Best Practices - October 2006

By Lis Calandrino

These days, 43 years is a long time to stay in business. While many Fortune 500 companies have come and gone in that time, Home Valu Interiors has been able to not only stay in business, but also to evolve and prosper.

Home Valu Interiors started as Plywood Minnesota, which was a pioneer in the home center business in the 60s and 70s. It was founded in 1963 by Rudy Boschwitz, who was later elected a U.S. Senator and U.S. Ambassador to the United Nations Commission on Human Rights. 

The Beatles had just begun making waves in the U.S. when Plywood Minnesota opened its doors as a home center selling plywood, paneling, kitchen cabinets and foam-backed carpet to do-it-yourselfers. When longtime customers look around these days, though, they don’t see plywood or paneling or a single thing the company offered back then. Even the name has changed, but the company’s still owned by the Boschwitz family, with six family members still actively involved. 

Nowadays, Home Valu specializes in remodeling homes, big and small. Its complete line of products ranges from flooring to kitchens and baths, window treatments and more. The company has 475 employees and nine showrooms ranging in size from 16,000 to 40,000 square feet in Minnesota, Iowa, Wisconsin and Indiana. It ranks among the top 10 specialty retail flooring stores in the U.S., with sales of more than $125 million.

How did Home Valu get here from there? 

The secret to its success—the glue which has held the company together—has been the ability to work together as a family, to react in a timely fashion to market trends and to make necessary, timely changes.

In the early days under Rudy Boschwitz’s leadership, Plywood Minnesota grew to approximately 65 home center stores throughout the Midwest. As the stores grew, so did Rudy’s influence in politics; in 1972 he became the chairman of the Nixon presidential campaign and was elected U.S. Senator in 1978. 

Because of Rudy’s political position, Plywood Minnesota had to be turned over to outsiders, and that changed the stores’ image negatively. This downturn forced Rudy to rethink the business. 

Sons Gerry and Ken, who were 23 and 22 at the time, came in and assumed control of the business. In 1982, it was restructured under its new name and pared down. As the 80s progressed and the new company began to grow again, it was caught in the middle of another economic change—the arrival of Home Depot.

What would Home Valu do? Compete, or choose a new path? 

It was time to write another chapter for the company. Rudy would lose his Senate re-election bid and come back to the family business. After lots of research, the family agreed to take a bold new approach. They decided not to compete with the big boxes, but rather to move into the specialty high end flooring business and start supplying builders of quality tract homes with flooring and other interior products. 

Since it made that change, the company has grown tenfold.

Home Valu is a lesson in what it takes for a family business to grow. “Like all family businesses, we’ve all been eating and sleeping business for most of our lives. We all have different skills... and we trust our differences,” says Tom Boschwitz, vice president of flooring and the youngest family member to join the business.

Tom says their success is a matter of listening to each other and surrounding themselves with good people who can help reach the company’s goals. “We’ve never looked back. In our case, we invited each crossroads and saw it as an opportunity to get better.” 

Tom offers six thoughts on staying competitive over the long haul:

• Keep redefining your competitive strategy. “One way to do this is to look to people and organizations that can help you refine your operations.” Home Value is a member of FloorExpo. Tom believes the group, which has been in existence for seven years, has been instrumental in helping them fine-tune operations. “No matter what group you belong to, it’s important to join something bigger than yourself so you can learn and share ideas.”

• Find the best brands you can get to build your competitive edge. “Karastan has helped us rethink our services and build a better customer base. It’s important to carry brands that consumers understand and trust. We’ve begun to certify our Karastan installers and are marketing this in our advertising.” 

Tom believes that the company’s increases in flooring sales over the past six months (the first increase in three years) is largely brand driven.

• Commit to constant and different types of staff training. “With 60 salespeople, it’s important for everyone to deliver the same brand message,” Tom says. He feels it’s not sales training per se that’s building his business. It’s training salespeople how to interact with customers and build more trusting relationships. “It’s really a back-to-basics approach that gives the customers what they need—a partnership.”

• Leave your ego at the door, and don’t be afraid to change. Tom says it’s easy to get stuck on a particular concept, especially when it’s working well. Eventually, he says, this can lead to one’s downfall. “The old ways, no matter how successful, have to be modified to meet changing consumer needs. In the old days, we tried to be everything to all people. This worked when we were the only game in town. When the customer changed and called for something better, we had to change too. We recognized the more profitable end of the business, so that’s where we went.” 

• Constantly examine your relationship with the customer. “As your business matures, that’s even more important. Your reputation is really all you have. We were able to build ours on our dad’s. Because of our political leaning, there were some customers who didn’t like us, but we stuck with who we were. We didn’t want to compete with Home Depot, so we changed. Through our marketing we’ve done everything from raffling ourselves off as the most eligible bachelors in town (we thought we were) to anything we could do just to get people to know us. For us, it was one customer at a time.”

• Search for what’s next. “Right now, that’s the Internet. We haven’t done a good job, but we’ve tried new things like listing our warranties online. I can see my own children, hopefully our next business generation, and how their relationship with technology is so much different than ours. We hope to tap into their creativity and self-determination, as well as their need for self-expression and customization as our next challenge.”

Related Topics:Mohawk Industries, Karastan