Service to the Core
LEADERSHIP IN THE PROFESSIONAL MARKET
General Millwork Supply
San Marcos, Calif.
Core values are much more than a sign on a wall or a phrase on a Web site to Tom and Wendy Duran, owners of General Millwork Supply. The couple has run a small window and door company in Southern California for more than 20 years by staying inside the lines on the guiding principles of the company’s core values.
|General Millwork Supply founder Tom Duran and his wife Wendy started the company more than 20 years ago with values the couple upholds today.|
Sure, plenty of companies trumpet their values. But while Tom Duran admits that focusing on core values might come across as lightweight or cheesy, it has provided a map for his business through good times and bad, and has enabled the company to thrive while competitors—some much bigger than General Millwork Supply—continue to fall by the wayside.
For example, while other companies’ owners celebrated the housing market boom with big bonuses and big spending, the Durans socked money away into investment vehicles that could protect—and now do protect—the business during leaner times. And though the company’s contractor base has dwindled in recent years, General Millwork Supply continues to expand its training programs for contractors and the service it provides to contractors’ customers.
“I ask myself daily what I can be doing better,” says Tom Duran, president of the San Marcos, Calif.-based company. “But I also look back and think of how proud I am from when we started in 1991. We’ve weathered three recessionary periods—this being the toughest of the three. All we can do is keep asking for help, stay the course and keep our core values in place.”
The Durans have invested in their company, focused on the health of the company’s relationships with suppliers and its professional customers and stood firm on its reasonable margins, even when other companies are slashing prices and endangering the long-term health of their businesses. And while some might say that operational changes—cutting workforce and other expenses, curtailing plans for future growth, and shaving the margin out of prices—will save a business in a down market, Tom Duran knows that staying the course on a solid business plan will make a lasting impression on the customers that are worth fighting for. “If they can feel the passion from us, we’re already 60 percent of the way to the sale,” he explains. “It’s not always about the price.”
When the Durans moved from the East Coast to the West Coast more than 20 years ago, Tom had wanted to take the experience he had built in the window and door industry since getting out of college in 1977 and perhaps start his own company. He had run a branch location of a larger window and door company—a $14 million or so operation—on the East Coast and he was confident that he had learned enough from his mentors to run a successful business.
Still, he knew he needed time to learn the local marketplace and his West Coast customers so he took a job with another window and door business. “I thought it was best to get into the industry here to see what it was like, get a feel for how things were marketed and how sales were being conducted,” Tom Duran recalls. “But as I did that for a while I thought, ‘You know what? I need to put together my business plan and a mission statement.’ I developed a marketing strategy and started looking for locations to start my own business.”
Duran spent six months putting together his plans and securing financing. When he started General Millwork Supply in 1991, he pulled on his past experiences to shape how he would present his company to the professionals in his area. “Running that operation back on the East Coast, I learned from some very talented people with whom I’m still in contact today,” he says. “I was blessed to learn from some sharp people who knew how to run a business, manage people and manage inventory, and maintain profit margin. I use a lot of that expertise to benefit our business today.”
The Durans began growing the business by focusing on serving mid-sized and larger contractors that were seeking a partner to handle the window and door purchase part of a project. “We really try to position ourselves as a partner to take the pressure off the contractor in terms of assisting them with their clients,” he explains. “We do not do installation. We have our contractors’ clients come into the showroom so we can show them the different features and benefits of various windows and doors. We help them make that decision so when it comes time to purchase the windows and doors, the contractor’s work on that part of the project is already done.”
|Tom Duran stayed the course on investing in the business and saving for a rainy day, values that he credits for the company's success in a tough economy.|
The company does offer a mix of new construction and replacement products, but is focused almost exclusively on serving professionals in the area looking for mid- to upper-end window and door products. A supplier of four main product lines—Marvin, Andersen, Jeld-Wen and Eagle—General Millwork Supply sets itself apart as a wood window expert in a vinyl-dominated marketplace. “It’s not really a wood market in this area, but we’re trying to be the ones to change that,” Duran says. “We’ve positioned ourselves and formatted our showroom to show the nice upper-end products first. We do sell vinyl windows but it’s not a big percentage of our business.”
The services that General Millwork Supply offers its contractor customers is increasingly important, as consumers want to explore all of their options before making a significant window and door decision and many contractors are not equipped to do the full roll-out of window and door options. “The consumer is becoming more sophisticated in their purchases these days,” says Mark Sabre, an Andersen Corp. sales rep. “With the availability of the internet, they are able to do a great deal of research on their own. General Millwork’s showroom helps consumers narrow their focus by showing the most popular features of their most trusted manufacturers.”
GUIDED BY VALUES
In the early days of the business, as General Millwork Supply was establishing its personality and value proposition among the local professional contractor community, some key values emerged that characterize the company even today.
As the company got a foothold with contractors and gained momentum in terms of its sales, the Durans stayed focused on how they might invest in the company to make it better. “We’ve always had that mentality from day one,” Tom Duran explains. “We’ve invested back into our company with our computer system and network. And we’ve also invested our profits in CDs and other investment vehicles.”
Duran credits his conservative approach to business funds as the reason the company has been able to weather the current economic storm. “Thank goodness we did that, otherwise we might not be here,” he says.
This hard-earned financial crutch has offered General Millwork Supply something that less disciplined companies of all sizes don’t have right now—time. Leaning on its investments to keep its staff in place and doors open, General Millwork has given itself the luxury of adjusting its marketing approaches and waiting for more business to come through the door. “Albeit modest, we have seen an uptick in quoting activity in the last few months,” Duran says. “For the first six months of the calendar year, we’re up about 5 percent [over last year]. It’s nothing to brag about, but it is on the positive side of the line.”
And if the roller coaster ride that consumer sentiment has been on evens out a bit, Duran expects that the second half of the year might be worth waiting for. “I think it’s going to take some time for everything to recover, although I am optimistic that the second half of this year will be better than the first half,” he says.
CORE CUSTOMER SERVICE
In addition to investing in the business and saving for the rainy day that did indeed come, General Millwork Supply also established early on as a core value that it would take its partnership with professionals far above and beyond the transaction. Despite tight budgets and a lean staff, General Millwork has used this downturn as an opportunity to look for additional ways to add value to what it offers local builders and contractors. “Our contractor base has diminished,” he notes. “A lot of our guys have gone out of business—they may be going into another field or moving out of state. So we have to try to recoup that base somehow.”
|General Millwork offers contractor seminars on a regular basis, connecting its suppliers with local professionals to share product knowledge and best business practices.|
And it’s not just customers that General Millwork is investing its time and energy into—the company looks for ways to bolster its relationships with vendors as well. “When you boil it all down, one of the things we’ve truly put way up at the top of our priorities is strengthening our supplier and customer relationships,” Duran says. “That helps us get through tough times as well. It’s no revelation that it’s cheaper to retain an existing customer than attract new ones, and we partner with suppliers we know we can count on.”
Knowing that its professional customers are struggling to win projects in a competitive market, General Millwork Supply rolled out a lunch-and-learn type training platform specific to the window and door products it offers. Contractors and building professionals can swing into sessions hosted by General Millwork as their schedules allow to learn about advances in window and door technology and new aesthetic options they can offer their homeowners. “We often bring our customers together with our suppliers,” explains Wendy Duran. “This way, our customers can see that the reps are not only here to serve us, but to serve them too. We’re all here to help them get more business, and we’ll do whatever we can to support them in getting that job.”
The contractor seminars focus on product education and related topics such as installation best practices. “A lot of our same customers come over and over again, so I know they see the value in it,” Wendy Duran says.
“The contractors really do appreciate the seminars,” Tom Duran adds. “Even if just one or two things stick to the wall, they’re at an advantage in the field over the next guy. If it helps them look more professional or informed to their clients, it lends credibility to their business, and it lends credibility to how they work with their clients. I think it’s all positive.”
General Millwork’s suppliers think so, too. “It is important to keep our customer base up-to-speed on new technologies, products and services so they can stay competitive in the market,” says Andersen’s Sabre.
The company is also taking advantage of the slower market to update its Web-based presentation to contractors and their clients as well. General Millwork Supply was one of the first window and door specialists in its area to have a Web site, and now the company revamping its online personality to more accurately reflect its core values. “We’re redesigning it right now to focus more on our expertise and the length of time we’ve been in business,” Tom Duran explains. “We’re trying to display some of the core values of our company, and hopefully people will recognize that and it will lend even more credibility to our company.”
Duran notes by way of an example that he believes it’s misleading for a window and door company to display pictures on a Web site that the company itself has not completed. “Ethics are an important part of our core values,” he says. “Our competitors’ Web sites have pages with pictures of projects, but most of them have been imported from the manufacturer. To me, that’s not ethical. If somebody’s going to show pictures of projects, it should be projects they’ve supplied.”
THE BOTTOM LINE
While General Millwork Supply, like everyone else in the industry, has looked for ways to do more with less, Duran is adamant that the business must maintain appropriate margins in order to protect its long-term health. He founded his company on the premise of fair margins—not too high, but also never too low—and he’s sticking with that, even in tough times.
“While larger companies can afford to sell things a lot cheaper than we can, all it does is drive the margins out of the products,” he says. “To me, that’s a fatal move.”
And he’s not just talking about window and door products and companies. “These steep discounts—not just in our industry, but in things like clothing, shoes, appliances—have sent a message to the average consumer that prices are dropping. It sends a very bad message that if you get a price from somebody, you can go to the next guy and he will drop his price even more because he needs the business.”
Sometimes sticking to his guns on pricing means that General Millwork will have to walk away from deals, especially in this business environment. But with a financial cushion to fall back on, Duran would rather stick to his game plan to ensure the long-term health of the business. “I’ll have consumers say, ‘This other guy will drop his price; do you want to meet it?’ and I’ll just say that we can’t do business at that margin,” he explains. “Some consumers actually commend us for holding the line.”
The policy has had an impact on his business, for sure, but his tight-knit staff and salespeople stand behind Duran’s philosophy. “I would be lying if I said it wasn’t hurting us,” he said. “But our sales people here know we can only go so far. We’re fortunate to have some great people here who are willing to do what we need to do to maintain a high level of service and take care of our customers.”
Rather than shaving margins, Duran and his team is instead looking at other product lines and service offerings to stay competitive. “We’re ramping up our selection of door hardware and cabinet hardware,” he says. “Even though it’s not a high dollar value thing, it does give us some volume and the margin is good.”
Looking to the future, General Millwork will continue to operate lean and mean—the company has just five employees—and Duran will hold fast to the values on which he founded the company. “In a lot of areas in our economy right now, there are some core values that are missing,” he says. “We may not be able to offer gift certificates or $1,000 credits on a window package but we do feel we do the best job out there. We keep our expenses minimal and we have reinvested back into the company. That’s what’s helping us get through these tough times and I think that’s just what a business needs to do to survive.”
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