Prices And Profit

Sandra Wood

Many people would think that someone in business for over 35 years would know everything, right? But Gerald Van Woudenberg, President of Van Arbour Design, knows there’s always more to learn.

“Start with being curious and open,” explained Van Woudenberg. “Take the time to seek advice from our peers facing the same challenges.”

The company president values his time and spends it on important things for him and his business. A few years ago, Van Woudenberg sought out a business coach who helped him take more control over his business and the time he spent in his company. He is now much more in control of working on his business than in it, giving him more clarity and less stress. He admits that you wear many hats when running a business, and things can quickly get away from you.

It’s a known fact that most business managers don’t feel they can afford to spend the time working on themselves and their business because they are too busy just keeping their head above water. It can be a vicious circle that you, as the business owner, must be prepared to address. For Van Woudenberg, the experience of leveraging a business coach has been “Nothing short of amazing, and I would highly recommend to anyone to have a renewed focus.”

Van Woudenberg was committed to stopping making the same mistakes, including figuring out a better pricing structure and learning how to value his team’s labour and skill correctly. He started from scratch, and it was daunting. He revisited jobs previously completed and repriced them using new formulas. The biggest challenge was accounting for time. Time spent was hard to calculate. According to Van Woudenberg, there’s only so much relevant data you can glean from past jobs. This then brings him to three options:

  1. You can guess, which exposes you to underestimate your time and build for free, or you protect yourself by padding the numbers as a guess or a protection measure, and by doing so, you may price yourself out of a job.
  2. You can track, but that’s only really relevant from the past tense perspective.
  3. You can agree with the client that takes the largest part of the uncertainty, which is the time it will take.

Van Woudenberg admits this is Van Arbour Design’s current approach because it builds trust with his clients. They tell the client the material, finishing, and margin costs and estimate how long they think the process will take. The company bills for actual time. He admits this takes the client’s trust, but he believes it’s the only way his company has found any degree of certainty to work every single time. Van Arbour Design solicits feedback from people in the shop regarding how much time they think it would take to engineer the custom piece, which helps establish the price.

“It is tough to price custom millwork, especially when they are one-offs; they are never the same.”

Van Woudenberg also reads the annual industry survey results on pricing. In his opinion, there are shop prices so low he’d like to hire them to do work for him. Where are these companies shopping for their materials? In his opinion, these shops are not factoring in the material costs, overhead, insurance, wages, heat, light, property taxes, etc.

Admittedly, many wonder how the survey results will change in 2022 with the current supply chain issues. CKCA still receives calls from members who are being pressured to keep their costs down, yet their supply costs have gone up exponentially. One member reached out to tell us their melamine costs had gone up 86%, and their developer client was not accepting any price increase. We know members are under pressure, but some companies make those difficult decisions and tell their customers they can’t do the work if they don’t accept the price increases.

One member told us recently: “No builder wants to accept price increases; however, this is the world we live in, and rest assured that they will protect their bottom line, bypassing the increase to the end consumer.”

Van Woudenberg has found that looking at survey results on pricing over the years has revealed a complete ignorance of the value of time.

“If you are not attending to what matters, no one else will, and you may find yourself in that uncomfortable spot where you realize you have not been turning a profit.”

So what are the three main lessons Van Woudenberg has learned over the past 35 years of business?

  1. Time can harm how you do your business.
  2. You can change and learn from your mistakes.
  3. There are opportunities for everyone.

He also makes time to engage with the industry, remain curious, and drive to learn more. 

“We can read books, listen to podcasts; we can solicit help from business coaches, and, last but not least, we can get involved with organizations like the CKCA and learn through that network,” he said. “Because it’s important, we continue to connect with our peers and suppliers and get introduced to new opportunities and new ways of thinking. All of which creates new ways to move forward.”

Many in this industry have enjoyed fulfilling careers in our sector, and the time will come when you will want to move on. But as you start thinking about that, remember that you have spent considerable time building up the wisdom and business knowledge you currently have. What will you do with that knowledge?

Consider this: A next-generation is entering our industry that needs the mentorship and advice that many experienced woodworkers have. How can you pass along what you have learned to help set up this next generation for success? Can you spare precious time to share what you know with others? How will you evaluate that knowledge just as you evaluate a project?

Reach out with your ideas. How can we help you take the next step? Because we need mentors, and we need them now. We are facing unprecedented challenges in attracting talent into our industry, and the truth is no one knows the industry better than you do!

CKCA Members strive for quality, professionalism, and innovation. For more profiles like these and many other benefits, consider becoming a CKCA member!

Sandra Wood is the Secretary and Executive Director for the CKCA. She enjoys “connecting the dots” and facilitating strong networking opportunities to engage members. She believes associations are about fostering strong business relationships fueled by an empathic and sound business approach.

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