Top 500 Profile: Economic Efficiency
authors Kyle Clapham | June 16, 2021
Following his graduation from the University of Miami, Scott Berman moved to Cleveland, Ohio, and worked for his father’s window manufacturing business. After his father retired they sold the company, and Scott returned to Florida. One day in North Palm Beach, he drove past a window installer and struck up a conversation, which inspired him to start his own window business.
“The economy was a little crazy in 2009 and 2010, and new construction here in Florida—unlike today—was booming,” says Berman, who founded Florida Window and Door in 2009. “I didn’t really know the new construction market, but I knew the replacement market. Nobody could understand why I would want to be in replacement as opposed to new construction. But it turned out to be the right approach, and it allowed us to get through those difficult times.”
Based on his previous experience, Berman never had an interest in the manufacturing side of the industry. “I just didn’t like the business model,” he explains. “You have a lot of money tied up in capital-intensive equipment, and you’re reliant upon a lot of suppliers and labor. I know there are people in our industry who are exceptionally successful doing both, but I wasn’t very good at it.”
With the scarcity of new-home inventory fueling demand for home improvement projects, his wager on the replacement market turned out to be the right bet. Florida Window and Door exceeded its projection of $86 million in sales last year, and the company has its sights set on $100 million this year, he notes. But the good times have brought challenges such as material prices and labor.
“I think complacency is the biggest challenge because what’s happening right now, everybody is doing well,” Berman says. “Their phones are ringing off the hook, their backlogs are huge and customers are buying, so the price increases are universal. Things are so good that they don’t look to improve the way they market, the way they do business and the systems they operate in.
“From an ownership perspective, the message that I drill down to my management team is this is not going to last forever; we’ve got to continually get better,” he adds. “In this business, the well-run companies are going to survive, but the companies that are not well-run will not because they can’t survive on customer deposits when they’re not doing enough business.”
To improve efficiency, Florida Window and Door has been investing in technology and watching all its metrics including profit margins, lead costs and price increases. The COVID-19 pandemic has offered the company an opportunity to identify different methods of doing business, whether through Zoom calls or Microsoft Teams, to better serve customers who have been stuck at home.
“Also, all our sales meetings will remain online so that our salesforce is more efficient,” Berman notes. “We have people working remotely as well, which I assume will continue for a period of time—if not indefinitely. We’re trying to reset our model to the new expectation of people going to work, working from home, and how it affects culture and the success of the individual person.
“From a marketing perspective, that works back in a different way, which is now you’re going to end up with more people home in the afternoon or people home in the morning,” he adds. “You can increase the value of a 10 a.m. appointment or a 2 p.m. appointment, when you traditionally couldn’t get both people home because they were at work. There are going to be advantages that we don’t necessarily know right now that I think are going to bear themselves out over the next several months—if not years—that will pay dividends for the home improvement industry.”
Although the cost of leads has gone down as more homeowners pursue projects, Florida Window and Door continues to mix and match strategies based on successful campaigns. “It’s a constant struggle to get leads,” Berman says. “To grow your business and get leads is the toughest part of the business. You’ve got to keep trying different things, and we’re trying as many as we can find.”
The company has been investigating opportunities to expand its product offering for window and door improvement and might have an announcement later this year, he notes. “I don’t have great visibility to the second half of the year. There’s a price point where I think consumers are going to get a little more cautious in reference to some of these material cost increases,” he continues.
“I’m concerned that this is a once in a lifetime boom, and I don’t know how we can maintain it for any given length of time, if for no other reason than because the manufacturers can’t even catch up. We can sell all day long, but if our manufacturers can’t produce, it makes it very difficult.” QR