Dual Revenue Streams

Follow the Fish!

I am sure that a lot of Dealers these days are looking at 2023 with some trepidation and understandably so. I don’t think we need to belabor the fact but all the folks that I have been talking to are already seeing a 15-20% drop. (Both Dealers and Manufacturers) Suffice it to say that it also depends on other variables like location, customer segments and local competition but as a whole, that is where it is roughly running right now.

So, what’s a person to do as the number of fish coming down their stream is drying up? Certainly, putting more lines in along with using better bait will help, but what about starting to fish in a different stream? There’s a new one over yonder. The fishing there is average right now, but my favorite crystal ball is showing me that it won’t be long before it is teeming with fish.

Note to self…start fishing more in the stream that has the most growth potential. I guess the “jig” is up now and my analogy and extremely poor attempt at humor have fallen flat. Go figure! 😊

Here’s an outline of items to help you on your way:

  • Step 1 – Decide who you are going to be selling to; retail, remodelers, builders, or everyone on the planet!
  • Step 2 – Pick which products and services you are going to be offering, cabinets, design, measuring, installation etc. Don’t forget, we are in the digital age!
  • Step 3 – Do you go with a completely different website and name instead of adding it to your current website? If I get a vote, it would be the latter of the two. Building a website for your new audience takes time. Enough said.
  • Step 4 – Decide how you are going to internally support this business, skill sets needed and pay range. You can certainly start with your current team and then add or change as you grow. Note to me and you…your first year of online sales may account for 5-10% of your overall revenues so don’t set your expectations to competing with Etsy. It’s going to take time to build this type of business. It’s also imperative that you start sooner than later. Take the lead!
  • Step 5 – Make sure you have the right website people/partner so they can help guide you. Very important!
  • Step 6 – Decide what margins you will be selling at for products and services. This should give you a good estimate of your overall margin blend.
  • Step 7 – Create a marketing plan for this new business stream. How are you going to reach these potential customers? Build a leads list that allows you to target certain types of customers, i.e., Builders, Interior Designers etc. Use SEO to attract the right people. Be sure to remember to set money aside for the 50 billboards you’ll be putting up…that was a joke, or at least I hope so.
  • Step 8 – What will your Key Performance Indicators (KPI’s) be? Website visitors, quoting opportunities, closing ratios, etc.? Measure whatever you feel will have a big impact on your success.
  • Step 9 – Don’t pick any metrics that have to be tracked manually. If it’s too time-consuming, it probably won’t happen. You really need to have a system that can track all these for you and can generate reports on the fly. They should be easy to generate and shown in a manner that is simple to understand.
  • Step 10 – Now it’s time to set up the budget for 2023. As I mentioned earlier, you want to make sure that you are not setting your sales goal too high for the first year. Somewhere around $100K would be a good place to start. Take into consideration what you would classify as an online sale. I like to define it as a sale that began on your website and ended there as well. No showroom visit involved. The last thing to think about is whether you want to set up a P&L that flows into your current one or one that stands alone as a business.

I just heard Big Ben chime so it’s time to bring this fish fry story to a close. I leave you with this:

There is a lot of work that needs to be done so get started right away. This time of year is slower, so take advantage of it. Secondly, get help. Seriously. If you are telling yourself that you “got it”, you may want to think again. This is really important to the future of your business so remember the School of Hard Knocks can be costly and will only slow down the process.

Good luck and feel free to contact me if you have any questions or need any help. [email protected], and if you’d like to set up a 20 minute meeting to discuss our services, you can schedule on the Calendly link below.

Tata for now and have a great Holiday Season! thad