About eight years into the kitchen/bath design profession, I developed a different way of doing business that completely transformed my operation, producing results far beyond all expectations. This new sales process was predicated on four core marketing principles:
Contrary to popular opinion, a bigger showroom is NOT always better. At least, not if you want your firm to make a healthy profit. It might be good for your ego, for your sales staff’s use to make a good living, and for your vendors who love having so much of their product on display there. But a bigger showroom may not be good at all for your bottom line.
Ours is an industry that in many ways is more people-intensive than capital-intensive. To be successful, startups will definitely need proper capitalization (usually through long-term loans) to finance their showroom displays, office equipment, organizational expenses, and 4-6 months of fixed overhead expenses. But good cash flow from assertive payment terms with residential clientele enables most mainstream kitchen and bath firms to not require much borrowing for working capital purposes. That feature alone can make this industry quite appealing for budding entrepreneurs.
There are a number of solid reasons to value your business – even on annual basis. First, if your spouse will inherit the business upon your death, your company should have enough term insurance on your life to be able to buy back the stock from your spouse. That action assumes, of course, that you would like (a) to see your company be perpetuated for the benefit of your staff and your clients and (b) your spouse has neither the interest nor the skill to operate it.
Sixty years since the advent of the modern kitchen/bath industry, design firm owners are still not making nearly enough money for the beautiful, functional, and complex projects they design and produce. A bold statement, yes. Here's my proof that dealers are not charging enough for their work. The vast majority: