"We had more work than we knew what to do with for seven years," says Kitchen Mart  President Dave Hollars. "We were swimming in good times, but it's caught up with us now. I think really what's happening for 2008 is just this shakedown and settling down — let's figure out where the floor of the housing market is and we'll pick it up after that."
While things may have gotten tougher, Hollars is confident that the Sacramento, Calif.-based company will continue to be successful because of the firm's focus on hiring good people and a culture of integrity that sets it apart from many of its competitors.
"I call them kitchen and bathroom cowboys," he says. "They've got a pickup truck and an A-frame and a lumber rack, and we have to compete with those guys."Respect and Integrity
Success starts with treating customers with respect. A failure to do so is why contractors walk around with a "bull's-eye" on their heads, Hollars says.
"It's a self-imposed bull's-eye," he says. "They have a failure to communicate with consumers and do follow-up calls and make it to appointments on time."
That's why one of the Kitchen Mart rules is not to be late for an appointment without letting the client know. With an increasingly busy client base, saying someone will be there between 7:00 and 8:00 and showing up at 7:30 just won't cut it.
"We have 50 cell phones in this business, and if you're going to be five minutes late, you're calling and saying, 'I'm just around the corner and I'll see you in a few minutes,'" Hollars says.
The message of respect and integrity is constantly reinforced with every employee, from the first phone call ("They have to answer it with a smile, because smiles can be heard.") to the final walkthrough with the project manager.
"I don't just say it once a month at meetings," Hollars says. "I have to instill integrity, I have to promote integrity and I have to show integrity, because if it's not there from the very top, they're going to see that."
As part of the company's efforts to ensure quality, at the end of every project Hollars sends out a letter and a Kitchen Mart Report Card. The company gets about 65 percent of the report cards back, and it allows Hollars to act quickly if there are any problems — or to reward someone who was singled out for recognition.
"Being a service business like we are, it would get back to me really quickly if somebody doesn't have integrity, doesn't follow through," he says. "Everyone here understands the standards and that if the standards aren't met, they're just not here."
Clearly, that message is resonating with clients, who bought enough kitchen and bathroom remodels for the company to achieve double-digit growth in revenue for the last several years. More than 80 percent of the company's business comes from repeats and referrals.
"Especially in times like these, you need to bank on your referral base," Hollars says. "We have to nurture that referral base because we've earned those one at a time."
Every person who calls Kitchen Mart is asked how they heard about the company. If the lead comes from a referral, the person who referred the new client gets a personal thank you letter from Hollars and a gift card to Borders, Starbucks or Sees Candies. The program has worked very well for the company and encouraged more referrals and repeat business.A Solid Team
Building a company culture of respect and integrity requires having a good team of employees in place. Hollars is looking for people who want to make a career, not just get a job.
"If they want to be here for a while, I can build this company without having to worry about who's installing it, who's fabricating it," he says.
For that reason, the company takes time in hiring people, and while Hollars delegates sales and production, he still handles the personnel decisions.
"That's important to me," he says. "We are asking someone to trust us when they give us the keys to their home. I don't take that lightly."
Kitchen Mart is a drug- and alcohol-free workplace and adheres to regular drug testing. The company also uses a three-interview hiring process to get to know applicants better before they make a decision.
The first interview is only about 10 minutes long and is a chance for Hollars to talk to the applicant and tell him or her about the company. He also mentions the drug policy at this interview, causing some applicants to eliminate themselves from consideration.
For the second interview, also a short 10 to 15 minute meeting, Hollars is joined by the manager for which the applicant would be working. The third interview is the longest, with Hollars, the department manager and human resources.
"It might seem like it's a waste of time, but there's a reason for three interviews," he says. "At the first one, everybody's nervous. We're just feeling each other out. At the second one, I get to see if they're the same person I met on the first interview. And if they come back for the third interview, then I know they want the job."
While economic conditions may play a short-term role in slowing the company's growth, Hollars knows that in the long term the company's success hinges on building a solid team of employees.
"I have fantastic journeymen now that are in their 40s and 50s and I need to make sure I have a talented young workforce," he says. "In a society where swinging a hammer or running a Skil saw is not seen as a glorious job, how do you get young people to realize you can make a career out of this?"
Toward that end, Hollars stresses the career potential of remodeling during the hiring process and that Kitchen Mart offers good pay and benefits, although, as a small business, that's getting tougher every year.
Hollars' own history with the company is a good example of why it's important to hire good people. Starting as an installer in 1997, he worked his way up to vice president in 2000 and president in 2004, taking over from CEO Jim Bartol, who founded the company in 1976.
Hollars came to the company as a referral from a DuPont sales representative who knew he was an experienced installer looking to leave Hawaii and return home to California.
"I wasn't thinking at that point of a manager or anything, certainly not somebody to take over the company, but just as a knowledgeable installer," Bartol says.
After working for the company for a short time, Hollars actually left to work for a shutter company right next door.
"I just felt like I needed a little step away from the kitchen world," Hollars says. "That only lasted a few months, and I was back on his doorstep."
Bartol rehired him, breaking his rule of never taking back a former employee, because he thought so highly of Hollars. He recognized his skills as a people person and quickly moved him into management.
"Dave picked up the ball and ran with it very, very nicely," Bartol says. "It was a two- or three-year transition where Dave and I would work closely together, and he gradually took over and I became less and less active with the business."
Hollars is quick to credit Bartol as a mentor and says he is responsible for much of his and Kitchen Mart's success.
"Whatever I need, he's there for me," he says. "I value his opinion like no other."
Three years ago, Bartol and Hollars initiated a buy-sell agreement, with Hollars gaining more ownership every year. Currently he owns about a third of the company and Bartol owns the rest. While a constant resource for Hollars, Bartol has removed himself from the day-to-day operations of the company and is enjoying retirement.
"One of the nice things is he's handed me control and he doesn't get in the way," Hollars says. "I couldn't have asked for a better transition."