The sub-prime loan debacle and the downturn in the housing market have made everyone the home improvement industry a bit nervous lately. How does this uncertain economic environment affect your plans for growth and longevity in the window covering industry?
At Danmer, we’ve spent more than 30 years focused exclusively on the window coverings marketplace. During that time we’ve seen both economic booms and busts. Through it all, we’ve grown to become the largest fabricator of custom shutters in our local markets. Do we have a formula for this kind of growth and longevity? You Bet!
In a word, you might call it discipline. It’s easy to grow when everyone is growing. But sticking to basic cost reduction and efficiency enhancement techniques during volatile times is what really sets the successful companies apart from the struggling ones. We use a series of simple, tried-and-true techniques to maximize profits during such downturns.
5 BASIC STEPS
Here are five basic steps that, in spite of any potential for a slowdown in the short-term, will add to your bottom line immediately and insure your company’s growth and endurance over the long haul:
1. Reduce Waste—Find ways to eliminate more waste and optimize your material usage. By reducing waste by-products—even by as little as 10 percent—you’ll save thousands of dollars per year. This is money that goes directly to your bottom line.
Highly efficient new technologies and machinery will pay for themselves over time through significant waste reduction.
2. Innovate or Stagnate—If you’re standing still, the world will pass you by. You must innovate. Your customers are savvier than they used to be, so you need to distinguish yourself from the competition. Otherwise, your customers can’t tell the difference between you and your competitors.
Look for new products, new finance options, new services that you can offer your customers that set you apart from everyone else.
3. The Green Trend—The trend right now is for everything green in home improvement materials and processes. Take advantage of this trend to make sure your customers know where you stand. Educate them about your products that contain 100 percent non-toxic, flame retardant, water-resistant material, about your FSC certified wood, your non-toxic formaldehyde free glues, low VOC paint and stain emissions.
If you don’t have products that fit this mold, see Innovate or Stagnate section above.
4. Make Technology Your Friend—You don’t have to spend thousands of dollars to have sophisticated software that adds efficiencies to your business. Such tools are available from industry experts like the Thermalite Shutter Fabricators Association. Streamline your customer tracking, job tracking, scheduling, purchasing and inventory, job pricing, even sales commissions and installer pay. Accomplish these tasks in a single, unified software package and you’ll save you hundreds of hours in manual data entry and thousands of dollars each year, with all these savings going straight to your bottom line.
5. Data Is King—The days of placing ads in the yellow pages and waiting for your customer to flock to your door are long gone. Customers are more sophisticated than ever. They want to be educated, not sold. You need to be engaged in a regular interaction with your database of past and prospective customers. This requires vigilance in collecting data (contact information including phone, address and e-mail) from just about every breathing human being that you and your business come in contact with.
Every successful company with a long and profitable track record has learned how to use simple CRM (Customer Relationship Management) techniques to stay top-of-mind with their expanding customer database.
YOU SHOULD BECAUSE OTHERS WON’T
Here’s the real opportunity in times like these: Chances are, many of your local competitors will not take this disciplined approach and will flounder. Their market share will decrease, while those who innovate, interact more regularly with their customers, and build efficiencies into their operations will flourish.
The truth is that we’ve seen this all before. The housing and home improvement industries are not immune to the ups and downs of the economy. The real trick is in knowing how to weather the storm in a systematic and predictable way so that you come out on top.