Exploring Alternative Opportunities for Profit

I hope by now most of us are seeing an improvement in the business climate. I think it’s safe to say that over the past nine months, many of us have made some major changes in our business thought processes. But while many of us have changed our way of doing business, have we realized the potential for bigger fish to catch?

An example of this would be the outdoor kitchen industry. I used to think that this was an industry that wasn’t pertinent to my market, since I live in a climate that has four seasons. I figured my clients really wouldn’t have a need for an outdoor kitchen.

New Profit Avenues

Well, because of the slowdown of our business, we had to take a good hard look at other opportunities and how we could capture some of that work. When we explored the idea of selling outdoor kitchens, we found that there are numerous outdoor kitchen cabinet companies that supply products for these projects. There are stone and tile companies making products for the outdoors, and more and more appliance manufacturers are getting into outdoor cooking equipment as well as sinks and refrigeration.

With the variety of products that can suit anything from a tiny to a large outdoor living space, you as a kitchen designer are better equipped to design and sell these projects than any other industry professional. There’s really no new training of sorts, just a different place to put the products you’ve already been designing with for many years.

But one thing you need to do is let people know that you can handle these types of projects.

My next door neighbors just finished some major outdoor renovations, and when they had me over to look at what I thought was going to be some stone and brick work, I was surprised to see their brand new outdoor kitchen. I told them that we can do that sort of work and they said, “We thought you only did indoor kitchens.” All I can say is there was a sale right next door to me and because I didn’t let people know what we can do, I lost out on a great opportunity.

Another opportunity comes in the form of lighting. Why do so many kitchen and bath designers think it’s not their responsibility to help with the lighting of a kitchen or bath? In reality, lighting is a major part of the success of a kitchen or bath project, and that alone makes it our responsibility.

With all of the lighting products available to us, we should be at the forefront of designing and selling these products to our customers. In our buying group, we have a number of different companies that not only make these products, but also offer assistance is designing the different components into our projects. We need only send the kitchen or bath plan to them and they will make recommendations as to the best lighting for the space. They will even price out the necessary parts so all we have to do is list them in our price breakdown and sell them. It doesn’t get much easier than that.

Lighting is also a great profit opportunity, since this isn’t an area where people do a lot of comparison shopping. At our firm, we generally don’t have customers complain that our lighting price is high as long as we sell them the features of our lights over the average lighting that is out there. Especially in a down economy, having some additional sources of revenue becomes very important, so untapped areas such as these are worth exploring.

As a kitchen and bath dealer, you need to be looking at what products customers are buying that you don’t yet carry. For example, what about bar stools? Every kitchen you design that has a sitting area is a chance to sell chairs or bar stools.

One of our vendors is in the chair and bar stool business. This vendor can match chairs for the table to the bar stools, and has many different styles and materials to choose from.

Add on Sales

How about the bathroom business? I’ve talked with many dealers over the past few months and I have heard the statement over and over: “It’s a good thing we do bathrooms because that’s the majority of what we’re selling today.” One dealer told me that his kitchen business was down over 50%, but his bath business was up over 40%. He stated that if it were not for the bathroom part of his business, he’d be out of business.

Doing baths also presents other unique opportunities. For instance, as you walk through your client’s house to get to the bathroom, how many of you notice the doors to the closets, and the other rooms of the house? Many a customer has accepted our offer to change out all of the doors in the house since we were changing the bathroom door anyway.

We recently completed a kitchen, bath and powder room project, and by helping the client realize the benefit of doing everything at once, we added more than $7,000 to the sale by doing all of the doors in the home.

Closet systems are another great way to add to your sales, since they are a natural extension of what you already do (see Behind Closed Doors). Some cabinet manufacturers do closet systems and they have the components to help you make an additional sale. Depending on your clients and their budget, the best closet system for their needs can range from relatively inexpensive to really high-end custom.

There are many additional outlets by which you can create cash flow and generate more sales. But all too often, I hear people say, “We don’t do that because there just isn’t enough money or profit in it.” Well, in today’s economy, most of us would do just about anything to generate business and keep our people busy. If you haven’t figured it out yet, things are changing. If you’re not looking for new avenues for your company to grow, you may be in serious trouble.

Joining a buying group can be one way to learn what’s available and to see how other kitchen and bath companies have grown their businesses. Remember, the economy has created not only challenges, but also opportunities. You could be just one step away from a new beginning and just maybe an expanded base for your company.