Paul’s Cabinet Shop in rural Plymouth, WI, had a backlog of orders stretching 11 weeks, enough to get its 18 employees into June 2008. Brad Parent, the new owner, was learning how the cabinet trade differed from his general contracting business. His first year, 2007, sales were up 15 percent. But then the market crashed.
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“To get through the slow period, I had to learn the manufacturing business quickly. The business was so fat from the good times that I wasn’t sure where to make the cuts,” says Parent.
The shop was heavy into remodeling and also cabinets for new homes. Prior to the market downturn, Paul’s Cabinet Shop focused on a standard cabinet they could build repeatedly, in volume. The shop avoided custom work, designers, and anything out of the ordinary. “We avoided anything elaborate,” says Parents.
Parent took a hard look at the shop and decided he would treat it not as a cabinet shop, but as a business. “I read an article about how during a tough economy it is better to make one big cut instead of several smaller ones. I ended up making two medium cuts instead.”
While cutting the receptionist, six plant people and design, Parent revamped the manufacturing process. The shop went to just-in-time delivery of all its goods. By talking to new vendors and establishing relationships with key suppliers, they eliminated the bunks of inventory and cases of hardware that ate into profit.
But the real key to survival and success was increasing the sales closing rate.
“The most important thing we did to increase our profit was changing our sales process. In the past we would take a $500 deposit and re-work the plans until the customer was satisfied. This process took several weeks and sometimes we would lose the job just as it was about to close,” says Andre Ozols, Sales Manager for Paul’s Cabinet Shop.
Parent's motto is: “Sales Fixes Everything,” so, with that motto in mind, Ozols went back to the designers and opened the door to more custom work. He also changed the quote process from three weeks to two days by coming up with three standard offerings based on lineal footage, and lastly, he changed the sales process. “We found a way to increase our closure rate by over 50%.”
Ozols focused on changing the customer’s expectation at the first meeting. He meets with the customer and explains that the first design they come up with will not be final. At the next meeting Ozols arrives with a basic design and three estimates. The design is based on the linear footage of cabinetry including most of the standard accessories; undermount slides, trash roll-outs, susans, and roll-out shelves. The three estimates are created from three different wood species: oak, with basic cabinetry; nicely appointed maple and a full decked out solid cherry with painting or glazing included.
During the first meeting, Ozols also sets up the expectation that if the estimates are approved, a 50 percent deposit will be required to go further with the job.
Parent sees the business picking up from the recent changes. “We are more profitable now with less people. We have the right core employees for the volume of business and we are interviewing people for key positions so we will be ready as the business grows. The key to our future will be getting Andre in front of more people more often.”
Ozols says, “People walking in our door are not sales — shoppers and referrals are not really making sales. Sales are building new business by going out into the field and getting it. Now that is a sale.”
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