Making the transition from auto glass to full service
When it comes to expanding your service offerings, “it’s all about planning,” says Kenny Keller, president of Keller Glass Inc., headquartered in Trinidad, Colo. In 2000, after more than 15 years in the auto glass industry, he decided to tackle the commercial and residential glass markets, turning the once auto-glass only operation into a full-service glass company. Today, Keller Glass has two Colorado locations: one in Trinidad that offers auto, commercial and residential glass services and one in Pueblo that offers auto glass repair and replacement. Prior to adding these services, Keller Glass made about $50,000 a year in profits. Last year, the 12-person company did approximately $750,000 in business. This year, Keller estimates it will bring in $1.5 million, a figure he attributes in part to the variety of services the company offers.
“The auto glass market is fun. I’ve been doing auto glass for about 20 years now.” Residential and commercial services help the bottom line during the slow months, Keller says. “They help a lot with the cash flow. In a small town, you can’t do just auto glass; you have to be diversified.”
While the decision to add residential and commercial services to the company’s repertoire came relatively easily, making the actual transition was not without its challenges. “You need to research your market, have enough capital and get out there and hustle up business,” Keller advises. “Take it slow, and don’t rush into it.”
Finding a niche
“You really have to look at your market so you can identify what services to offer,” Keller says. “Check out your competition and see what their strengths and weaknesses are.
“We started out doing a little bit of residential glass, including mirrors and shower enclosures. Then, people began requesting we do more commercial work,” Keller says. In 2001, he had the opportunity to purchase local competitor, House of Glass, which offered commercial glass services. He took it, completing the transition from AGR shop to full-service glass company. The challenge then was to find a niche in the Trinidad marketplace.
“We do a lot of commercial, historical renovations that entail replacing windows and storefront,” Keller says. “Trinidad is an old town, and there are a lot of investors coming in to rebuild it, keeping with the old style. When you’re dealing with historic applications, you have to research the original design so you can restore it back to the way it was when it was originally built. It requires a lot of research, but it’s a really good niche.”
Historic renovations aren’t limited to commercial buildings either. In an older town such as Trinidad, many homes still have single-pane windows, Keller says. “People can save a lot of money retrofitting their homes with new windows, and we do really well with them. There is a lot of good money in window replacement and new construction.”
Be prepared to spend
Residential glass services are the cheapest in terms of startup costs, Keller says. “With replacement windows, we do all of the installations ourselves. That way, we can keep a close eye on the installations and make sure they’re done right.” Technicians specializing in residential window replacement receive training from CertainTeed Windows of Valley Forge, Pa., and are all CertainTeed Master Craftsmen, Keller reports. By partnering with CertainTeed, Keller Glass can provide its installers with CertainTeed installation and sales training, cutting down on training costs.
“CertainTeed has a great product,” Keller says. “Their pricing is good, and we don’t have to deal with warranty issues. If you’re selling vinyl or wood windows, you really have to have a good partner in the organization you work with. We dealt with another window manufacturer a few years back, and found out it didn’t have a very good product. The cheapest is not always the best.”
Although Keller was able to utilize his existing staff on the residential side, that was not the case on the commercial side. “You have to bring in experienced glaziers for the commercial work because of the types of projects and the associated costs involved,” he explains. “On the commercial side, you might be dealing with $25,000 worth of product. You really have to have the right people on your team, whether they’re estimators, installers or project managers.”
For Keller, that meant hiring experienced glaziers, which meant shelling out serious cash. “In terms of employee compensation, [glaziers] cost about twice as much [as auto glass technicians] when you include their salaries and worker’s compensation. It’s the workman’s comp that gets you.”
When it comes to equipment, costs vary depending on the size and nature of the commercial jobs the company takes on, Keller says. “Our jobs range anywhere from $20,000 to $100,000, so in terms of overhead costs, we don’t have a lot. You might be looking at approximately $25,000 for cutting tables, vehicles and rack systems to store your glass. Companies that do $250,000 to $1 million jobs, however, are going to have a lot more overhead costs.”
In terms of liability insurance, it’s a necessary evil, Keller says. “Liability insurance is high, but it’s high for auto glass-only shops as well. For just auto glass services, you’re carrying a $1 million liability [policy] at least. We carry a $1.5 million to $2 million liability policy, which covers residential, commercial and auto glass. I personally don’t think there’s a huge difference.”
Sell, sell, sell
As with any business, success relies largely on marketing services. “You have to do the same thing for residential and commercial services as you do for auto glass,” Keller says.
“You have to get out there and make cold calls. You have to market to the retail consumer, and then you have to go out and market to the contractors and architects.” Get creative, he adds. On the residential side, Keller Glass offers contractors special package deals to buy windows, shower enclosures and mirrors for a new home all at once.
“Even the big corporations are starting to offer residential and commercial services,” Keller points out. “As independents, however, we’ve got the advantage of being more in tune with retail customers. We can be a little more flexible. Right now is a good time for auto glass shops to get into it.”