Top 500 Profile: Greater Appreciation

No. 200 Next Stage Design + Build continues to invest in marketing and technology as home living spaces become even more important.

After 25 years of sales and leadership roles in testing and measurement, Jim Kabel got the itch to start a small business. The Southern California native wanted to leave the corporate world and its extensive travel behind, and he figured Silicon Valley would be ripe for home improvement with its aged housing stock. Then he saw an ad looking for new Case Design/Remodeling franchisees.

“I liked the idea of getting a business started within a system of proven processes and tools—and not having to start from scratch,” says Kabel, who formed his corporation in 2004 and worked on a business plan while studying for his contractor license. “I didn’t come with the perspective of a craftsperson who was trying to go out on their own. I’d been involved in selling, marketing and running a services organization with profit and loss responsibility. I had leadership experience.”

Each year Kabel created a business plan with a three-year window and adjusted it consistently as conditions changed. He also remained careful about the employees he brought into the company as he built a team of people with similar values and ethics. For the first four or five years, Kabel represented the entire marketing department and navigated his firm through the Great Recession.

“We cut back, obviously, because our business shrank by about 50 percent, but I never stopped investing in marketing,” he notes. “I’ve always looked at marketing as a utility. I’m not going to turn the power off and keep the business running, so why would I turn marketing off?

“Even though we had a tremendous number of repeat and referral clients, to be able to grow, we had to constantly find new people who related to our business model and our reputation.”

Over 15 years, Kabel increased sales to $8.2 million and became the lone Case franchise west of the Mississippi River. His business partner retired earlier this year and, following amicable talks with the franchise, Kabel rebranded his company as Next Stage Design + Build on June 30. And in spite of COVID-19, lead volume and website traffic are higher than usual at this time of year.

“Initially the county down shut residential construction for about a week and a half; then when the state went into lockdown, they turned it back on and determined it was an essential business,” he says. “And then they scaled back and turned us off again. When we were shut down, we weren’t able to do any production work. We were able to still meet with clients and continue to work on designs [and] sales opportunities, but there weren’t a lot of those opportunities. We had very few leads in March and April.”

With so much uncertainty, many clients were not comfortable moving forward on projects, he adds. As lead volume rebounded the last few months, however, the company has encouraged customers to begin the design process as local building departments continue to struggle with demand. A permit application can take months to review, let alone approve, he notes.

“We can complete the design, order and receive the materials, and start the project when clients feel more comfortable—especially if it’s a kitchen or bathroom,” Kabel explains. “Many families have kids at home and can’t dine out, so they need their kitchen. Even if it’s out of date, many don’t want to do a remodel of that critical space right now.

“We’re seeing a shift to larger projects and, strangely enough, we’re seeing whole-house projects where the owner’s going to move out or hasn’t moved in yet,” he adds. “Or an addition project or an exterior remodel—we’re seeing more of those right now than single kitchens and bathrooms.”

Based on county requirements, the company has to develop an on-site protocol for each job and post it somewhere at the home or leave it in a three-ring binder near the front door. Employees review the document with every client, and Next Stage has been working with a third-party organization in the Bay Area called Diamond Certified to provide an extra level of comfort to homeowners.

In response to COVID-19, Kabel adjusted revenue projections for 2020 from $8.6 million down to $7.4 million. Although the company lost six weeks of income, its recent lead pace has been as good or even better than last year, he notes. Despite all of the challenges, the business remains bullish on California, where low interest rates and little new construction offer opportunities.

“COVID-19 has created a greater appreciation for home spaces and new ways of how we use those spaces,” Kabel says. “We’ve also been implementing more technology to help simplify, track and eliminate paper and reduce the labor involved in some of our basic tasks, so our people can just focus more on the creativity and craft of what we do.” QR

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