As some of you know, the company that I own has been doing remodeling, and new home building for many years as well as custom cabinetry. At the same time, I have been working as a manager for a cabinet company based in Atlanta. I have been handling sales, installs, and customer service for them here on the coast.
The owner of the cabinet company is now importing a line of cabinets from China that are built to our specifications, and are shipped knocked down. He has also decided to only pursue large condo and apartment complex jobs. In making this decision, he has put me in touch with the importer that he had been buying cabinets from so that I can still sell and install cabinets for our local builders and for my remodel projects.
I have completed the paperwork to become a dealer for them and have also sent in my application for a Sales Tax permit.
I have said all this, to ask the question, If you were in this position, how would you go about marketing this new direction or expansion of your companies services?
I have considered running an ad in the local paper, however previous results from running ads with them are mostly tire kickers and low price shoppers.
My son’s Boy Scout troop sells discount cards each year and I am offering a discount on the installation of cabinets with the purchase of cabinets from my company. They typically sell 4-5,000 cards each year, so I felt like that would help get the word out to a fairly large audience.
I am also working with 2 of my counter top suppliers to put either sample kitchens or a small run of base cabinets in their showrooms.
Does anyone have any other suggestions?
Thanks in advance for any thoughts, ideas, or help.
Trust your neighbors, but brand your calves.
TCW Specialists in Custom Remodeling.
Replies
I think some market research is in order, first.
Who are/will be your clients? How much do they make? What's the best way to reach them? How much do you want make, specifically? What are your labor costs? Material costs? And overhead and projected profit margin?
jack,
Those are all good questions,
1. Current clients include some spec. builders in the $400,000.00 + range, average whole house cabinets with granite or solid surface counter top jobs have been running in the $12k to $15k range. Other clients are people I am building or remodeling for, remodels usually run from $150k up depending on the scope of the project. A typical kitchen remodel usually 30k to 100k, baths can be as low as 10k to as high as 30 or 40k.
2. I have depended on word of mouth for the last 5 or 6 years to reach potential clients, however I am looking for ideas other than an ad in the news paper to expand my client base.
3.My mark up on cabinets is 50%, we charge $50.00/box for installation, $1.50/ln. ft. for crown + $25.00 per corner. If I sub out the install to one of the few subs I trust, I pay them half of those amounts.
4.My material & shipping costs are covered at the beginning of the job when I collect the deposit check.
5.My overhead including office, ins., truck, and other expenses usually run no more than $1,500.00 per month.
6. I am aiming for a 50% gross margin.
Thanks
Trust your neighbors, but brand your calves.
TCW Specialists in Custom Remodeling.
Just a rez bump to put this in front of a few more eyes.Trust your neighbors, but brand your calves.
TCW Specialists in Custom Remodeling.
I have said all this, to ask the question, If you were in this position, how would you go about marketing this new direction or expansion of your companies services?
Which is it? A new direction, or an expansion?
If it's a new direction, I would sell my construction tools and layoff all the crew I didn't need to install cabinets.
If an expansion, I would start a new division whose task was to market and sell cabinets, subbing the installation out to my parent company. Different office and facilities. Stand or fall on it's own.
SamT
Now if I could just remember that I am a businessman with a hammer and not a craftsman with a business....."anonymous". . .segundo
Sam,
From my point of view, this would be both a new direction, I am offering something new through my company and I expect it to lead to an expansion of my business.
As far as setting it up as a completely different division, I don't think that starting out, I want to put that kind of burden on it.
As I mentioned, the owner of the cabinet company I have been working for has decided to not sell to the market that I am targeting, his reason for that decision, was the fact he has not been able to turn a profit on this section of the business. I really believe that I can make this a profitable operation, but do not want to hire additional help, lease more office/warehouse space, etc....... until I have proven that point.
Thanks for your thoughts.Trust your neighbors, but brand your calves.
TCW Specialists in Custom Remodeling.
late reply, sorry i just found it. couldn't help thinking when i looked at the numbers that the money for this business is all in the sales if you can get a few more crews that you trust to "sub" work, and you just concentrate on sales you will soon be very wealthy
now your question of how to "market" sales, i can't answer, im not a salesman. i wish i knew, please educate me, i am following this thread to learn! isn't that a question for a salesman? isn't that what you are trying to do?
segundo,
Selling isn't something that just anyone can do. You need to have a tough hide, be persistant as heck, think quickly, and correctly most of the time, and yet industry wide less than one person in a hundred who attempts to make their living in sales is still selling 5 years later. Far fewer are successful than that!
I would guess that less than one person in a thousand earns six figures a year or more in sales..
Having said all of that there are a few good books out there, some are more inspirational some have a few good hints but in general rehash everything.
The one really great book on the subject is called Shut Up and Sell. Basically it tells the salesman not to get in the way of a sale.. Too many salesmen are guilty of that..
If you are thinking of taking a marketing course you must realize that most are taught by those who could not succeed.
Old saying in teaching,
Those that can do, do.
those that cannot do teach!
typed a nice long reply, got eaten when i posted, here goes again.
thank you for your advice, absolutely not interested in marketing classes, will try and get the book.
i think most in business have to be a salesman of sorts, i know i do if i am to be successfull, and if my margins are greater selling then they are managing or fabricating or installing than a selling is what i want to be a doing.
i am a good craftsman, but i need to sell that craft to make a living. i am a salesman even when i am an employee in that i am selling my skills by asking for two dollars more than the clouts i work with are getting.
In order to be a salesman, you have to have something to sell. Your first prority is to make your product easier to sell so you have enough time to run your business.
That means Branding and Branding means Marketing.
You're a businessman now. You'll never get rich, digging a ditch. You're a businessman now.
The very first "Hat" you received when you started a business is the Captains Hat. Read some about the theory of seagoing Captains. That's you.
Then you get two Department Head Hats. The Sales Dept and the Production Dept.
As the Captain, you will definately want your business to move forward, so you'll need to pick up a Marketing Dept Hat. And let's not forget the CFO's Hat. Somebody's got to keep track of what all those hooligans in production and sales are doing.
Finally, we get to the ones you really like to wear, the Ditch Diggers' ballcap and the Janitors cart.
What Fun!
Captain, I respectively suggest that you sit the CFO down with Production and Marketing and figure out what you can make and how many you can sell for how much. Then give Sales his marching orders.
You just sit back and point the direction.
Bon Voyage.
SamT
Now if I could just remember that I am a businessman with a hammer and not a craftsman with a business....."anonymous". . .segundo <!----><!---->
Edited 12/22/2006 5:38 pm by SamT
thanks sam
SamT
You are correct in the first hat you need to wear is the captains cap. However you won't wear the captains hat for long if you don't sell..
Before anything happens first something must be sold!
Now maybe you'll sell it toyourself on the hope and faith that you can later sell it to someone else and make a profit doing so.. To a degree it means putting the cart before the horse but it's how many business get started.
If you have great credentials you might be able to sell yourself first and then build according to the market, however that simply isn't the way it's done normally..
Even Henry Ford built the car first and then sold it..
Sorry it took me so long to get back to this thread, and tahnks for your interest.
I can understand keeping the books separate from my remodeling businesses finances, so thanks for that suggestion.
Segundo, I got your e-mail and will be responding to it shortly, thanks for bringing the recent posts to my attention.
frenchy, I like the captains hat analogy, I am probably wearing to many hats at the moment, but am trying to make the needed changes to remedy that.
Overall my intention is to find enough builders or remodelers (some of whom that may want to do their own installs) to keep 1 or 2 install teams busy. I usually allow 8 to 10 hours for a simple install, say 14 or 15 cabinets in a kitchen and 2 small baths. Admittedly that figure is based on a condo project that we are doing at this time. The kitchen has a soffitt that the wall cabinets got tight to at the top, and the two baths get one cabinet each. Having said that I just finished installing 24 cabinets in a house for one of my repeat builders with crown around the wall cabinets in the kitchen and deco panels on the ends of the cabinets and across the back of a peninsula in 15 hrs. Of course that comes out to 30 man hours, as I had a helper. With our install pricing that job paid $1,350.00 just for the install.
If I can average selling two cabinet jobs per week for starters I can maintain a comfortable enough profit margin to concentrate on doing more selling and growing the cabinet company.
Even better would be for me to find other construction professionals in various areas that are spaced far enough apart to broker cabinets to. I don't want the hassles of trying to franchise this thing out but I would consider setting up other dealers with their own territories.
Once again thanks to all that have taken the time to respond.
Trust your neighbors, but brand your calves.
TCW Specialists in Custom Remodeling.
segundo, Thanks for bumping this back up.
Rarebreed
What you're proposing is doable.
What is your style going to be? Price, Quality, or, Speed? Pick two.
If you want to net 50k, take home 25(?) you have to sell 1 $10K unit a month or 2 $5G units. For every $50K you want to net. When I suggested setting up a serperate division, I meant in an accounting way. That would let you track its' progress better.
Is your old boss willing to give you the clients he's dropping?
Spec home builders. They know months in advance and they spend pretty good. Unfortunately, they only buy once or twice a year. So how many spec builders do you talk to?
Remodelers. They know from days to months in advance and they want from cheap and fast to "Fergit Speed and Price, gimmeee Quality!" One group will buy once or twice a year. Another, larger group will buy 2 to 6 times. Then there's the last group, but let's just group them with the next category.
Tract builders.
Nuf said.
So how many remodelers do you talk with very often?
SamT
Now if I could just remember that I am a businessman with a hammer and not a craftsman with a business....."anonymous". . .segundo <!----><!---->
Get up a nice color brochoure and send it to the interior designers, architechs, and contractors in your target area. let them know who you are and what you got. These are the front lines people out there and they are probably looking for you right now.