Having launched the kitchen/bath industry’s first buying and business development group in 1994, the SEN Management Team has had an opportunity to work with hundreds of design firm owners. We have analyzed their financial statements, studied their business models up close and personal, critiqued their operations onsite, and coached owners for many months on end …. and through both good and bad economic times.
What follows are the key takeaways from these myriad experiences. Specifically, what we at SEN consider to be the “Top 10 Best Practices to Make Your Business Stronger.”
Let’s start with #10 and work down to #1 in true Dave Letterman fashion, leaving the most important for last.
10. Know Your End Game When it comes to achieving goals, Stephen Covey said it best in his book The 7 Habits Of Highly Effective People: "Start With The End In Mind." Most well-intentioned owners may very well start with an end-game for their business, but lack the discipline to pull it off.
9. Sharpen Your Saw Probably one of the most valuable lessons our most successful Members have learned over their years in the kitchen/bath industry is the need for "sharpening your saw" on a regular basis. It's critically important to learn from others ... whether they be experts, instructors, or peers ... because they bring a unique perspective to running a business that a typical owner lacks.
8. Motivate Through Emotion Our management team’s analysis of Dealer Income Statements did not reveal a huge percentage with higher gross margins than the industry norm of 35-36%. But those that did achieve 42%, 45%, 48%, or even greater than 50% gross margins were found to have outstanding sales personnel … professionals who had excellent training and had mastered the fundamentals of selling …. and practiced them on a daily basis.
7. Collaborate on Price Research shows that it's very difficult to convince anyone of anything. And that's understandable because it's an adversarial approach. Someone wins and someone loses. Through 40 years of experiences, it has been found that people will literally convince themselves that the price of a kitchen or bath is the right price when they are involved in the process.
6. Bottoms Up Team Development After cost of goods sold, personnel payroll is your biggest expense on your Income Statement. Organized properly, and armed with outstanding skill sets and management systems to control all the project details, your personnel team can make a night-and-day difference in the quality, appearance, function, and performance of a new kitchen or bath.
5. Sell More Products & Services Into Every Project When a lead costs NORTH of $400 based upon recent research, it makes good business sense to load up as much product into each and every sale.
4. Account for Burden One of the main reasons why the vast majority of kitchen/bath dealers have only marginally profitable operations is this: they FAIL to account for their burden expense in their pricing formula.
3. Focus on Gross Profit Dollars Don't focus on the top line – REVENUE. Too many dealer/owners in the kitchen/bath and design/build industry do just that. When networking with industry colleagues, invariably the first question asked - to gain a reference point – is: How big is your company in sales? … or some variation.
2. Know Your Numbers Numbers run a business. If you don't engage in reading your financial statements, and know what they are saying, you are literally driving blind.
1. Leverage the Technology Thirty years ago, the introduction of computer-aided design (CAD) enabled us to produce kitchen designs faster. Sure, it took the average kitchen/bath dealer/designer awhile to get onboard, but this technology definitely advanced institutional growth.
Dig deeper into ways to make your business stronger with top education in Atlanta on April 13th.
Many thanks to our sponsors for making this event possible.