The Key to Increased Profitability — Shop ‘Extensions’
Long-time New Jersey shop partners use other shops’ capabilities to raise their bottom line.
By Lisa Whitcomb
The quintessential saying, “Produce it quick and get it out of the shop,” is the core mission statement for Roselle Park, NJ, shop owners Julian Rappaport and Bruce Rogers.
Since 1977, Rappaport & Rogers Associates has weathered the highs and lows of the custom woodworking industry and have come out ahead of the game, its owners say, because they continually reassess their place in the market and overall business plan.
Implementing modern business practices and providing customer satisfaction and quality has led to continual growth for the company’s bottom line. “We are always trying to better ourselves and make a better product,” says Rappaport.
Building high-end European cabinetry is the company’s specialty, but in recent years it has diversified itself to include a line of semi-custom cabinets from manufacturers in Pennsylvania to stay competitive. “We carry these for builders and people who just don’t have the money and can’t afford to have a custom cabinet,” says Rappaport. By offering Yorktowne and Birchcraft cabinets, the shop attracts an additional customer base.
Over the last several years, the shop has decreased its overhead by reducing the number of employees to three and increasing the number of major pieces of equipment. Currently the 2,700-square-foot shop is in the process of adding a 900-square-foot office/showroom on the second floor.
Finding good employees is hard to do these days, Rappaport says. “The cost is high to train employees, and when they finally get to the point where they know what they are doing or they can make you some money, then they seem to want to go into something else or open their own business.” This lack of interest in custom woodworking is of concern for both men. “Once we are gone, I don’t know who is going to do this,” says Rogers.
The all-too-regular turnover of employees has led the company “to purchase equipment whenever we can,” says Rogers. This year it purchased a Busellato Jet 2000 point-to-point machine from Delmac that processes parts designed with Cabnetware software. “With the point-to-point machine in the shop, we can finish a typical job in a week, and we don’t have to rely on others,” says Rogers.
Other equipment in the shop includes a Striebig vertical panel saw from Colonial Saw, a Brandt edgebander from Altendorf America, an HP 3000 case clamp from J.H. Uhling Products, a Joos Junior hot press, a Magnum dowel insertion machine, two Ayen drilling machines from Black Forest Machine Co., two Blum hinge insertion machines, a Dodds drawer clamp, a Delta Unisaw tablesaw and a 5-hp Delta shaper with automatic feed. Owning these pieces “allows us to handle so much more work,” says Rappaport.
“People thought that we were stupid for buying so much equipment,” says Rogers and adds, “We probably produce as much as a 10,000-square-foot shop, I can guarantee that.” Rogers tells a story about the time a machinery salesman brought clients from Japan into the shop just so they could see how a small shop can house a large number of pieces of equipment efficiently.
In addition to owning a lot of equipment, Rappaport and Rogers realized they could take on even more jobs and increase their overall bottom line by outsourcing pieces of a project to other companies.
“A company that makes just one thing, like doors, will make a better door than we do and we know this,” says Rappaport. Rogers agrees. “Space is at a premium,” he says. “We just don’t have the size to build or spray everything here. We find it easier to send these jobs out and when they come back assemble them just before delivery.” About 70 percent of the shop’s projects are residential and 30 percent are commercial.
In the 1980s, the company switched over to manufacturing high-end European-style cabinetry. Rogers remembers, “In 1983, we decided to invest in all European equipment for the shop. We liked the look and especially liked the ease of the frameless production. We found that people were really excited and pleased with the look, especially here in the East. People wanted that full overlay look with the raised panel doors and more room in the boxes.”
Rappaport adds, “We got tired of doing everything the old way and screwing all of the cabinets together. You can get a much better hinge system on a European cabinet than you can on a face-frame, and they are less problematic, with more ease getting into the cases.”
At the shop, the employees produce all boxes, which have pre-finished maple interiors unless a glass door will be used. They also do light finishing and all of their own laminating and veneering. “We have our own hot press to layup specialized veneers and more exotic-type woods that you cannot readily purchase,” says Rogers.
In recent years, the shop has begun ordering all of its wood drawers and doors from Meridian Products and its thermofoil doors from DKT & Sons Inc. It also uses other local shops for various pieces needed for a project like mouldings and fluted columns. “We have millworkers who make special mouldings for us, which we supply to architects and contractors. We send most of our things out to be finished now for health and space reasons,” says Rappaport.
The company also buys out things like carvings and corbels, which it uses to enhance its cabinets. “We think that we are very clever in how we can make something that looks very involved, and yet it is just really cleverness (like hiding storage racks behind fluted columns in a kitchen),” says Rappaport.
Rappaport and Rogers like to refer to outsourcing as using “extensions” of their shop. But even with these extensions, they avoid any project if it is deemed time-consuming and not a money maker, says Rappaport.
In addition to using other local woodworkers, the shop also utilizes installers and granite and marble fabricators, and Eagle Fabrication, a local firm, for all of its solid surface tops. It has an in-house designer. Designs are free of charge for repeat customers. However, the men will charge new clients for design services, because it is an excellent tool for weeding out those who are less serious, says Rappaport.
Rogers, who used to be an electrician, stays on the premises full-time and runs the milling machines and manages the employees, while Rappaport, a one-time general contractor, assists with the installations and works on the sales side of things.
The men meet every morning to keep each other abreast of the shop’s work load. “We spend an hour to an hour and a half going over projects and any special problems we might be having with a customer. We also discuss how we are running our business, who we will buy our materials from and any other loose ends,” says Rappaport.
Customer satisfaction is always a primary concern for the company. “Once a client or contractor has worked with us they generally call us back or recommend us to someone else. This is how we get all of our business. We don’t advertise. We haven’t had a need to,” says Rappaport.
“We still get service calls, sometimes 15 years later. People are surprised that we are still here. We will go back and touch up or take care of something many years later. And if we feel that it is something that should have never happened, like a glue failure, then we will take care of it free of charge. We have always taken great pride in servicing our clients and our old accounts,” he adds.
Both men agree that going into business is a large investment. Unfortunately, the duo learned early on the ramifications of taking on a job without being paid something up front. “We went 16 weeks one time without pay. It was really hard on us, because we had obligations to pay on. But we learned our lesson,” says Rappaport.
“The only way to protect yourself is to have a payment schedule,” advises Rappaport. “This is what we do now. If it is an inexpensive job, then we ask for 50 percent up front and the remainder on completion. For expensive projects we graduate the payments, beginning with 33 percent and ending with a client only owing us a couple of thousand dollars at the end. If a client doesn’t want to start off adhering to your payment schedule then you shouldn’t take the job, unless you are really really hurting.”
Another way to protect your business, the men say, is not to hire any subcontractor who cannot prove that he has up-to-date health and workman’s compensation insurance. “If we find out that an insurance policy has lapsed on a contractor or that his insurance company has dropped his policy, then I will back-charge him a percentage of what it is going to cost me when I have my yearly audit, which is either conducted by the state or my insurance company. If I get charged, I make sure I get paid for it,” Rappaport says.
Carrying completion insurance is another way in which the shop guarantees customer satisfaction. Rappaport says this ensures that if any damage occurs as a result of their installation, then their insurance company will pay for it.
Installations are a source of pride for the shop. “We are extremely particular that boxes and tops are scribed to the walls and pre-fit before we build them. All of our joints are glued and everything is nicely caulked and filled on site. We always offer new construction contractors a mechanic for the first time, so they know how we work and how everything goes together,” says Rappaport.
“One thing we have always used is 1/2-inch backs on our boxes. With our melamine boxes we used to use 5/8-inch backs and now we are using 1/2-inch there as well. This lets us keep our milling the same [without having to adjust the machines too often],” says Rogers. The shop also uses 3/8-inch solid bottoms on drawers, top-notch slides and dovetailed joints for added durability. “We do everything we can to make a better product, a stronger product,” says Rappaport. “We care because it’s our product, it’s our reputation.”
Looking to the future Rappaport and Rogers want to stay in the shop they already own, but plan to find more ways to use shop “extensions.” “The bigger the shop, the bigger the problems,” Rogers says with a laugh. He adds, “We are hoping to utilize more outside people who do their own installations,” says Rogers.
Another area of growth the shop is interested in is closet systems, “because they [are less involved and] move through the shop quicker than a kitchen does,” says Rogers. Rappaport looks forward to bringing clients into the shop’s new 900-square-foot office/showroom space. By bringing the clients in-house, he says, “We are showing them a little touch of everything. This will be a working showroom. Clients will see our work first-hand and they will know what it looks like, what it feels like and what the colors are.”
To round off their business and increase their profits even more, the men are also looking into becoming a displaying dealer for other products, such as appliances, plumbing fixtures and hardware, thus allowing them to sell these things as a side business to clients they already have.
Rappaport and Rogers recommend that people should not go into business today without a bankroll behind them or some kind of secure cash that they can live off of for a year.
“If someone thinks that he is just going to start a business and get paid – it just isn’t going to happen,” says Rogers. “What he should do is save for years, ask questions, read trade publications, develop relationships with other local shops and share his equipment and knowledge. Because sometimes, someone else has an easier way of doing the same thing.”
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