So, it’s that time where I do an assessment of our business and the market we are in. I use the results of this assessment to make decisions regarding purchases, expansion, marketing, etc. Each time I conduct this exercise, the observations and perceptions are a little more pessimistic than the time before. Here they are.
Marketing: It used to be that an ad in the phone book, a couple lawn signs, and an annual appearance at the home show was all that was needed to bring in sufficient and regular work to sustain and grow a cabinet shop. Now it requires a professional website, an active social media presence, current photos on professional internet sites, network marketing and more. Maintaining proficiencies in these areas requires more and more of what used to be production time. None of these activities produce enough leads individually to sustain the business.
Sources of leads: Contractor’s in our market seem especially attached to the cabinet sources they currently use, and are reluctant to switch. With the improvements in quality and features of stock and semi-custom cabinetry from large manufacturers, contractors and designers are, however, increasingly using them as a source. To counter, I have attempted direct to customer marketing, but have learned that unless you commit significant effort and resources, the results are negligible. It just seems that when a customer decides to redo their cabinetry, a contractor or designer is the first person they contact.
Product: At the shop I worked for in the 90’s, we would do entire houses in one species with the same finish and the same knobs or pulls through-out. With the prevalence of designers, design web-sites and remodeling shows on TV, customers are requiring much more in their projects, all while staying within a modest budget. Now, it’s typical to have multiple finishes in one room and 3 or 4 different pulls on one cabinet. Makes for spectacular kitchens, but it’s putting a strain on our capacity. With the accelerating pace of innovation and the ever-increasing amount of options and features, we are spending more time on engineering. Because of our volume level, we aren’t recovering the costs of engineering and development before the next change or innovation comes along.
We are a small residential custom cabinet shop (1 full-time and 1 part-time cabinet maker, a part-time designer and a part-time finisher). Our upper mid-west market is small and diverse (county population = 100,000), so finding a niche market is not very viable. We do nice work and have a great reputation (we have multiple repeat customers). I’m not inclined to want to get bigger for fear that I will end up spending all my time running the business, and never get out on the floor where I want to be, or have to lay people off when the economy tanks again.
I’ve never been accused of being an optimistic person, but it does seem that the challenges are increasing and the profits are getting harder to generate. While I’d be interested to hear successes, I’d be even more interested in hearing others observations and feelings. I’d especially like to hear from shops similar to ours. The future of my business depends on your responses, but, no pressure.