Made Here: ‘No’ is not an option

Michelle Di Gangi
Posted by Michelle Di Gangi
Small Business Banking

Manufacturing in America is alive and well. In our “Made Here” series, we talk to some of our manufacturing business clients and learn how they’ve flourished in spite of tough odds in recent years.

Robert Potts in the Feral Productions shop.Robert Potts rose from being the part-time delivery guy more than 30 years ago at Feral Productions in Newark, California, to owner. His company, which manufactures custom parts for the defense and biomedical industries, has grown steadily at double digits by staying true to Robert’s mantra: “Just get it done.”

As you’ll see in the Q&A below, Robert won’t take “no” for an answer from his 35 employees — not even when customers push for tight turnaround times or product specifications that frankly seem impossible. I admire his work ethic.

Q: Given what we hear about high costs, regulatory constraints and other factors, how are you able to compete and succeed manufacturing in California? A: It’s all about service. Even if the customer asks for a part that we don’t currently make in our shop, our answer is always yes. Or if a customer has a job and says they want it in eight weeks, then you get a call, “Oh my God, we want it in two weeks!” The shop’s answer is there’s no way, and I look at them and say, “You find a way. There are weekends.” It’s all about service — “Yes, you can.” I don’t want to hear, “No, we can’t.”

If you do that, customers will always come back. In addition to service, there’s what we call “from red light to green light.” Let’s say I make 100 widgets, and then I have another order for 100 widgets of another type of part. How fast can I get that machine to switch over from the old parts to the new parts? Because when that machine is sitting there idle, it’s not making money. How fast can we move from red light to green light? We’ve purchased a lot of newer equipment, quicker equipment, stronger equipment, and that’s what we continue to do.

What is your biggest obstacle?

Our biggest obstacle is trying to get new employees to have our mentality. I don’t want to hear “no.” I tell employees, “Figure it out. And we’re behind you to figure it out. Don’t just walk away; our customers are relying on you.”

How do you instill that can-do attitude?

When I hear, “It’s not going to happen,” I say, “No, we don’t want to hear that.” They will say it a few times, and then they will say, “Damn, I guess I just have to go figure it out.” And I say, “Yeah.”

What guidance would you give someone starting a manufacturing business today?

Focus on the service. If you do that, the money will come. Stay away from chasing the money. You also have to have a passion for the business you are in; if you don’t, you shouldn’t be in it. If you focus on service and the personal touch — your customer can pick up phone at 3 a.m., and you’re going to answer — the money will come.

What is your outlook for 2015?

It’s great! We’re going gangbusters. We’re busting at the seams, and we have to get a new facility. Our lease is up this year and we’re thinking of moving to the Central Valley and we will still be close enough to our customer base. We might just decide to keep our manufacturing facilities where they are, and have the office people out in the Valley, and use the cloud.

What is your biggest financial challenge?

Probably my biggest worry would be cash flow. You have to be liquid; you have to have that cash when you need it. The biggest expense is payroll, second is materials — we get an order and build a part. And almost all my customers pay within my terms, which are net 30. What we’ve also done to improve that cash flow is ask our vendors, especially the larger ones, could we do a net 45? And they agreed. So our customers are paying their bills before we have to pay the materials bill.

What banking services have you found essential or particularly valuable for a business like yours?

A line of credit. That’s going to be tough to do if you’re just starting a business. But that line of credit is huge. Unless you have a big bank account, how are you going to pay your employees if your customer doesn’t pay you? That line of credit would be the most important thing to me.

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