|Mike Detmer is global vice president for the residential and light commercial markets at LED lighting manufacturer NuLEDs. he can be reached at email@example.com.|
It’s been a while since I received an
invitation for a grand opening of a
residential systems integrator’s new show
room. I’d like to think that the reason isn’t
due to waning popularity but rather dealers
just aren’t opening that many showrooms
as in the past. So I was particularly keen
when a personalized invitation arrived for
the grand opening event of Crown Audio’s
newest location in Winter Park, FL. I’ve
known Crown’s owners, Nael and Wael
Yacoub, for many years and relied on
Nael’s input as a valued member of past
Niles Dealer Council events.
Given that many integrators are
contracting versus expanding their
facilities these days, I truly wasn’t
expecting much. But I sent in the RSVP
and darted across the state in an effort to offer Crown’s owners and staff my
best wishes. Yet when I pulled up to the new location on West Fairbanks
Avenue, my expectations suddenly amplified. The facility was a real store,
located on a busy street and the valet was busy parking upscale cars and
SUVs. Moreover, after mingling with the Crown’s affluent customers, I
was certain that opening this location was a well-crafted business venture.
From all appearances, Crown’s newest location looks expensive–a bit
more than most integrators would want to spend. Digging deeper in an
interview with Nael, however, it turns out that he was able to purchase the
facility at a much lower monthly payment than leasing one in the same
general vicinity. The combination of low commercial property values and
historically low interest rates put Crown in the position of converting its
monthly rent into real property equity.
A business owning its own property isn’t a new concept. This is
evidenced by Walgreens owning locations in nearly every neighborhood.
But considering Nael’s comments may get you to think twice about a new
facility for yourself. Here’s what Nael had to say about why his new facility
is not only a good tool to grow sales, but it’s a good investment as well:
Customers Want a Quality Experience. Over the years, Nael said,
many of his competitors contracted their facilities and focused more
on efficiencies of scale, which sometimes compromised the quality of
experiences received by customers. Now there are more clients emerging
in the high-end who value premium products, intricate system designs,
and a place to go to experience them.
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|Crown Audio’s Nael and Wael Yacoub outside their new showroom in Winter Park, FL|
“The high-end customers are out there and we wanted to show them
that our business is there to service their needs,” Nael commented.
“Surprisingly, by opening a second showroom in a prominent location,
business in our first location has grown as well.”
Real Estate is a Good Investment. Because it’s currently a buyer’s
market, Crown Audio’s owners decided to forego leasing and to invest in
a building. The purchase rate per square foot was lower than lease rates
in the same part of town.
“We are literally paying half as much for our mortgage than we would
have for a lease,” Nael said in explaining his rationale for buying.
Locate on the Fray of a High-End Area. “We looked for a location that
was convenient to high-end home owners,” Nael said. “Because we’re
close enough for word-of-mouth to spread but not in the heart of town,
we get the benefits of an upscale clientele with reduced facility costs,” he
told me. In looking around, I noticed a wine shop, coffee bar, and custom
tailor. Like Crown Audio, they are all geared to upscale customers.
Focus Your Build-out on Customer Tastes. Crown’s choice of décor
reveals careful thought about who its customer is and what makes them
comfortable. “You have to build an environment a woman can imagine
in her home,” Nael advised. “Each of our rooms has a clean look and one
system–no multiple displays and several popular styles represented. That
way we can put everybody in something that matches their taste.”
Don’t be Scared by the Commitment. Judging
from the tremendous turnout of customers at
Crown’s grand opening event, I have to believe that
there is a strong business potential in their area. “This
is what people want, and it has to start with us,” Nael
stated. “I’m confident that we will be selling highend
and custom-installed systems for years to come.
Tell your readers not to be afraid,” he concluded.
Expanding as the market grows is a natural
evolution. Maybe your business is ready to take
a big step like Crown Audio did. If so, be sure
to do all you homework and consult with your
accountant, real estate professionals, and banker
before jumping in. For some residential systems
integrators, new facilities can be a great investment.