International Door & Operator Industry

SEP-OCT 2013

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

Issue link: https://idoi.epubxp.com/i/177021

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Page 46 of 110

MaNageMEnt by John Zoller & David Bowen, Zoller Consulting, Inc. Is It Time for Capital Expenditures? Garage door dealers are emerging from a rough fve or six years after the construction recession. Many successful dealers carefully and successfully managed through these hard times. They realized the good times of plentiful new construction would not return for some years. They reduced their inventories and generated cash. With this cash, they paid down lines of credit, payables and equipment loans. They reduced unneeded staff, eliminated wasteful overhead and right sized themselves. Finally, they quickly understood that with homes not selling and with a glut of commercial space available, these successful managers redefned their organizations to emphasize retroft sales. This resulted in many frms remaining proftable, or marginally proftable during these tough economic times. Now however, there are signs of much stronger construction activity in many parts of the country. Now these successful dealers need to rethink the draconian fnancial measures they have taken to survive. Successful door dealers need to refocus on their organizations and efforts to make sure they are not so tightly controlled that they miss this apparent uptick in business. This might very well be the time to shake off the depression era psychosis and look at the condition of the company's rolling stock including equipment like trailers, forklift and scissors lifts. Now might also be the time to update computers and give the offce a major face-lift. It is important to truly comprehend how different today's industry is from what it was before the 2006-2007 construction crash. Data from 2012 shows that while the residential units comprised 25% of the doors sold, these doors represented only 13% of the total residential dollar sales. More importantly, 75% of the residential 44 International Door & Operator Industryâ„¢ units represented 87% of the dollars. Retroft doors sold are typically higher priced doors than those sold to new home construction. There are similar comparisons for commercial door sales in that a large majority of commercial sectional and rolling doors sold in 2012 were installed in existing buildings that were renovated for new use. Most of the limited new commercial building construction was for special use structures. This analysis forces garage door dealers to understand and act on the signifcant organizational changes need to succeed in this new environment. Marketing is the key to success. Dealers must embrace the three legs of the residential retroft stool: Creating and maintaining a great website; building and constantly enhancing a showroom with a signifcant "Wow!" factor; and teaching sales persons to close deals in the homeowner's home. Given that more commercial jobs are for retroftted buildings, no longer can a dealer react to just bidding every job that presents itself. Retroft jobs often go to the garage door dealer the contractor is most familiar with and trusts. Therefore, commercial sales persons must reinvent themselves and develop relationships with many contractors to assure a chance to quote a job. Given the emphasis needed to market the dealership, now is the time to review the fxed assets of the frm. How old is the feet? Has management resisted buying new vehicles in favor of a perceived less expensive repair? Is the forklift leaking gallons of hydraulic fuel? Is the scissors lift unsafe, but still in use? Is management constantly fghting a computer system that fails on occasion and requires the CPA to come in a recreate data? If yes, it might be time to purchase new rolling stock and upgrade management systems. Continued on page 46

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