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Dealer, Dealer, On The Wall!

Dear Stephen, 

I’m a sales manager of a large dealer; our major line is one of the big three. I report to a third-generation owner of the dealership. My work situation is probably not unlike sixty percent of the contract furniture dealers’ sales managers in the United States: family-owned businesses where generations of dealer families who have sold #Steelcase, #MillerKnoll, #Haworth, #HNI or #Teknion brands as the major line with lots of ancillary open lines as well.

In many of the multi-generational dealers, the second or third generation initially goes off on other careers… but sooner or later, they see that the furniture dealerships in the family are cash cows, and they all return to pasture. 

Ironically, regardless of generation, most dealer owners still hire professional managers (like me) to run the day-to-day business. We have all kinds of titles for what a glorified sales manager is… the new, most-popular ones are COO (Chief Operating Officer), or CSO (Chief Sales Officer), or CRO (Chief Revenue Officer)… Or, sometimes we’re just called “President,” but only when the owner happens to be the CEO… as you probably know, basically everyone else who works at a dealer has the title “VP” or “Principal,” with the theory being the executive title gives you more credibility with the client. And, of course, the universal trait to working at any dealer is, beyond managing their business and sales team, the owner wants us to sell, sell, sell! 

Here’s my question: I’m in my mid 40’s, I like where I work, but I have aspirations of owning my own dealership someday. Before I worked at this dealership, I worked for #Steelcase. How do I get started in opening my own dealership? Is it even possible for someone like me?


On The Road To Ownership


Dear Sal Paradise, 

Everything you described is more or less the norm of the American office furniture dealer. Most prominently in the #Steelcase and #MillerKnoll world are multi-generational, and these generations of family leadership have helped build these manufacturer’s brands: running excellent organizations and selling millions of dollars in office furniture. Contract Furniture Dealers must be great businesses to own because private equity firms are buying into ownership at a record rate. Not a day goes by when a PE company does not contact Viscusi Advisors and inquire about a dealership that may be for sale.

In recent years, #Haworth, #Teknion, and even #HNI continue to fill the landscape with more dealers. Contract furniture dealerships are a great business to be in, and it’s only natural that it becomes a generational one – much like the manufacturers themselves. 

Most smart dealer owners hire professional industry managers, not family members, to run the day-to-day operations. People like you. It is the smart thing to do. You can’t begrudge them that. And, admit it now, you are well paid for your work.

Let’s face it - opening a contract furniture dealership is hard. The best analogy I can give you would be car dealerships. Generations of families have owned #Chevy, #Buick, and #Ford dealerships across America since the invention of the automobile. And they have territories, after all. You only need so many dealers in a given geography, whether it’s cars or contract furniture. 

To answer your question, it may be difficult to open your own dealership, no doubt about it, but it is by no means impossible. I think there are many different options for you, but I’ll give you only two for now; however, they may include relocation to a new geography. 

The first would be to buy a small existing dealer with an SBA loan. (Believe me, there’s always a dealer for sale). My second suggestion is to approach manufacturers hungry for quality new dealers. Typically, that’s not going to be Steelcase or MillerKnoll, who have some of the strongest dealers in most markets, but we’ve seen Haworth “flipping” dealers in recent years. This tells me they are the logical people to approach about opening a new dealer, and to me, the same applies to Teknion or #Allsteel. Or, don’t take on a major line at all and just select a quality group of open lines. We have many clients who are enormously successful, with multi-million-dollar dealerships, who just sell open lines like #Global, #Humanscale, and the #OFS brands. There is nothing wrong with an open line/non-aligned dealer to start.

Manufacturers such as Haworth, Teknion, and Allsteel are open-minded to new dealers if it makes sense in a particular geography. That being said, you need to have business experience, acumen, and financial backing. These are privileged franchises; you need to be able to prove why you will be successful. 

Keep in mind, if you happen to be at a Steelcase dealer, chances are you’re not going to be able to open another Steelcase dealer, even in another geography. But it’s your experience as the COO of a Steelcase dealer that’s going to attract Haworth or Teknion, for example, on why you’re qualified to open a dealership for them somewhere else.

Let’s be clear, I am only giving you two of many avenues for becoming an owner because I’m hoping my readers will have some ideas and anecdotes to share in the comment section! And all my readers are always welcome to email, DM, or call me with any business questions. We could always use more dealers - competition is good for the marketplace, and manufacturers should be more open to helping start new dealers, including in major metropolitan areas! Good luck.