October 2004

 

Strong Business Skills Bring Company Success>

With no cabinetmaking skills but a strong business background, Forbes Cabinets' new owner spurred additional growth.>

By Hannah Miller

 

Forbes Cabinets>

Apex, NC

www.forbescabinets.com

Year Founded: 1985

Employees: 10

Shop Size: 9,000 square feet

FYI: Under new ownership since 2002, the company narrowed its focus to medical and dental commercial casework and pursued larger jobs to increase profits.

When Jim Bendel bought Forbes Cabinets in late 2002, he had never built a cabinet, the U.S. economy was still in a slump and the dot.com meltdown had left empty office space all over the company's home area of Raleigh-Durham-Chapel Hill, NC. Not very fortuitous for a commercial casework company.

Today, Bendel still has not built a cabinet himself. But he has seen the company's sales grow from the $700,000 to $800,000 range to more than $1 million last year. This year, he says, "We will again top the $1 million mark."

The company, in the community of Apex just outside Raleigh, has added two fabricators and a part-time office manager, bringing the total number of employees to 10, counting Bendel. It recently purchased a CNC router from Stiles Machinery in order to do nested-based production. It is a brand-new model from Weeke, the BHP 200 Optimat, and is due to arrive by the end of the year, to great anticipation on the part of Bendel.

"We will be the first shop in the United States to have one," he says. "It is our expectation that this new CNC, in conjunction with a new software package (Microvellum) we recently purchased, will not only help us become more productive and efficient but will also ensure that our quality remains top-notch."

Of course, equipment isn't everything. When Bendel bought Forbes Cabinets, the company came with a couple of human assets that have been invaluable in the quest for success, he adds, namely Director of Project Management Keith Hill and Senior Production Manager Mel Manning. Between them, they have 27 years with Forbes, and Bendel says their skill and experience helped convince him to buy the company.

 

This reception desk for a Cary, NC, orthopedics and sports medicine clinic features cherry veneer and stainless steel panels.>

Bendel himself had spent the previous 15 years in the health-care industry. With the kind of commitment brought by Hill and Manning, Bendel says he felt he would have ample time to bring himself up-to-speed in his new field. However, his own background was also a help as he pursued his vision for the company's future. He had trained in economics at the University of Maryland and worked in sales and management jobs at an HMO. He was vice-president there before buying Forbes.

This background meshed nicely with Forbes Cabinets, which did a lot of work for medical and dental offices. Bendel had valuable contacts in the industry and says, "I also knew doctors like to upgrade their offices periodically."

Being in the medical market also helped the company weather the slow economy. Although businesses in the area struggled and left much office space vacant, "medical is basically recession-proof," Bendel says.

Recently, the overall space glut has begun to ease, he adds. "It has started to come back now, which we expected."

Long accustomed to looking closely at the bottom line, Bendel brought that type of focus to cabinetmaking, to Forbes' advantage. "A lot of our competitors are cabinet shops run by cabinetmakers who are not really business people," he says. "Their focus is not what my focus is. Every minute you spend doing something, you need to figure out how much you are making on it."

Focusing in on a Narrower Market

When it comes to sales, the company continues to do most of its work for a dozen or so general contractors with whom it has established long-term relationships. "If we give them quality, service and a fair price and live up to our commitments, there is a good chance they will keep coming back," Bendel says. He suspects that there are several dozen other contractors to whom he could pitch the company's work, but he has been so busy with existing jobs that he hasn't had the time.

 

This sterilization room in a dental office features patterned plastic laminate casework and a bright blue laminate countertop. About 50 percent of the plastic laminate Forbes uses in its projects is from Nevamar.>

One thing he, Hill and Manning have done is narrow the scope of what Forbes does, limiting it to the types of work employees like to do and do well. When he first bought the company, "We were bidding on everything under the umbrella of architectural woodworking," Bendel says. "During my first 60 days, we were in the middle of a small restaurant project that had taken way too long to complete. There was a tremendous amount of detail required for such a small space. It drove everyone nuts and took much longer to complete than anticipated. We lost money on the project. We don't do many restaurants anymore."

They shifted focus, and Forbes now does mostly laminate casework for medical and dental offices and office fit-ups.

In addition to laminate casework, it also fabricates wood veneer reception desks and sales centers. "We can provide standing and running trim," says Hill. "But we try to stay out of the panel business." There are so many other companies that do a good job of paneling, that Forbes avoids it, he adds. "Our forte is casework."

Forbes does all its own installation, even when the job is out of its home area. The company tried subcontracting its installation, Manning says, but missed the degree of control and quality it has when it uses its own employees. Now the only jobs subbed out are granite and solid surface.

Typically, cabinet interiors are melamine-coated particleboard and exteriors are plastic laminate. To avoid waiting on shipment of pre-laminated panels for smaller jobs, Forbes bought its own vacuum laminating press from Vacuum Pressing Systems, which has been a tremendous help, Bendel says.

Forbes prefers to stay in its own geographical area, but does travel outside of North Carolina for one customer that is building a chain of retail stores. "They use the same store fixtures at each store ," Manning says. "The customer gets the quality they want, delivered when they want. In a nutshell, they know what to expect from us.

"We are going to build them all, even if they go out West," he adds.

Bendel handles the sales, marketing, estimating and finances for the company. Hill and Project Manager Amy Le Westray do the design drawings, order materials and manage production scheduling. Once drawings are approved, they create the cutlist, which is sent to the 9,000-square-foot shop. There, Manning parcels out the jobs.

 

The red oak veneer used in this reception counter and desk area of a dental office features decorative mouldings in a contrasting species. The mouldings were laminated in layers to form the curves.>

Employee Appreciation

In the six-person shop, everybody is crosstrained. Even the two installers come into the shop to assemble pieces when they are not working on-site. But, says Manning, "I try to keep assignments to what employees prefer to do. Some like to do countertops. Others would rather cut."

Bendel is equally conscious of employees' needs. The company has managed to keep good people, he says, by providing a safe working environment, a terrific benefit package (employees get medical, dental and life insurance coverage at no cost), bonuses and above-average pay.

"It makes more sense to spend a little more to have a dedicated employee, than to keeping churning through employees just so I can personally make a little more," he says.

"We are very lucky to have skilled workers here in a market that really appreciates good workmanship in woodworking," Hill adds. Unhappily, not all shops offer that kind of environment to woodworkers, he says. He has a good vantage point for observing other cabinet shops across the country. Currently he is president of the Cabinet Makers Association and was one of the organization's founders in 1998.

Forbes also belongs to the Architectural Woodwork Institute. Bendel says he joined after he bought the company "to help me get a better understanding of the whole industry." The company became a certified participant in AWI's QCP program last year. "I thought that was very valuable and important to us," Bendel says. "The certification assures customers that they are getting a quality product from a quality shop."

The company's average job size has been climbing, from $10,000 to between $20,000 and $25,000. Smaller jobs are frustrating for a shop the size of Forbes, Bendel says. Customers think that because the jobs are small, they can be finished in a week, forgetting the time involved in ordering material, designing the project and scheduling.

Bigger jobs have a considerably longer lead time, Bendel says. This past summer the company tackled the biggest job in its history, $200,000 worth of casework for a two-story building. When asked how he planned to do the project, Bendel responded, "How do you eat an elephant? One bite at a time." The job went smoothly, he says, and the general contractor and owners were happy with the end result.

An Upgrade in Equipment

For many projects, Forbes relied on a ShopBot router that Bendel bought shortly after he purchased the company. He accurately predicted it would pay back its $10,000 purchase price in a year's time. He also bought a Brandt edgebander and the vacuum press during his first six months. The company already had two Altendorf sliding panel saws, two Brandt boring machines and a Rockwell shaper.

With the company's uptake in business and larger jobs, Bendel decided to replace the smaller router with a new Weeke CNC machine. He says he made the decision even before tackling the $200,000 job. "I felt that we either had to add more employees or upgrade to a CNC router," he adds.

Now Forbes can more efficiently pursue its revenue goals, he says. "We will focus on profitable jobs and manufacturing the projects we are good at and employees enjoy, which will help us become the market leader in the segments we are pursuing."

                                                                                                                                                                                           

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