Closet.Tec’s 13 Steps for Survival

As all other companies in their industry, survival during the recession was key. Designers were let go or kept on a commission-only basis, installers, manufacturing and expenses were reduced to the absolute minimum for the company’s survival.

The following 13 steps were also taken:

1) Replace the production of drawers from pre produced drawer parts (blanks) to an in-house production of drawer boxes built from wood components. Closet.Tec today is the only local company to produce custom wood drawer boxes, dado sides, no exposed nails of other unsightly construction methods. A custom routing table saw was developed to produce 5mm routing and the drawer box design automated for manufacturing to match the construction method.

2) Expand the software modules in solid to allow more rapid designs by less number of designers. Designers were reduced to two persons whom were able to meet the market demand for solutions and alterations. Without the software this personnel reduction would not have been possible.

3) Reduce component and panel purchases to only meet current project sales. No more purchasing for inventory or future expected sales.

4) Pay off all debt, including trucks and equipment on lease purchase options.

5) Reduce advertising to only proven markets, like the local newspaper and custom magazines like “The Home Mag”.

6) Re-negotiate building rental with the landlord, the company has a 7,000-square-foot manufacturing and showroom site. Rental rates were cut by agreement to repay the delta to the landlord once production volume reached an agreed monthly rate. Repayment would be over time based on the attained agreed to volume of sales.

7) Re-hire the installation team on a part time bases versus the original full time employment bases. No guarantee of full daily employment unless there was scheduled installations. Work with the installers to get them side jobs for Closet.Tec customer and allow them the use of the company resources to complete the side job(s) – like use of the company vehicles, tools, etc.

8) Expand the focus of the company to more home office and media center solutions

9) Move from melamine only solutions to also include wood based offerings for closets, home offices and media centers.

10) Focus on melamine solutions for the base of a design and wood solutions for doors, drawer faces and trim for higher-end customer demand.

11) Produce designs for all prospects within days, not weeks as in the old days of demand and success.

12) Maintain good financial relationships with the bank and vendors of company credit line.

13) Re-evaluate and change all office procedures. Replace internet and telephone offerings with a lower cost internet solution. Expand the use of Quick Books for budget, performance and expense tracking. keep payroll in house. Expand internet advertising expense and update the company Web site.

As good luck and planning would have it, Closet.Tec remains a vibrant business and looks forward to expanding once again with even more bottom line profit and increased employment. It is clear that with the actions taken in the past difficult years has equipped the company to grow with the market demands.