The company’s chairman and CEO begged his bankers and threw in some of his own money to keep it afloat. The company did a paltry $600,000 in sales in its first year.
Today, Gorell employs 400 people at his Indiana, Pa., plant. In 2005, he posted just under $50 million in sales, and he sees plenty of opportunity for growth in both existing window products and a new line, patio rooms.
Despite the company’s shaky start, an experienced work force and a constant quest to develop new products and improve existing ones have allowed Gorell to sustain growth. Long experience in the replacement window business he worked for years in his father’s business, Season-All Industries, and served as its CEO before a subsequent owner closed it in 1993 has also contributed to the company’s success, says Gorell.
In a business that requires high volumes of production and a high degree of customization “Our average product run is one,” he says Gorell faces a few large competitors and thousands of small shops vying for the replacement window business. To thrive in this highly competitive environment, he has chosen to focus up-market, staying out of the large home improvement centers, where price is king.
Gorell talked to Smart Business about how he took Gorell Enterprises from zero to $50 million in annual sales.
What are the most significant challenges for Gorell Enterprises and how do you meet them?
The challenge is staying ahead of the competition and evaluating what the market is asking for and providing our customers with the best we can physically do. I go out and see the customers regularly.
I talk to them. I personally get all of the Internet messages that come to Gorell, and then I distribute them out so I get all the information and service requests.
One, I want to make sure that our quality is top-notch and stays that way, and it gives a pretty good insight into what people are looking for, especially consumers. Hopefully, I can assimilate that and come up with a business plan.
Now, (I focus on) how to maintain the growth percentage. As you get more dollars, the (growth) percentage gets to be a tougher nut to crack. That, to me, is the biggest challenge.
What are you doing to continue the growth of the business?
Rooms, we think, is a fast-growing market, and high-end vinyl replacement windows, we think, is a strong, growing market. We’ve been selling conservatories, which are the very high end of the patio room market, for about six years. We’ve had our toe in the water, but we’ve decided to jump into patio rooms completely.
We have a full line now ... and we doubled business this year from last year, and our plan is to double it on the room side for the next three years. It’s the same materials that windows are made of.
A lot of it is the same processes, machinery and equipment. A number of our dealers also sold rooms. So when you put those factors together, it’s another way to grow the company and add to the products we are used to dealing with.
We market them through our dealer network. We have about 30 dealers for rooms at this point; for windows, we have about 300 dealers, and we expect to get room dealers up to close to the same number. We’re looking at plantation shutters, an interior decorator-type item. We’re adding options and features to our existing products, and we’re expanding geographically.
How do you stay on top of what’s happening in the market?
I try to talk to a handful of customers each week by phone and I go out and visit the top 20 or 30 customers each year go to their place of business and see how they’re doing and what they’re doing. You see a lot of ideas, and you see a competitor’s product because a lot of these places will carry a lower-end window or another window that has a feature that we don’t. You see the impact of some of these options, things that we haven’t had that we might think about.
For example, we started to produce a dark wood-grained color window about two years ago. We didn’t think there was much of market, and it isn’t huge, but when people need a dark color, they need a dark color. Imagine a Tudor-style house; a white window just wouldn’t look right. We have a dark exterior window that would suit that kind of dcor.
Why don’t you sell into the big retailers?
We’ve focused on this mid- to high-end market, which is why we don’t deal with the big boxes or much in new construction. For the most part, builders use the least-expensive product they can find.
We have a new construction product, but we don’t focus on it. We’re selling on features and benefits and up-selling; a lot of our competitors sell on price ‘Gorell’s a pretty good product, but I can give it to you for 10 bucks cheaper.’
If that’s what the dealer wants, he can always get a better price. We have to be in the game.
How do you change strategy to meet changes in the market?
I’m not sure the market is changing greatly, other than a much more knowledgeable consumer, and the Internet has done wonders in helping people to understand that there are differences from one window to the next. I’ve been in replacement windows since high school in the 1960s, when the first replacement window built in the United States was made in our building.
Most of my team has 20-plus years in replacement windows, and we can adapt pretty quickly. We know what can be done. When we see something that can be a desired feature for a consumer, we can adjust quickly.
How does that process work?
Somebody comes up with an idea, we get together at weekly staff meeting for all the key managers, and each person has input on what’s going on in their area. Anything new, we discuss if we can do it.
We consider how it affects purchasing, materials handling, how it affects IT can they program it? How it affects data entry. Can we make this change? What will it impact? And within a couple of staff meetings, it’s done.
How to reach: Gorell Enterprises, www.gorell.com