Early risk reaps rewards - Business breakdown

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Business breakdown
Everything at Hayes Cabinets is custom built to cater to the individual homeowner. The main product is kitchens, which accounts for approximately 65 percent of the company’s business. Full rooms, bath areas, dens and entertainment centers are the remaining product areas. Because of the housing crisis, there has been a significant jump in remodeling projects.

As owner and president, Swanberg oversees a business that is divided into four departments: sales, engineering, manufacturing and installation.

“We sell everything and we install it ourselves, so we don’t have any dealers. We have a team of sales guys and a sales manager. The sales guys and their organization do the designing themselves, make the sale and give their drawings to the engineering department, which turns that into a manufacturing order.

“Right now we are running nine installers that work out of their homes. I will not sub out an installation job. I have good guys and they work for me and no one else, and that’s part of our presentation.”

Hayes Cabinets spends a substantial amount of resources on the bidding process. The company focuses on a 50-mile radius — the bedroom communities of Portland, Ore., and Vancouver, Wash. — and it’s a competitive market.

“Some of the builders never check you and others, privates, check you a lot,” says Sawnberg. “We do not go to bid centers and just bid any job on the board. But we do spend a lot of time and money on the front end of our bidding.”

Product development
The majority of the work handled by Hayes Cabinets originates from building contractors, designers and architects. There are also a small percentage of walk-in sales from homeowners.

“Most of it is contractor work,” says Swanberg. “We’ve developed relationships over the years so we do all their work, and designers are a big key to us. And we have a showroom where we deal as well. If somebody comes in and wants a kitchen, we’ll help design, build and install it. If it is more of a stock thing, then we do quite a bit of that on a speculative basis where we just figure out what we’re doing between us and the builder and we build it. There’s a lot of repetitive business.”

The showroom area consists of several full-size kitchens and rooms exhibiting various styles, finishes and other completed projects.

Hayes has used Pattern Systems software for years, but recently switched to Planit Solid Design. Swanberg says it’s too early to form an opinion on how the new software is working out.

“I have people in engineering who process the order, [outsource] the doors and enter the batch downloads to the different machines. We’re so custom that at least one-third of our sales volume are items other than cabinet boxes — turned posts, moldings, hoods, etc. I’ve basically built a shop to build boxes and the industry has turned almost into a millwork [operation].”

Good lookin’
Swanberg can’t stress enough the importance of product quality.

“I’ve always tried to position myself to be in the upper level of quality,” he says, “and I think that has always contributed some stability to me. We have always had a stabilized sales force as well as an installation group so we can process it all the way through. That’s always been a good deal, and the builders have appreciated that as well.”