Unexpected Ownership, Beyond-Expectations Success

October 8, 2013
SPECIAL FEATURES | Close-Ups
     
Outside the Box

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Window Factory

Larkspur, Calif.

Three years ago when Window Factory owner Leon Blum died suddenly, his two daughters—Jaclyn Blum Guelfi and Rachel Blum—had some big decisions to make. Barely into their early 30s, the sisters found themselves the heirs to a struggling company built on an outdated business model. Still, Window Factory had a good reputation and a great staff. In the midst of a family tragedy, the women had to decide whether to walk away from the business, closing its doors for good, or throw themselves into it 100 percent.

  
 Sisters Rachel Blum and Jaclyn Blum Guelfi became unexpected owners of Window Factory, and have positioned the company for long-term success.

“We had to put aside a huge part of the personal aspect of it and move quickly,” Rachel Blum recalls. “We had to deal with the family death later. My sister and I bounced everything off of each other regarding the company and we moved fast.”

Though Window Factory, a specialty window and door retailer serving the San Francisco Bay area, had grown steadily since its founding, the housing downturn hit the company hard starting in 2006. “In the last year of his life, my father shelled his own money into the company to keep it afloat,” Blum notes. “He did that because he always thought it would come back. He really put a lot of faith into it. And he had employees he didn’t want to let down.

“It was a shocker, even to us,” she adds, noting that she and her sister were unaware of the company’s financial standing until her father passed away.

Fully Committed

They have spent the last several years modernizing the infrastructure, revamping the marketing strategy and reining in expenses to better align with the company’s business volume.

“We had to decide whether to close the doors or almost reinvent Window Factory,” Blum says. “We’re so excited we made the choice we did, now almost three years later. All we want to do is this—forever. It was all worth the risk. Every day is still a risk for a small business, but you never know what the results will be.”

The outcome has been impressive, says John Maloney, president of Anlin Industries, a Window Factory supplier. “I’ve been greatly impressed with the sisters’ resolve and determination to move forward, in spite of some difficult odds,” he says. “We were pleased to learn they wanted
Window Factory to continue as a major player in north San Francisco Bay area window sales and installation, but still had some concerns. Well, to their credit, Rachel and Jaclyn have worked through the rough first year [in 2011], and have now brought their monthly sales volume back up to near the prior levels—not an easy task.

“We are pleased to have them as an Anlin dealer and excited to work with them to see what the future holds as they continue to move their business forward,” Maloney adds.

Intervention

At the time of their father’s death, Guelfi had been working at the company for more than a decade doing human resources, bookkeeping and placing product orders. “She really had a lot of information and product knowledge,” Blum says. “For every job that would come, she’d place the order and do the confirmation.”

And while Blum had spent a few summers working for the company through college, she had opted out of the family business in order to build a career in commercial real estate. She had no way of knowing at the time that her experience in evaluating the value of an asset in real estate would translate into her ability to team up with her sister to save the family’s company. “We knew right away that we had to do some number crunching,” she says. “Although it was our father’s business, my sister was just an employee [before his death]. She didn’t worry about the things you have to worry about when you own the business. For the first one or two months, there were a lot of cocktail napkins and decisions about who would do what.”

Blum also applied her experience from her former career into evaluating the potential of the business. “I came from a background of crunching numbers and taking an asset and looking at where the income was and what the expenses were,” she says. “The truth was we had to cut expenses first thing. There were things my father had never pulled back on when the market went down.”

The dealer’s building was a significant driver of overhead cost, especially because most of the 4,000-square-foot building was used for office space rather than for showroom displays. With the lease on the former building drawing to a close, the sisters looked for a facility that could house the company’s offices, showroom and warehouse space all together, and somewhere close to the 101 freeway in Marin County, California. “It was almost a fantasy,” Blum recalls. “I don’t know how we found it.”

But they did find it, and by September 2011, just nine months after their father had passed away, Window Factory was transitioning to its new space. “In property management, where I nickeled and dimed everything, it was all about the performance of the asset I had in my hands,” Blum says. “We couldn’t look at 2004 and say, “That was a good goal for sales.’ We had to start from scratch and determine what our sales would need to be to stay afloat. If we wanted to make sure the installers had full-time work and everyone got paid, we had to figure out that breakeven number.”

Getting into a lower-cost facility was the first step of the turn-around process. “I think 2011 was our transition year,” Blum says. “We wanted to break even, pay the bills and pay off the debt. By the end of 2011, we had almost accomplished that. We basically started 2012 with a clean slate.”

Turnaround

  
 With a fresh approach to marketing, Window Factory continues to build on the name the company has come to represent.

In its new facility, Window Factory boasted a contemporary new showroom and the sisters were ready to tackle the marketing challenges the business faced. “We needed to modernize,” Blum says. “My father was still using AOL and he didn’t even have company email addresses. I had helped my dad do the website 10 years before and it hadn’t changed since then.”

Luckily, the company had a strong referral base to keep it going during the transition years. “We have a good name and we’re always going to have our referral business,” Blum says. “The people who know us from word-of-mouth and from being local in the Marin County market are guaranteed marketing for us. We have that part down.”

From there, the sisters updated the website, ventured into social media and starting making appearances at local home shows. “That’s something we had never done before,” Blum notes. “I guess we felt we needed to put
a face on the business to go with the name we inherited.”

Window Factory was in a phase of reinventing itself to the public, Blum says. “The business was built off of telemarketing,” she says. “That’s how my father built it. He had a room with 15 people at a time cold calling homeowners. That was a dying breed by the time we took over. Most people don’t even have home phone numbers anymore.”

The sisters redirected the money that was being spent to pay the few remaining telemarketing employees into updating the company’s website and internet advertising presence. The company’s salespeople each drive a Prius wrapped with Window Factory branding and the sisters have made the decision to reach for younger homeowners in addition to its standard customer base. “I’m 33 years old and she’s 36,” Blum says of herself and her sister. “We’re in that younger generation and we’re different than dad. Our friends are the people who are buying homes now. We’re the next wave of people who need windows. It’s an adjustment to our old way of doing things.”

Telling Their Story

Two sisters running a window and door company is not exactly a common occurrence in the industry. At first, the sisters were hesitant to share their story publicly. “We were resisting putting our story out there early on. We wanted to make sure this would work and we want to make women in business look good.”

Now, the ownership situation is a part of the company’s story and Blum says that customers respond well to dealing with women for a home improvement project. “Our sales people love talking about us in the home,” she notes. “The truth is that women are making a lot of the home improvement-related decisions out there.”

In fact, Blum says there’s room for plenty more women to succeed in this type of business. “I think more and more women should be doing this, to be honest,” she says. “We shouldn’t be scared of the construction industry. Most of the time, it’s women calling and making appointments with us, starting the process, and even making the final decisions. There’s a trust factor in home improvement and everybody’s had a bad experience with a contractor. This [trust with women] is part of what sets us apart.”

Being female business owners also results in a customer-focused mindset at the company, Blum adds. “Women are a little more sensitive and it comes across in our customer service,” she explains. “When a customer calls
with a problem, no matter how small it may seem, we take it so personally that we treat them very well. It’s almost emotional. The last thing I want to hear is that a customer isn’t happy. It’s personal.”

This sensitivity to customer satisfaction is one thing the sisters often joke that their dad would be surprised to see at Window Factory. “He’d probably want to ring out necks about the stuff we do—the lengths we go to—for customer service,” Blum laughs. “But my sister and I have a conversation about anything and everything the customers might be concerned about, and then we do something about it.”

Family Traditions

  
 The Window Factory team functions like a family, working together to build long-term success.

Blum says that working at a family business is the last place she expected to be just a few short years ago, but she wouldn’t trade it for anything. “My father would have taken me in at any time with any salary I wanted, but I wouldn’t have done it,” she recalls. “I guess it’s interesting how it all turned out.”

Working together might put a strain on some family relationships, but Blum and Guelfi have quickly figured out the formula that works for them. “My sister and I have learned not to hold onto anything,” Blum says. “We may have a rough day and get at each other a little bit, but when we make up the next day, it’s a clean slate.

“Because we are sisters, there’s a sense that we’re in this for the long haul and we can’t let it ruin our relationship,” she adds.

Window Factory is now well positioned for future growth. Being as young as they are, the sisters know they can guarantee their work for a long, long time. With slow, controlled growth in mind, Blum says Window Factory is ready to bring on more teammates to supplement the bedrock of long-term employees. “What we have now works,” she says, “and it’s a little frightening because you don’t want to mess up what’s working. But clearly, things are getting better out there and I feel good about it. Now it’s just about finding the right people to join us. We need people with experience, but at the same time, they have to know our way. As a small business, I find that to be the hardest part.”

Serving everything from entry level all the way to high-end homes with a broad product offering, Window Factory may grow geographically over time with some additional showrooms throughout the Bay area.

“Window Factory is an excellent example of family teamwork. Rachel and Jaclyn were faced with a huge task when their father suddenly died, but in his absence their spirit, enthusiasm and business sense grew because they
knew that he would want the family legacy to continue,” says Cynthia Holt, Northern California Territory Manager for Weather Shield Windows. “Together they created a new business plan and model to build an even stronger business for the future.”

With a solid foundation and plans for future growth, Blum and Guelfi overcame a tragic situation to solidify Window Factory’s position as a long-term company in the industry. And what would their dad think if he were alive today?

“I can’t tell you how many times we say, “Oh if dad were here, he would have gone crazy,’” Blum says. “I’m sure he’s looking down and he’s really proud of us, but he’s probably a bit shocked. We’re his daughters and he always sheltered us from this a bit. But I think he’d be proud of us working together. That his death didn’t tear us apart.”