Greg Parham was looking to purchase property and build a modest size home. A friend happened to email him a link about a tiny home story. Greg had never heard of tiny houses before, but upon reading it he realized, “I can do this. I have the skills to build my own tiny house.” Greg researched the project, learning everything he could on the subject, and realized that creating his own tiny house business was very possible.
After visiting family in Dallas, TX, a thought came to mind on how he could get this venture off the ground. He would sell his rental property in an advantageous Austin housing market and subsequently utilize a portion of the profit for start-up capital. At the time he held a couple of odd jobs in Durango, including one for a contractor who focused on green building design; as soon as Greg’s contracting job was over he began building his first tiny house.
He went to the Small Business Development Center (SBDC) at Fort Lewis College, and was matched with Joe Bishop. Greg shared his plans and knowledge about tiny homes with Joe, in addition to asking pertinent questions a fledging entrepreneur needs to know. The first task was to determine whether establishing a company to build tiny houses a feasible business idea? Then begged the question, what requirements were necessary to make the business viable? What would Greg need to know about hiring employees, workman’s compensation issues, expenses, insurance and pricing?
Joe recruited some business students to research the marketing potential for Greg’s business venture. Their analysis concluded tiny houses was an emerging market, and had immense potential for growth. In the spring of 2013 there were ten tiny house builders nationwide; today there are over one thousand. Greg was at the forefront of this movement. Joe addressed all of Greg’s questions accordingly and assigned him some homework. First on the list was to obtain a business license and open a bank account. Rocky Mountain Tiny Houses (RMTH) was officially founded in April of that year while Greg was constructing his own tiny home. Once Greg’s homework was completed his business confidence was high. He set out to build more houses, each with their own unique design. “I learned so much from building my home and I still learn something new on each build,” he explained. “No two houses are the same.”
When Greg finished his home, he shared his story and photos with tiny home bloggers. Shortly after, his name and work spread like fire across the internet. “I began receiving calls from people across the country wanting to know more.” The orders began to pour in. RMTH is on their second location with several employees focused on house design and construction. Greg estimated he could build six houses a year in 2013. In 2016, RMTH almost tripled that estimate, building seventeen homes! Over fifty houses have been built to date.
Greg recently checked in with Joe to update him on RMTH’s growth and posed questions regarding RMTH’s future direction. Joe was impressed with the results. What are Greg’s ideas for the future? There are several. Greg is looking to buy a new shop with a facility large enough to build five tiny houses at a time versus the current three, generate design plans for customers who would like to build their own home, and become a tiny house community developer.
Joe and SBDC staff shared forward thinking wisdom and business tools for potential expansion. For one, Joe recommended Greg stay at the present location for another year to show a healthy 2017 profit and two good years of tax returns. Such results would be beneficial for acquiring a loan at a better interest rate. Joe also presented an option of finding a building similar in structure to that which he desires, but with a one year lease. Such a move would conclude if RMTH could generate enough income to support the higher expenses.
One tool SBDC offered was a spreadsheet program to determine cost projections five years out. “You want to know the high and low end of profitability when carrying a mortgage in addition to any issues which could inhibit production.”
SBDC has been a fantastic asset for Greg and he highly recommends them to anyone with business related questions. “They are a great free resource. It is also great to have a second set of ears to run ideas through.” SBDC helped make Greg’s tiny houses business idea into a reality. If RMTH’s future goals are realized, SBDC will have played a role providing affordable housing within community developments. No idea is too tiny or too big for SBDC!
