Lauren and Kevin Russell have no problem getting their wave hall tables out into the market. In fact, it’s the best selling item of Russell & Mackenna.

Their problem is they can only sell as many as Mr. Russell and a few others can build and paint.

And that takes a while.

Two years after Mr. Russell, 34, left T. Rowe Price in Baltimore, a part time job at the Severn School and the garage of the family home in Severna Park, he’s chief engineer, painter and assembler of the 36 pieces handmade by the Hanover furniture company.

His wife, a former e-designer at the Cyphers Agency in Annapolis and one-time online retailer, designs the lines. The family business even extends to Mrs. Russell’s father, Larry Strassner, who keeps a handle on cost overruns as chief executive.

“It’s the American dream, building something from nothing,” said Mrs. Russell, 33.

And that, too, takes a while.

Each piece, inspired for beach cottages, is built to order - no inventory is sitting in a subleased area of a 50,000 square foot warehouse in a Hanover industrial park. Pre-cut wood is brought in and assembled, sanded, prepped and painted several times.

Before the items are shipped off to high-end customers, it is inspected against a checklist for quality. With some of these prices, which range from $2,850 for a large vanity while a kids’ gear box nears $900, it’s not an option.

“We listen to the market, but we don’t let the market dictate who we are,” Mrs. Russell said.

But money does talk. Recently, the company added custom orders, taking existing pieces and making a tweak, as requested by designers working on clients’ homes.

“We want to build a brand when designers are working on a beach house, they say ‘we’ve got to work Russell & Mackenna in the room’” she said.

C. Thomas Culbreth, professor of industrial engineering at North Carolina State University, said while the residential furniture industry has shrunk rapidly in the United States, it’s not an impossibility for small makers to be successful.

“There’s no reason why they can’t maintain or build a market for themselves,” said Dr. Culbreth, associate director of the university’s Furniture Manufacturing and Management Center.

He said successful small furniture companies have to make high-end products with lots of style content and serve a niche market that doesn’t attract attention from the firms that mass produce items.

But enjoying the scale of success that was once the hallmark of the industry might be a different story, he said.

Last year, Russell & Mackenna, consisting of six employees and a couple of freelance assemblers, sold 119 pieces, grossing $96,000. This year, so far, there are 85 pieces scheduled for manufacturing and sales are projected at $250,000. The business plan has revenues reaching $1 million by 2009.

Up until earlier this month, the company chose to keep a low-profile in the area. Part of that was by design, the other part just chance.

After Russell & Mackenna was featured in several magazines, including Coastal Living, the flood gates were opened to a national brand. The company has done no advertising locally.

Today, there are 14 dealers nationwide, who must buy $5,000 to open an account and guarantee $3,000 in sales a year.

Not bad for a company that started out of necessity.

Living in a small home, the couple needed furniture with multiple uses. Friends, impressed by the designs, kept reiterating the suggestion they build furniture as a business.

“People loved it,” Mrs. Russell said.

So, the two started off, slowly. Mr. Russell asked to work part-time at Severn School while he devoted two days to putting out furniture in the garage. They used the cash from their first sale, $30,000, to fund the business.

As the prospects started turning serious, the Russells enlisted the help of Mr. Strassner, a retired Army officer and former bank president in Pennsylvania, to take over the books. He packed up his bags and left Norfolk, Va., to give the couple a hand.

But coming up with legitimate financial statements and getting handle on the true costs of doing business were difficult, he said, because of price fluctuations in oil, wood and transportation. At one point, the family business was paying to be in business, burning through cash before the products were out the door.

“We don’t have the luxury of building inventory,” Mr. Strassner said.

Now, he keeps a spreadsheet on fixed and variable costs, and there’s a weekly schedule handwritten on a calendar on who will paint and who will build.

The biggest expense, employees, has been mitigated by a clever idea to outsource the assembly to carpenters, including the Annapolis Woodworkers Guild. As a result, the company made $3,500 last year, a rare feat of positive cash flow in the first year of operation.

And come March, Mrs. Russell will take a salary for the first time.

Mr. Strassner said the company would survive the next five years because of financial controls, flexibility and a niche market. Then, he paused, and added one more component.

“And God-damn dogged determination.”

Source: hometownannapolis.com

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