Floors, Cabinets and Racks, Oh My!

Floors, Cabinets and Racks, Oh My!
Two door dealers take a stab at the garage finishing market

You’ve heard the numbers—$2.5 billion. You’ve seen the glossy photos of picturesque garages decked with shiny epoxy floors and wall-to-wall cabinets. Maybe you’ve even done some online research. Although there’s no denying garage finishing—from floor to ceiling—is a hot market, is it right for your company?

PDD talked to two veteran door guys who’ve made the jump—successfully. After nearly a year of research, Scott Grace, owner of Garage Concepts of New England, entered the garage finishing market less than a year ago. With four locations in the New England area, Grace is determined to grow both his residential and commercial door business, as well as his new venture.

Tom Brandt, owner of The Garage Project LLC of Middleton, Wis., has chosen a different route. Tired of low margins and cutthroat competition, Brandt turned to garage finishing two years ago, even creating a business model that can be easily franchised. He still dabbles in residential doors, but garage finishing now makes up 70 percent of his business. Here’s their take on the expanding industry of drawers and floors.

Grace: When we took at look at this space, it fit nicely in with the piece of the strategy that was behind the market being the driving force behind everything we do. We had customers that were asking for some sort of solution around the garage finishing and organization field. For about a year, we looked at all of the manufacturers, the different products that were on the market and visited several of the manufacturers. It really came down to direct feedback from our customers that getting started in the garage storage and organization business was the right thing to do. We found the right fit between us; the manufacturer, Designer Garage; and the customer base.

Brandt: I was reading a newspaper and saw an article about organization in the garage. The next weekend, The Chicago Tribune had an article. The next weekend, The Milwaukee Sentinel had an article. After three weeks in a row, I decided there must be something to this and we should look into it. We did well over 1,000 hours of product research. I hired a consulting company to give me the hard statistics on what was happening in the industry. After doing the research, I discovered it was the No. 1 trend in residential housing.

Grace: It has longer sell cycles than what we’re used to. That has been the primary obstacle. Because we have a significant number of measurements on the doors side of the business, we can determine the sales results we should be generating each week from our marketing activities. In the garage storage and organization business, the sell cycle is longer and more expensive. It’s not an execution issue with installing the product. Once the customer commits, we can move forward as if he were a regular garage door customer. We have the resources to get the product installed quickly. We stock the product. We have several installers who are cross-trained on both doors and finished garages.

Brandt: Being a small business owner is always a struggle, especially in the construction field. But this has been the best thing I’ve ever done. It’s much more profitable. When I wrote my business plan, I wrote it so it can be franchised to dealers in the garage door business. It’s such an easy transition. If a dealer already has a warehouse, installers, a bookkeeper and secretary in place, it’s a matter of adding three personnel and you can pick up and run with this business.

Brandt: It’s middleclass and up. But more than 50 percent are women. They’re after organization and easy maintenance. We get a lot of specialty requests, especially from motorcycle and car enthusiasts. They’ll spend $100,000 to house a car or motorcycle. Our general contract starts at $3,500 and goes up to about $30,000. The customers are looking for flooring, cabinets and walls. We have a high-end showroom that really validates what we do. The fact that they can actually stand there and see and touch it really closes the sale.

Grace: We developed Garage Concepts of New England as a separate corporation. It has its own financials. It’s run as a separate business. We made the investment of hiring someone to be focused on this part of the business, a dedicated sales and operational resource. All the while, we leveraged our administrative resources from our door companies. That is how we’ve been able to effectively separate the businesses.

Brandt: We blended them together. I started my new company and then rolled everything —the inventory, trucks and equipment— into the new company.

Grace: Initially, there was some skepticism. It wasn’t understood. It was new. It represented change for our business. However, once we were able to get into the substance of the product, that skepticism was overcome because they understood the value of the product and the impact on our business strategy.

Brandt: Yes. For the carpentry work we do—the cabinets and modular flooring—the installer only needs rudimentary construction skills. A good garage door guy can do most everything we do. I did need to hire a good dry-waller/painter, and I contract out the epoxy floors.

Grace: The training is a work in progress. For the installation side, Designer Garage visited our company to train three separate crews in three states. To this day, as we continue to work on, for example, some of the older, retrofit opportunities, there always seems to be a new field condition that requires innovative solutions. The fun part has been sharing innovative solutions on the more complex installations between the crews and taking pictures of what we’ve done for very satisfied customers.

Grace: You have to know what you want to be. For those of us who want to continue to grow aggressively, it’s difficult to say no to segments of the market that may need the product. We have to continuously challenge ourselves by asking who we want to be and who we want to market to while remaining flexible. Those customers who want the $300 solution will be best pointed to a home improvement center rather than us.

You also have to be smart about leveraging your resources and knowing which resources you can use effectively. Once you establish who you want to be, you need to determine how to sustain continued profitable growth in the door business. Don’t take your eye away from the focus of growing the core business. For us, we made that investment with a dedicated resource.

All the while, we’ve made previous investments in our accounting and computer systems, to support strong, long-term organic growth with the ability to set-up companies with completely separate financials to command profitable market dominance.

Finally, have fun with it. If you have the right product and know you have the right people within your organization, you can significantly improve your customers’ quality of life while escalating the value of their homes or businesses. Having fun is something we’ve been able to do by delivering a focused solution tailored to the customer’s needs. Being the customers’ trusted advisor from garage finishing to garage doors has helped us to continue to profitably dominate each of the markets we serve. 

Brandt: You have to put some money into it, but the return is much better than it is with garage doors. The people in the closets business are also getting on board with this right now. But they don’t understand the garage is different from any other entity of the house. The garage door is the biggest moving part of the house. And it’s a multifunctional area, where you keep your gardening equipment, storage, and sporting equipment. To be able to incorporate into one room, you have to have a knack for it.

The overhead storage and wall organizers are products every door dealer should be carrying. They can try and sell it on every job. If you can hang a garage door, you can hang an overhead storage system.