Scaling Up on a Budget

Here are three strategies cabinet shops should consider to introduce valuable efficiency and productivity gains, without the high costs and pain points associated with traditional expansion methods.

If you’re a small business owner thinking about how to keep up with an unrelenting demand for home remodels, you’re not alone.

According to Freddie Mac, U.S. cash-out borrowers represented 51 percent of refinance borrowers in the second quarter of 2021 — up from 38 percent in the first quarter of 2021. At the same time, median home values skyrocketed in response to a white-hot purchase market.

With homeowners still cashing-out on their equity in the form of renovation refinancing loans, some market analysts predict the massive lift in home renovations and home improvements to continue, eventually reaching $400 billion by the third quarter of 2022.

What does this mean for you and your business? It suggests the high volume of new project requests you are experiencing now is likely to continue. And, as lumber prices continue to return back to Earth, cabinet and kitchen remodels may even encounter rising demand.

To keep up with the prospect of a long-term boost in demand, expansion might feel like the next logical step for your small business. But it isn’t an easy decision to make — especially when you factor in the cost, risk and growing pains.

Three Strategies Every Small Cabinet Shop Should Consider

Deciding whether to scale up to meet high demand can easily feel overwhelming. To introduce valuable efficiency and productivity gains, without the high price tag and pain points associated with traditional expansion methods, cabinet shops should consider these strategies:

  1. Prioritize efficient, affordable workflows.
  2. Attract and retain the talent you need to grow.
  3. Limit growing pains along the way.
Business owner speaks on the phone while working on a laptop computer in her small wood shop.

1. Prioritize Efficient, Affordable Workflows

Expansion can be expensive, so you need to know that you can afford to add new equipment while still maintaining the revenue margins required to keep your business afloat. One of the biggest traps that small business owners fall into when it comes to expansion is that they feel they need to do it all at once. While this might be an option for some businesses, it isn’t an option for everyone — nor is it generally the best option.

Small cabinet shops can benefit from finding opportunities to improve productivity. Once simple, routine steps in the cabinet-making process have been optimized for peak efficiency, you can move on to bigger expansion projects.

In many cases, wood finishing offers a great place to start. Whether you’re sealing, painting, staining or adhering, customers expect the finishing process to include the same high quality look as the cabinets themselves. While quality materials and skilled craftsmanship is paramount for custom cabinet design and assembly, finishing can be vastly improved through technology upgrades.

For example, integrating easy-to-use sprayers or spray guns can help drive down time-to-installation, without compromising the unique craftsmanship and careful design your customers expect. Furthermore, the right tools can cut down on costly rework and touchups that will prevent your team from moving on to new projects quickly.

When considering which spray guns and finishing systems fit your budget, don’t forget about maintenance and replacement costs. Not only does regular maintenance create hidden costs, but it also limits uptime, which can undo the productivity gains you hoped to achieve. Opting for a high quality, reliable choice often nets out better in the long run.

2. Attract and Retain the Talent You Need to Grow

Part of the reason intuitive equipment is such an important part of the expansion process is because experienced help is increasingly hard to find. Hiring new employees with the specialized skills to contribute immediately and match your eye for craftsmanship and design detail is like finding a needle in a haystack.

If you can find the right employees to join your team, they may come with high salary requirements that make adding more new hires a difficult proposition—even if the demand is coming faster than you can keep up with. According to one National Association of Home Builders (NAHB) survey, builders’ top concern in 2021 is labor—with 85 percent of respondents predicting skilled labor costs and availability problems to continue to rise.[1]

Although they cannot completely avoid the challenges of a tight labor market, small cabinet shops can ease the strain by freeing up their skilled carpenters from routine duties.

Advancements in spraying technology may make cabinet finishing a logical task to hand off to entry-level employees. With the right equipment, they can quickly learn how to do their work with the attention to detail that’s needed to wow customers and earn valuable word of mouth endorsements.

Bringing in spray gun equipment with good ergonomics — from gun balance and spacing to handle and trigger pull weight — not only makes the spray booth a better work environment, it helps improve performance and output. Additionally, material-specific air caps help control nuanced differences in finish type and deliver consistent spray patterns — regardless of experience.

3. Limit Growing Pains Along the Way

If you’re thinking about expanding your business, you’ve probably also thought about all the ways expansion can go wrong. Do you worry about quality oversights or mishandled customer service detracting from the 5-star experiences you’re known for? Are you anxious about unexpected costs derailing your efforts before they ever have a chance? Whatever your expansion fears may be, they likely stem from how it’s hard to predict the unknown.

For that reason, early in expansion is the wrong time to take a risk on unproven products and inexperienced vendors. You need to know you have the expertise and backup at every unexpected turn in your expansion journey. As you implement each of the first steps included in this article, it’s important to make sure you get the right mix of affordability and proven performance with every decision you make.

A few questions to ask yourself when it comes to choosing vendor partners:

  • Is the equipment easy to use — and easy to teach?
  • Does my vendor have a proven track record for durability?
  • When it comes to maintenance, can replacement parts be sourced quickly and locally?

Starting with these questions and using them to help guide your procurement process can help ensure you invest in technology that is compatible with both your existing workflows and future goals for labor investment.

When paired with the right mix of labor and workflow strategies, a tech-driven finishing strategy can help jumpstart your expansion process by prioritizing efficiency as your team and project load grow.


References: Freddie Mac, Refinance Trends in the First Half of 2021; Natalie Campisi, Forbes Advisor, Pandemic Remodeling Boom Looming? Cash-Out Refinancing Hits 13-Year High; Ryan Dezember, The Wall Street Journal, Lumber Prices Are Falling Fast, Turning Hoarders Into Sellers; Joint Center for Housing Studies of Harvard University, Gains in Remodeling to Remain Robust

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