At first glance, Mitchell, S.D., home of Patzer Woodworking Inc., would probably not strike a cabinetmaker as an ideal place to open a shop. With a population of about 15,000 and a business climate where local lumberyards have locked up nearly all woodworking business connected to new construction, it wouldn't appear that there would be much work left to go around.
Appearances can be deceiving. In 2005, Patzer Woodworking logged an impressive $2.4 million in sales.
So how did it do it? Through aggressive marketing and by offering products not typically found in a cabinet shop: ceramic tile and hardwood flooring.
Tom Patzer, owner of Patzer Woodworking, started his business in a fairly typical way in a 1,000-square-foot garage. In 1986 he moved up to a 4,000-square-foot facility, and expanded that with another 1,200 square feet by "tugging another building in behind it with a tractor and building a hallway in-between," Patzer recalls.
Patzer realized early on that the only way a shop could compete with the many local lumberyards Mitchell's equivalent to big-box stores was to offer speed, quality and some things larger operations couldn't, such as allowing design changes once an order was in production, close attention to installs and on-site finishing touches. The strategy paid off. By 1996, Patzer had grown the business to $500,000 in revenues with six employees, which prompted another move this time to a 9,600-square-foot shop in Mitchell's business district, and near the thoroughfare that leads to Mitchell's major tourist attraction, the Corn Palace.
Within a year, growing pains hit again and the facility was expanded another 2,400 square feet, to 12,000 total. This held until 2003, when Patzer moved across the street and built the company's current 24,500-square-foot facility.
The addition of flooring to Patzer's offerings happened almost by accident. A friend of Patzer's was building a house and asked him if he could get him a wood floor. Patzer checked with several suppliers of wood floors and found that, to his surprise, he could. It was not long before other customers asked about ceramic tile, and he found he could supply that as well.
"It's a perfect tie-in because we don't put the cabinets in until the tile is down or the wood is down," Patzer says. "So we coordinate the floor layers. They don't work for us, but we assign all their work."
Now, flooring makes up $400,000 of the shop's annual sales and Patzer couldn't be happier. "We have a real opportunity with this flooring thing. I've never sold anything where you're guaranteed a profit," Patzer says. "We build cabinets, but if we don't make hours or control our materials we don't make money. But I can sell X amount of flooring, make a set percentage on it, and that alone pays for my office staff."
Importance of marketing
About 60 percent of the shop's cabinet work is residential remodels, which averages out to be about $10,000 per job. "With roughly $1.2 million of our revenue coming from residential sales, that means we do a lot of small jobs," Patzer says.
To get that many jobs, Patzer relies a great deal on walk-ins to its 3,000-square-foot showroom, which looks and feels very much like the kind of showroom typically seen in big-box stores. More than a dozen kitchens are on display, interspersed with bathroom vanities and fireplace mantles. Ceramic tile and hardwood flooring displays from several manufacturers are prominently displayed, and the floor consists of a mosaic of different flooring types.
To help bring in traffic, Patzer Woodworking advertises a lot on the radio, in the Mitchell newspaper and in the newspapers of small towns around Mitchell. Patzer's client area is roughly 150 miles north and west of Mitchell and about 30 miles east. Moving farther to the east puts people closer to Sioux Falls, where there is a Lowe's and a Home Depot.
The shop's commercial work varies a great deal. Currently, it is working on a job for the George McGovern Library at Dakota Wesleyan University. It routinely does work for businesses in and around Mitchell, and has even done work for the Corn Palace.
As to the cabinets themselves, Patzer is adamant in regard to what his shop will build: frameless cabinets only. "Everything you see in my showroom is based on a frameless format," Patzer says. "I won't build a face-frame kitchen. I hate them. This is the form of cabinetmaking we've perfected. My guys don't have any idea what a face frame is. Why would they? We didn't teach them. Our customers don't care. Customers want a look."
According to Patzer, the wood most requested for cabinets is maple. Following that is cherry, hickory, birch and then oak.
The shop section of the facility is 13,000 square feet and includes 12 full-time employees. In 2005 Patzer purchased a Weeke BHP 200 CNC router and is moving to nested-based production. Before purchasing the CNC router, the shop was using a beam saw and a point-to-point CNC machining center. "We were doing that with disks, and weren't doing the screen-to-machine thing," Patzer says. "Now we're going from screen-to-machine, and that's slick." The company uses Planit Cabinet Vision software.
In the shop
Patzer outsources its doors and offers a lead time of 6-8 weeks. However, once a job hits the shop, it actually only takes about a week and a half for production.
Jobs go to the floor by way of a written work order that details materials and assembly. Pieces are cut at the Weeke CNC router, put on a cart, moved to an SCMI edgebander, and then go to a craftsman for assembly. Craftsmen work in teams of two on a project. "That way, no one does just drawers' or anything like that. Otherwise they get bored," Patzer says.
Once jobs are assembled, they go to the finishing room, where Tami Young, the shop's finisher, sprays the pieces with a catalyzed lacquer. Pieces are then rack-dried.
Laminates are ordered in within a day. Patzer makes laminate tops and orders out their postform tops.
One unusual aspect of working at Patzer Woodworking is that all employees get overtime each week, working 45 hours. Patzer's two college-age children, Ryan and Amanda, work in the shop during the summer and their school breaks. Ryan, a metallurgical engineering student, plans to return some day to run the family business.
While Patzer expected that a 3,000-square-foot showroom would be sufficient when he built it, he has found that he already has to remodel it because of changes in flooring offerings. While a larger showroom would be nice, Patzer has no immediate plans to expand again.
"We want to get used to where we're at for a couple of years," Patzer says. "Then we'll decide where we want to go." l
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