I began my home improvement career in 1980, selling solar hot water heaters. Over the years I've worked for various companies, in sales and sales management, mostly in the home improvement industry, including time spent at AMRE, a Sears SFI contractor.
During the late 1980s, I met someone who also worked for AMRE and who later started a window replacement business. He contacted me to help expand the company's sales.
The business grew from about $2 million a year in 1996 to $3.5 million by 1999. At that point the owner sold it to a family from out of state. This family owns many businesses, including a window manufacturing operation. Their intention was to use the company to market their window product.
At the end of three years, with sales eroding, the owners decided to either close the business or find a buyer. I bought the company because I knew what the potential was and I felt the group of employees we had was awesome.
Strategic Changes The experience of previous owners I'd seen convinced me that I'd prefer to run a company rather than own one. But, having been executive vice president and then president for more than seven years, I knew the workings of this company better than anyone. And without having to please an outside authority or be limited in my product selection, I could follow my instincts and succeed.
When I bought the company, it was not really that profitable. At the time I became owner, in June 2003, we were projected to generate about $2.5 million (down from $2.8 million in 2002). Needing to boost sales, the company had purchased a Luxury Bath franchise. I was particularly excited about that, because I felt that the bath division had great potential. I needed to turn the company around.
The Turn Around The first thing I did was lower my overhead. We were operating as though we were hitting much bigger numbers than we were. I took a hard look at expenses. I cut some staff. I analyzed our advertising and decided which media should stay and which should go, calculating that we shouldn't use any lead source where we didn't generate at least $5 in revenue for every dollar spent.
In my first year of ownership, revenues grew by about 25%. I adopted an aggressive lead generation strategy, based on targeted direct mail. I switched our window product line and brought on a higher-end product unique to the area, featuring, for example, self-cleaning glass, so we could differentiate ourselves from other companies.
That fired up the sales-people and increased our average job price to more than $8,000. I also hired a salesperson who was an expert at selling Luxury Bath. In the first six months, we not only increased window sales but also tripled bath revenue. At the time, bath sales were 15% of volume. Today, they're 40% of our sales.
Sense of Purpose The company is now profitable, and I'm confident we can maintain profitability as we grow toward the $5 million level. My long-term vision is to continue building a stable work environment for me and my employees and to create very happy customers along the way.
What did I learn? First, never say never. Second, opportunities always exist but can be scary. Successful people are the ones who take action. And third, respecting employees will reap rewards beyond your and their wildest dreams. —Donn Reinin is owner of The Clear Choice, a replacement company in Livermore, Calif., that specializes in window replacements and bath remodels.
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