KBB

KBB

News: 

How to Create New Revenue Streams Today


© thithawat- stock.adobe.com

June 10, 2021

Few could argue that never has there been a more optimum time to stretch your flexibility boundaries and engage in innovative ways in which to stay afloat and increase revenue streams. The pandemic had our industry in an uproar at its onset, and we had to change the way we were doing certain things overnight.

Now that some of the dust has settled, we are getting back to business – kitchen and bath remodeling has some really robust figures at the moment. But don’t get overconfident about our current state of affairs – things can and will always change. It literally pays to consider the ways in which you can create new revenue streams in the form of new services you offer, as well as maximize the original scope of a project where it makes sense to do so.

Introducing Project Enhancements to Your Clients

Plenty of homeowners not only want to transform their kitchens and baths into areas that really function for everyone living in the home, they also want to consider spaces that are collecting dust – like the formal dining room – and make them usable. Spending considerable amounts of time at home has given us all the chance to really evaluate the changes that need to be made, and it is more important than ever to assess your clients’ needs.

Although things are going back to a new normal, will they still benefit from a home office and/or a study space for the kids? Do they see themselves transforming that unused storage space into something more functional? Do they want to be able to spend more time in their outdoor spaces all-year round?

According to designer Patricia Davis Brown, CMKBD, owner of Vero Beach, Fla.-based Patricia Davis Brown Designs LLC, a lot of her projects have included great rooms, where some of the enhancements have included TV walls, bars for entertaining and outdoor kitchens.

“A positive part of the pandemic has been that clients are thinking outside the box to create new opportunities in their homes,” said the designer.

Designers Joann Kandrac and Kelly Kole of Atlanta-based Kandrac and Kole Interior Design have found it a no-brainer to include a steam shower and a washlet in the master bathroom project scope in light of the recent surge in the desire for wellness products.

Julie Schuster of New York-based Julie Schuster Design Studio, says some of the good advice she’s learned is that if you show clients products that are outside of their budget, they will not be satisfied with the choices they do have the ability to purchase. She suggests starging the process by showing them what they can accomplish to improve their comfort level about spending more money.

revenueThis outdoor mecca designed by S&W Kitchen has a 15-ft. waterfall, curvy water slide, grotto, see-through linear fireplace, huge tiki hut with a bar and seating/tv area, and outdoor grill area, a 15-person infinity hot tub and 18-ft. sliding pocket doors.

Investing in Product Specialization and Project Range

Design professionals are supurb at creating the concept, rendering and finished project, but there is room for additional revenue if you also have knowledge of certain products and can add that as a service. Brown has added lighting design to her expertise, which she says has huge profit margins. When she realized not a lot of designers were looking into lighting, she started studying it, and this has sold more contracts for her than anything else.

Kandrac and Kole also specify high-end lighting for their clients that they would not get from a contractor, which is another project upsell. They also specify window treatments, which is another revenue stream for the design duo, who say they offer better resources than the local builder design center.

Brown has opened up her project expertise to include more than just kitchens and baths, which is important especially now when clients are asking for so much more. She prides herself on always being open to learning new things, like designing with more detail via ceilings and moldings.

“Having someone on your staff who has an interior design – specific background is a potential upsell and value add to a project that expands beyond four walls,” said designer Christopher Grubb of Beverly Hills, Calif.-based Arch-Interiors Design Group.

Brandon Bryant, president and owner of Asheville, N.C.-based Red Tree Builders, said his firm recently brough a full-time designer in house instead of using a third party, which helps answer client requests much sooner and allows them to charge a design fee.

In more than one instance, S&Q Kitchens’ clients have been so impressed with their original kitchen and bath projects that they asked them to come back and do things outside of their normal scope. Although the firm does not specialize in pools or sliding pocket doors, they partnered with vendors and subcontractors on one project to bring to life the resort-style outdoor space their repeat clients desired.

“Our clients appreciate our quality as a design-build firm, and we have built up a strong level of trust with them,” said Chris Druschel, project designer at Central Florida-based S&W Kitchens. “Stepping outside of our comfort zone has allowed us to open more doors. If every job was a cookie-cutter kitchen or bath, I don’t think half of us would be in this industry; it’s the creativity that keeps us going and engaged.”

revenueAnother of S&W Kitchens’ clients asked for something outside of the firm’s list of specialties: a mancave – complete with a station where the husband can brew his own beer. S&W’s usual projects are kitchen and bath related, but these repeat clients knew the firm would be willing to take on something different, which has opened up more doors for them.

Diversifying Your Services for a Greater Revenue Stream

With the onset of the pandemic, you may have panicked when clients were delaying – and sometimes even canceling – their projects. Maybe you had the luxury of time to attend more virtual events and/or step up your social media game. A lot of your probably tries your hat at eDesign, which gave you a way to still provide a service to your clients – even if it was not an all-out renovation. It is always good to plan ahead and have some other revenue streams in the form of additional services you can offer – pandemic or not.

Kandrac and Kole offer a “Design for a Day” program for clients who do not have the budget for full-service design and who are comfortable purchasing products on their own. The designers charge a flat fee to meet with the homeowners. For a set period of time to create a presentation and a link for them to start placing their orders immediately.

“It’s like a DIY project but with our professional guidance and concierge service,” said Kandrac, who explained that she and her partner also offer a flat-fee service for helping homeowners make their product selections when they are only working with a contractor. “These have been well-received options as we continually try to cater to our clients’ needs.”

Brown has been diversifying her talent for years. Aside from her design services, she also offers the “Dig This Design” blog platform, which operates sponsored posts and product reviews. During the pandemic, she has published multiple posts per day as a revenue generator. She has also worked with various builders to design model homes, which keeps her portfolio constantly fresh.

With the housing shortage in his area, Grubb says accessory dwelling units (ADUs) are being encouraged in California.

“An additional revenue stream could be that you offer designs for these ADUs as a specialty – limiting design materials and options but not limiting your profitability,” he added. “I’m seeing more contractors and architects promoting this, and with the right partnership, you can be built into the construction costs.”

For showroom operators, Grubb suggests building successful partnerships with those in the trade for repeat business – not just homeowners, who are often a one-off sale. He also advices more brand-designer collaborations – especially if there is a pro in a part of the country where the brand is trying to increase sales.

“I think it is just all about asking what else can we offer,” said Rebecca West, owner of Seattle-based Seriously Happy Homes, who suggest building partnerships with professionals who specialize in something you may not – like furnishings – and then the two can be referral colleagues. “There is also a classic marketing technique of offering services at al price points, which will guarantee that you sell more middle-of-the-road services over the lower-end ones.”

Finding ways to diversify your service offerings and project expertise can help you not only in the challenging times we have been facing of late, but it will always keep you in tune with client requests and set yourself apart from the competition. Always be innovating – you never know what’s coming down the pike – and always be prepared.