What I've Learned
by David Rothenberg
The DRCNE/CDNE is now 10 months old. The transition of Bottaro-Skolnick to “Design Resource Center NE and Corporate Designs NE” is nearly complete. Many years in the making, a business plan was developed five years ago, which was intended to gradually, and gently make the transition. The deteriorating economy caused me to pull the trigger 1 year early. Last year was very tough……..so what have I come away with?
When things are going well we do our thing and all is right in the world but complacency is a killer! One must constantly evaluate where your business, your industry and the world are going. Look down the road for trouble, especially when everything looks fine. What challenges MIGHT I face? Before being in financial distress was in the vogue, I had troubling questions that I struggled with. Is my business still viable? My industry has been turned on its head. How should I react? What is the right move, close, redefine my business model or stay-the course? Can I REALLY be sure that want I am doing is the right move? Am I mentally and physically prepared? Most importantly, is my ego ready? (We all define ourselves, to a greater or lesser extent, though our businesses. A dramatic business change will effect how one views ones self.) Is there a way to prepare the staff, customers and vendors for the transition? Finally, how do I deal with years of forward inertia i.e., making a turn in an aircraft carrier?
Initial preparation for Bottaro’s demise
I came to Bottaro 30 years ago after marrying the boss’s daughter. I had been in the clinical psychology business and needed a change. Mr. Skolnick was getting on and needed a successor. I moved back to the area from New Orleans where I had been living.
Fortunately, I was immediately able to grasp the business model but there was an aspect of the business that I just couldn’t get my arms around. The name of the company, “Bottaro-Skolnick Fine Furniture” described a fine retail furniture store but we were so much more than just a furniture store. The issue was that nearly all of our business came from residential interior design clients. Their jobs not only involved furniture but also interior design, custom window treatments and custom upholstery. We had a furniture store inventory ($500,000-750,000 most of the time); staff and overhead but nearly all sales were special order. Over the years, Mr. Skolnick and I had headed battles over the necessity of carrying this much overhead but it was his business ……he won.
After running his business for 20 years I gained control about ten years ago. I’d like to say that I immediately made the changes that I had dreamed about for so many years but business was good so I continued to do business as usual. Chalk this up to the problem of forward inertia and my fear of change.
After several years I felt compelled to make changes. Demographics had changed, furniture was coming from low cost off shore manufactures and people did not want to invest in heirloom quality furniture. The venerable 50-year-old business model was no longer viable. I had debt and bloated inventory and operating expenses. I knew that the residential and commercial decorating divisions had legs, as did the drapery and upholstery workrooms. If I could focus on this core and drastically bring down the expenses I felt good about my chances for success. I was not sure if I was making the right move but like Indiana Jones I had to have faith and step into thin air. I approached the task with vigor. I took a real close look at what everybody was doing and determined that I could cut the staff by over 50%. I subcontracted work that I had done in-house and I began to look at the “fixed” expenses and found that they aren’t as “fixed” as I thought. Because I had lost 3 people in the office I took on the complete fiscal management of the business. For the first time ever I had control of my business!
The process was painful but I was able to extricate myself from the “retail furniture business”. I was anxious and unhappy. Nothing brought me joy. It seemed that every day brought new insurmountable crises. It was so Felliniesque! Sometimes I just couldn’t help but laugh at the craziness.
Staff morale plummeted my morale plummeted. AS the leader I HAD to stay upbeat to lead and present confidence to the clients. I had trouble keeping myself moving forward. I want to thank the members of this round table who offered suggestions and support during this period. The advice I can offer is keep your head down and take it one day at a time, just one day at a time.
The new reality
The transition was really difficult but incredibly empowering. I cut my staff, cut back on all non-essential expenditures, and collapsed the businesses footprint from 5 floors to two. I am much more agile and able to take quick advantage as opportunities arise. Maybe the biggest change was the acknowledgement that, rather than waiting for business to happen, I had to make it happen. I lead by example with my New York business; the corporate people are very active in soliciting business. I am still the boss but we have become a cooperative entity. We have weekly meeting in which I offer complete fiscal transparency. Major business decisions are discussed and I work at empowering everyone who is on the staff. I actively solicit advice. Through this all we have become a more mature organization with people taking responsibility for their actions. Only time will tell if my decisions were correct but it has certainly been a learning experience.
So, What have I learned
1. Ask yourself the hard questions. Be honest in your answers.
2. Constantly look for new opportunities. Remember Crane Papers original business was stationary. Now they make money. A business is an organic creature that must evolve to survive.
3. Trust your instincts. Nobody knows your businesses as well as you do. The buck doesn’t stop with you the buck IS you.
4. Look at the issues, ponder them ask for advice and then draw a line in the sand, walk over it and don’t look back. Vacillation will kill you!
5. Your staff is the key to your business success. Keep them informed of what is coming down, both good and bad. Dole out lots of encouragement and thank you’s. They are your biggest allies and supporters and your most important asset.
6. Keeping ones mind together is the most difficult part of the transition. Look for support and understanding and remember that there are forces beyond your control. Don’t kick yourself unnecessarily. What will be will be.
7. Acknowledge that as a business owner you are living a bi-polar life. Times are usually really good or really bad.
8. When things turn around DO NOT LOSE SIGHT OF YOUR GOALS and don’t return to your wasteful ways.
9. Finally,” What doesn’t kill you makes you stronger”.
It’s easy to do business when it’s easy…true businessmen and women are bred in days like these. It’s the opportunity of a lifetime to grow into an adult. Don’t get caught up in the minutia, as you must also look at the macro picture. Determine what has to be done and do it! Good luck!