Cast a Wider Net: Incorporating Closets into Your Window Design Business

BY JEFF FALCON

While on vacation in Maui, I came across a man fishing off a rocky point using a traditional throwing net. We struck up a conversation, and I asked him why we don’t often see this technique used. He shared with me the struggle against dwindling fish populations in island waters and told me very simply that fewer fish meant fewer fishermen. I noticed that he had quite a catch stashed in his bucket, so I asked him his secret in being luckier than his competition. He replied, “Brah, I got a bigger net.”

The current pandemic has created a challenge for our industry, but it is not the first storm we have weathered in the last decade. The window fashion industry faced an enormous crisis during the Great Recession of 2008-2011, and our entire industry flailed. Much like that time, the 2021 market faced and continues to face huge challenges, so it’s no wonder that many companies are once again choosing to batten down hatches to wait out the headwinds. As many experts have predicted, the business environment we now face may very well become the new “normal,” at least for the foreseeable future.

“We launched our custom closet business in 2007 to synergistically appeal to the same demographic of high-end homeowners who appreciate luxury additions to their lifestyle.”

Instead of shrinking operations, laying off talent and tightening belts, Bay Home & Window chose another path during the last recession. We began looking for opportunities to broaden our base to become less vulnerable during the storm we faced then and the one we face now. Like the fisherman, as leads became scarcer, we began searching for ways to broaden our appeal to both new and previous customers. We believed that a new offering could invite customers who, at the time, chose to postpone buying window coverings but might possibly consider another opportunity, and, even more importantly, invite those who DID buy window coverings to do the same.

Our first decision was choosing an analog product that dovetailed into our operations but did not siphon away from current sales opportunities. We looked at several options, including flooring and tinting, before ultimately deciding on custom closet systems. We launched our custom closet business in 2007 to synergistically appeal to the same demographic of high-end homeowners who appreciate luxury additions to their lifestyle. This new offering allowed us to create a different conversation with potential customers who needed more storage and organization to facilitate spending more time in, and even working inside, their homes. And we found a new conversation with our previous customer base, homeowners who had already demonstrated a willingness to invest with us.

There are many products that offer diversification, several of which we liked as much, but we determined that closets met the balance of new opportunity, common appeal and consumer demand. Nevertheless, closets presented stiff challenges in acquiring significant capital funding and institutional knowledge.

Financial investment presented one of the greatest hurdles, not the least of which was risk. Cost can be steep for things like machinery, vehicles, staff, showrooms, work space and technology. Funding can come from current operations or banking relationships, and material manufacturers are also sometimes willing to contribute to startup loans and special payment terms. But, as in all business planning, one simply cannot hit a blind target, so preparation is key. This is why it is crucial to develop a solid business plan to drive KPIs, milestones and expectations.

Institutional knowledge is another critical success factor. Any line of business requires a learning curve, and it is important to acquire product specific knowledge before launching. The closet industry, in particular, requires a substantial amount of product knowledge, but it enjoys many business-led associations to support acumen development, which can significantly shorten the time investment needed to launch. Installation skills can be a bit more challenging to attain, so hiring industry professionals is often the most expedient pathway to competency.

After funding and product knowledge, it becomes necessary to train your sales team. The first decision here centers on whether to train current staff or create a separate selling team. There are benefits to both, but it is important to decide if the new product offering is considered new or “add-on” business. If the decision is to create a new business, a separate sales team is more advantageous but more expensive to carry. The training process can be daunting as we learn to design in a 3D plane of custom closets versus the relative 2D plane of the window covering world, but much of the creative process can easily transfer. In addition, some closet material manufacturers offer a wide range of training support, so this may become an important data point in choosing your supplier.

Product diversification requires the commitment of time, resources and money, yet you might find the challenges and risk worth the trouble to create the vessel you need to grow your business, even while many around you lose ground. And, as the pandemic fog begins to lift, you may just find that your company can double its size in the coming years. V

Jeff Falcon is CEO of Bay Home & Window, based in the San Francisco Bay Area since 1994. The company is a national leader in the custom window coverings and built-in home organization industries and employs more than 130 people. Bay Home & Window has been a pioneer in “live event” marketing, Net Promoter Scoring and TQM in the home design industry, and Jeff speaks nationally on these subjects. Jeff is a past chair for the International Window Covering Exchange, a CEO think tank comprised of industry leaders.