Jim Lawrence and Avondale Kitchens: The Only Constant in Business is Change
“I attribute my success to two things.” Says Jim Lawrence, owner of Avondale Kitchens, “First, reading. Second off, a love for seminars or meetings and trade shows. For me, even though I didn’t like school, I always had a love for reading. From the time I was a kid, it didn’t matter if it was about woodworking or ancient archaeology, I’ve always loved to learn.”
“Even when I was a builder, my competitors wouldn’t go to the association meeting because they were too busy. I guarantee you 80% of the guys with cabinet factories across Canada think they’re too busy to go to CKCA meetings. But really, they are too busy NOT to go. They are missing out on the forest because they are too focused on their own trees.
“I went to my first CKCA association meeting in 86 because my phone rang one day and the man of the other end said ‘Jim, you don’t know me, but I’m Eric DiCarlo. We have a CKCA meeting next month, and we’d be honored if you would attend.’
I have a small factory. I’m on my own. I’m doing construction renovations. I have basically a three-man shop.
I say. ‘Well, yeah, I do know you. You have Eastland Industries. Do you know who you’re talking to? I’m just a little nobody in the backwoods, a little three-man shop.’
But he says ‘oh no, we already checked you out. We know who you are and the size of your shop doesn’t matter.”
“So, I went down and went to it. I thought, whoa, that was interesting. I learned a lot, but it was interesting because when I talked to the big guys, I found that they had a way of doing things and I would tell them our method to accomplish the same without being able to afford the same machinery and if it worked, they’d talk to you. So, I always enjoyed those kinds of meetings and I’ve always been involved in associations.
“I would go to CKCA meetings when it came to town or was in the Maritimes, and then about 18 years ago as our business was getting more successful, I decided I would get more involved in the Canadian Kitchen Cabinet Association. Originally my goal was to do some tax-free traveling, but for every thousand dollars I spent with CKCA, I probably made back $50,000.
Lawrence would become CKCA president in 2014.
“We officially opened in 1982. We had decided that instead of building kitchens in the houses, we would build them in our factory. Several local people told me that it couldn’t be done, but I knew it could be done because they were doing it in New York City and Toronto. I really didn’t reinvent the wheel. I was educated enough to know that those guys were doing it. So, in 1982 we started building all the cabinets in the factory and then taking them out and installing them.
“I was doing construction renovations at the small shop building cabinets and there was a little time in the middle where I was having a little trouble with the trying to figure out whether I was making money with the shop or not. But after a few seminars, I was able to work that out. A year before 1995, I said to my wife – I’m going to build a new factory in Woodstock, maybe you should take me to the sanatorium and get me checked out because I know it’s going to be really hard. But my brain told me I’ve had to build a new factory. So, in 1995 we built what we call the new factory where we’re then at 13,000 square feet. When the pandemic hit we didn’t need any more room, but I put an addition on the factory that moved up it to 18,000 Sq ft. We did it mostly for employee satisfaction. We used to load our trailers up outdoors and now we load them all up indoors under lock and key so it’s ready to roll the next morning. We actually design, manufacture, and install one kitchen every day.
“Even before we were at the new factory, I had something that the big factories didn’t have. The large competitors were running $1,000 computer systems for their CAD. I had put up the outrageous amount of $10,000 for a CAD system that would do a cut list. It was 10 times the cost of what they had, and these guys were 10 times bigger than me. We were the first company on this side of Toronto with a CAD system that tied in and would generate a cut list.
Expanding Markets and Increasing Efficiency
“I knew that if we didn’t get out of town and find more markets that we wouldn’t survive. So in 1996, we started marketing and doing home shows about an hour away. 1997, we started doing home shows in St. John and then in Bangor, Maine, which was two hours away. A couple of years later we did Portland, Maine, which is four hours away. We kept growing the business by expanding into these markets out of town in increments.
“We were focused heavily into the U.S. and about the year 2000, we were doing about a million dollars in sales in New Brunswick and a million in Maine. The advantage of doing the sales in The U.S. was that in the year 2000, USD to CAD was running at 50 cents on the dollar. A $20,000 kitchen returns $30,000 Canadian. We had been running that for almost 10 years, but then early that year the dollar started to move, and I knew that if the dollar continued to even up that we would not make it. In fact, it was totally impossible to grow enough to match the shrinking exchange rate. Our growth was about 10% – 15% a year. The exchange was closing in at 25% a year. I knew we couldn’t drive 25% growth at that time.
“I had already been going to the machinery shows in Atlanta and going to association meetings. The first CNC machine I ever saw was probably in 1990 and it was $700,000. That’s when you could buy a house for $50,000. So, in 2004 I reacted by scraping up a deposit for a CNC machine, driving to CNC Automation in Montreal, slapping down $20,000, and saying, ‘okay, you better automate me or in another two years we won’t even be here.”
“In 2007 CAN and USD reached par. Five kitchen companies in New Brunswick went bust and many morewent bust across Canada. The only ones that didn’t go bust back in those days are those that pulled their markets back and automated.
“We started cutting kitchens with computerized equipment and were the first company to do so east of Montreal. At the same time, we implemented lean manufacturing and streamlined our process. We also made the conscious decision to quit working in the US and concentrate closer. We gave up a couple of home shows in the US and that automatically saved us about $35,000 a year by not doing those two home shows. That was the day we quit making cabinets and started making money.
“Three years later the CNC machine had paid for itself. We joked around that we couldn’t stand prosperity and should buy something else, so we called up CNC Automation to put in a flat line spray finishing system. That was about a third of a million dollars at the time. We were likely the first company of our size in North America with a spray line, so I had to look to Germany because I had no models in Canada or The U.S. There were spray finishing systems in North America, but they were $2 million and the length of my factory. So, nobody had the flat line finishing systems that goes into your medium sized shops down.
“Once we put that machine in, we could deliver a kitchen in two weeks. There’s nobody that I know of in North America that can deliver a kitchen in two weeks. It depends on our customer, but we could actually deliver in one week. Now what we do is we sell them, we design them, and then we just keep track of the builders. Like right now, I know what we’re shipping for the next two weeks.“Some people ask me how I can afford this machinery and do all that. I run a kind of standard joke line. I say – well, we don’t have cottages. We don’t have Ferraris. We don’t have Porches. It’s our own company and we just work. So, the money goes back into the company. Corporately, the bigger companies are usually looking at a two-year payback. But I don’t care if it’s a five-year payback or a ten-year payback as long as I eventually get my money back or make it pay. That’s what you do when you put a machine in you: You calculate it out.
“I own the company; I can play the long game. When I put each of these machines in, nobody else was doing it because it can be such a huge investment over a long stretch of time. Even when I put the CAD system in, that was $10,000. That’s like a hundred grand now. That was back in 88. I was the first guy in the Maritimes with it. A guy flew down from Toronto to sell me the software and train me. Our computers were still on DOS. There was no windows.
“When buying machines, the most important thing to me is service. Who’s going to provide it and who’s going to fix it when it goes down?
I can do mechanics, but I don’t like to do mechanics. So, I am buying their service and typically we buy our machinery from CNC automation because they’ve always been service oriented. They run their company under the same model we run ours. We sell a kitchen and if you call us 20 years from now, we can fix it.
“And so, with foresight, engineering, and a whole bunch of luck, we did everything right.
The only thing that’s constant in business is change.
“During the pandemic everything started ramping up. People from higher density cities and provinces were leaving and coming back to places like New Brunswick. Real estate went through a boom and our competitors went to a seven-fifteen-month delivery. We were thinking – how do you do business eight months or even five months late? We haven’t been late on a job for 20 years. We stayed on two weeks, but we really had to make some changes to make that happen.
“What we did was we quit doing vanities, fireplaces, countertop replacements, and refacing. We revamped our website and added a notice to customers before walking in for a quote that we do not do fireplaces or vanities unless it goes with the same kitchen order. We slowed all that down because they weren’t even profitable, but they were good for marketing. We would do a vanity for someone and eventually a kitchen for them two or three years off, but we had to keep our eyes focused on what was current and important. Sales went up 25% in the first year and 25% the next year, but labour didn’t go up. We were so efficient that we increased production 50% and didn’t increase labour.
Jim highlights that they had the benefit of having the proper machinery in place before you need it.
“You might have thought of putting a flatline finishing system or another machine in to help keep up during the pandemic but when calling during the pandemic and due to supply chain disruptions, there would be a three-year wait time on the machine. We had already had the flat line finishing system in for probably seven years and we had a thoroughly perfected it. The first three years of putting in major technology, when you put that kind of capital investment, you’re going lose money for the first year or two because your labor doesn’t go down the next morning. It starts going down the next year and then the third year. Before we put the flat line finishing system in We had 17 people working on our factory floor. Now we output almost four times as much product with six people.
“We used to sub out installing but 15-20 years ago one of my key subcontracting guys quit and we decided to do it in house because we have more control. They’re not even paid piece work. They’re paid hourly. The reality is the hardest job is the installing and because we have our own installers, we can decide tomorrow morning to send one guy or five guys to do a job. Maybe five isn’t efficient. Maybe we’ll lose a little money, but it may mean that we’ll pick up the next hundred thousand dollars working for his friends. With our current model we would never go back to piecework. We buy them the best tools, the best vans, and I actually meet my installers as they leave at 5:30 in the morning from the factory. I was in at five this morning just to talk to them.”
“We do about three million dollars a year in sales and 1 kitchen per day. We do 80 percent renovations and roughly 20 percent new homes. During the pandemic new homes threatened to take over but we prefer the 80 percent rate renovation formula because renovations are seasonal proof and recession proof and get four times the referrals. 60% of our business comes from referrals.
“If a prospective client doesn’t know somebody with an Avondale kitchen, they probably will before I leave the first meeting. We make our own magazines. I have one for each city I work in. I let people go through the magazine and they’ll say, ‘I know five people in this book.” Any of our magazines feature only Avondale kitchens. We make them right in house.
One guy was going through the book, and he goes ‘Holy crap, I didn’t know you did my brother-in-law’s kitchen’ And I said, ‘not only did I do his kitchen, I did your brother’s, he’s on page 14.”
‘I had no idea’ he says.
I joked ‘you guys gotta have more family get-togethers so you know what’s going on.”
“I got into the business because I like every aspect of woodworking. Today for me the best part is that we meet 200 new friends a year.”
For anyone reading this article, if you would like to know more about Avondale’s methods or procedures feel free to reach out to Jim Lawrence, Owner of Avondale Kitchens at Woodstock, NB.
Tyler Holt is the Editor of Wood Industry / Le monde du bois magazine. He has a master’s degree in literature and publication, and years of experience in the publishing and digital media industry. His main area of study is the effect of digital technologies on industrial and networked production.