Anticipating Growth: Scaling a Company with the Right Vision, Resources, and Balance

Transcript

INTRO: Building a great company is a marathon not a sprint. Each week Krista Ankenman and the team at TANK New Media take on growth challenges, explore technology, and interview business leaders that are always upping their game. If you're ready to build scalable systems to drive your business forward, this podcast is for you.

KRISTA: Welcome, everyone. Thanks for listening. Today we have Jonathan Lavender with us. He is the managing partner of Pack Leader USA. Welcome, Jonathan.

JONATHAN: Thank you for having me.

KRISTA: Absolutely. Why don't we start off by just telling everybody who Pack Leader is?

JONATHAN: Sure will. Pack Leader USA was established in 2010. Pack Leader Taiwan's been around for about 20 years now, but Pack Leader USA was established to really handle the North and Central American markets. And yeah, we've, you know, it's been about 10 years now and you know, we focus on really trying to stock as much equipment as possible for the marketplace for what makes sense. A lot of the competition will actually build each project specific to the application. And for us, we've identified, you know, certain, I guess, a line of equipment that that really matches well with the marketplace. You know, and allows us to really keep inventory and sell products faster and more efficiently.

KRISTA: Sure. So what are some of the equipment you have in your line?

JONATHAN: So primarily the most popular is wrap around. So anything on a round container we do horizontal wrap around, vertical wrap around, top and bottom, just anything with a label that gets applied to it. We can you know, we have equipment that can apply it.

KRISTA: Perfect. And you've expanded your line recently?

JONATHAN: Yeah. We we have we're getting into filling, capping. So with the labeling business model where we stocked a lot of equipment and componentry to be able to customize solutions in a quicker manner. We're taking that into the filling and capping side. So the idea there is that we stock, you know, a core line of products, whether it be filling capping, labeling. And we have the componentry conveyors, product handling, handling to be able to provide a solution quickly. So most of our competition, they're going to be, you know, let's say 12 to 14, even up to 20 weeks. We can, you know, our target is on the labeling right now is about four to six weeks. Filling and capping, we're probably going to be somewhere between eight to ten to twelve weeks.

KRISTA: Sure. And you do, so you kind of describe it as a modular solution. Can you talk to us a little bit about what that means?

JONATHAN: Yes. So modularity, it's basically the design of the equipment. So when you take a step back and you look at how it's built. You've got electronics, you've got a conveyor on the labeling equipment, you've got label heads. On the filling equipment, you have different componentry that allows you to fill the product. And then on the capping side, you know, various ways to cap it. So being modular allows us to customize things in a lot quicker fashion. So if we stock those components on the shelf, we can roll the main assembly frame over and then modify based on what the application calls for.

KRISTA: Okay. So how do you kind of get started in this business?

JONATHAN: So Pack Leader Taiwan had tried to sell into the U.S. marketplace for quite awhile and I actually went to work for a company that represented their product line. And the company I worked for didn't do a good job of selling and marketing the equipment. And, you know, at the end of the day, I knew what it would take to make the line successful. But the more established people within that business couldn't, they really couldn't understand that, I guess. And so that some relationships were severed. I had the opportunity to open Pack Leader USA and partnered with Pack Leader Taiwan in 2010. And we started small. We had a 3,600 square foot warehouse, which is actually decent to start with. But compared to where we are now, I mean, it's in that small.

KRISTA: Sure, so how-how big are you guys now?

JONATHAN: We're probably all the buildings combined, around 50,000 square feet, roughly.

KRISTA: How many, about how many employees you think you have?

JONATHAN: We're about 30 right now, roughly.

KRISTA: Very good. So you moving a lot of equipment through there.

JONATHAN: We are, yeah. A lot of gray hairs and headaches.

KRISTA: So you kind of, so you do kind of all the way. So you go from sales all the way through service. So you are still servicing machines after you put them out into the marketplace?

JONATHAN: Right, correct. So, yeah, service is a big part of it. You know, starting out obviously realize that service and parts were important. But as you progress, you realized how much more important it is because, you know, when we start to differentiate ourselves from the competition, customers, they want to buy a good product for a good price, but they also have to make sure that it's going to be supported from a service standpoint in part because if it's cheap upfront and it's easy to get, it may cost them on the backside. So we try to be a good balance of all those things. You know, put competitive price on the equipment, making sure it's the quality is up there where it needs to be. And then also on the service and the parts being able to provide not only parts in effect for a fast lead time, but having service techs that can go out and actually fix the equipment if something happens.

KRISTA: Yeah. Yeah. I mean, I feel like you just kind of like encapsulated like everything that Pack Leader kind of stands for. And it really kind of how you operate, you know, as a business.

JONATHAN: Right. Right.

KRISTA: And then kind of on top of that, your philosophy of making sure things are in stock and people have a short lead time. That seems to be no from what we hear. That's one of the biggest pain points that manufacturers have is having that downtime in their lines.

JONATHAN: Yeah. That is a big thing. And we actually dedicated an entire building to parts. And so we just bought that a year and a half ago, and we didn't, we didn't really think that we were going to fill the building up that fast, but it's almost completely full of components and parts. And we have a team of, I think, eight people just in that building. And, you know, most-most companies are afraid of that investment. But if we don't invest in that area, we're not going to get the repeat customers. We realize that. So we want to make sure we invest in the right areas.

KRISTA: It seems like you have a pretty, aggressive might not be the right word, but like investment back into the business, it seems like you're very serious about that. You make that a big point.

JONATHAN: Yeah, almost too much. Yeah. We-we haven't really taken a lot out of the company. We reinvest everything. You know, there's a lot of companies, a lot of books that I've read that have talked about companies that can reinvest up to 80-90% of the retained earnings. The payback is just really big. And so we try to stick to those numbers. And it has-has helped us quite a bit because human nature is, as you know, a business owner may start a company in three to four to five years. If they've had some success, they feel like they want to start pulling that money out. And they don't realize how big of an impact that can have on the success of the business.

KRISTA: Sure. Sure, definitely just kind of allowing you to move forward, allowing you to do the things that are gonna help you grow.

JONATHAN: Yeah, exactly yep.

KRISTA: Sure. So you just you mentioned, you know, kind of reading some of those business books in those types of things, like how do you really kind of stay on top of what's happening in your industry? It seems like with labeling, you're kind of having to be on top of what's happening across multiple industries and trends and things that are going on.

JONATHAN: Right? Well, tradeshows are a good way to kind of connect and catch-up. You can see some stuff and, you know, obviously talk to people. Fortunately for for us in today's economy, we have YouTube and other places where you can check up on your competition pretty easily. I usually do it at night because, yeah, the shows that my wife watches aren't the same things that I like. So I'll just get YouTube on my phone and start keeping tabs on competition.

KRISTA: Oh, good idea. Definitely. So where do you kind of see Pack Leader going over the next five or ten years as a company?

JONATHAN: So we want to keep growing on the labeling side like we have. You know, as far as the filling and capping we touched on, we feel like we've become experts on the labeling side. We want to become truly experts on the filling and capping side and being able to offer a complete end to end packaging line for a fairly quick lead time. Have good product at a good price. I think based on those additions to what we're doing, I think we could double or triple where we're at now, if not more.

KRISTA: Yeah. That's awesome. Let's switch gears just a little bit here. Let's talk maybe a little bit about some of your biggest growth challenges that you've had. So you've been doing this for a while now, you know, as you grow different parts of the business kind of change. And-and break as you go, what's kind of been one of-maybe one of the hardest things you've had to address over the years.

JONATHAN: Yes, that's-it's a great question. I would say people, employees.

KRISTA: Yeah.

JONATHAN: You know, starting out. You kind of underestimate that portion of it, and to be able to build a good team and keep everybody on the same page is really the-the hardest thing for us. And fortunately, we have found a lot of good people along the way. There's been a few that have been tough. It's something that I've learned where if-if somebody comes into the organization that isn't a good fit, it's better to just kind of cut ties and move on, but I think that's one of the hardest things. The amount of growth we've had, I would say the real estate portion of it is incredibly difficult to keep up with because in our business model is really heavy on the physical inventory. So as we grow, we've always been out of room so that-that can be tough. And, you know, fortunately, we have a very good partner Pack Leader Taiwan and they've been exceptional. And I think being able to partner with a company like that has helped out a lot. But I'd say probably personnel and real estate, you know, trying to keep up with the growth and put the right people in the right place.

KRISTA: Absolutely. Have you found that maybe you hire the right person, but you initially put them in the wrong seat or vise versa?

JONATHAN: Yeah, that's a good question to you're right. We've switched a lot of people around, you know, and I believe in promoting people from within because as each person builds continuity and understanding of the business, I think it helps them in other jobs. And we did restructure quite a few people in the last year. And I think it's it's really helped. And it's-it's fun for me to watch some of these young, I call them kids, but they're adults come into our organization and excel. And there's, they've done a great job in the last year and there's quite a few of them. So I think even though people and bringing people into the organization can be extremely difficult. I think it can be rewarding, too, just to see that, the growth and the advancement and every once in a while we get a smile on her face from a few people, even though, you know, it's a lot of work. But it's, I think we're having fun at the same time.

KRISTA: Absolutely. Absolutely. So talk to me a lot about, you know, adding the different departments. So I know kind of start out maybe a little bit heavier as a sales organization than it had to grow more into the operational side of getting machines out and then adding kind of a bigger service department. Talk to me about that process and what that was like.

JONATHAN: Well, I mean, I'd say for the most part, it's kind of demand. So when we started getting pulled in a certain direction and people are calling for parts, calling for service, it kind of forces our hand, so to speak. And so we, you know, we've always wanted to get out ahead of that. And I think we have. But, you know, I think the demand is what prompts us to be more tentative, those types of needs. From the sales and marketing standpoint, it's kind of you don't know how much business is actually going to be there. So obviously, you want to, you want to market it and sell it. And so we've we've invested heavily in that side anticipating growth, you know. So obviously, you've got a lot of different parts of the business. You've got areas that we can be proactive or reactive. And I think being proactive as much as we can is-is definitely probably the best thing that we can do.

KRISTA: Just trying to see as much what's on the horizon and being ready for that as opposed to waiting for it to come. Yeah, definitely. Well, what do you feel like it's been one of your greatest successes?

JONATHAN: That's a tough question. It's not really well. I'd say my wife and my daughter.

KRISTA: Aww.

JONATHAN: Just kidding, but you know, I don't know. At the end of the day, people produce their own luck, I guess. Yeah, but I wouldn't say that we've gotten lucky. I think we've got a lot of good people. You know, my father, obviously, has been in this business for a long time. So he moved into the sales division about a year after I started the business. And we were able to bring on some more people that had had experience. And so when you add certain people to an organization that has the experience, they can kind of take the ball and run with it. That helps, because then if they're focused on the sales side of the business, maybe I can focus on the marketing, the inventory, the production, the service. And I'd say I think it's a, an assortment of things that have enabled us to have success. And it's really I think, you know, it's so easy for us. And we've had employees like this and people, people start saying, hey, you know, I did this or, you know. And so I think if we keep the-the you know, we've all accomplished a lot in a short period of time, I'd say that's probably the biggest success that we've all had together. It's just where we're at today.

KRISTA: And you mentioned that, you know, you work with your dad. So I know there's quite a few family members kind of involved in the business, How has that been?

JONATHAN: Yeah, there's, there's pros and cons.

KRISTA: Just look at the look on your face.

JONATHAN: Yeah, yeah, we spent too much time together. But, you know, I mean, at the end of the day, like, you know, I can trust them, they can trust me. And so I think that helps. And I've seen a lot of partnerships go south.

KRISTA: Yeah.

JONATHAN: Over the years. And most of it has to do with greed. But if you can trust the people you're partnered with, and they can trust me. I think that's the biggest thing. And that's what we have to remind ourselves every day. And I talk about that a lot. As you know, we're all better together instead of on our own, because if we all decided to be greedy and separate. Where would we be? We wouldn't be where we are.

KRISTA: So if you could do if you're gonna do this all over again, start-start from scratch again. Would you do anything differently?

JONATHAN: I probably would have just stayed in sales. Just kidding.

KRISTA: Simplify things.

JONATHAN: Yeah. Now, that's a good question. I would have if I would have known how fast we would have grown. I would have probably built a bigger building or built something from the ground up, to anticipate all the growth that we've had, because that's really been the toughest thing. And now that we're in, you know, four or five different buildings. There's pros and cons to that. But that's very, very difficult. As far as some of the accounting things that we've gone through in terms of inventory, now that I can look back and see some of the mistakes we made, I would have handled some of those things differently. And it's hard to explain here on the podcast, but because we keep a lot of inventory, if we don't track everything specifically by the part number per order and ship it when it ships, then our system thinks that that inventory still in stock. So without going into all those details, the numbers are very important. The part numbers are important and we want to print off the income statement or balance sheet at a moment's notice. We want that to be as accurate as possible. Absolutely. And so we've really learned the last three or four years and obviously meeting with accountants, we've cleaned up that portion of our business quite a bit because, you know, we have to know where we're at. When you're moving that much product in and out, yeah, you've got to know what your numbers are.

KRISTA: Absolutely. Absolutely. Is that something you feel like it's really become kind of come to light in the last four years or so?

JONATHAN: Yeah, yeah, I'd say so. We brought some employees in and, you know, you take people for their word. And when you're told that, yes, I can handle the books or handle certain things, you kind of you assume that they can. And unfortunately, things uncovered cover themselves later on and you have to fix them. And, you know, there's no turning back. Let's fix it and figure out a move forward. Make it right.

KRISTA: Absolutely. So when it kind of comes to, you know, your overall leadership, we've talked about, you know, your company has been a pretty fast-growing company over the last 10 years or so. You know, how do you... how do you kind of manage that? On a personal level? Are there things that you you can do every day? Are there things that you kind of keep in mind from like a-a leadership or management perspective?

JONATHAN: Yeah, that's a good question. It's tough. I mean, it can become overwhelming because even though we only have 30 employees, I mean, it's, it is a lot to be responsible for. And so there's a lot of sleepless nights, a lot, a lot of conversations with my wife on the couch at night, trying to figure out what the next step is, you know? But I think to be a leader, you've got to show up every day with a positive attitude and kind of have-have a vision for the company on where it's going. And I'm not, I'm more of an introvert than an extrovert. So a lot of my goals and ideas for the company, they come via e-mail or, you know, in small group meetings. But I think it is important to have new ideas constantly and kind of bounce those off the team numbers and see what they say. And I think, you know, obviously I think we're a lot better when we talk about ideas amongst ourselves and figure out what makes the most sense, because in my mind it might make the most sense. And while I used to make more of those decisions when the company was smaller, I also have to think about, you know, more parts of, you know, where we're at today, and the company is obviously a lot bigger. And there's, there's more of an impact on everyone and every division. So I don't know if that answered your question, but yeah.

KRISTA: Absolutely. What do you feel like has been one of the biggest challenges from a, from a leadership standpoint? Has there been things you have a hard time delegating?

JONATHAN: Yeah. So I've been dealing with that lately. It's a good question. So I tend to try to do everything myself. And because it's easier for me to just do it instead of having to try to explain it. And so I've had to grow in that area and try to delegate and have confidence in people that they can do it. And I've started doing that more, more lately. So I'd say that's probably one of the biggest challenges.

KRISTA: Yeah, just letting go of certain pieces, right? Right. Yeah. How do you have overcome that?

JONATHAN: You know, lots of conversations, lots of meetings. You know, it's it's tough because you have if you've got employees there that are working 40 or 50 hours a week, you've got that much time. Yeah. And I would obviously go in on the weekends. But communication is the biggest thing. So as we've added more people to the company, communication has become the most important part of what we do. Because you add you know, if we double what's in the double twice and double again, you've-you've got more individuals doing what maybe one person was doing the whole way through. So if I if I started, I can finish it. But if we have four people involved and, you know, the same process, what communication are we providing, whether it be written, verbal? But that's probably the biggest challenge. One thing. We've constantly had to work on.

KRISTA: Yeah. And, I'm gonna get my stat wrong here, but I've seen somewhere where it's like for every person it's like five communication channels, like becomes five times more complicated for every single person that you add to a team. Yeah. And that adds up, quick.

JONATHAN: I believe that. Well and there's, there's certain things that we've done. There's a website called Monday.com that we've implemented in technology. You have to be careful because if you try to implement too many things, you've got people that are 20 to, let's say 65 trying to use that same program and how well can they adapt to it. And on top of that, we want to create less work, not more. And so it's a, it's a fine line. And so we have implemented some more technology into our company that has helped streamline kind of what we do.

KRISTA: Sure. Do you feel like that's made a big impact? Yeah. Like you said, streamlining and making everybody more efficient. You can put a lot more through.

JONATHAN: Right? Yeah, it has. So when we had five people, everything was word of mouth. So we'd operate off an excel sheet. We obviously had our billing system, which is pretty good for the size of company we were and still are. But I'd say being able to have that information out there constantly. So our production schedule, we plan that out, you know, two-three months in advance and all the information is received with the order up-front. It's entered into our billing system. We invoice the customer. At that point, we have an individual who's done a great job. She puts that actually on Monday.com with all the details and it says what production week it's in, what the ship date is, when we receive the money, the samples. I mean, there's so many things that go into what we do. And that system that tracks everything has been instrumental in really making what we do more efficient.

KRISTA: That's great. So when we think about kind of how you get ready for the day in, you know, you talked about, you know, coming up with a positive attitude. Is there anybody, you know that you kind of look up to from a leadership standpoint or maybe you find inspiration in?

JONATHAN: And that's a good question.

KRISTA: Hitting you with all the good ones today.

JONATHAN: Got to think about that. I follow a lot of people online. I read a lot of business books. And, you know, I've had some mentors that, the crazy part is, you know, obviously, my dad, I've had a relationship for a long time. He's really good on the sales side of things. And I tell them all the time, I mean, he's-he's probably one of the best salespeople out there. And he's been a mentor for me from that aspect. And I look up to him from that standpoint. Looking back on my career, I never really had someone guiding me from the business aspect. So I kind of had to go outside and read business books, take a few business classes, talk to people. Another mentor that I've bounced off of as my wife's dad. He owned a business and sold off years ago that I wouldn't say I have one mentor, but probably many, many different areas that I go to for advice.

KRISTA: So if you were gonna give somebody one piece of advice, what would that be?

JONATHAN: Man, it depends on what they want to do. I mean, what I've learned the last 10 years is you really want to have balance with anything that you do. And so whether it be family and business or hobbies or whatever your interests may be, I think creating a good balance. And don't-don't put too much of your time in one area, I think. I think when it comes to the business side of things, probably make sure that your message is well received in the marketplace, find good people to partner with and to bring on your team with whatever your goals and objectives are. But don't become too consumed with one thing, because 10 years, 20 years into a business, there's-there's going to be a lot more after that's done, whether you sell it, whether you get acquired, the company goes out of business. I've seen a lot of different scenarios play out with a lot of people I know. And at the end of the day, you've got family in a lot of other things. So I think a good balance is probably one of the most important things.

KRISTA: Cool. Well, thanks so much for being with us.

JONATHAN: Thanks for having me. I appreciate it.

KRISTA: Absolutely. For more information on this episode, visit manufacturinggrowth.com.