Sometimes in business what might seem like a disaster at first blush later turns out to be a blessing.
Consider the case of Bill Daubmann.
Daubmann and his family had the licensing rights to Mr. Shower Door on the Gulf Coast, doing a bustling trade selling and installing shower doors for homeowners and builders in Fort Myers and Naples.
But about two years ago, Daubmann received a letter from the company's Connecticut-based founder, Tom Whitaker.
The letter contained terrible news: Whitaker wrote that he wouldn't renew any of the licenses to use the Mr. Shower Door name, including Daubmann's.
Daubmann was shocked and tried to persuade Whitaker to reverse his decision, even offering to buy the name from him. “I'd put so much money into that name,” he says.
Since he opened the Naples and Fort Myers stores nearly 10 years ago, Daubmann has invested thousands of dollars in advertising in magazines and newspapers, in signs on his stores and installation trucks, uniforms for his employees, a website and countless other promotional efforts.
Daubmann is well known in business circles in Naples and Fort Myers for his marketing savvy. Indeed, Daubmann won the 2004 Entrepreneur of the Year Award from the Collier County Economic Development Council only a year after he opened the Naples store.
But entrepreneurs like Daubmann don't shrink in the face of what appeared to be disaster. Unshackled by any licensing agreements, Daubmann changed the name of the company and seized the opportunity to expand the business despite the economic downturn.
Since last year, Daubmann opened a new store in Sarasota and plans to open another in Tampa. There are plans to expand nationally, too.
In addition, he created a new company that manufactures glass for his own needs and to supply others in the area. The manufacturing facility opened this month in Fort Myers and sales could exceed retail store revenues.
“It opened a whole new world for us,” says Daubmann.
Open the shower door Daubmann, 57, who operates the business with his two sons, Keith, 34, and Douglas, 30, moved to Bonita Springs in 2001 after selling the Mr. Shower Door stores they owned in Massachusetts and Connecticut. The family decided to start over in Southwest Florida, acquiring the licensing rights to Fort Myers and Naples.
Mr. Shower Door is the ultimate “niche” business. The company focuses exclusively on manufacturing and installing shower doors. It doesn't do plumbing or install fixtures or bathroom tile, for example.
While the real estate recession reduced business from homebuilders, remodeling work picked up as homeowners made improvements and flimsy shower doors broke. Last year, the retail operation's sales totaled about $3 million. This year Daubmann expects sales of $3.5 million with the addition of a store in Sarasota that recently opened.
Every two years, Daubmann would renew his Mr. Shower Door licensing agreement with Whitaker for locations in Fort Myers, Naples and Sarasota. But when Whitaker decided he wouldn't renew anyone's licensing agreement after 2010, it gave Daubmann a year and a half to phase out the name in Florida.
Daubmann, who speculates that Whitaker's aim is to grow the company's sales on the Internet, unsuccessfully tried to buy the Mr. Shower Door name. So Richard Gargano of RFG Consulting Group, a marketing company in Naples, suggested to Daubmann that he change the name to My Shower Door. Whitaker agreed even though the names are similar. “It was the most amicable split,” Daubmann notes.
Still, substituting one letter in the company's name didn't take the sting out of having to change the marketing. It cost $1,200 to paint new signs on each of the company's nine trucks, $5,000 to replace each sign in front of the two stores and $15,000 to redesign the website. In addition, Daubmann had to pay legal fees for a new trademark and more money for new uniforms. “We were pushing $30,000,” he says, not to mention the time he spent marketing the new name to new and existing customers.
Daubmann enlisted anyone he could to spread the news about the company's new name, saving money by doing most of the marketing himself. “Our insurance company sent a blast to all its employees,” he says. To announce the change of name to My Shower Door, he called a news conference at the Bonita Springs Chamber of Commerce in October that attracted local media and dozens of vendors and customers.
A wider door Daubmann had always harbored ambitions of creating a larger company, but the licensing agreement he had with Whitaker had held him back because he was restricted to the Gulf Coast.
After the initial shock of losing the Mr. Shower Door name, Daubmann decided to analyze the prospects for expansion with the help of Fifth Avenue Advisors, an investment and consulting firm in Naples.
Daubmann concluded that he could expand My Shower Door in Florida and nationally. He opened a new store in Sarasota on Clark Road in December and has plans to open another in the Carrollwood area of Tampa. Meanwhile, he sold the business plan to another operator in Oklahoma as a way to test a franchising model.
Losing the licensing agreement for Mr. Shower Door turned out to be a blessing. “We were scared, but we can go anywhere now,” Daubmann says.
In addition, Daubmann started a new company called D3 Glass, a glass-manufacturing facility he opened a few weeks ago off Alico Road in Fort Myers. Previously, Daubmann's glass supplier was a company in Tuscaloosa, Ala.
“Our glass will feed our stores,” says Daubmann. “It gives us control of turnaround time, quality and a better control of price.”
With the help of a loan from SunTrust Banks, Daubmann equipped the D3 manufacturing facility with $2 million of new equipment, including cutting machines and a furnace to temper the glass. “I'm setting up a distribution system,” he says.
Because it's the only one of its kind and size between Tampa and Miami, D3's facility can supply commercial-building contractors in the region. In addition, Daubmann says he plans to supply retailers who need glass cases to showcase their merchandise and manufacturers who make specialty glass items such as aquariums and trophies.
Daubmann estimates that D3 Glass could generate $8 million to $10 million in sales next year, triple what the retail stores generate.
Managing the growth of the stores and the glass manufacturing has been challenging. “It's very difficult and my head spins all the time,” Daubmann says, but he adds with a smile: “That's what an entrepreneur does.”