We are now heading into the New Year and this raises the question, “How will the business landscape change for the door and window industry, and what must we do to adapt to these changes?” The horizon looks quite different this year, so there are some things to keep in mind as you decide where to focus your efforts and what strategies you will choose to maximize success for your company in the months and years ahead.

Several things will come onto play. Despite all of the concern last year about Energy Star going away, it hasn’t yet. Maybe tighter regulations will not be surfacing at the same pace, but what is currently in place is so well entrenched that we will not be seeing a disappearing act anytime soon. However, as more energy-efficient door and window products are released by manufacturers, these companies can no longer rely on stiffening regulations to sell their products for them. If you invested dollars to make a better product, you will also have to invest marketing and advertising dollars to let the world know about it.  Having a great product is only half the battle – convincing consumers that you have “the best” product is equally important. The importance of marketing and sales strategy will take on a whole new meaning.

Sales training will also become even more important. An Energy Star label can only do so much to help sell a product. Beyond that, you need to invest dollars to better equip and train your sales staff in their efforts to sell the features and benefits of your window and door products. The goal should be to make them experts when it comes to convincing customers that your brand is “the” most desirable and that your products encompass the “highest value” proposition versus anything the competition is trying to sell. With the slow season upon us, now is the best time to bring your sales staff together and to “sharpen their saws” for the upcoming selling season that kicks off in March. Having a great product but a poorly trained sales staff will not get you where you want to be.

Another factor that will affect strategy in the next few years is the new tax regulations that will go into effect. The most significant change in the new tax law is the change in the corporate tax rates – from a system of graduated tax rates topping off at 35 percent down to a flat tax on corporate profits of only 21 percent. This new tax law also allows “full expensing” of certain business assets, enabling businesses to write off 100 percent of the cost of these assets. This replaces a system which only allowed the cost of these assets to be written over a period of years through “depreciation” and “amortization” deductions. The net effect that this new tax law brings is greater profitability for corporations. So, you might ask, “this is great news … so what is there to decide?”

Well, the decision comes down to one of retained earnings. How much of these additional profits do we give to shareholders vs how much do we plow back into the business to better position our company for success, to boost growth and to potentially create more jobs?

Well, many in our industry could argue that there are already plenty of manufacturing jobs but not enough takers to fill these positions. So perhaps, this new tax law will enable manufacturers to invest more heavily in automation. Automation is the game changer when it comes to pulling ahead of the competition. Those who take all of these added profits to the bank are making a poor decision in the long run. Those who re-invest these profits in the business will better position themselves for victory.

Investing in automation also creates higher-paying jobs that are associated with employment positions requiring higher skill sets. It takes a more sophisticated work force to run automated machinery. Knowledge of electronics, software and advanced maintenance procedures is required to support these new machines. Perhaps manufacturers can therefore create more desirable jobs that are more challenging and rewarding, thereby attracting a different segment of the workforce – those more likely to stay and grow with the company. Perhaps attrition rates will decline.

So, as we strive to improve profitability and grow our business year after year, these changes to the business landscape will likely require us to refocus our strategies. Those who are quicker to adapt will go faster around the curves ahead. Adapt and enjoy the victory lap!

Leave a Reply

Your email address will not be published. Required fields are marked *