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Is The Very Small Cabinet Shop Becoming an Anachronism?8/10
So, itís 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: Contractorís 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 90ís, 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, itís typical to have multiple finishes in one room and 3 or 4 different pulls on one cabinet. Makes for spectacular kitchens, but itís 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 arenít 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). Iím 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.
Iíve 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 Iíd be interested to hear successes, Iíd be even more interested in hearing others observations and feelings. Iíd especially like to hear from shops similar to ours. The future of my business depends on your responses, but, no pressure.
That said if you offer a great product, at a good price and offer excellent customer service clients in the current economy will beat a path to your door and even in slower times will keep food on the table. I find that as a small shop it is almost all about customer referrals and just having a website that shows your work.
First the customer referrals. In my opinion it's about three things- quality/ perceived value of the product, price and customer service.
Your quality and design looks decent to good enough, although you need more pictures and to feature only the best of the work on your website. A few of those photos are not doing you any favors by having them on your site. If you don't know which ones then you don't have the quality eye it will take to succeed. If you need more pictures go out and take them but don't put up sub quality pictures of average looking work- and red oak typically don't feature it unless it's a spectacular piece. A finish means more than the woodwork- something a great many woodworkers never learn.
Price. I have no idea what your pricing is but unlike many folks on here who say if you are winning more than 30% of your bids you are leaving money on the table. I would rather get the 70% and work on lowering my costs not by producing sub quality work with sub quality materials but by getting so darn efficient that I can compete on price also because 7 out of 10 clients give a lot more referrals then 3 out of 10. Can you say a marketing budget & advertising of $0 for a decade? Without one slow day and a year of backlog?
Customer service. It's actually really easy. So easy it hurts and yet so very, very few do it. Communicate early and often. Calls get returned within two hours. Same with emails and texts. Smile and be nice. Dress like a woodworker, but one that owns a washing machine and a stick of deodorant. Keep your word on delivery schedules and if impossible communicate early and often on the rare occassion you cannot keep your date. Remember names. Stay organized.
If you can do those three things you will need none of the stuff you say you need. But you have to want it real bad. Bad enough to get organized because you are your own worst enemy. Not the big box store. Not china. Not designers. You.
If you can do those things you will create a rolodex of clients that want to do business with you and brag about how "they got XYZ to do their cabinets. It's so hard to get on their schedule. But I got on because..." Right now you are needing them. Be so damn good at what you do that they need you. But that takes discipline, fierceness, energy and at times to not let your praying knees to get lazy.
It might be mentioned that this business cycle has taken a long time to peak/recover from 2008. This one might last another year or two.
The next cycle figures to be much stronger.
A lot of the spending has been done by people who could take advantage of good credit as with high end remodels and larger commercial work.
The next cycle will see more 1st time buyers and the economic growth that will create throughout the economy.
ITR (they are the guys that Stiles uses) also say the economy for construction is going to be good.
There have been a lot of people move out of the construction industry so the demand will be stronger because that coupled with demographic growth. However I'm not sure that applies to the cabinet shop because of automation, China, etc.
One thing is for sure if you produce good work on time you will always find customers.
But you already know that, why the question? Has someone been renting space in your head?
I live across the lake from you. I have a small shop, and seperate finishing space. I lost my job at a 6 man shop during the recession. I agree with Family man about customer service, and quality products. I have learned that it's better for me to forget the marketing thing, and seek out higher builders and designers and have them feed you work. I don't have time to chase every lead that came along. They prequalify customers and handle the design. I work with them to make their product better, so it's a win win for both of us. I do about a kitchen a year, tons of built-ins, alot of exterior millwork (my newest most profitable niche), and restoration work. By seeking out the good contractors and designers, I have made my business sound enough that my wife quit her nursing job and came to work for me (I gave up on trying to find a good employee that met my expectations ). She and I are a two person shop, and I have a couple subs I use when the workload becomes to heavy.
Well I somewhat feel davids pain. I used to have plenty of work. 1/2 from word of mouth and 1/2 from internet search to my website. But I never did the facebook thing and I didn't keep the website updated and I think I am paying for it. My remodeling buddy says he gets lots of leads from facebook. I just do not find the tech stuff interesting, although I do have a website redo almost finished and guess I will link it to a facebook page and maybe Houzz. I just wish there were more web designers who see the whole picture and would help me in this. I recently learned of Google Analytics but for some reason my web designer never mentioned it over these last 8 yrs. I definitely see the benefit of a business that is large enough to hire staff to keep on top of their web presence, advertising, feedback, reviews and so forth. But, I do what I can.
Itís good to hear that, by design or by chance, there are small shops that have found a way to survive, even thrive, in the current market. Thatís encouraging. Portions of the responses, though, speak to my original point of the challenges facing a small shop, ours anyway. The comments about our photos are valid and Iíve gotten that feedback before. To deal with that requires a proficiency in photography (limited budget to hire a photographer), photo editing, and web site maintenance (again, the budget thing with hiring a professional). Mikeís reference to Facebook and social media is another example. Without someone on staff to keep up with it, the task typically falls on the owner, and thus tends to get shortchanged by all the other tasks requiring attention to keep the work coming in. The result tends to be that none of it gets the attention it requires and thus becomes ineffective. But with no 1 or 2 activities generating enough leads, it is necessary to try to manage as many methods as possible. We do have a reputation for great work and customer service at a competitive price, at least according to customer reviews on Houzz and Angieís List, but that hasnít translated to steady leads either. Without the staff of larger firms to handle engineering the continual innovation, maintain a website and social media, and get out to meet contractors and designers, or the resources to hire professionals for photos, websites, etc., Iím perplexed by how to successfully and adequately perform all the tasks that seem to be requirements to operate a profitable custom cabinet shop today. Iíll continue the search for the correct formula and share the secret when I find it.
david, concerning your comment about pictures. I have never paid for photography. Well, maybe one time and they came with a nice camera and small camera mounted flash. Poor pictures was the result. Although I do not want to compare my photo's to a professionally staged photoshoot, I think most of the photo's on my site are pretty good. Maybe others would disagree but they get good feedback. Here are a few low budget tips I've gotten over the years. A. photograph during the day when sunlight is brightest in the room. B. I also used 500w halogen lights to brighten dark area's like under island overhangs or a dark corner. I have even considered purchasing a few 'umbrella' lights for better light diffusion C. photograph after owners move in for a staged looking kitchen. I leave a thank you note and maybe a small gift certificate. D. Use a tripod. E. I've been known to take 50-125 pictures; usually 5-10 have that perfect look, angle and lighting and those I use for advertising. This takes 2-3 hrs. F. I have never used photoshop, if you did you could get even better results. Most of these were done with an early 8mp camera.
Hope this helps but still, I find it hard to be good at everything that a successful business demands. mike ps please note my website is currently being redone so some things are new, some are old.
sorry, above is the new website and gallery draft in progress. mike
I have been in a different market for the last 12 years here in south Florida, than the niche market I had in Montreal Canada. I was the only orthodox Jewish cabinetmaker in a very large religious population. Never had to advertise or think of where my next job was coming from. Large families of 10 kids, with a natural cultural loyalty and comfort zone gave me an ongoing market with little bother and never had to leave my comfort zone. The US is way more diverse and in Florida the concept of community doesn't exist as everyone is from somewhere else.