Most of us in the kitchen and bath industry have been in survival mode for the better part of two years, watching new construction activity shrink to the lowest level seen in decades. Many of those involved with new construction have migrated to the remodeling business, adding to the competition in that segment and, as a result, driving margins down.

Under the circumstances, it’s hard to imagine making plans for an increase in business, but that is exactly what should be done before it actually comes about.

You need to keep in mind that it will not take a dramatic change in remodeling activity to make you feel like you have too much to do instead of not having enough. When that time comes, you will need a plan for dealing with staffing, materials and lead times.

Staffing

When there’s an increase in business, there are many issues that you will face, particularly if the change is a significant and dramatic upturn in the level of work that you are committing to. The first of these is the fact that your staff has likely consolidated its functions over the past few years, where one individual is performing the role previously carried out by two or more people.

Remember that these people have been stretched for a long period of time and they will react to this increase in business with mixed emotions. On the one hand, they will be thrilled with the prospect of improving cash flow and seeing greater stability for their jobs and the business. On the other hand, the addition of a larger work load associated with more business may push them past their breaking point.

The challenge will come in determining whether the uptick in business is just a temporary one or is more permanent. Just like the national economy, every business has “leading indicators” that will give an indication of what will be coming in the future. These are things like phone calls, Internet leads, floor traffic in your showroom, etc.

Assuming that your business takes retainers before doing design work, the level of retainers that your designers are working on will be the best indication of what the nearer term holds. You should regularly go over these indicators with your staff so that you can track these early warning signs of the future.

As always, it’s important to make sure that your staff knows what you are thinking and what plans you have to add help once there is confidence that the market has really turned around.

Materials, Suppliers & Subs