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Business Observer Friday, Mar. 20, 2015 7 years ago

Cabinet appointment

The recession almost claimed McCabinet. But its second-generation owner is working to ensure the company will survive the next one.
by: Michael Hinman Tampa Bay Reporter

Brian McKenzie doesn't like to think a lot about the housing market collapse, and all the small construction-related companies that sank with it.

His family's business, McCabinet, should've been one of those casualties -- it's something McKenzie still loses sleep over some nights. But thanks to a legacy set by his father, Kevin, all the way back to the company's founding in the family garage in 1996, McCabinet had something to hold on to so that it could live to build another day.

Since then, the Pinellas Park company has grown from a few employees to 18, and is set to move into a new warehouse space it purchased in Largo. The big gains in revenue -- that this year could hit $2.8 million compared to sub-$1 million ledgers right after the recession — could be attributed to the housing market's return. But it's also the product of McKenzie's insistence the cabinet installer diversify.

That diversification includes a new way to handle the payroll, something that could be done in any industry.

“When the market crashed, we dropped 99%,” says McKenzie, a part of McCabinet since his college days at the University of Florida. “There wasn't a lot for us to be optimistic about, but luckily we didn't really have any employees.”

In fact, the entire payroll was McKenzie and his father, his brother Eric, and his father's original installer, Russell Drevitson, who would later become a minority owner in the company. Kevin McKenzie, however, is a “frugal guy,” the younger McKenzie says, and even when the company's bank accounts were full, there wasn't a lot of spending.

“That helped us through those tough times,” McKenzie says. “My dad would still do everything a good employer should do, even giving out Christmas bonuses and that kind of thing. He didn't have to do that, but he wanted to make sure we were all taken care of.”

McKenzie wants to do the same thing, without having to dip into reserves. That's why in the last couple years, he has broadened the offerings of McCabinet so that it doesn't depend on a sole source. The company still caters to new homebuilders, both on the developer and single homeowner sides. But McKenzie added an element McCabinet has been resistant to in the past: the home remodeling market.

“When people aren't buying new houses, they're looking around their own homes to see what they can do to make them more comfortable for the long haul,” McKenzie says. “I talked it over with the other owners, and they were against it. So I offered to do just a little bit, as sort of a trial, and it grew to 5% of our business.”

It didn't stop there. Remodeling now accounts for 30% of McCabinet's revenue, almost evenly dividing the company's service line into thirds. At least on paper, McCabinet becomes recession-proof, McKenzie says. No matter where in the building cycle the market is, at least two of the three lines will be busy.

McKenzie also moved from a reliance on independent contractors to hiring employees. As the ancillary building market fires up again, he wants to ensure customer service can help differentiate McCabinet from everyone else. Putting people on the payroll instead of giving them a 1099 is one way to help with employee buy-in.

“I come from a long line of builders, like my father, grandfather and great-grandfather,” McKenzie says. “They all experienced downturns more than once, and we know it's coming again. But we have a plan, and that's why after the next downturn, we'll still be here.”

Follow Michael Hinman on Twitter @BizTampaBay

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