2009 cabinet industryThe other day I was watching TV with my family when a show came on where they dropped this guy in the middle of the desert with little more than a smile. His goal was to survive. It was fascinating watching him use years of British Special Forces training to skillfully navigate through the desert to safety. I would have needed a guide to help me- which is why I thought of writing this article for you.

My family has been in the cabinet industry for over 50 years and survived some pretty harsh conditions. Our industry is facing some pretty harsh conditions now and no expert sees the business getting better in the next four months- and most think it won’t get better in 2009.

When they dropped this guy in the desert- he was pre-occupied with water- the way you should be pre-occupied with cash. He did anything he could do to build his store of water.

In 2009, instead of planning for the next 6 months- companies should assume a 12 month horizon with little recovery of the market. They need to take actions that will reduce their use of cash and only count on small increases in revenue. Following are 6 steps cabinet dealers should take immediately, if they don’t see their current cash getting them through the next 12 months.

Step #1 – Restructure Employees

No one likes to let go of employees. It is hard to find good ones and laying them off feels like such a waste. Listen to me. Consolidate duties, lay people off and make sure everyone is busy. You can’t afford to give everyone a semi-vacation until the economy comes back. You should even look at the employees who got a little “over-paid” during the boom time and re-negotiate their salaries in exchange for keeping them employed. Use this rule; your people should be as busy now as they were 2 years ago. If you have the right number it will happen.

Step #2 – Re-negotiate

I mean re-negotiate everything. Talk to your cabinet suppliers, property management, utility companies and bank. Everyone is open to re-negotiate right now. No supplier wants to either lose a customer or risk not getting paid. Tell your vendors you need lower prices and better payment terms. All of them will listen and many of them will give it to you if you only ask.

Step #3 – Get Rid of “Non-core” Overhead

What does that mean? Well remember when times were good and you started fabricating counter tops? It was a good idea at the time. It might not be a good idea anymore. That additional overhead is what sucks cash out of your bank account when times are lean. Get out of “non-core” businesses and focus on your strength; distributing cabinets, and use quality 3rd parties to do the other.

Step #4 – Consolidate

Consolidate is just a fancy way of saying get rid of everything you are not using. Sublease warehouse space. Sell trucks you’re not using. Review all your equipment and sell anything you are not using, and close any locations that lose more money being open than if they were closed.

Step #5 – Partnerships

In lean times partnerships can help you reduce cost and increase sales without huge sums of cash. Look at all the people you are currently working with and see if you can suggest a relationship that might help both of you reduce costs. It might be sharing a showroom, warehouse or delivery staff. Be creative. Maybe approach a flooring or plumbing company to share office space. There are many companies in related industries in the same boat. Figure out how to help each other.

Step #6 – Plan for Cash

Just like the guy in the TV show planning to never run out of water- you have to plan how you’ll never run out of cash. In the show, the survival expert had dozens of little tricks to find new sources of water. Friends and family are always challenging, but a likely source of cash. Asking people you know and trust if they know someone who might lend or invest in your company is always a good undertaking. Finding an investor is a very slow process so start now.


Survival in 2009 will be about managing your cash. Take the right steps now to reduce costs, increase revenue and find new sources of capital. 2009 will likely be considered the deep winter of our current recession. By acting on these 6 steps now; you can ensure you’re around to enjoy the beautiful spring that is just around the corner.