SHORTS 7 | Mitch Holmes with MitchCraft Tiny Homes

Welcome to the Loco Shorts Podcast from Loco Think Tank. In this podcast series, Loco Business Developer Rory Shah will help unfold bite-sized business learnings through the crazy experiences the business owners face along their small business journey. Listen in and listen up because these short business stories may just have the secret ingredient to taking your business to its next level of success. Okay, so I'm Rory Shah. I am here with Mitch Holmes, owner of Mitch Crafts and Tiny Homes, and we are going to explore his story in the Loco Shorts episode and know more about what it takes to start and run and own a tiny house company. So Mitch, the free to introduce yourself, tell us all the good details and tell us more about your business. Yeah, sure. So yeah, I've been doing Tiny Homes on Wheels specifically for about five and a half years. So before that, I was just a residential contractor. It all kind of started from building my own tiny home, which I lived in for about five years out of the last five and a half years. So that happened without really the intention of starting your company. It was just something I wanted to do, some like a living situation I wanted to be in. So I built my own tiny home, lived in it until recently. And about a month after I moved into my own tiny home, which I just built like on nights and weekends, took me about a year. And so about a month after I moved in, I just sort of had the realization that I was not enjoying, you know, doing remodels for people who didn't appreciate my work and that sort of feeling of driving around, chasing work, all that sort of thing. And I really wanted to sort of put my skills into something a little more detail oriented and meaningful all at the same time. So the tiny home thing just sort of made sense. So I pretty much just dropped everything, took all my savings and started building another tiny home without a customer, without a website, nothing. And you know, learning the hard way along the way, just sort of cobbled together a website as I was building the first professional quote unquote tiny home, because I had photos of my tiny home to show and progress photos. And five and a half years ago, the whole tiny home industry was kind of the Wild West. It wasn't that long ago, but it feels like an eternity. So back then, there weren't that many builders. I'm still the only kind of the only builder in this one hour sort of local regional area. There are other builders now in the Denver area, but I was one of the first and I think I just got into it at a really good time. So I have a pretty good reputation now in a good portfolio and decent web presence. So yeah, it's just been kind of rolling steamrolled ever since, gaining employees, moving shops, bigger, you know, I got a bigger location now and all that stuff. Awesome. I have so many questions already. The first is what made you personally want to make the transition into a tiny house? I want to say mostly financially driven. That being said, I've sort of been on the French society my whole life as far as living situations. Like I historically almost like never pay rent. I always sort of have found ways to live really cheap. So an example would be before the whole tiny home thing, I was living in someone's house for free in exchange for remodeling the entire house basically. So I lived there for three years as I built the house, remodeled it. And yeah, you know, living in uninsulated basements and stuff like that. So kind of yeah, just that kind of been what I had been doing in my younger years. And so the desire for a tiny home was actually like an improvement. It was like I wanted to space for my own that I wasn't having to invest hours or dollars into that I didn't want to. So yeah, it was just a space for my own, you know, and I could pour my creativity into it. So yeah, that's kind of the reason behind it all. Tell me also what you were doing before you sound like some like contracting work or building work. Yeah, it was just doing residential remodels basically with one other guy. It was just a two-man team in the Northern Colorado area. Most of our work was in Greeley and Windsor because that's kind of where all the construction was happening, at least that's where our jobs work. So nothing, nothing super exciting as far as my Colorado work history, I've only been here about eight years. So just generally remodeling, strictly residential, you know, kitchen bathrooms, decks, you know, the usual stuff. But before that my kind of background was more in like cabinet building and furniture making. So I moved here from Virginia and all my work history in Virginia was more like finer woodworking stuff. I just didn't necessarily find that sort of work out here when I moved here. But I've kind of been building my whole life, you know, I bought my own home when I was really young and remodeled it and have been working on friends' homes and stuff. So I'm mostly self-taught. But yeah, my work history is kind of strictly residential but also kind of woodworking-esque. Tell me about what it was like trying to translate your passion into now your career. Well, I would have never seen it coming basically. So I often, this sounds, you know, it sounds some way. But I often wake up and kind of don't even believe that I kind of am where I am. And it's been a pretty short time period between like having one mindset to five and a half years later, here I am, I'm going to get business, which is weird to me. And the business is like bigger than I thought. I would be able to accomplish like I've had a lot of help along the way, obviously I'm not doing it all by myself. I have a great team, but yeah, I've just been learning the hard way for five and a half years. And how many employees do you have, by the way? I have eight employees. Okay, that's a sample. Yeah, yeah. So it's a full-on operation and it's just not, it wasn't ever a dream of mine to like come in my own business. I was just telling a friend the other day that I always just envisioned I would be a carpenter, just sort of making do with whatever work was out there, you know, and I wasn't even married to the whole Colorado scene, you know, I'm not from here. So I didn't have any, any roots here or anything like that. So I didn't really know if Colorado was it for me or not, but now that I have a business here and I'm a little more rooted and established, you know, yeah, I'll be here long-term. I already forgot the question, but hopefully that answered it. I think so. Well, you're in that because I had like a more questions pop up anyway. So what was it like as do you sort of, you built this, this first home without any customer? So tell me about that story, like then someone found it and sold it, then you're like, okay, I think there's some traction here. I'm going to do this again. And how did you start to scale up from there? Well, basically, the first home, my intention after I decided to do it, my intention was definitely to make it a business and keep doing it no matter what. So I was, you know, I was just a one man band, my first home. And I got, I just always tell people I got really lucky. So like about halfway through building my first home professionally, not my own tiny home. I've cobbled together a really terrible website and somehow somebody found it. And they saw progress photos and they was basically a young couple moving to Fort Collins. And they weren't even wanting a tiny home for themselves. They were just wanting to purchase a tiny home as an Airbnb rental for their property. So it was actually a perfect scenario where they contacted me wanting to know, hey, is that home you're building for sale? And I said, yes, it's not done, but it's for sale and I can finish it however you want it. So they, you know, they had their input and their say in the fit and finish of the interior at that point, which was great for them. But it was also great for me because they weren't the client living in the home. So like what we typically build is custom, fully custom built tiny homes for full-time residences, basically. And you know, we'll do the occasional Airbnb or mobile business or something, but that first customer, they wanted it as an Airbnb. So they just wanted a nice looking home. It wasn't like something that they were super invested in the style or the finishing. Yeah, so they contacted me. They literally, as when they moved to Fort Collins, they came and met me at the shop, saw the home kind of paid a deposit on the finish of it. And then I built a suit. Yeah, and then I kind of slowly improved my website and the photos and all that. You know, the following six months to a year after that is all a blur. I don't know how I got customers, but I did. Like I said, it was the Wild West back then. One of your referrals, people knew your name? No, not referrals. It was all web-based, you know, leads. So yeah, like my following customer, so customer number two, they were in Utah. And they drove all the way out from Utah to meet me and see the first home that was still at my shop and in progress before I delivered it. That's probably a big selling point, right? So they can like interact with it to know that that's what they want. Oh, yeah. And let's have some hesitancy. Yeah, I mean, that's definitely a selling point nowadays, like we usually have three or four tiny homes at my shop that people can tour of various stages of construction. But even back then, just for people to see one tiny home, since there really weren't many builders out there, the whole tiny home thing was pretty new. They were excited that they could come and meet me, get a sense for what I do and how I do it, and then see a physical product. So yeah. And then it was all web-based maybe referrals. I don't know. I mean, I basically blasted the internet with photos of what I was doing and that was all free marketing. And yeah, people just started calling and I can't explain it, but that's what happened. Well, and like you said, it was kind of that the beginning of that trend of like wanting to downsize and at Fort Collins, where we are, it's like there is some property still available or at least a little bit outside of city limits where you can actually have a tiny home. So it's I think a very Fort Collins type of lifestyle. It is. Yeah. And that being said, I might answer a question you might already have, but honestly, most of our customers aren't in Fort Collins. So since we build on wheels, everything is permanently attached to a trailer. We, that's an awesome opportunity because we, our customers are nationwide. And so, majority of the tiny homes we build, ship, you know, everywhere, west coast primarily or western rocky states, you know, Rocky Mountain region, we, I would say like 40% of our homes stay in Colorado somewhere, not necessarily not necessarily Northern Colorado, but more Southern Colorado, some Northern Colorado. But yeah, California, Washington, Oregon, Utah, Texas, those are all sort of like little hot beds for the tiny home world. Yeah. So what was it like learning to ship a home or to hire your third employee? And when did you know you needed to hire more people? Was that production work? Yeah, I mean, I hired a guy after my first build. So since the very first build I did was all by myself, after that was hiring people pretty regularly. So I hired one guy and that was right around the time where I decided, I mean, I was building out of a forest barn. It was like, I'm telling you, it was not anywhere resembling what I do today. But how many things? Yeah, building in the winter in a forest barn was miserable. Your man? Yeah, it was terrible. So it was kind of around the time where I started hiring people because the demand was growing and that's when I moved and officially, you know, at least a shop space, where I still am today. And my current shop, pretty long time, about four years. But yeah, so it all just happened pretty fast. Like the transition between solo building to hiring employees and moving locations and sort of establishing a manufacturing facility, essentially, is what I do. Like we're custom home builders, but we're more or less the manufacturer and not like a residential carpentry company. It's kind of a weird blend of both. But as far as like the business mindset goes, it's more like manufacturing mindset, you know, of like production of tiny homes, you know, we're working on multiple every day. You know, we just drive to the same shop. We don't have to pack up tools or chase work or drive around for Collins doing remodels. You know, it's like, it's an awesome, awesome work experience in my opinion. What was it like looking on the horizon of all these opportunities, maybe some sort of summer challenges and knowing like how do you find the answer to it? Like you're this one person and you have a team that you're responsible for and you have to find all these solutions. How do you personally approach like managing a business and being the owner of a business and helping other people with their careers? Yeah. So what I've already said a couple times where I've just learned the hard way, you know, I'm not college educated. I don't have a business degree, you know, I'm just a carpenter like in my blood. So the whole business side of the business has been, it's been, you know, exciting to learn about, but I've had so many struggles along the way. So it's, you know, I like to give myself some slack every once in a while. But yeah, if I would have known more going into it, I would have handled things a lot better. So yeah, the whole like managing a business, managing people, managing projects, communication with customers, that has all been just trial and error based. I mean, I'm pretty good at customer service like innately. So I think that's a reason I've got a lot of business to the years is I kind of, I feel like I can understand the customer and, you know, the tiny home thing is a pretty fringe industry as far as like the grander scheme of society. It's becoming more mainstream, but, you know, most people don't know anyone living under tiny homes. So by nature, it's kind of strange still. So customers naturally have about 13,000 questions throughout the process. And so, you know, it's a house being delivered to you that you have to set up and level it and hook up utilities and all that stuff. So it is quite a different living situation than just moving into a condo. So I've, and being that I built my own tiny home and I lived in a tiny home, I already knew and could pretty well anticipate all these questions. So I wasn't just someone who wanted to start a business and caught on to the fad of tiny homes and didn't know anything about them. So I already knew about tiny homes, you know, from experience and I don't know, I'm a pretty personable person as far as the customer relations part of it. So I haven't really struggled with that a whole lot through the years, but it's just like finances, the insurances, the overhead, the payroll, you know, managing employees and, you know, attitudes and that sort of thing. That's been my struggle is like managing people is not my strength, but like managing a business and the project and the like seeing it come to life from nothing, that's like super exciting to see every day. I think, excuse me, that's a part that I like about business or something like physical like that, you can see your progress and it's not like so daunting, like, oh, will this work in theory that you can see the direct outcome? Yeah, yeah, exactly. And like, I've kind of my whole life with anything I've done, there's a physical product or representation of my work that day, but doing what I do, I mean, the best part of it is the end of a project as you show off this home you built for someone that, you know, it's not a surprise for them, they designed it with you the whole way. And I hold their hands through the whole process, you know, making every little decision. I mean, yeah, we're fully accustomed, so they're getting what they want and they're not, it's not a surprise or anything, but just for them to like actually see the completed home, which I don't always get to see them see it, you know, I don't see their reaction if they're in California, but if it's a local customer visiting even like during the build or at the end of the build or whenever in the process, it's pretty exciting to sort of like have that grounding moment of, oh yeah, this is someone's house that I'm building, you know, it's, I kind of forget that on the daily basis is like, I'm just concerned about running the business and I'm stressed and I'm not losing sleep and all that stuff, but yeah, it's like remembering that is pretty cool, just like, wow, I'm actually building homes and people are living in them. It's pretty weird. Yeah, you're, you're contributing to someone's space and happiness and home, creation of home. That is pretty cool. Yeah, yeah, it's fun. So you were on a show, a show, maybe some people have on their, they've seen before they have on their cable. Tell us about your HG, HG TV is the tiny home hunters, right? Yeah, so I wasn't personally on it. I'm kind of camera shy, but we've had a few homes on HG TV, the tiny home hunter show. There's, there's honestly more exciting tiny home shows out there that one's pretty cool. So yeah, we've had a few homes on that show, but I had my personal time home on that show. And this is like, like right after I moved in, it was like five years ago. So it was like kind of when the tiny home shows were all brand new and everything's super exciting, but it was a, it was a cool process, but after doing it a few times, I'll never do it again. Oh, really? Yeah, it's, it takes a lot of time and energy and it's all staged and they paid me like $200. That was my paycheck for it for showing off the home and like allowing them to use up a 12 hour work day and catering to their needs and specifications and all that stuff. So I mean, it was cool to like see homes I've built on TV. But still, it was kind of, you know, it wasn't this, you know, whatever, rainbows and really kind of the key point of your business career. No, honestly, I don't, I don't know if anyone like, I don't know if I got any customers from it basically. Yeah, it was cool. Cool. It's maybe a fun fact that they're running at the party and you know, I was on TV or my own TV. Yeah, yeah, exactly. Tell me about how was 2020 for you? 2020 has, it's been great actually, aside from all the pain in the world, it's the business wise, it's going pretty well. We've, I was not sure how it was going to go. It could have gone one way or another and luckily it's swung in the fate of what I do for work. I was concerned that, you know, with the economy, who knows what was going to happen back in March. I wasn't sure if people were going to have money for tiny homes or if everyone was just going to close up their wallets for the unforeseeable future, I wasn't sure, no one was. But for some reason, it seemed like a lot of people with the uncertainty of it all decided to like make this big step and maybe it was financially driven, you know, I don't really know the motives of my customers, but it could have been like, hey, we're paying $3,000 a month for mortgage. How about we take our savings by tiny home and who knows, like escape debt or escape this claustrophobic apartment complex or whatever the case may be? You know, tiny homes do have some freedom associated with them depending on the situation. So that could have been the reason for the uptick, but basically in 2020 has been slightly busy or I would say the normal, we've always been busy, like since day one, literally I've never not had work, we're always booked out, which is fantastic. But 2020 especially, so we've just seen just so much interest in what we do. And yeah, it's just been a pretty rewarding year financially. I've gotten more of my ducks in a row, you know, number one since joining Locke of Think that's helped me a lot with how I manage the business and I've, I've just put more energy into making sure it's a sustainable thing and not just breaking even and, you know, making sure the employees are happy and everyone enjoys coming to work every day. I'm just sort of focusing more on the business than usual. And coinciding with that is the fact that we're slammed. So 2020 has been great with a huge asterisk behind it. Yeah, there's been some caveat. You mentioned that your local Think Tank chapter, tell me more about what that experience is like for you and what your group is kind of like. Uh oh, thank my signals going out. That's okay. Oh, there we go. It's back. Okay. Yeah. Do you want me to ask that question again? Yeah, I didn't hear it. Okay. Perfect. So you mentioned your Think Tank chapter. Tell me more about what it's like to be in your chapter and what that experience is like with the other business members and your facilitator. Yes. So I didn't look at Think Tank less than a year ago. I joined right before the pandemic, which was kind of interesting. So I joined in January. And you know, too much later, everything hit the fan, so to speak. So I probably joined at the perfect time. I'm not sure. But it's been fantastic just to hear different perspectives of other, other more wise people than myself. Um, and hopefully I've been able to add a little, you know, to the group as well from my perspective and, you know, insights and all that. But I've just gained a lot of wisdom and knowledge to straight up business knowledge from the group. And, um, you know, obviously processing my issues and things I've, I've had it along the last year or so has been really helpful. I mean, I, I won't go into the details, but I did even with how great 2020 was. I did go through this really huge hurdle. I had to get over with the business. So they helped me through that. It was extremely stressful. I wasn't sure. Even I was really weird. I'm not, I don't know how much detail to get into, but basically. I was having a thriving business, but I might have had to close down my doors. It's, it's a long story, but they helped me through that. And yeah, I mean, just being a part of what other people are doing out there is also exciting. You know, with people in my group. Yeah, the facilitators have been fantastic. I had two facilitators in our group. Both are just great. Meeting one on one is super helpful. Knowing kind of someone's rooting for me. If you, you know, if you think of it that way. It's all, yeah, it's all very helpful. So yeah, another good thing about 2020. Okay, well, I'm glad that that could be a key part of it for you. Yeah. When you think about the future is. Your tiny house business. Everything is at the end, I'll be out. Or do you picture or getting into another industry one day. You know, I'm not honestly sure. I envision doing this for as long as I can, honestly. I love what I do. I love. I love it every day, honestly. So it's, it's kind of, I don't even think about like an exit strategy or another thing I would rather be doing. It's kind of exciting to not just be the laborer and the carpenter. It's kind of exciting to actually run a business. And so. I think that's what I've learned along the way. I mean, obviously there's more knowledge and opportunity to do something else in the future. If the tiny home thing doesn't last forever. I mean, yeah, I'm kind of a big picture person, but I honestly don't think that far in the future. So I'm not envisioning myself at 60 years old building custom tiny homes. What will happen, you know, in the next few decades, but. Yeah, I don't know, I'll always be building. I knew that. It's just what I'm good at. It's what I like to do. So I, you know, and owning my own business. I'll never go back to working for someone else. Hopefully. You know too much now you're on the other side. I'm on the other side. I'm just living large, living like a king. I love it. I love it. Mitch, my last question for you is for you to share a crazy business story that you have. Whichever one that you think is the most interesting to our audience. Oh, man. Well. I think I'm going to share. I'm going to share my worst folly, my, my, my most stressful. Period of my business ever is what I'll share because it's far enough in the past where it's kind of amusing at this point. You know, it's not super hilarious, but it's basically just a story about. Like the most money I've ever lost. Essentially, you know, it's a story about a nightmare customer. So every business has nightmare customers. We had a customer. You know, it was going to be our most large and expensive tiny home we've ever built. This was like three years ago. So that was kind of cool. It was a really awesome tiny home. Had a lot of awesome features. You know, it was just just another sort of thing to add the add to the portfolio that we're excited about. The customer, you know, I had a gut instinct about them from day one. And I just sort of ignored it because of money and work and all that. I don't want to say no to customers. So, you know, the build progresses and he's adding change orders and upgrades and all these expensive features. And we're just bending over backwards. You know, the timeline behind it all is a little fuzzy now. But essentially, I learned towards the end of the bill that he actually wasn't paying for it. His parents were paying for it. And this was a man. He was in his mid 50s, I believe. So it was just a strange realization. You never sort of imagine your 55 year old customer is buying something with his mom's money. Yeah. Like, not that there's anything wrong with that, but it was just a weird realization. And he didn't even tell me essentially what happened was he added all these things. I sent him the change order. He apparently then sent it to his parents. To look it over and then they they kind of blew up. You know, it was like to the tune of like 27,000 dollars of extra. Mom, can you pay this please? And so, you know, they they basically gave their son a water cash to buy a tiny arm. And then he came back to them and said, I need more money for all these things. But then, then, and they're out of state. This was a local customer. They're out of state. Never met them. You know, they called me yelling at me. And they called me yelling at me and I didn't even know who they were. Could I get your name before you verbally tell me? Like that's when we learned that they were his parents and they were paying for the tiny home. And at all, all the pieces came together. I made the huge mistake of actually delivering the tiny home before I received that final payment. Yeah, I know it's terrible. So basically the tiny home gets built. I give them the change order and his parents basically said, OK, we're going to look this over. But can you deliver the tiny home first and get it all set up that way we know. You know, everything's good or whatever. I'm like, OK, sure, I'm an idiot. Yeah, sure. Why not? Yeah, you're probably ready to be done with it too. Exactly. So I'm like, all right, I'm not going to fight them. I'm just going to go deliver it. We're done. They're going to pay me later. It's all good. And so we deliver the home, set it up, level it. We even built him like a little exterior patio thing. We, I don't know, we just did everything that he asked. We did skirting around the sides of it. You know, all these were also change orders. And I was, I was basically saying, yeah, we can do all this stuff for you. We'll just add it on the final bill. And so the, even the final bill that was already tens of thousands extra were still adding on to after the fact. And long story short, it's already a long story. But he essentially, as soon as he moved in, he just, he just kept making little punch list things for me to do and tweak and change. He was claiming appliances weren't working. I would go up there and run the appliances for him. I would, I would be in his house for hours. Like making sure everything worked perfectly. I was there on Super Bowl Sunday. For like three or four hours, running his fireplace. And like just a prove that it worked. I was like, I'm going to go up there and turn it on for you. And I'm going to run it and run it and run it. So I ran his fireplace to like a gas fireplace really nice thing. I ran the fireplace for like three hours. It was like 95 degrees inside the home in February. And I'm like, okay, this proves that your fireplace works. And you know, that's just one small example of the things he would. He would dangle the check in front of me basically. So did they pay you for all that stuff? No, that's the end of the story is it just snowballed into this terrible yelling battle. And you know, his parents refusing to pay all these extra charges. They were mad at him. He was mad at me. I was mad at everyone. I was stressed. I was not sleeping. So essentially, I determined that I would rather never see him again than have $27,000. And so I basically just gave it up as a talk that up as a huge loss. And it was obviously a huge loss. My profit margins aren't some ginormous figure. So yeah, that was a hard lesson, basically. Yeah, a financial lesson, you know, so. Man, you're probably too interested to like want to like pursue legal action or. Oh, no, yeah, I don't I literally that stressed me out even more. So I just wanted to completely wipe his memory away from, you know, my mind. And if I had to pay $27,000 to do it, that's what I did. So I wouldn't do that today, you know, I have way better contracts today and. That's the lesson. Yeah, yeah. I mean, that was like just the hardest lesson I've ever had. And it was a huge blow to the company. Obviously in a huge blow to my time. I spent. Yeah. So hours every night up there for weeks, spending over backwards for him. So, you know, just not sleeping. And at the end of it all, I didn't even get paid. So. Not worth them. Well, on that note. Move that, that's a heavy note, but do you have. Any quick tips or encouragement for business owners who are listening who are on their journey of being. You know, the best business owner or trying to be and. And it's just not worth having their growth back. Huh, I'm not. I don't feel like I'm qualified necessarily to give advice yet. Maybe I will be when I'm 60 and still building tiny homes, but. That's where you got something in there. Yeah, I don't. I. I guess. If you're someone like me who is passionate about what you actually do. And you don't know about the business of doing it. I mean, I think it's a good thing to be. To learn the business of it first before you just jump in. I mean, that's what I did. I just jumped in. Started building tiny homes. Was thinking I was making a lot of money. I wasn't. And every little thing along the way on the business side of things. Was like, I felt it as a huge blow where if I would have just. Invested a little time in planning for the business. I don't know if those would not have felt like blows. They would have been expected. So. Yeah, I don't know if it's just research or. Yeah, mentors talking to people do. Own businesses and can you can get a clean advice from them. That would be my advice is don't. Don't jump in, you know, with your heart only, I guess is what I would say. Yeah, a little bit of mind in there too. Thank you so much for sharing your story. I feel like I still have more questions. But this was a really good entree to understanding more about your journey through. Starting your tiny house company. So congrats on everything and I'm glad that 2020 went well for you. And best of luck in 2021. We'll see what happens. Yeah, sure thing. Thank you for having me on the show. Thank you for listening to today's episode of the local experience podcast. This is Kurt Baer, founder of the local think tank and hosted the local experience. And I'm here with Rory Shah, local business developer and hosted local shorts episodes. We hope you heard some new ideas and business perspectives in this episode. Our mission and all that we do, including this podcast, is to share collaborative business ideas and solutions that uplift the business community. Subscribe and follow us where you listen to podcasts to get new episodes as they are released. Curious about local? You can learn more about us at localthinktank.com where you'll find more information about our chapters, business resources and events for business owners and key leaders. If you're looking for perspective, accountability and encouragement along your business journey, why not apply for a chapter near you today? Why not? Why not? We'll catch you next time on the in-depth local experience podcast with me, Kurt. And with me, Rory, for Bite Size Business Lessons in the local shorts. Bye!