"We Can't Find Employees"
A business owner selling custom cowboy hats generates $2M revenue but is supply-constrained by a shortage of skilled hatmakers. The discussion reveals that despite good margins (40-45%), the owner needs to increase compensation to attract talent to Kentucky and solve the staffing bottleneck.
Summary
The conversation centers on a cowboy hat business generating $2 million in revenue with products priced between $800-$1,200. The owner wants to scale to $5 million but faces a critical supply constraint - finding skilled hatmakers. The owner believes hatmaking is a dying trade that takes years to master, and expresses skepticism about recruiters' ability to find qualified candidates. The advisor suggests that the real issue isn't the availability of hatmakers, but rather the compensation being offered. The business maintains healthy margins of 40-45%, which provides room for increased labor costs. The core problem is identified as underpricing talent - the owner needs 2-3 additional hatmakers to reach their growth target of $5-7 million revenue. The solution proposed involves significantly increasing compensation to attract workers willing to relocate to Kentucky and undergo the necessary training, while still maintaining profitable margins given the business's pricing power.
Key Insights
- The advisor argues that recruiters can find hatmakers by simply Googling hatmaker businesses and calling owners directly
- The advisor claims the business owner is underpricing their talent, stating that people don't want to be in Kentucky for what they currently pay
- The advisor suggests the solution is determining how much more to pay workers to get them willing to move to Kentucky and go through training while maintaining good margins
Topics
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