Donald Fletcher has some important words of advice for kitchen and bath design firms that may be experiencing a bit of a downturn thanks to the first-quarter economic slowdown.
Fletcher's advice: Don't let on to clients and prospects that business may be off; the last thing you want to do as a business owner is create the perception that your company is feeling a pinch. That's a perception, Fletcher observes, that could quickly grow into a dangerous and damaging reality.
Fletcher, of course, should know.
As president of the building industry consulting firm George S. May International Company, he presided over a recent study which conclusively revealed that homeowners retain a marked preference for working with remodeling professionals who exude success. Remodeling consumers feel far more more comfortable with companies they believe will meet their expectations, Fletcher notes. While they may feel sorry for a business that's experiencing hard times, he adds, they'll take their business elsewhere in a heartbeat if they get even the slightest hint that something is wrong with your company.
This reaction part human nature and part a fact of business life is exceptionally difficult to overcome once it begins. It also warrants particular attention these days.
The current industry slowdown which may be more myth than fact, and will probably be over before it's truly felt is a time for many things . . . the least of which is to signal prospective clients that business may be off and your company may be hurting.
Instead, kitchen and bath dealers and manufacturers should view any sort of slowdown they may be feeling right now not in a "glass-half-empty" frame of mind, but in light of the opportunities a slowdown presents. In short:
The opportunity to devote more time to customer service, marketing, personnel and other issues that may have gone neglected when the flow of business was at a fever pitch.
The opportunity to address critical showroom needs that weren't on the radar screen, in terms of your priorities, until you had a moment to breath.
The opportunity to branch out into sales of new kinds of products and services, while broadening your base of business and creating new types of clients.
The opportunity to simply catch up on things, energize yourself, polish your skills and tweak your business none of which you can really get to when business is "too good."
Now is a good time to remind yourself, too, that a high level of revenue doesn't necessarily translate into a high level of profitability and that there are steps you can, and should, be taking to increase your profits even if sales are down for your business.
In fact, according to the NKBA's recently completed 2000 Dealer Profit Report reported on in this month's issue of Kitchen & Bath Design News controlling key profit variables is of far greater significance for kitchen and bath dealers than simply increasing annual revenue. Interestingly, the Dealer Profit Report finds that the highest-profit dealers in the industry actually have lower average annual revenues than "typical" dealers. They also have far less overhead, turn inventory faster, get paid quicker and have greater levels of employee productivity.
All of which have nothing at all to do with the high levels of revenue typically associated with high times good news when sales slip.
Lastly, I think it's important to put the current "downturn" into proper perspective.
Stated succinctly, things are not nearly as bad as some people may make them sound. Viewed in a historical vein, in fact, they're actually quite good maybe not quite as good as they were in the past few years (which, remember, were record years), but certainly far better than most years in the industry's history.
So don't go broadcasting the news if sales at your company start to slow. It may not necessarily be "bad" news for your business at all and it's certainly not the kind of news you want to share with the people you'd most like to do business with.