Aaron J. Crowley

Stone Industry Consultant

Of all the lifts one can do in a weight room, the bench press seems to be the universally accepted measurement for manliness.     

“What’s your max?” is understood by most guys to mean the heaviest single rep on the bench press. The answer, measured in pounds, determines one’s place in the pecking order and the more you can bench, the more respect you theoretically have earned.

Unfortunately, this is an utterly misleading comparison of true strength and the great irony is that guys with the lower maxes are statistically some of the strongest…when bench press weight is measured as a percentage of body weight.

While it may be pointless to try and argue that opinion in the gym, arguing it here in the pages of the Slippery Rock is important because it is easy to slip into the belief that universally accepted measurements like “Square Feet Per Week, Installs Per Day, or Total Jobs Per Month” are adequate indicators of true (or potential) financial strength or profitability.

It’s one thing for stone professionals to use these commonly understood metrics to gauge their place in the competitive pecking order or to use them in scheduling counter top capacity.  But to use them in the attempt to finesse a profit out of a dynamic and high-risk manufacturing business is like trying to thread a very small needle while wearing three pairs of leather gloves.

Those metrics alone do not provide enough financial “feeling” or accuracy because the variable expenses on a typical job such as material, waste factor, sales commissions, discounts, and job complexity can differ so dramatically between two jobs of identical “square footage.”

This requires us to replace the clumsy gloves with nimble fingers and see our operations through a 3-D magnifying glass of a much more precise metric: DOLLARS!  

In other words, we must know precisely how many dollars are required to cover all of the costs that are incurred in a typical month of producing all that square footage! Those costs include overhead (fixed costs such as rent, insurance, payroll– including the owner, etc.) and variable costs (material, consumables, and commissions). This is the break-even point and everything above it is profit!

Once the break-even is identified, it must be broken down from a monthly total to weekly and ultimately a daily average that dictates our daily decision-making.

For example, if break-even is $100,000 per month, then the weekly target must be $25,000, and the daily $5,000. Let’s call this daily minimum the Daily Dollar Demand (3-D view) and in reality, it must also include the reasonable and acceptable profit.

In this scenario, the focus becomes activities that enable us to sell, schedule and produce a $5,500 Daily Dollar Demand target (including 10% profit) each and every day of the month while maintaining consistent costs.

It is here at this intersection where we cross over from the vague pursuit of trying to increase profits by blindly increasing square feet to the needlepoint accuracy of adding dollars instead of more work.

With high dollar add-ons like 15-year sealers, sink and faucet packages, and other highly valued services… hundreds and even thousands of dollars can be added to a day or week without the added burden of producing a single additional square foot of countertop!

So what about you? Are you willing to start using measurements that matter instead of measurements that mislead? Are you ready to bulk up on the financial realities in your business and managing by the Daily Dollar Demand? 

If so, your profits are about to grow stronger.

And remember, PROFIT is measured in DOLLARS, not square feet!

Aaron Crowley is a stone shop owner, author, speaker, and consultant to mid-size stone companies. Contact him at aaron@fabricatorsfriend.com.