Hank Darlington says: Resolve to make better use of management tools and follow smart business practices.

I’ve been writing this column for many years and every once in awhile I find it a challenge to come up with a relevant and educational topic. My ultimate goal is to help you run better, more profitable showrooms. However, once I zero in on a topic it seems like I never have enough space to fully express my thoughts.

This month I had a number of topics that I thought might be of interest to you:

 2011 is going to be a better year.

Everything I’m seeing and reading indicates that this year will be better than the past several. Praise the Lord! It’s been a long, hard, unpleasant struggle.

Those that have survived will be stronger, brighter and better positioned to be successful for the years ahead.

Managers had to make some very tough decisions these past few years. In order to survive, cuts had to be made in almost every area - not the least of these being people. People costs generally run 55% to 60% of total expenses - so this is one of the first places managers have to look to make cuts. The smart managers got rid of the weakest, least-producing team members. That means that the strongest are left to move forward. This is a very good thing!

More sophisticated, better management tools need to be instituted.

Too many folks out there have NOT been utilizing all the best management tools available. The past several years have forced people to get much smarter in this very important area. Some, but not all of these, include:

• Develop a comprehensive, well-thought-out annual budget. 
• Maintain true, accurate, readable monthly profit and loss statements for the showroom, to serve as an honest report card on the financial operating results of each showroom. Study them and react to them. 
• Write a job description for every showroom team member. 
• Evaluate the job performance of every showroom team member in depth at least once a year. 
• Create an annual marketing plan for the showroom that includes how many dollars will be allocated to telling the showroom story and where these dollars will be spent.

(If you fall short in any of these business management areas, you might consider buying my book “Kitchen and Bath Business Management.” This is a hardbound book in layman’s language on how to run a small business. Call or email me for more information).

Develop the absolutely best website in your entire marketing area.

Many of you have had to make serious cuts in your marketing budgets. Newspapers and Yellow Pages are dying. Good “home” magazines are expensive, and television and radio are hard to do. But today a good Web site can be by far your most valuable marketing tool. Hire a professional and do it right!

Develop a revised compensation program that is driven by productivity.

I’ve talked with a number of people who have changed their programs in the past few years. They’ve gone from more “guaranteed” pay to programs that reward sales and margin productivity (the higher the sales number and gross profit margin, the higher the compensation). Straight salary lessens the incentive to sell more at a higher profit.

Set a goal to improve your GP margin by 1% in 2011.

You make too big an investment in building out your showrooms, educating your people, and being the “go to” destinations for decorative plumbing products to be languishing in the 27-32% GP range. Your longer term goal (2-3 years) should be 35%+. A number of people are achieving this in today’s economy - you should be, too! Raise your prices today, just one point.

Read my analysis of the 2011 Supply House Times Showroom Survey in the April 2011 issue.

I hope all of you wholesalers with showrooms participated. My article will summarize the results of this survey - the ONLY resource of true, accurate showroom benchmarks. See how the overall wholesaler showroom industry is performing and compare your results to industry averages in a number of important areas.

Bring your showrooms, displays and products up to date.

With the tough times of the past few years, many showrooms have fallen behind in this area. Develop a budget and plan today to start breathing fresh air into your showroom. The longer you wait, the more it will cost you - both in doing the updating and in lost business.

Diversify!

I have always been (and will always be) a big fan of showing a diversity of bath and kitchen related products in showrooms. The more products you show and sell, the more opportunities open up to sell more and make more money. Today’s busy shoppers continue to appreciate one-stop shopping. Make your showroom friendlier to both your customers and your bottom line. It worked for me when I owned my business. It’s working well for a number of my consulting clients and it’ll work for you.

Learn how to “blow your own horn.”

Learn how to win some awards, get written up in newspapers and magazines and then brag about it! I have a hard time understanding why we don’t get more nominations for our annual “Showroom of the Year” contest. Just think of the great PR that you could generate if you won. When I owned my business we earned these awards:

• Small Business of the Year in Sacramento, CA (Sacramento Chamber of Commerce 
• Best Kitchen and Bath Showroom in the USA (Kitchen and Bath Design magazine 
• Best Supplier of Kitchen and Bath Products (Sacramento area Dream of Homes 
• NKBA Hall of Fame (National Kitchen and Bath Association) and several more.

Sometimes we nominated ourselves and were proud to do it. Every time we received recognition like this we made sure we got plenty of PR. We created a “Wall of Fame” that showed our customers that we were winners. You should be doing the same thing. Don’t just sit there waiting for something to happen - make it happen!

Make sales training a priority for 2011 and forward.

Buy into the ASA “Essentials of Selling Skills” program. Attend workshops. Bring in professionals to help teach the all-important basics of selling. Ours is a selling business. Nothing happens until the sale is made. Very few of you spend the time and energy or money to teach your people how to be truly professional salespeople. This drives me nuts!

Speaking of going nuts, here’s another pet peeve of mine: When salespeople do not get up and welcome a customer into their showroom. Last month I was in southern Florida working with two of my consulting clients. One was seriously looking at growing a new showroom in a new area. I was asked to do my “mystery shopping” exercise on six potential competitors in the area. I visited all six showrooms, spending about a half hour in each. Not once did a salesperson come up to me and say, “Welcome. Thanks for coming in. What project are you working on?” I just don’t get it! Business stinks, the showrooms were empty and still no one cared enough to find out who I was and why I was in the showroom. Isn’t there something terribly wrong with this? It has happened to me so many times that I’m no longer surprised. Disappointed, yes! Frustrated, yes! But not surprised. Your showroom is a destination stop. You owe it to your prospects, your company and yourself to meet and greet every prospect promptly and sincerely.

This has been a potpourri of thoughts and ideas for the new year. I hope that one or two may have rung a bell with you. If you have any subjects that you’d like me to consider writing about in the future, please send me an email at darlingtonconsulting@gmail.com. I’m always looking for new ideas.



Hank Darlington, owner of Darlington Consulting, writes several monthly articles for magazines, teaches seminars, and offers a full range of small business consulting services to kitchen and bath dealers, distributors and manufacturers. Hank Darlington was inducted into the Hall of Fame by the National Kitchen & Bath Association in April 2004. He can be reached at 2010 Granite Bar Way, Gold River, CA 95670. Phone: 916/852-6855, fax: 916/852-8866, e-mail: darlingtonconsulting@gmail.com.

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