Sound Advice

What's the best way to increase your profit margins? Should you charge a design retainer, and if so, how do you keep this from costing you business? How often do you need to update your showroom displays? Should you be targeting your services to a specific niche, or trying to serve the broadest client base possible?

In an industry that demands a wide array of skills, from managerial to mathematical to creative, even experienced kitchen and bath dealers sometimes struggle with these questions. After all, a good number of kitchen and bath firms learn how to be successful primarily through trial and error, and many spend decades making costly mistakes as they learn the best way to make their businesses profitable. It's not uncommon to hear of experienced designers solving a problem or making a smart business improvement, and then saying, "If only I learned that 20 years ago, think how much better off my firm would have been!"

While there's no substitute for experience, smart kitchen and bath industry professionals can still learn a great deal from successful dealers' smartest decisions -­ and worst mistakes.

This month, Kitchen & Bath Design News decided to speak with top kitchen and bath dealers and designers about the best business advice they ever got, as well as what advice they would give kitchen and bath dealers starting out in the industry. Their advice covers a gamut of key subjects from profit margins, marketing strategies and client relations to design retainers, hiring practices and networking opportunities. By finding out what successful kitchen and bath professionals wish they knew years ago, K&BDN hopes to offer those starting out in the business a few educational "shortcuts" - while reminding experienced designers that you're never too old to learn a few new tricks for improving your business.

On this and the following two pages, leading kitchen and bath designers and dealers share their best business practices, advice and tips for building, maintaining and growing a successful business.

Carefully Define Your Target Market
"It's imperative that you carefully define your target market. Trying to be all things to all people is not a sound marketing strategy. Your marketing plan must include a clear description of the market segment you want to sell to (i.e. mid-priced projects, volume builders, high-end luxury clients, etc.), what products and services you wish to provide, and how you will promote and price those products and services.

You may want to write out a tight description of who you are trying to reach, and remember to include demographic, economic and psycho-graphic characteristics. Refer to this definition often and focus your business on providing the best mix of products and services to completely satisfy your target customers.

Don't manage your business based on 'job site anecdotes.' Rather, work to continually seek out research articles regarding your target customer in order
to better identify their needs and wants.

Strive to determine the 'decision levers' that truly drive their purchases, be it products and product mix, features, service, price, availability, or some other, more intangible need.

Be careful that you're not tempted to chase after new markets or projects that don't fit this description, unless you're willing to thoughtfully and completely modify your business and marketing plans.

As exciting as new business opportunities may seem at the time, take care and stay focused. Remember you'll never lose money by avoiding the wrong customer or project."
Carol Lindell, owner
DCI Home Resource
Charlotte, NC