Slippery Rock Soapbox
Peter deKok
Founder of GranQuarz and Stone Industry Leader
In the March 2016 issue of the Slippery Rock Gazette, there were articles by Sharon Koehler/Artistic Stone Design and Aaron Crowley/Granite Concepts which attracted my attention.
Whilst I agree that “learning is everything” and whilst I agree one should try not to “trap yourself in a box,” I think that a major hurdle in our industry is not the professionalism with which so many of our fabricators work the stone, but rather the non-professional way in which the businesses are run.
There is one reason, and one reason only, to run a business and that is to MAKE MONEY. If it is run for any purpose other than to make money, it is either a charitable institution or, more often in the stone industry, a hobby. As some evidence thereof, if you speak to a fabricator about a job he has just completed, he will point with some pride to the finishing details such as a very tight seam or a beautifully executed edge, but when one asks, “How much profit did you make on that job,” you are met with a blank stare. He has no idea.
That then leads me to Mr. Crowley’s article which encourages people to downsize their operation to “shrink and grow rich.” That leaves one to wonder why anybody would grow their business without a clear target or plan, evidenced throughout that article.
The MIA has spent some time in the last years on benchmarking surveys. Reading through the numbers and analyzing them, it is quite clear that a bigger, automated plant saves money in labor, tooling and raw materials, all measured as a percentage of sales.
If all of this is true, as shown by these statistics gathered from around North America, then one does not “shrink and grow rich”, but “rather expands and grows richer.”
This latter statement has one serious caveat, i.e. if you expand beyond the capacity of the market to absorb your product, then Mr. Crowley’s statement holds water.
Analyzing the last sentence, it then also means that if the business owner in question “needs to shrink”, he has not made any attempt to establish the size of the market he/she is in. The article by Ms. Koehler indicated the need for marketing knowledge in the stone industry and it is this that I miss in Mr. Crowley’s contribution.
I submit that judging the market size for the kitchen countertop industry is a simple function of analyzing the demographics carefully, as one sells countertops to homeowners and, whether granite or engineered stone, these houses must be say $200,000 in value or above. That this number may vary from Atlanta, where I live, or New York/San Francisco as other extremes, is obvious: so in those very high cost areas the price threshold for granite countertops would be higher, but nevertheless predictable.
Given that the demographics give you a very reasonable idea of the market size, then the next bit of homework involves figuring out the number of players who are feeding that market place. If there are 10 in the area and the market can easily absorb double their theoretical capacity, then “expand and grow richer” clearly has merit.
Now there is another wrinkle. Using the MIA benchmarking statistics and concluding that there are serious savings to be made on labor, tooling and raw material by expanding the operation, then the marketplace could be expanded by lowering the selling prices and/or by eliminating a competitor, i.e. survival of the fittest.
The stone industry has been around a very long time, going back to biblical days when Cain slew Abel and covered him with a cairn of rocks: ergo, the first monumental mason! However, to me it appears as if our industry has become more and more professional in the way in which it works stone, waterjets, CNC, et al, BUT has made very little effort to expand the knowledge of running a business.
I see that the silicosis rules have been amended by OSHA again. This will impact the stone industry, but I submit that the smaller, manually operated plants will be more affected than the bigger, automated plants, as automation requires water coolant for all machines, thus suppressing dry silica dust. In addition, it is easier to collect the water coolant for recycling. One more reason that “expand, automate and grow richer” is possibly a better concept than “shrink and grow rich.”