Hello. If you can make it through the long read, I appreciate it. I am 31 and have been self employed in the remodeling industry since 2015. Most of that time I was physically on the tools and self performing most if not all work, specializing in Kitchen & Bath remodeling, finish carpentry such as wainscoting, crown mouldings, fireplace surrounds, built in cabinetry, etc. I had ventured into “large job” territory which included an addition, large structural beam installation, and more.
There was a family owned K&B showroom that was failing due to utter lack of organization and leadership. It is a design/build business model. They had to leave the showroom and the landlord was left with this beautiful K&B place, which took at least $250k to build out and finish. Comes with an approx 16 car newly paved parking lot, 2 large attached warehouses, offices, conference rooms, and an extremely large (300x300 maybe bigger) back lot for 18 wheeler deliveries, company vehicles, dumpsters, etc. I also inherited most of the employees, so they really know the ins and outs of the day to day.
I took it over in November. November and December are notoriously slow for my industry but there were some ongoing jobs that we finished out (under new management). Now, we’ll be dead slow in a couple more weeks because it has taken me too long to get all the marketing together, and I’m still not done.
The business model is there. The showroom is there. The staff is there, most are amazing and truly want to see this new venture succeed. I am lucky to have them. I have implemented a few new policies that will help us track profitability and accountability. I have also joined with a phenomenal marketing company. I KNOW that if I can make it through this new rough patch, it will be a successful business. However I am struggling.
The previous 4 years of sales for the showroom averaged around $2.5m. Payroll is about $10k a week, before taxes… this includes 1 sales person, 1 PM, 1 office admin, and currently 5 field employees. I believe our prices need to come up as well. Large venture capital firms have been buying up LOTS of home remodeling businesses with the same business models. The numbers I have seen have been astounding for businesses doing $20-30m.
Average “phase 1” bathroom sale is $10k minimum, costs us about $2500-3000 to get it done labor & materials, we have it done in 1-2 days. “Phase 2” bathrooms start at $20k and takes us 1 week and cost us closer to $6000 in our cost. “Phase 3” is closer to $30k or more, takes us 3 weeks generally and might cost us around $10-12k to get it done, I’m still working in truly narrowing down those figures for “phase 3” as we just started job costing when I took over.
Kitchens range anywhere from $50k-$100k and we have a pretty tight 50% cost on those. Our workmanship and design is great as well.
I KNOW we have what it takes to succeed, but I’m worried I can’t make it through. We need sales or we need a loan. I can’t pay for the marketing and advertising that’s needed because I’m barely covering expenses as it is. My credit card limit is too low so it’s killing my cash flow and they won’t raise it. I only have a few weeks left if we don’t sell any jobs and then I’ll be dead in the water.
TLDR; carpenter takes over local Kitchen & Bath showroom, can barely cover expenses and needs to make it through this rough patch until new marketing company can get our phone to ring. All my efforts have been spent on operations and setting practices in place. Help?
EDIT: wow thank you all so much for all the feedback. I was able to keep up with it for a bit but had to take some time to focus on work! I will be going through the rest of these comments and I am so thankful for all the input!
There was a family owned K&B showroom that was failing due to utter lack of organization and leadership. It is a design/build business model. They had to leave the showroom and the landlord was left with this beautiful K&B place, which took at least $250k to build out and finish. Comes with an approx 16 car newly paved parking lot, 2 large attached warehouses, offices, conference rooms, and an extremely large (300x300 maybe bigger) back lot for 18 wheeler deliveries, company vehicles, dumpsters, etc. I also inherited most of the employees, so they really know the ins and outs of the day to day.
I took it over in November. November and December are notoriously slow for my industry but there were some ongoing jobs that we finished out (under new management). Now, we’ll be dead slow in a couple more weeks because it has taken me too long to get all the marketing together, and I’m still not done.
The business model is there. The showroom is there. The staff is there, most are amazing and truly want to see this new venture succeed. I am lucky to have them. I have implemented a few new policies that will help us track profitability and accountability. I have also joined with a phenomenal marketing company. I KNOW that if I can make it through this new rough patch, it will be a successful business. However I am struggling.
The previous 4 years of sales for the showroom averaged around $2.5m. Payroll is about $10k a week, before taxes… this includes 1 sales person, 1 PM, 1 office admin, and currently 5 field employees. I believe our prices need to come up as well. Large venture capital firms have been buying up LOTS of home remodeling businesses with the same business models. The numbers I have seen have been astounding for businesses doing $20-30m.
Average “phase 1” bathroom sale is $10k minimum, costs us about $2500-3000 to get it done labor & materials, we have it done in 1-2 days. “Phase 2” bathrooms start at $20k and takes us 1 week and cost us closer to $6000 in our cost. “Phase 3” is closer to $30k or more, takes us 3 weeks generally and might cost us around $10-12k to get it done, I’m still working in truly narrowing down those figures for “phase 3” as we just started job costing when I took over.
Kitchens range anywhere from $50k-$100k and we have a pretty tight 50% cost on those. Our workmanship and design is great as well.
I KNOW we have what it takes to succeed, but I’m worried I can’t make it through. We need sales or we need a loan. I can’t pay for the marketing and advertising that’s needed because I’m barely covering expenses as it is. My credit card limit is too low so it’s killing my cash flow and they won’t raise it. I only have a few weeks left if we don’t sell any jobs and then I’ll be dead in the water.
TLDR; carpenter takes over local Kitchen & Bath showroom, can barely cover expenses and needs to make it through this rough patch until new marketing company can get our phone to ring. All my efforts have been spent on operations and setting practices in place. Help?
EDIT: wow thank you all so much for all the feedback. I was able to keep up with it for a bit but had to take some time to focus on work! I will be going through the rest of these comments and I am so thankful for all the input!