If you had a crystal ball in 2008 and were looking to work for a company that deals in the home improvement industry, you might have been advised to run for the hills. But Ben Davis had no crystal ball when he became president of N-Hance Wood Renewal, a franchise that renews kitchen cabinets and floors — and regardless of the challenges, found ways to grow the company.
“I took the president position with N-Hance in 2008, which was not the best time to take over a home improvement business,” Davis says. “However, when the recession hit, it’s not as if people stopped caring about their homes.”
In fact, in many cases homeowners cared more about their homes because they understood they may be in that home longer than they anticipated. With the recession taking hold in late 2008 homeowners began looking for ways to maintain their current properties and started demanding high ROI decor and remodeling project options.
“We’ve positioned ourselves to fit very well into that space,” Davis says. “We positioned ourselves not to be victims of the recession, but to be opportunistic about changing consumer demands with regard to home improvement projects.”
Instead of the traditional sand and refinish process, N-Hance Wood Renewal’s services renew the existing finish of cabinets or floors, adding additional layers of protective finish and changing the color if the customer wants to get a factory look without all the dust, dirt and inconvenience of having to be out of the home for a few days. And the process saves consumers considerable money.
In an industry where nearly half of mom-and-pop and smaller remodeling companies have evaporated over the last five years, N-Hance Wood Renewal has grown substantially in that same period.
Here’s how Davis grew N-Hance since 2008 and is positioning the company for further growth in the next five years.
Don’t participate in the recession
N-Hance has been very fortunate to have a stellar network of franchisees who took on a mantra of refusing to participate in the recession. Every year throughout the recessionary period, the company experienced growth.
“Any organization that was operating without a great deal of fiscal discipline at that time was in a pretty precarious situation,” Davis says. “We’ve always been a pretty disciplined organization. We’re always willing to spend where a growth opportunity presents itself, but we manage ourselves quite well.
“On the other hand, we knew we had some franchisees in the network that enjoyed the housing boom and didn’t have the rigor or fiscal responsibility within the organization.”
Davis wanted to make sure he positioned the brand and its service offering properly to maximize on changing consumer sentiment, but also that the company was taking all steps possible to give its network of franchise owners every chance at surviving.
“It was really a two-pronged strategy of ‘Let’s go out and create opportunity, but at the same time let’s make sure the ship is as seaworthy as possible,’” he says. “It was really helping our franchise owners focus and understand, and our marketing partners focus on and understand changing consumer needs and consumer sentiments.”
A marketing partnership it has with Home Depot has helped N-Hance increase its sales. When Davis took over N-Hance, he met with several kitchen designers in Home Depot stores throughout the country and discussed how frustrating it was for customers to come in with mismanaged expectations as far as time and budget.
“Customers want to do a kitchen remodeling project, but when they see that just the new cabinets alone are going to be $15,000 or $20,000 and their budget is $12,000, they either laugh or cry their way out of the store,” Davis says. “N-Hance can make old cabinets look brand new, change the color and update the look of them for a third or a fifth of the cost of new cabinets.”
Davis positioned N-Hance with franchise owners and marketing partners with a specific message: This is the key to seek consumers who are extremely frustrated with not doing the project they feel they want to do — or in many cases, that they need to do in order to sell their homes.
“This is a new option that allows customers to get more out of their remodeling budget,” he says.
Follow the strategy
The biggest aspect of Davis’ strategy for N-Hance was making sure the franchisees were more profitable and able to perform as growth ramped up.
“We had to seek all the opportunities and be very growth-oriented,” Davis says. “We launched a lot of new tools around helping franchise owners hire the right people and track their labor expenses, material expanses and understand in a very detailed way the economics of every job that they did.”
N-Hance created several initiatives to make sure the franchise network was as secure, robust and healthy as possible. Making the timing of the company’s partnership with Home Depot fortuitous.
“As a lot of other lead sources or places that we would find customers were declining, that’s when we launched our Home Depot partnership and said we need to open doors to new lead sources and opportunities we haven’t gone after in the past,” Davis says. “Home Depot is a major part of that strategy.”
Statistics show that roughly 80 percent of the people who are looking to do a remodeling project to their kitchen walk into a Home Depot design center for the next step. Cabinets represent 75 percent of N-Hance’s total revenue.
“If you’re a new service offering like N-Hance, and you have an uneducated consumer base out there, and 80 percent of them are walking into Home Depot stores, that’s a great partnership,” Davis says. “Home Depot found a home for us in their kitchen design center. In fact, they coined a phrase around the whole idea which is ‘replace, reface, renew — a solution for every budget.’
“One thing we wanted earlier on that we weren’t doing nearly as well as we needed to be doing was getting referrals,” he says. “When our customers saw what we could achieve, we had this amazing moment of ‘Wow!’
“But we weren’t leveraging that unique moment of wow that we were creating in the customer’s home. We have been working with franchise owners on seizing referral opportunities and going after strategic alliances with stagers, real estate managers and property managers.”
Look to the future
Now that N-Hance has established its services and has built-up its partnerships, Davis’ focus is to grow the company’s footprint.
“We have 255 franchises throughout the United States and Canada,” Davis says. “We are looking for overseas expansion and in key markets throughout the United States and Canada. We have a lot of inventory available, so our big focus is building our network.”
One of the biggest ways Davis plans to build a more robust national footprint is to go after other opportunities that N-Hance hasn’t been able to go after like relationships with restoration companies, insurance companies and real estate companies on a national level. He also wants to grow the partnership with Home Depot.
“Today, we cover maybe 1,300 of their 2,000 stores and we want to be in all 2,000,” he says. “Our growth will also help us with the awareness issue among consumers considering a remodeling project. The more franchise owners we have out there that are helping to educate the public and advertising in their local areas, the easier that becomes.
“In my opinion we have a pretty sexy service offering that’s really fun to be a part of.” ●