Since early 2008, cabinet dealers and remodelers have been witnessing a downward trend just as most of the other businesses in the construction field have. As 2011 kicks off, there seems to be new hope that the worst recession since the great depression could be loosening its grip on the industry. The last three years have taught cabinet dealers and remodelers how to survive in lean years and how to get the most out of their stripped down businesses.
As signs point to growth, cabinet dealers are searching for ways to be at the forefront of the resurgence of the industry and realizing the importance of increasing their efficiency. Perhaps the fastest and most productive way to do so is to implement an effective automation process for your business.
Efficiency has always been a major factor in increasing bottom line margins, but the last three years have taught business owners of all sorts how to become less wasteful, more resourceful and more streamlined.
Doing more with less is every owner’s goal and the cabinet dealer’s and remodeler’s world is no different. How can a cabinet dealer position their business to come out of the recession on the leading edge of efficient kitchen purchasing? The answer is simple: Implement an automation strategy to help your dealership in the following areas:
Error Frequency and Cost– A $10M operation with an average sale of $5k, with 20% of its jobs each containing a $300 paperwork or pricing error can add $120k back to its operations each year.
Labor Reduction– A cabinet dealer or remodeler with 5 sales people who each spend 20% of their time purchasing can essentially add one full-time sales person by automating the purchasing work.
Customer Service– If a $10M dealer loses 5% of their customers each year from poor customer service, process automation can add $50K per year back to the bottom line by giving the dealer the capability to better serve the customer.
Reporting-Automation usually means much easier reporting. Many dealers fail to understand how much manpower they are spending to compile their management reports. Eliminating this effort and having better information can easily add $25K to $50K to the bottom line.
Commissions– Most dealers and remodelers don’t have the automation to track true gross profit by job. This means they are most likely overpaying commissions. If a $10M operation makes no money on 5% of its jobs each year, but still pays a 5% commission, they can easily recapture an extra $25+ each year by implementing process automation with good job gross profit tracking features.
Sales– If a dealer or remodeler can quote more efficiently, they can win more work. If a $10M dealer has 8 sales reps and they each can increase sales 25%, they can easily add $200k to $300k in net profit (cash) to the operations each year.
The current business environment encourages dealers to review their operations in search of greater efficiency. The fastest way to do so is to implement or address your automation process strategy.
Service– If a $10M dealer loses 5% of their customers each year from poor customer service, process automation can add $50K per year back to the bottom line by giving the dealer the capability to better serve the customer.
The current business environment encourages dealers to review their operations in search of greater efficiency. The fastest way to do so is to implement or address your automation process strategy.
