Eureka Woodworks, Inc

[Thalermade]

Just saw this in Woodworkers Journal. Anybody ever heard of this company, or know anyone who is involved with it?

http://www.eureka-business.com/index.htm

Pretty interesting, but I would be wary of buying a "franchise" that does not have a protected territory. Profit potential seems pretty optimistic, or maybe I am just pessimistic about how many adirondack chairs are needed in the world.

What are your thoughts.

Russ

[LarryG]

I've not studied it in detail, but at first blush it looks like the typical "We want to show you how to get rich!" scheme.

The way these things usually work is that someone sells you a package, usually at an inflated price, to establish your own independent business, and then you're on your own. Sometimes the package consists of books, tapes, or DVDs containing the "secrets" to succeed in the endeavor, sometimes it contains the actual necessary equipment, sometimes it's both. Either way, at that point, after you've bought the package, they've got theirs and couldn't care less whether you ever get yours. With most of them there will be just enough documented success stories to lend credence to the enterprise. But, like the fine print says at the bottom of all those weight-loss product/program ads, Results Are Not Typical.

You're right to be pessimistic: it seems to me that if there was really that big a market for Adirondack chairs, these people would just hire someone to crank them out by the truckload and they'd sell them themselves.

IOW, it's generally the package seller who is really getting rich, by selling the dream of getting rich to others. See any number of late-night infomercials on real estate, eBay selling, gov't auctions, etc. for examples.

[final_t]

I expect to see more and more of these kind of scams as the economy dips down.
Spend less, save more.

[Wandere]

What Larry said.

It wouldn't be out of line to request financial statements from other franchisees...they could be bogus too, but it's a part of the due-diligence required before throwing your hat into this kind of ring.

FWIW...what Larry said.

Hrmm...maybe *WE* should sell biz plans with templated support...

-Rob

[williamr]

Just saw this in Woodworkers Journal. Anybody ever heard of this company, or know anyone who is involved with it?

http://www.eureka-business.com/index.htm

Pretty interesting, but I would be wary of buying a "franchise" that does not have a protected territory. Profit potential seems pretty optimistic, or maybe I am just pessimistic about how many adirondack chairs are needed in the world.

What are your thoughts.

Russ

I wen through the site, the offered materials etc.

I have seen that line of furniture at a number of outdoor shops. I never delved into it. I am sure it is from those templates -- it was good quality from what I saw.

In most of Canada it would read something like -- "And sell lots of furniture for Three months of the Year!". :-) It definitely has a southern view of the sales period of the year. I guess in Texas you can sell lawn furniture for most of the year.

Would it cost you $16000 to duplicate the the top end package? With _honest_ costing probably so -- if you can't do it all yourself -- including decent marketing brochures.

A get rich scheme? I don't thinks so -- unless you have a pretty limited view of rich -- for the seller of furniture or the producer of the program.

If I had a shop in place, wasn't selling what I sold, there was a ready year round (at least mostly) market for the goods, and I really enjoyed working with pine/cedar ipe -- the outdoor class woods -- then why not?

I don't think a protected territory would be all that meaningful. I would not want another dealer with a point of sale within a mile or two -- but that's all.

If you had space and tools ready to go, and could mount a family oriented company -- then you could be up and running in (probably) less than a month with their package. The you just need customers.

If the shop was on a two lane hwy -- leading to a densely cottaged area -- you could probably make a real good living -- especially if you are on the RHS of the hwy as people travel to the cottage.

From a retailing perspective...

For example -- I am near Hwy 48 in Ontario (Not far from Beaverton and Sutton) -- it is on the way to cottage country, on a main access road from Toronto for Lake Simcoe (Perch Fishing), and close to several small holiday destinations. It could work for three to four months of the year. If I could add some simple mission furniture for the insides of cottages I could pick up ski season -- another three to four months. If I could add an inexpensive line of kitchen furniture and bedroom furniture I could probably work all year.

If you look up those town on an Ontario map -- near south end of lake Simcoe, North of Toronto on lake Ontario and near the Terminus of hwy 404 (major Route) Look at map 5 on the link below. Look for Sutton and Beaverton.

http://www.mto.gov.on.ca/english/tra...thindexpdf.htm

Ideally I would site this business on the SE corner of Hwy 48 and the Junction of Hwy 12 for cottagers. Closer to Sutton to pick up furniture business.

(Location, location, location)

From a wholesaling perspective I would look at mostly transportation costs (time), vs cost of buying and shipping via my own truck and analyzing lost shop time if I drive myself. I would look mostly at proximity to suppliers and the markets. I would line up several clients first (or one or two capable of moving volume.)

For both I would look at if the furniture can be supplied in flat cases (knock down). That could expand the market considerably if the caes fit in compact cars..

Could I do all of this myself? Yes I have -- and for bigger companies. Most don't have the DTP and marketing and analysis skills combined with the technical skills -- or don't have the time to learn or the equipment to produce the needed materials. So analyze your skill set and see if you are missing anything. If you are, look at it closely.

One critical point -- dealing with retail customers and wholesale customers is a different skill set. It is tough to _keep_ a wholesale client -- you have to keep delivery schedules, and meet commitments. In retail, you sell for the moment -- you got it, the customers likes it and you -- they buy.

If you _want_ to do this and are missing some of the skills, have the cash, and need the help -- it's a good deal. If everything doesn't line up -- it's a bad deal.

Not for everyone, but possibilities.

Hope that makes sense.

---
Will

[LinuxRandal]

I've not studied it in detail, but at first blush it looks like the typical "We want to show you how to get rich!" scheme.

The way these things usually work is that someone sells you a package, usually at an inflated price, to establish your own independent business, and then you're on your own. Sometimes the package consists of books, tapes, or DVDs containing the "secrets" to succeed in the endeavor, sometimes it contains the actual necessary equipment, sometimes it's both. Either way, at that point, after you've bought the package, they've got theirs and couldn't care less whether you ever get yours.

You're right to be pessimistic: if there was really that big a market for Adirondack chairs, these people would just hire someone to crank them out by the truckload and they'd sell them themselves.

IOW, it's the package seller who is really getting rich, by selling the dream of getting rich to others. See any number of late-night infomercials on real estate, eBay selling, gov't auctions, etc. for examples.

You too, can learn my secrets of getting rich. All you have to do is buy my book and inside I tell you the secrets (along with a lot of other bunk), of getting rich..........


Last page of the book, "and write a get rich quick book and sell it for quick $$$$$$$$".

[Mr__Bill]

I have sat in the furniture and it's not as comfortable as real Adirondack furniture. Didn't take the time to figure out just what was different other than the real stuff was made of white pine and lower to the ground.

Also noticed at the craft fairs that I saw it at that the sellers sold more kits and finish than the furniture.

good luck with whatever you decide to do,

Bill, now on the Oregon coast

[Thalermade]

Will thanks for the detailed analysis. Very good points for anyone to take in. The ability to produce a product (and hence make money) year round is very important point. I guess I relate that to the landscapers who plow snow in the winter or the contractors who focus on decks in the summer and basements in the winter.

Also I can't imagine paying $179 for a chair.

Russ

[williamr]

Will thanks for the detailed analysis. Very good points for anyone to take in. The ability to produce a product (and hence make money) year round is very important point. I guess I relate that to the landscapers who plow snow in the winter or the contractors who focus on decks in the summer and basements in the winter.

Also I can't imagine paying $179 for a chair.

Russ

Russ:

Whatever you think -- Don't take my comments as negative. I ran the business plan past a company owner I have dealt with for years -- I wanted a second opinion. We went through everything -- siting, start-up costs, start-up timing, the automation, the ability to start up with relatively little equipment, the pricing, the margins, the target markets.

I took a real good look at this and will look more. It is actually a good scheme for someone who wants to make a bit of money. A GRQ scheme it is not. <grin>

If it is a GRQ -- you could pick a simpler target with a bigger greed factor quite easily. The odds are that it is exactly what it appears to be. Whether it is a good scheme generally, or a good scheme for you is another issue.

If anyone does look at this what I see him as selling is a "factory" made from plywood and clamps. He is selling a system of automation (the jigs and methods) that would make an efficiency expert proud. If anyone thinks they can duplicate what he is offering, for a competitive price -- I would like to see it. He is selling the guts of a simplified manufacturing plant -- with low-tech automation.

Where he is making his (real) money seems to be on the repeat sales of customized lumber -- if you don't sell, he will sink into oblivion. This give him the motivation to uphold his end of the bargain.

This was the area I identified here three years ago as the reason I would not do a similar business -- I could not purchase quality wood milled to my specs in a quantity that would be of interest to the local mills. The hardware was a similar issue. The three to six months to build the jigs and write the procedures for automation was another issue.

He has less than 200 (140?) dealers in the USA -- but assuming 200 -- that is $3,200,000 max in franchise sales -- not exactly big money for many years of effort -- probably about $300K a year -- less costs.

Your point about seasonal work is right on the money. Add some products that sell in a northern winter and you can be pretty comfortable -- particularly if you can apply the same methodology -- low tech automation.

One other issue. If you would be uncomfortable selling a chair for $179 you could never do this -- people would pick up that _you_ don't believe in the value. You have to believe in the value of what you make and sell.

I have made furniture similar to what they offer. My costs were a bit less than their selling price. So I can accept the selling price. Besides, near Toronto, for example, there is a large market of people with ready cash, no tools, no woodworking skills and expensive cottages to furnish -- in Muskoka (Orillia, Lake Simcoe) for example and the Haliburton Highlands (Minden, Haliburton, Dysart) -- and they need furniture inside and out. So the plan could work here -- even with a winter climate.

BTW -- he bough the business from a Canadian who was running it from near a "cottage country" area. The market for this in the USA is probably ten times bigger.

So if you are looking for something -- but don't like this one -- look through all his stuff carefully -- list what you like and what you don't -- then go look for something that has more things you like on the balance sheet.

The only thing I saw missing was a template for Quick Books or Simply Accounting or a similar package -- if you are doing a "standing start" that would be a big help to a small operator. If you are already doing a small business you may just have to modify oor add to accounts already in place.

Standard risk analysis might point to lumber supply, and whether other lumber than cedar can be substituted and maintain a price point acceptable to their target market -- aging boomers. (Should cedar supply become weak.) Another risk would be -- for northern dealers -- is whether they can develop other lines to keep you busy year round. Another risk is the delivery issue -- with cars likely to down size will the goods fit -- they do have "case goods" as someone pointed out so that should be ok.

Look at this the way you would any other franchise, or small business opportunity.

---
Will

[eurwood]

Eureka Woodworks has been in business since 2002. Since that time we have grown to over 200 producer partners in the US, Puerto Rico and Canada. We pride ourselves in providing great value and a program that works. We don't sell you and leave you; we provide on going support, new products, updates, annual partner meetings, shop tours and we work very hard to make sure no two producer partners interfere with each other. We do not offer protected territories because we are a business opportunity and not a franchise. In each of of our programs, we not only provide precision jigs, templates, sales & marketing materials, a point-of-sale website but enough lumber and hardware to almost recoup your intial investment. We welcome any prospective producer partner to check us out with the Better Business Bureau, call for references and visit us in Dallas.