Leah: Ken, business is so good these days that kitchen and bath dealers seem to be chained to their operations. They love having the work but not the workload. How can they make time to work on their business so they rise head and shoulders above their competition?
Ken: This is just the time that owners should be furthering their business education, because their competitors are also working too many hours to keep up with the demand. To me, being ‘too busy’ does not equate to being productive. Or being profitable. That kind of response is sending a strong signal that owners are working in their businesses, not on them. When I hear someone is ‘too busy’ to attend a seminar or conference, or to get away for a long family weekend, I am genuinely concerned for their health, both physical and mental. And for their company’s welfare.
Leah: Sounds like a self-defeating, never-ending track of trying to get all the business while they still can. Isn’t the quality of a dealer’s customer service the first thing that usually breaks down when owners and team members are ‘too busy?’
Ken: Yes, exactly. And that can quickly affect a company’s reputation. Looking back over my 50 years in this industry, the single most important quality a business owner can bring to his or her company is self-discipline. Simply put, the person most responsible for holding back the continued growth of his business, and team productivity, is the owner himself.
Leah: An absence of self-discipline is probably true of lots of sales designers, too. Continuing education can be a real challenge when times are flush. How do you define self-discipline?
Ken: I think the dictionary probably defines self-discipline as the ability to make yourself do things you know you should do even when you don’t want to. Or, in the case of kitchen and bath folks, even when you are ‘too busy.’
Leah: So why do you single out industry owners for their absence of self-discipline?
Ken: Two reasons. First, most business owners blatantly don’t know what they don’t know. They love design and the creative side of the business. Rather than learning about financial management, how to run a business by the numbers, they continually sign up for more design courses for which they are already quite expert. Even in good times, most apparent business successes are just a shiny veneer for weak balance sheets.
Leah: I can see where ego can get in the way of making the best business decisions and growing an operation profitably. What’s the second reason?
Ken: The second is that small business owners don’t have to answer to anybody. They don’t have a boss to evaluate their performance or a board of directors to please. So if some business improvement project isn’t completed by the end of the month as planned, it will get done soon enough. There is always tomorrow.
Leah: Can you give a few examples of why an owner’s lack of self-discipline plays such an important role in a company’s success?
Ken: Sure, a SEN/Kitchen & Bath Design News survey revealed that 83% of kitchen and bath firm owners don’t prepare an annual budget. Not preparing an annual budget for a $2,000,000 business is like not doing a detailed estimate for a $200,000 kitchen project. You can’t expect to realize your financial goals for either.
Leah: That’s why SEN estimates the vast majority of business owners undercharge their clients by as much as 15-20%. They don’t understand the direct connection between what their budget dictates the company’s overall gross profit margin must be in order to earn a 10% net profit and their pricing formula on all projects.
Ken: Precisely. Another example of the absence of owner self-discipline is that few companies have a proven, written sales process for all team members to follow – something from the first hello to the collection of the final check. I have witnessed countless times where multiple designers on the same showroom floor each use a different sales approach with prospects. As a result, most firms are not getting even close to realizing their full revenue and profit potential.
Leah: So, with a proven, successful sales process handed down in writing from the owner, companies could, what…potentially double their sales in roughly half the time?
Ken: Yes. Or even triple their sales if the process was automated.
Leah: I imagine, then, that a general resistance to technology would serve as a third example of owner lack of self-discipline. Industry owners tend to be baby boomers who haven’t grown up with technology the same way millennials have.
Ken: I completely agree. Most owners seem overly comfortable sticking with a combination of Excel spread sheets for estimating jobs and one or more single-purpose technology tools – like for lead management (CRM) or production scheduling, rather than leveraging some self-discipline to learn how to gain much greater productivity by converting to a single full-cycle, web-based software program that manages a client from lead inception through budgeting, estimating, product selection, contracting, ordering and project management.
Leah: Besides speeding up the sale, that kind of early technology adoption would not only make a positive impression with prospects, but no doubt zip them past their competitors in sheer productivity and revenue generation. So, again, how can ‘so busy’ kitchen and bath owners make the time to get smarter about business budgeting, pricing jobs, developing a powerful sales process, automating operations for streamlined efficiencies and the like?
Ken: In my view, it’s finally time for kitchen and bath owners to adopt a new routine. The reason that they feel like hamsters running on a wheel is that they haven’t taken regular time off to get away from being ‘in’ their business – in some cases, far, far away – to learn better ways of doing business, or thinking about what it takes for consumers to pick them over their competitors.
Leah: You are talking about an annual plan for education and renewal then?
Ken: Yes, I am. A saw can get pretty dull when used repeatedly over and over again. It needs to be sharpened every once in a while to get the job done more efficiently. The same advice applies to kitchen and bath professionals who work so hard, day in and day out and even on weekends, to have their projects fit seamlessly in a client’s home. To that end, SEN’s planned BIZCON event, for example, would serve busy professionals well as part of their annual education plan. It offers a great variety of business education workshops mixed with inspirational keynotes, fun networking events, and the opportunity to relax and unwind in a lovely resort setting.
Leah: In his famous book, didn’t Stephen Covey call ‘sharpening the saw’ one of the seven most important habits of highly effective people?
Ken: Covey actually hailed it as the seventh – and most important – habit. Because it makes all the preceding ones possible. It preserves and enhances the greatest asset kitchen/bath professionals have – themselves! It renews the four dimensions of human nature – physical, spiritual, mental and emotional. ‘Sharpening the saw’ is the term he ascribed to a balanced self-renewal. In his view, the single, most important investment we can ever make in life is the one we make in ourselves. Because we are the ‘instruments of our own performance.’
Leah: I’m interested in knowing more specifics about how you would set up a recommended annual education and renewal plan. But our time has come this time around, so let’s cover that in our next column. ▪