After Andy Joseph got out of the U.S. Navy, he started a fabricating business to make extra money while working on his college degree. One of his customers was interested in botanical oil extraction equipment.
“I didn’t have any idea of what it was at the time, but I said, ‘Sure, I can make that,’” Joseph says. “So I started making those and did that basically on the side, while I worked a real corporation job.”
Little did he know Apeks Supercritical would become Ohio’s fastest growing private company, according to the 2015 Inc. 5000 list.
It’s also the 24th fastest growing company in America, thanks to a three-year growth rate of 8,249 percent. In 2012, Apeks’ annual revenue was around $750,000; in 2015 revenue reached about $13 million.
Ninety-five percent of Apeks’ business is with the cannabis industry. And as an ancillary equipment manufacturer, Joseph, who serves as the company’s president, compares the business to a pickaxe manufacturer during the gold rush.
In fact, the gray legality of the cannabis industry has become less of a challenge than keeping up with the skyrocketing growth.
Plan for the future
You cannot be frugal and experience rapid growth at the same time — they work against each other.
Joseph says if you think you’ll have rapid growth, get in front of it, while still not hiring too fast. Maintaining the right balance has caused him more than a few sleepless nights.
“Use your gut. Follow your instincts,” he says. “If you’ve gotten to this point where you’re positioned as a company to experience rapid growth, you got there for a reason.”
Joseph also believes in not giving your company away; instead bootstrap as much as you can and borrow money from friends and family if you have to.
“Be creative and find ways to keep it for yourself,” Joseph says. “If you gear your company right, the growth will come. It won’t come just because you bring on an investor. It won’t come just because you give away part of your company on ‘Shark Tank.’”
Joseph’s hiring strategy has worked well, even though he says it wasn’t necessarily by plan or design. He hired people more talented than what he could use, even though it inflated his payroll.
“When I needed a welder, if I had just hired a welder, and not a guy who can not only weld but manage production, train other welders, things like that, I’d been in a hard place to be able to keep up with the growth,” he says.
Luckily, the company remains profitable, so Joseph has been able to make future investments, such as a new manufacturing facility that will likely be expanded again this year.
Time to transition
Joseph drew on his experience in the military, and previous jobs, to go from entrepreneur to businessman, but it has been a tough transition.
“One of the hardest things to learn, especially as I transition to president or CEO, is learning to trust and to hire people who are smarter than you,” he says.
As an entrepreneur, Joseph says nobody else understands what is the best thing to do for your company. Most advice just isn’t applicable.
But as your organization grows, there comes a point where you need to start listening, he says.
“That’s been a really difficult mental challenge — is accepting, that these guys are … smarter than me. They are telling me what to do, it’s the right thing and I have to trust them,” Joseph says.
You can’t always follow your entrepreneurial mindset.
“That will backfire. It’s backfired on me enough times that I’m kind of over it,” he says. “But you definitely have to get your gut kicked a couple of times before you’re able to make that transition.”
Risks and rewards
Although Apeks is projecting rapid growth for the near-term, Joseph also is cognizant of the risk of little customer diversification.