Lee's Music was simply a retail store with a specialist repair arm until Lee's son, Mike Miltimore, came up with an innovative technique for building stronger, better guitars in a fraction of the time. The company has big plans for its patent-pending design and is tooling up a manufacturing plant to scale up production. Danny Bradbury caught up with Miltimore to get the details on Riversong Guitars, a new family venture.
Q What do you do?
A We started out as a retail music store, but then four years ago, we began building custom guitars. People would come in and want a specific width and feel for their guitar neck, and we'd build it for them. During that time, we came out with a new design that has a worldwide patent pending on it. It was for a guitar with a neck that extends through its body.
Q What was your biggest business problem?
A Growth. Before we came up with this design, we put 100 hours of work into building a guitar. It took a specific, skilled luthier with his style of binding and bracing. To grow and expand, you'd need multiple luthiers, but each one needed a lot of training and skill. At 100 hours per guitar, we were limited to building six to eight a year. How can you grow a company building one-off instruments?
Q What was the turning point?
A It was producing the design for a new guitar that was easy to make. Previously with guitar bodies, you'd have to use a table or handsaw, then you would sand those pieces to fit. I called it fitting a square peg in a round hole. What we did was create a 3D model of an acoustic guitar, mapping out how the profile of the side changes as it goes through the body of the guitar. The line is curvy and crazy, not what you'd expect at all. We needed CNC (computer numerical control) machines to cut the profile of the guitar so that it's exact.
It all has to do with how accurately we make the parts so that we don't have to sand them down. This changes the game. Traditionally, we'd use clothespins to glue the part of the guitar that joins the sides to the top. That involved quite a bit of sanding, and if you were out by a millimetre, you'd suffer from big problems. Half a millimetre makes a huge difference between a great instrument or an OK one. Now we use the CNC machine to cut the profile, and we built custom bending machines for the sides of the guitar.
In the summer, I hired a Grade 10 student, and after two weeks of training he was making guitar bodies that we couldn't tell apart from those produced by master luthiers. The body assembly takes 15 minutes. We simply clip the sides onto the top and it gives us a profile with perfect joins all the way around the body.
Q What was the biggest challenge?
A There were many times when we wondered if we could make our design work. Our original idea was to eliminate the structure entirely from the top of the guitar, getting rid of all the bracing (the part of the guitar that reinforces the body to cope with the tension from the strings). The original designs weren't quite working. Then, a year ago, we had an "aha" moment. I decided to destroy a guitar to see if this crazy idea I had would work. I did it, and the guitar exploded with sound. And it was structurally really strong and adjustable. That was the turning point.
After that, the biggest struggle was learning how to start a proper woodworking shop. Up to that point, we had been using a 120-square-foot area, but we knew we needed to buy some CNC equipment. Even creating a digital 3D model of the guitar to use on those machines was difficult. I spent six months trying to learn how to round a corner on a square cube, and I was beaten. One day, a 6-8 tall guy named Lee came into my office and said, "I heard you have some CNC equipment." I asked if he could round a corner on a cube. He could, and by the end of week, we had a working prototype of the neck.
Q How much has it cost to pursue this innovation?
A We have spent about $250,000 on labour and machinery, and that's a conservative estimate. I spoke to our bank manager, and she set up an appointment with the Business Development Bank of Canada (BDC) to help.
Q What's your monthly output now, and how will it grow?
A We developed the guitar in April, and we're still working on the manufacturing facility. We have already expanded three times. We're currently making 30 guitars a month. Retail store is a couple of million dollars, and the ultimate projection for the guitar company is millions. Some of our competitors are doing tens of millions now. I can't do that in the first year, but that's the possibility in the long term. In the first six months, it's certainly catching up with the rest of the business. It's the fastest-growing segment.
Q How are you selling them?
A The company does offer online sales but our main line of distribution to the consumer is through retailers. Every guitar needs to be sold and have the service and support of someone locally. We're trying to keep our margins up for dealers.
-- Financial Post
A JOINT VENTURE WITH BDC
Insight: Web presence key to good marketing
1"The biggest thing about a digital sales model is that, if well planned and executed, it can create instant exposure for your business the second you implement it," says Steven Karpenko, ICT Partner for the Business Development Bank of Canada.
The online world offers both opportunities and challenges, he notes. "Exposure on search engines and social networks is key to driving prospects to your website to maximize sales opportunities. The Internet can become a 24/7 online sales presence or virtual trade show for both small and established companies."
But a lot of businesses put tactics before strategy. Although they see having a website as a mandatory part of doing business in the modern world, they limit their planning and execution to downloading a pre-fab template and more or less put up their brochure in an online format instead of thinking strategically.
"Currently, about 75 per cent of businesses still rely on an earlier version of their website but now need to closely align business and marketing strategy with their online presence."
If their web presence is to be effective, Karpenko says, companies must focus on consideration of their ideal customer, what makes their products different and how the customer interacts with their brand and makes purchase decisions. Implemented online, this results in calls to action that convert interested prospects into legitimate customers.
This type of planning is essential before establishing an online presence, he says; shortcuts rarely work and negative experiences online are hard to overcome. Without a long-term strategy and a commitment to keeping current, Internet exposure could result in negative reaction and "the brand could be at risk."
"Web and social network content have to engage the customer and be maintained regularly. Proper execution also includes efficient online order management. Customers expect to receive products in good order and timely fashion and to be able to contact the company and receive good customer service," Karpenko adds.
Before making a major commitment, it is vital for the business owner to "understand the fit of the business in its digital ecosystem and to study the trends impacting the Internet right now."
The company also needs to have a certain degree of flexibility to adjust to the constant changes in buyer behaviour. "A web presence is now as important an investment as human resources. Plan, track, measure, adjust and adapt as you go forward."