Question
I have been an installer of architectural millwork for about 15 years. My income has topped out, so I'm wondering if owning a shop is the next step in my career evolution.
But it looks like there is an awful lot of overhead involved. I have seen shops set up with so much space to heat and utilities to pay, the overhead has got to be crippling. Especially when you figure in employee cost and payroll, etc.
And it seems that making the sale and getting it at the right price is the most important aspect of the game. If you are set up to do beaded face frame, and the customer wants a Euro kitchen, you lose the job. If you are set up for Euro box and they want face frame, you lose the sale. It seems the industry has become so specialized that any company that does one thing (i.e. doors) will be able to do it cheaper and better than a job shop.
So a good salesman (ex-cabinetmaker and installer) should be able to outsource multiple lines of cabinets and any components that he would need to build just about any job he could sell. Except for the weird or one-off reception desk, etc.
In my opinion cabinetmaking has come up to a level where the real denominator is the sales and customer relationship. This could be done without a large shop. I think the design and sales is now the most important ingredient. Anyone doing things this way?
Forum Responses
(Business and Management Forum)
From contributor A:
It's done by the big box stores everyday.
My shop is one of the seemingly few that will take on all different jobs. I do mostly residential, though occasionally get small commercial jobs. I don't try to compete on price with what everybody else is offering. I try to compete by offering what the other guys can't.
For example, I had a potential client call me up this past spring to talk about building a custom bar for his new restaurant. He wanted an odd shape (kind of like a spade from a deck of cards) and had several other shops tell him how difficult it was and that he should change his design so they could build it their way. I told him no problem! He was a bit surprised, but when we met I told him in layman's terms how I would build it. I got the job and now have another very happy client in my fold and never had to compete solely on price, but instead by offering something many shops couldn't or didn't want to do.
People want the wow factor; they want others to see what they have and ooh and ahh over it. This is where the sales part can either get you the job, or increase the scale of the job. I have another job coming up where I was asked to bid on a straight run of bookshelves roughly 28' long. In the middle is a 36" diameter chimney they were planning on just wrapping with bending plywood and painting. When I came in with my drawings showing how we could wrap the chimney with a half circle cabinet complete with doors below and curved glass shelves above to keep the bookshelves continuous, the job was sold. Not only did I not have to try to underbid somebody else, but I added about 33% to the cost of the job and still got it.
So yes, the sale is important, but more important is, what are you selling? You need to have a product people want to buy for a price they want to pay. If you're only becoming another middleman, you need to make sure there is an actual market left for you. And you're still going to have overhead, as to be successful you'll probably need some kind of showroom open normal business hours.
It can be done, but work must be sold at a price that figures subcontractor markup, your own salary/overhead and your own markup. I just could not sell enough work to just sell full time and justify sitting in the office while someone else builds the cabinets and does all the field work. For example, on a small bathroom job I could pay a plumber $70-$85 per hour, or I could just get in there and get it done and save those costs. Plus if I buy the cabinets from another firm, I pay 6% tax on top of price. If I make it and install it myself, I do not need to charge that tax. There is so much more to say, but it can be done. I continued to subcontract as an installer about 50% of the time for about 2 years until I had a large enough customer base to have all my own work. Also, although I make my best money on cabinetry, I have been getting far more calls for bathroom work, so I have had to learn how to profit from installing a $500 tub and related work.
I say start looking at relatively small shops that could supply you with components that you assemble and/or finished casework that you install. You may be surprised what you find. This isn't a new concept. There are companies such as Conestoga and Waltzcraft that are processing parts that you assemble and install. The only reason I suggested you look for local/small is from the custom standpoint. Custom cabinetry is more easily handled when you have some control over knowing what your limitations are.
Same installer slamming in 100+ frameless cabinets at a small business. My shop built them. I bought and sold a lot of postform tops with it, and I have a margin on those. The shop this week had 14 deliveries already, and the products ranged from residential to commercial. From solid surface windowsills and p-lam cases and tops to mahogany grain filled custom cabinets - we run the gamut.
We have one thing that contributor J mentioned above - service. The price generally is not the issue. Do we give estimates? Yes. Do we always get the job? No! Does what we get keep us busy? Yes!
Yes, you can order a lot in pre-made (outsourced), but I recommend predictability with capacity and reliability under your roof with whatever you do. Coupled with service and quality, you should be able to build a rip roaring business in two-three years.
You bring up the customer wanting a beaded face frame and that's what you need to price. Bid beaded face frame cabinets. Get the job and while the outsource is milling the stock (or get a Magic Moulder and Marc Sommerfiled Kit and do it yourself), build some frameless product. Or install a kitchen countertop.
Don't lose the sales because you are trying to convert them to something else. Sell them what they have pictured, draw it, spell it out in writing, contract it and deliver (don't forget to get money for materials and spend it on that - materials).
The sky is the limit with planning and versatility. One employee that has good clean cut lists can make a whole lot of cabinets in a decently equipped shop. But it has to be very well organized. It needs to be set up. Dust collection, air hookups, all machines ready to work. No fumbling around for anything.
High overhead is for the poor businessman. Turn the lights off and plug the air leaks, do not run the compressor unnecessarily.
Get a booth, two pressure pots, and two gravity feed guns and clean them and take care of them. Build a mixing bench, get some lights and keep it clean. Get set up to make money.
We run out of 5000 square feet and work diligently on Lean manufacturing. We keep the trips to a minimum and so on. Yes, it is about sales, but when you keep the basics in mind like doing what you say, they come back, and in droves.
Get a box line, find a granite partner, and keep the shop going with high end jobs or whatever, just price it right. Make money. Don't worry about the competition, focus in on the basics. Go make money.
Most cabinetmakers are horrible at sales. Sales is not about price, or at least price is one of the smallest factors. Price is a factor in the customer's choice when weighing different options, but it is not really part of the sales process. I'm going to repeat that...
Price is a factor in the customer's choice when weighing different options, but it is not really part of the sales process.
Over the years I attended a few sales seminars. They never talk about the price of the item, or negotiating the price. There are 3 or 4 discrete steps to closing a deal, but I forget them now. The point is that when sales, or more accurately salesmanship, is discussed on this forum it almost always turns into a price or value discussion. A real salesperson from an orthodontics supply company or SnapOn tools will tell you there is a lot more to it than that.
Most of us are a lot better off simply creating accurate pricing schemes for our work and having others do the selling.
I guess where I am going with this is that I think my real value is in my knowledge of how to get a wide variety of wood based projects done, and who the best suited players are to fit each need. It is probably not in trying to be Home Depot cabinet design in a truck. I may have been headed a bit in the wrong direction with that line of thinking.
I like to install and of course that is where I make my best money because it is what I am proficient at. But I guess the real core of where I am going is seeing 15 years into the future and knowing that at 50 I will not be as fast or able to keep up with a fast paced install job. But I will still have 15 or more working years left and do not want to have to look for a pm job at someone else's operation. I have a real problem with having to be the one running the show.
A few years ago I had 12 installers under me and did the install for 3 local shops. This was almost enough income for me to stop putting on the bags and manage full time. Two of those shops do all the install in house now, and the third can barely keep me busy and some days a helper. All three have cut a lot of manpower.
What do those of you that outsource your installation need the most in your installer subs?
I think I would really lean toward your type of setup, contributor C.
2- No supers or PMs calling me because of smoking, cussing or spitting on the job.
3- I need solutions fed to the shop, with me in the loop. If it costs money as in an extra, get involved, but make sure the paperwork is in place. Then we are both going to make money.
4- Bring solutions and can-do attitude daily, to every job.
5- Personal problems and dirty laundry on the job is really not a good idea. I like to think the best of everyone and I don't really want to know about your cheating spouse or imprisoned brother. I have empathy and compassion, but I can't extract every hour of the day listening to it.
6- I have given you a picture, the prints are there. Make sure the install looks like the projected product we have drawn out of the client. My job is to get jobs and make money, so help me to do that, and I will in turn help you.
7- Call me in private, and tell me what the problems are in private. Period. We have to project the image at every moment that we really have it together.
Pointers on business... The shops are not your partners if you are not making good money. Good money for you means they are making a good percentage on you and apparently they are not looking at you with the perspective of "good business for him means good for us."
Answer your phone with can-do attitude and look at your schedule before you commit. I didn't say to tell them "I don't know..." Let's face it, schedules are just chess boards. I think you need to set up a 90 day plan as where you want to go and check it every week and make sure it is coming to fruition and make adjustments. Set up milestones and stick to achieving the goal.
In sales, you need to find a couple of serious interior designers and start wooing them. Solve their problems and sell them the entire trim package and when they want you to make beaded face frame cabinets, get set up and do it. Be ready. Listen very intently on what they want and put it in writing. Then deliver it. Or sub it out and tack money on it. Use someone you can trust and tell them you need it two weeks earlier.
I think you have been used and abused like a lot of us, and you obviously have the drive to survive. Now you need to place that energy into thriving and really make some money. One other thing, look within for all your problems. You can solve them and achieve the goals you want, you just need to commit.
