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The CIAMO Blog

You Are What Your Record Says You Are!

Your Numbers Don’t Lie:

Although this was quoted by Super Bowl Champion New York Giant’s Head Coach Bill Parcells, this also applies to small business. The custom closet industry in North America generates sales of approximately $40 billion/year. Of the nearly 4000 closet companies, 80%

are independent while the remaining 20% are affiliated with nationwide franchises like California Closets, Closet Factory and Closets by Design. Franchisees benefit from their ‘Mother Ships’ who offer support in marketing, search engine optimization, training, manufacturing, and business coaching while the independents have to fend for themselves,

until recently. For this privilege, they pay an initial franchise fee and percentage of sales.

Enter the CIA:

Not that CIA.

We are referring to the Closet Institute of America,

In 2014, a group of independent closet business owners realized

there was power in numbers and decided it was time to create their own support trade association. Restricted to Independents exclusively,

the first Closet Summit Conference and Vendor Expo was held in Savannah Georgia and was a ‘sell out’ event. Since then, the yearly face-to-face networking conference has been held in Alexandria VA, Austin TX, Greenville SC, Atlanta GA, Charlotte NC, Orlando FL, Salt Lake City UT, with the 10th annual Homecoming event back in Savannah last October. This last Summit conference was the best attended of all previous venues.

If you don’t know your numbers, you don’t know your business: In the early days, most of the independents figured if you had money in the bank at the end of the week after payroll, you had good cashflow and were doing just fine. Remember the joke about the kid who wants his parents to buy something and his mother says they could not afford it? The kid’s reply is priceless, “But I see you have checks in your checkbook.” Even your yearly growth in sales was enough to keep you happy, back then. Once the independents started to network, and compare notes with other closet owners, they began to realize there was more to it than just individual growth.

Are we not in the efficiency business? Just as the custom closet industry is all about space efficiency, running a small closet business is all about business efficiency as well. Are you utilizing your manpower and resources to maximum efficiency? How will you know if you don’t have a basis of comparison by which to gauge your operation? There are many variables and differences in the ‘closet world’. For instance, two thirds of independents manufacture their own product in their own workshops while the remainder outsource production to a local cabinet shop, regional supplier or nationwide dealership network.

Both manufacturing and outsourcing have advantages and disadvantages which will be covered in another article. The common thread for all custom closet companies are marketing, design, sales and installations. Are there common criteria to establish a basis of comparison so business owners can rate their performance against others?

Enter the SEALS:

What’s with all these acronyms? The Navy

SEALS have an expression: “You’re not here

to survive this, you’re here to take charge of

it.” The closet industry SEALS (Storage Experts Achieving Limitless Solutions)

was created for the Closet Summit Conference and Vendor Expo in 2014 so

select groups of non-competing closet companies could gather together for networking and exchanging business building data, including certain financials, where members could benefit from the triumphs (and

mistakes) of others in their group. The main requirement for membership in the CIA is your

willingness to share (not necessarily all financials) with others. Is there a common thread by which different closet companies can gauge their performance against others of similarsize and sales? Absolutely.

What is Your SER?

At CIA, we created the SER, Sales-to Employee Ratio. By dividing total yearly sales by total number of employees, you get a SER rating. For example, in 2023, the average SER from those who completed the SEALS questionnaire prior to the Savannah Closet Summit was $158,441. So, if your company had 10 employees and your yearly sales were $1.6 million,

you were about average. The interesting analysis is when you manipulate the totals, for example, group all the $1.4 to $1.8 million companies together, and realize other

companies achieved the same gross sales with only 6 or 7 employees. What do you do?

Simple. Join CIAMO, Closet Institute of America Members Only so we can assist you get in getting in touch with other non-competing peers. At CIA, we are all about sharing. And networking.


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