most of the orders that we outsource, they're orders that are already done because we know we've done them, we know that you know we can spoon feed it and it'll be okay. But um, yeah, like the dream would be what if I was just selling the same hat with the same design on it to all these people that are buying these hats, like holy crap, that would be so easy.
SPEAKER_02But you know, it's like that that advice is kind of like the exact same advice that that guy gave you. It's like, and it happens to people when they get into a business, they always think, oh, um, like if only this, my business would be so much easier. Oh, right. But if only that, then you wouldn't have the business that you have to do.
SPEAKER_00It would be a completely different business. So what but I'd be selling retail.
SPEAKER_02What I would say to you is that the trick for you, it was this is the same thing for us, is to take something that's customs. We do make um about 15% of our orders are custom air filters. Um, and you know, that is us offering that is what gets us a lot of that standard business. You guys hate it? Um, no, I I I don't hate it. I love it because it actually higher is higher margin for us. Um, but so but the trick for you is to build the system that allows you to do the custom just as efficiently as the standard. And so it's your business we're building exactly. So your but your business value is being the creator of that system, exactly. And that's why you have the business that you do.
SPEAKER_00Yep, exactly. And going back to the person just starting out or wanting to start out, like this is very, very hard. And I think without my knowledge and technology and software and being able to build the solutions to the problems, we could have done it, but we'd still be like in my garage, which isn't a bad thing. But to think that you're gonna go from you know one to ten million dollars as quickly as I did without having these systems and processes in place, which is it took 10 plus years of me working for massive conglomerates knowing their systems and writing their systems to be able to write my system, right? Like that's a big gap that someone's gonna have to come up with to make it work for themselves.
SPEAKER_02But don't you think that AI is making that a lot more accessible? It definitely does. Yeah. I mean, I think it makes it a lot more I think it makes it a lot more accessible because you don't you need to like when I think about how I build filter by And how I I suspect how you have built your business is you know, you're really it's a lot of first principles thinking, and what that means is like you have a problem that you need to solve, and you're like, what is the easiest way for me to solve this, or the way with the least friction for me to solve it? Yep, and you just do that all day long, and that's how that is what your system becomes.
SPEAKER_00Every single part of every single anything that anyone does in any part of their day, now you got to prioritize which one you're tackling, but how can you make it so it's either a push of a button or it just goes away entirely?
SPEAKER_02Correct. And so you do that. So it's that thinking. Like I think the takeaway for an entrepreneur to me would be if you have that thinking, well, then now AI and what you're able to do with it is getting better and better at allowing you to describe what you need to do and come up with with custom built solutions to help you solve those problems. And so you as an entrepreneur get paid for solving the problems. And so this so what I would say is you're solving the custom hat problem. Yeah, that's why you get paid. So the advice to go and do generic hats is not very good. It's like you're you is go out and find a problem like the custom hats problem and solve that.
SPEAKER_00Yep. Yeah, uh find a business that's done archaically, uh, any anything. And trades is a great example. We kind of talked about earlier, but everything is so so archaic and not automated and not tech first. I I always so my my saying is delegate, automate, and innovate. Those are the three words that I use. Yeah, delegate. I think that's one of the hardest problems for a new entrepreneur, entrepreneur to do is to get help and to trust other people to do the dang things for them. Like it is so hard and they're so hard-headed. Like, I can't get someone else to work for me. They're not gonna be able to do it. It's like, well, if they can't, they could do it halfway, and then you only have to do the other half. It's better than you having to do the whole thing.
SPEAKER_02I I think you have to build the system that allows you to delegate.
SPEAKER_00You've got to be able to spoon feed that person so that you know that they're gonna do it right by themselves. Yeah, so that means you do it yourself for a while so that you can build the playbook to hand it over to the new guy, where it's like literally just, hey bud, go here, press this button, and do it again and again and again. Um but yeah, that's I think that's their biggest problem. So delegate and then automate. That's like going through those processes and make them even better as you start scaling to where you know you don't really have to. So instead of a person delegating work for you, you have an automated system that delegates the work to those people and then innovate is like don't off-the-shelf stuff's great, but you can do stuff your own way, you can do stuff differently. You don't just because something's done in the industry a certain way doesn't mean you can't do it differently. Yep. And do it differently for what fits your needs in your business. So that's my my little saying.
SPEAKER_02Well, Robert, anything we didn't talk about today that you wanted to address or talk about or any questions you had?
SPEAKER_00I'm I'm just glad to be here. It's fun. I I've only done a few podcast type stuff. Like I said, uh it started my YouTube channel when you started yours. You're doing what's the handle? Uh oh gosh. I'm pretty sure it's just I'm pretty sure it's at at launch dude. Oh god, see, you're so much better than me at this YouTube thing. But the the launch dude or launch dude or Robert Hammer. You'll probably figure that out. Maybe, maybe we'll it'll be in the description down below. Make sure you like it. I think maybe what we can do is do like the whole, like we have a saying, the launch dude with the big X on it that gets and listening to you talk about uh you want to tell the true, the true sides of business and not the over the glorified get rich quick uh crap that you see on YouTube and all over the internet. I resonate with that so well, and that's why I started watching when when we found your channel when I launched mine and watched your first few videos. I'm like, holy shit. Because like you go to my YouTube page and it literally, I don't even remember. God, it's bad. I'm not a good salesman on my YouTube right now. You're not, it's great, I promise.
SPEAKER_02I don't think you're gonna make it as a YouTuber at that.
SPEAKER_00But it's like it literally says, no scams, no courses, no bullshit at the top of my thing. And like I truly believe in that. Like there's so many people just taking people's money, promising them, you know, selling them the dream that they're gonna get get rich quick when it's not it's not a real thing.
SPEAKER_02And I think like the the things that we talk about, like that, you know, I even I like the things that I'm most passionate about when I'm telling you are are actually things that you know I I have made that mistake myself and I've been there. I mean, so it's not like I'm telling you from personal scars and experience, you know.
SPEAKER_00So it's um I on on the flip side of the coin, I'm like, this guy did it. He did it, he made the same mistake, so I can just keep doing them and I'll be fine too, right?
SPEAKER_02But but what I'm here here to tell you is I think that you can get uh you can take where you are as far as you want to go. Um, you know, why are you gonna choose to do it on hard mode? Right. You know, but I'm trying to say is like it's not it's not stopping you from doing it, it's actually enabling you to do it while do it way better. Do it do it way better. That's that's the lesson. It's not it's not it's not um trying to limit you from doing it, it's actually um, you know, trying to set you on a path where you can do it sustainably, um, have a higher probability of success, and ironically, probably get where you want to go faster. Yep. I like going fast. The the thing that I think the the one difference between you and me in all of it is like I've been very aggressive, and that's what it takes to bootstrap a business. And you have to and you have to like you have to be willing to live on the edge to do it. And I and I definitely did that to be able to get to where I am. There's no there's no question about it. But the difference is I've always it's always been important to me to control my own destiny. Yeah, and like when you're when you're beholden to banks and covenants and this kind of stuff, you don't control your own destiny. And so I've never signed up for that because I'm not willing to like you know give up that control. Right. Um, and so like I've always I've always played it, you know, I've always been aggressive, yeah. Um, and I'll continue to be aggressive, but it actually you can be way more aggressive when you don't have to deal with that. And so what I'm trying to do is get you to the point where you don't have to deal with that. Yeah, and then I'll say, you know what, Robert, you wanna you wanna go all in, then do it. I mean, and you're gonna be able to still control your own destiny, right? Um, but that that that's really what I'm trying to trying to help you to do. Yep. You understand? Thank you. Yes.
SPEAKER_00Yeah, yeah. You're the only person that's sold me that. So that's good. I need it.
SPEAKER_02But you're but it but it's because you're in a you're in a great spot in a great business, in a great niche with a great product. And you know, so you're in a you're in a place where you're going to be able to continue to scale this. I mean, and it's a huge market. I mean, like, yeah, you're not gonna be tapped out anytime soon. Um, so you know, you're you're in a you're in a great spot, so just don't screw it up. Yep. Try not to. Well, we gotta start. We we I think we have to eliminate the words try and say, I'm not going to. How about that? I'm not going to. Yeah. I'm not going to allow that to happen. I'm not going to. And so that that that's where we're going to go. So with that, Robert, thank you. Pad Launch. Yep. Thank you. Patlaunch.com.
SPEAKER_01Pat Launch.com. Get yourself some hats.
