Operating a showroom may be the best thing you do for your remodeling business.

Since its inception in 1960, Blau Plumbing Inc. has always had a showroom. It's taken one form or another. But we've always stressed the importance of a showroom. You need a showroom if you're going to tap into the high-end remodeling market. I can tell you from experience, it would be impossible to sell a $45,000 complete bath remodel without having a showroom.

A showroom is essential since it gives you the legitimate place of business that you need to compete with the kitchen and bath dealers who are looking to do more bathrooms - if they can figure out how - and are upgrading their showrooms to include plumbing and bath displays. I strongly believe every plumbing contractor who is really in the remodeling business should have and operate a showroom. Here are two great reasons:

• Product Knowledge: First, contractors are the logical choice to display, explain and sell plumbing fixtures. We are the people who by code should be doing the installation. Where better to get the correct product for an application than from the person who knows what to install? Even with the advent of home centers, plumbing contractors have a great market edge if they take advantage of it. And manufacturers, who for years have said that they are just getting their product to the market in the way that the market is demanding it, are not taking full advantage of their opportunity to make bigger profit margins on the more sophisticated products in their lines. I doubt very seriously that a counter person at a home center can fully explain a high-end shower head to a consumer, much less order all the pieces that go with it. Does the home center staff know why consumers are better off with a diverter valve for each body spray? Or that a 3/4-inch thermostatic valve will supply the correct amount of water volume to run all of the spray heads at one time, plus the normal shower head?

• Pricing Control: The second reason a contractor should have a showroom has to do with controlling what he displays and doesn't display due to competition. Controlling product selection makes it easier to run your remodeling business. You don't need disgruntled customers coming back after they find that the faucet you installed only "costs" $39.95 at the hardware store.

Let's look at how a contractor can take the first steps to enter the bath remodeling business as an additional source of revenue, and, more important, an additional profit center.

Competitive Intelligence

The first thing you need to do is study your current competition. I would recommend taking the time to visit all the people who are presently selling plumbing products to the consumer. This would include kitchen and bath dealers, home centers, hardware stores, other plumbers, plumbing wholesalers, and anyone else under bathroom remodeling in the local Yellow Pages. Also check under the heading "Plumbing Fixtures - Retail" for more names that might not immediately come to mind. Also check with the local chapters of the National Association of the Remodeling Industry, as well as the National Kitchen and Bath Association. These lists should give you enough of an idea of who you're up against.

When you visit these competitors, take note of the following items:

• Styles and sizes of their showrooms and displays.

• The manufacturers on display.

• What services they offer.

• Location.

• Hours of operation.

• The level of professionalism displayed.

  Carry a notebook and write down your impression as soon as you leave so you can use this information later without being confused.

  Also, take as many business cards of the showroom staff as you can. This file can be used later on when you look for people to staff your remodeling showroom. Make notes on the back of the cards as to who impressed you the most. You might try to score the stores on a 1-10 grading system, and revisit the top three to review them after your initial canvass is completed.

  While you're scoping out the competition, have your service techs do a little market intelligence gathering of their own. Have them note the number and types of existing bathrooms that are on every job they visit. Make them fill out a simple question sheet scoring every bathroom in every customer's home. Have them score the size, approximate age, general condition of the fixtures, whether they have a shower and a tub, one or two lavs. Get a good feeling of what potential there is from your existing customer base for remodeling work. If you can gather this data upfront, you'll be all that more prepared once you start your initial marketing blitz.
  
  

  Location, Location, Location

  With this information, you can next look at what type of operation you will want to set up. I will only take the high end of the market in this next discussion because that is the business I feel you will want to get into.

  As they say in the real estate business, it's location, location, location. Where you put your showroom will be a very important consideration. In my opinion, you will want to find a location that is separate from your present building. Why? Because most likely if you're a contractor, you're located in an industrial park or business park, rather than a high traffic retail location.

  The ideal location would be a stand-alone building with approximately 1,800-2,000 sq. ft. of space. If you cannot find this type of a building, locating in a small strip mall would be the next best option, preferably in a mall that has a beauty salon included. (Remember that the decision to remodel the bath normally starts with the woman of the home.) In general you want to locate close to the center of the population density in the area that you will be working. Our pin map on display in our showroom shows that an affluent area within three miles of our location accounts for over 30 percent of our total business, and our general operating radius is within 30 miles of our location. Being close to a major freeway is a plus, but you should also try to be on a major street in your city or town.

  In the next article I will talk about the specific layout of the showroom, discuss the types and number of displays, start to look at staffing requirements, and touch on the basics of establishing a business plan for your new remodeling business.