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The Business Pivot Masterclass!

Mike Hall is a jedi-pivot master and we could all use his sage advice today. Since the 1980s Mike has been constantly adapting his business, not only stay relevant, but to be hyper-successful to the tune of 40 million in annual sales. This founder of Georgia Furniture Mart knows what it’s like to change your business model and even rebrand (Georgia Furniture Mart was formerly Underpriced Furniture) when necessary. So, if you’re just getting into the pivot mindset, listen and learn in this pivot masterclass!

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FROM TODAY’S SHOW:

Mike Hall:
I got involved in the waterbed industry in 1979 and that was pretty much the peak of it, at that point in time. It was a fabulous industry for selling a wonderful health benefit prop like that. I truly still believe that sweeping on water is probably the best sleep that’s ever been invented by mankind. But the product itself and the industry had some significant issues. It’s a very difficult product to deal with in the home because it’s an awful lot of water. And the people don’t really understand or know how to move it. And so, some of those issues contributed to the collapse of the industry. But like I said, we opened in 1986 as a water bed store and in 1987 the business began to unravel, the industry began to unravel.

Nate McGill:
The business pivot is nothing new to you, right?

Mike Hall:
Yeah. It was kind of one of those things that was out of our control, a whole lot like what’s going on right now with this stuff that none of us have ever seen in our lifetime. But you find yourself, when you’ve been at the business that many years, you find yourself in a position where you have to just figure things out. You could sit down and cry about it all day long and talk about how unfair it is, but that’s not productive thinking. We just try to convert that into finding out our blessings in it, finding ways to make things happen. Survive.

Nate McGill:
Once you get over that initial shock of the thing that just happened to you, you have to pull up the bootstraps and realize that you are still who you are, and you got to dance with what brung as, as David here sometimes will tell us, like, “Hey, you are who you are. Let’s do what we do.” And so how has the COVID-19 landscape impacted your business?

Mike Hall:
Yes, of course the business is much lower now than it was because furniture is one of those items where most people want to touch and feel and really understand what they’re getting. It’s generally the third largest purchase that people make in their lifetime followed by home and the car. So the business is significantly less, but we are really working hard behind the scenes to man the website, gafurniture.com and help people through that. We can handle them with phone calls. In addition to that, we can even take them around the showroom and show them via video some products if they would like.

Nate McGill:
Oh, that’s cool. Yeah. That’s awesome.

Mike Hall:
Yeah. And that can help, at times. I think the thing that we’re most blessed with right now is the interpretation of the essentials and this whole environment that we’re living in now, where we’re all stuck at home and the children are at home and there’s not appropriate places for them to do their homework and the parents do their work from the home. So we’re seeing some demands there and we’re just thrilled to death that we still have the ability to take care of people.

Nate McGill:
Yeah, absolutely. So what kind of things are you guys getting ordered for? You said desks and just work spaces? Or home offices.

Mike Hall:
Yeah, absolutely. Especially small desks, ones that can be a positioned in the corner of a family room or maybe even a bedroom or some of the area of the house, where they’re not intrusive. We’re not seeing a lot of demand for the great big executive desk, but just general work surfaces for the kids and for the parents are working at home. Seems to be a good bit of demand for mattresses. And then I remember seeing the list a little bit all the way across. People are different places in their life at all different times and some people are still moving. So we’re still seeing some need for the dining room sets, bedroom sets, spare bedrooms, living rooms, even. And those products, we can handle the service we typically give next day delivery, right now the delivery schedule’s pushed back a couple of days out of necessity for safety for our customers and our employees. But we still make those deliveries to the doorsteps, so long as the customer can get the products into the home.

Nate McGill:
That’s awesome. That’s awesome. So when you first started and you first opened this business, was it just you that started this business? How did you get into this? I’m curious about your entrepreneurial story here.

Mike Hall:
Okay, terrific. I was one of those weirdos that somehow knew what the destiny was at a pretty early age. I grew up with some pretty strict parenting in a small family restaurant and was made to work. And by the age of 15, I knew I wanted to have my own business, I just didn’t know what it would be.

Mike Hall:
And at the age of 19, I went to work in a waterbed store and got exposed to the industry. It was a vibrant and fun industry and I had this goal, I always wanted to be a millionaire by the time I was 30. So I went into a big convention and I had one of the key players in the industry take me around and introduced me to the millionaires in the business. And predominantly, not exclusively, but predominantly, I found an awful lot of those people that were millionaires, I didn’t think they knew what they were doing. I just think they were big bucks. Like, this is the business for me if these guys can become millionaires, I can deal with it. And so, I began to get an education with one of the larger waterbed retailers in the country in Houston, Texas. I moved there from Amarillo and went to work for him for about six years and then moved here in 1986 and opened a waterbed store with absolutely the poorest of timing you could have, right when the industry began to collapse. [inaudible 00:08:26]

Nate McGill:
1986 was a big year for Gwinnett too, because that was like, Gwinnett place mall and Gwinnett technical college. And so many things started right there in ’86 so you were right there with them. It’s almost the birth of the era that we’re in.

Mike Hall:
I agree with that. It’s interesting you knew that. When that mall actually opened in 1985 and my store was when that place derived, it was one of the first shopping centers that were built, the externals to the mall in that mall development.

Nate McGill:
Yeah. I mean, that was the hotspot, man. That was it. And so, I was a kid then, but I do remember the Service Merchandise over there and going to Toys R Us or seeing a movie at the cinema six or just being a kid and exploring the mall at Christmas time. I mean, that area was the consumer hub for a long time in Gwinnett. So you were in prime real estate.

Mike Hall:
You bet. Changed it an awful lot.

Nate McGill:
I know. Gosh, I don’t know what they’re going to do these days, but. All right. So you landed there, it’s 1986, you’re in the business, everything pivots. Waterbeds just decline in popularity and probably some issues people had with them, probably got some bad press or something and it just goes down, right?

Mike Hall:
Yeah. It collapsed for a number of reasons. But one of the big ones was it’s platform was very difficult to move. So the demographic of the product back in those days was a young 18 to 30 year olds, basically. And so, if you think about the process, those people got their careers really moving during those years and then when they went to move into maybe their first home or maybe their second home, that was where we saw a lot of difficulties. People didn’t understand how to drain the water out and they would pretty much get frustrated and just throw the thing away and go buy a mattress. That was one of the big factors that really contributed to the downfall. But like today and like many other times through the 30 something years, you just pick up the pieces and find a new plan, a new way to serve people and plan it.

Nate McGill:
And what did you do at that point?

Mike Hall:
Well, we converted most of the waterbed industry product conversion to become a bedroom specialty store, primarily selling mostly master bedrooms. And so we tried to blend them between waterbeds and regular mattresses. The problem with the business was you only saw a customer one time in 15, 20 years. You didn’t have anything else to sell them. And how often do you buy a master bedroom, right?

Nate McGill:
Oh man, yeah.

Mike Hall:
So that was a struggle for, I guess, five or six years or so before we decided to move into an oak and leather format. That was another trend that was really heavy around most of the country. It wasn’t real big in Atlanta nobody had tried it around here. And we put it in a large oak and leather store, we became the number one oak and leather store in America with about 12 months of operation. But the oak business, it was really interesting, it faded away as well and lost its popularity. So we then took that opportunity to convert into a full on furniture store. Here we are, some 20 years after that last conversion.

Nate McGill:
Right. And so as the trends change today, you just change right along with them, I would imagine.

Mike Hall:
Yeah, absolutely. The thing that we did, we never really had a large interest in having an awful lot of stores like the national chains do. We didn’t want to lose control of the management of the customer relationships. And so we focused really hard on becoming one very high volume furniture store, and we succeeded at that. We are now the number three highest volume standalone store in America. We do about $40 million of business in that one store, which is just almost unheard of, when a general, most of your national stores will do 5 to 10 million per store. And what happens whenever you do something like that, it’s your fixed overhead costs really come down to almost a nothing percentage, they just almost don’t show up on the profit loss statement. And that enables us then to lower our selling price and just really take advantage of giving the customers a strong opportunity to get incredible values. And that’s exactly what we do. That’s our foundational principle.

Mike Hall:
The store has over 120,000 square foot of product on it. We’re the largest square footage, largest selection store by far in the southeast United States. In many states, you can’t go anywhere and see the quantity of furniture and all selection. And we have over 130 living rooms. Now, let’s compare that to a Rooms to Go or an Ashley’s store, they might have a third of that. We have 130 living room sets to choose from. We have tremendous quantities of sectionals. Large seating environments are extremely popular. Nobody carries very many of them because they take up some space in the store. We have a ton of them. We have about 80 bedroom set. Put that in comparison with the competition, they generally have around twenties. We have over 80 dining rooms and the same numbers hold true there, they have typically about 20.

Mike Hall:
And the kid’s bedroom selection, we bring such extreme exciting value. People don’t like to spend an awful lot of money on the youth furniture because they grow out of that so fast. But we give them terrific function. And we can do that in many rooms for five, six and $700 for a bed, a dresser, mirror, nightstand. It was just extreme and it’s so popular. Our customers love us for what we bring, but we can also… You may know that we used to be called under-priced furniture. We converted the name to Georgia Furniture Mart recently, but we have not lost any commitment to the underpricing strategy. We found that that term was a little confusing to some people, they misinterpreted who we were.

Mike Hall:
But we have a beautiful, large showroom, where you get to shop in one place. Yet, overnight delivery into your home under normal circumstances. And have complete and total protection with no freight damage coming from these online sellers. And we’ll have someone right here in town that really cares and love to deal with, if there’s any kind of issues.

Nate McGill:
Absolutely. Absolutely. Well, okay, so while I have you on the phone, I can tell you’re an energetic guy. You were born to do what you do. You can tell that you love it. I can feel your joy coming through the phone line, which is not something you expect when you’re in the middle of a pandemic. So please, by all means, just take a minute to encourage and inspire your fellow business folks out there, the fellow Gwinnett businesses. What is your advice for folks in our community these days for their business?

Mike Hall:
Oh, thank you for asking that. I think communication with our employees has become very big right now. We know that we’re living through confusing times. I’ve got to tell ya, over the last 20 years, we’ve all had a lot of reasons, I think, right, to be frustrated with this American government and the way that it works and the things that they do. And sometimes I found myself saying. “I’m not early as proud to be an American as I used to do when I was younger.” And now through this crisis I just can’t… I’m swelled up with pride to be American. We’ll see what this government, what Donald Trump has done with the administration, the Senate and the House, what both sides have been able to come together and accomplish and taking care of the American worker, taking care of the American businesses. It’s just incredible.

Mike Hall:
So I want to encourage everyone to step back and reflect on that just a little bit because we’re not going down this soon. We’re going to start back up. It would be a little different. But we’re going to start back over and we’re going to build our businesses back up, we’re going to build our income back up. Everything is going to be okay. One thing that we’re working on right now, is we’ve reached out to our local municipalities to see if there’s anything that we can do to help that’s safe and legal. Maybe cleaning up public areas or whatever, to help make America beautiful. Give a little bit back. We find ways to give back. And the other thing that we’re working on is a program to try to help take care of some of the health workers. So my first one would be just to get creative and out of the box. Don’t set at home and be upset and be scared. Get out and do things that are legal and of course, absolutely safe health wise. But find things that you can do to give back to the community.

Nate McGill:
And that is where we’ll end it for today’s podcast. Thanks for joining us and please subscribe so you never miss an episode.