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Business Growth
Apr 15, 2014

Entering A New Market has Challenges and Opportunities

Sponsored Content provided by Cee Edwards - President/General Manager , Markraft Cabinets, Inc

Expanding a business into an entirely new market can open up tremendous growth possibilities, but it creates entirely new challenges. Since our company started its first branch operation six years ago, in Nashville, Tennessee, we have learned a lot of useful lessons about how to manage growth.

Building a team of people you trust, and who share your ideas about running the business, is the essential first step.

As you develop the staff in your new location, it’s vital not to let your business expand faster than you can hire and train good people. It’s a sad fact that many businesses fail when they grow too fast. During the first few years of Markraft’s Nashville operation, we worked hard to avoid that pitfall. You might think of it as not biting off more than you can chew!

A third interesting fact we learned is that different communities have different business cultures. Nashville, for example, is not just a bigger market than Wilmington, it’s one that depends less on personal relationships in business. That’s been both a plus and a minus for us.

We didn’t originally make a master plan to create a new division in Tennessee. But we did see an opportunity when a regional builder based in Nashville called us to say they needed our services. This company builds more than 200 new homes a year in that market, so we moved quickly to serve that new client’s needs.

Our biggest challenge over the last six years has been putting the right team of people in place. We didn’t want our management team to have to be constantly traveling back and forth. The first step was to find a qualified manager, an expert in our product line, who moved to Nashville to manage the start-up. Instead of trying to duplicate our Wilmington operation from scratch, we outsourced the delivery and warehousing functions. That’s what takes up most of our physical plant here in Wilmington, and would have taken lots of time, effort and capital to build.

That approach let us get our ducks in a row to serve our new customers before we had to make major investments in real estate or employees. We rented a small office in a corner of that outsourced warehouse and delivery facility, and started carefully building a staff.

Hiring people 600 miles away takes longer than it does at home. We had to rely more on telephone interviews, for instance, before deciding which job prospects we wanted to meet face to face. It was more economical for our CEO and me to interview the most promising applicants in Nashville, during one of our regular trips there, than to pay their expenses to come to Wilmington. It wasn’t until those new hires were on the payroll that we’d bring them in to start their training. After a week here to learn about how Markraft operates, the new people would return to Nashville to continue their training.

We went through a good number of people as we carefully built our staff there. Some worked out; some didn’t. We couldn’t grow until we had sufficient staff to ensure every customer got the right level of attention and service.

That careful, systematic approach has paid off for us. Now, after six years, we have the best team in Nashville that we’ve ever had. After concentrating exclusively on serving builders in the early years, we’re finally able to set up a Selection Center and hire a kitchen-and-bath designer. That is letting us move into the desirable retail trade, working directly with homeowners, which is so important to our business here in Wilmington.

So now our Tennessee division has half a dozen full-time employees, led by a division manager who oversees the hiring and training. We are continuing to build our installation team to include both W2 and subcontract installers, similar to what we have here in Wilmington.

An interesting fact we learned is that the management skills needed to get a new operation off the ground may not be the same ones needed once the division is well established and growing. So we have different people running our Nashville operation now than the ones who first set it up.

Personally, I’ve been amazed at some of the differences between the Wilmington and Nashville markets. On the one hand, being a much bigger city, Nashville doesn’t operate as much in the intensely personal, relationship-based way Wilmington’s business community does. On the other hand, it’s much easier in Nashville to make contact with key executives or owners. When you go in to see someone, they’re glad to see you and to hear what you have to say. Companies in Nashville rely less on the gatekeepers who can make it hard to get in front of the decision-makers.

By contrast, here in Wilmington we’ve learned how important it is to be a part of community organizations and events. Trade shows, the Homebuilders’ Association, and similar institutions play a much more important role in our business here than they do in Nashville.

Now that we’ve absorbed these lessons, we’re anticipating steady growth in this new division. Nashville amounts to about a quarter of our overall business now, but we expect that ratio to change. For example, we have an account representative in Tennessee who is aggressively calling on new prospects such as homebuilders and apartment developers, who are very active in that region. Like other non-coastal cities, Nashville’s market is a full circle, not hemmed in by the ocean as Wilmington is. And, for now, much of the business we are doing in Tennessee involves just supplying cabinets, not the full-service “turnkey” approach we take here that also includes installing counters, backsplashes and other kitchen and bath components. We’re working hard to offer a broader range of products and services to our existing clients there.

Markraft’s total focus is on Wilmington and Nashville. There’s still so much work to do to improve our operations in these two regions that we’re not about to jump into a totally new market anytime soon. Growing too fast can be as dangerous to a business as not growing at all.
 
I’m always happy to answer any questions about what we can do for you, in your home or for your business. Watch for more tips about how to enhance your home’s value and convenience!

Cee Edwards is President and General Manager of Markraft Cabinets. He joined the company in 1995. Since 1985, Markraft has specialized in cabinet and countertop design and installation in residential and commercial construction and custom remodeling. To learn more about Markraft, go to www.markraft.com. Contact Cee at 910-762-1986. Like Markraft on Facebook at www.facebook.com/markraftcabinets or follow Cee on Twitter at twitter.com/CeeEdwards

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