Slippery Rock Gazette

by Peter J. Marcucci

Photos Courtesy Rockheads Group

In 2014, shop owners Jon Kaplan, Nick Began, Paul Menninger, Eric Tryon and Larry Crowley, shared after-hour drinks during a Cosentino Global S.L.U. Conference. They touched on a variety of business-related subjects, eventually admitting that even though they were successful, if they had known each other in the beginning, things would have been much easier. When the conference was over, the five men went back to their companies slightly changed from talking shop. The wheels in their heads were turning, and brilliant ideas were forming, and just weeks later, while tossing the ideas back and forth, an Aha moment was realized by the five, and Rockheads was formed.

So, what was this initial Rockheads group all about, you’re wondering? Well, I wondered too, and after a wee bit of research, I called Executive Director Rich Katzmann, and asked “What’s up with Rockheads?” 

Katzmann came to Rockheads with many years of construction and home improvement experience as well as a five-year stint as president of Laser Products Industries. He recalled, “The original and current owners of Rockheads started the group as a way for shop owners to network. For the first five years it was small and exclusive, and nearly 100% focused on information sharing. The 30 or so member group was broken up into exclusive territories, so that information could be freely shared by like-minded owners without fear of giving away secrets to a close competitor. Our feeling was simple: why wouldn’t a shop owner in Florida, mindshare information with someone in Pennsylvania? This concept made everyone much more open to sharing their ‘secret sauce.’”

Above: Rockheads members immersed in the wonders of innovation: Exploring the T-Rex machine by Poseidon Industries during an enriching visit to Star Lumber during the Oklahoma City Summer event.  Below: Oklahoma City conference participants delight in the fruitful outcomes of benchmarking efforts, fostering knowledge exchange and growth.

A Purchasing Powerhouse 

During its first 5 years, as Rockheads membership grew, vendors and equipment manufacturers were chomping at the bit to get on board. Companies like BACA, Laser Products Industries, BB Industries, and Park Industries to name a few, saw great opportunity in selling to a select audience, while the Rockheads saw an even greater opportunity for its members to save big bucks. Currently, Rockheads has 110 members with combined yearly revenues totaling a whopping 1.5 billion, said Katzmann, adding, “The organization is set up, so that I can go to a large or small vendor in the industry, and even outside the industry, and say, ‘Look, here’s how we can give you access to one and a half billion dollars’ worth of buying power.
 I can give you this, but in exchange, you need to offer our members an exclusive purchasing program.’” 

Selecting the Best Partners: Over a dozen vendors bring invaluable networking and group buying prospects to Rockheads Group members at the Oklahoma City gathering.

Advanced Best Practices, Networking, and Benchmarking Programs

All Rockheads companies are at different stages of their life, and it’s Katzmann’s job to pair them with shops that can use each other’s acquired wisdoms. “I’ll get a call from a member shop that is doing $10 million per year in revenue, but can’t figure out how to make the leap to $20 million. We’ve got 30 Rockheads members who have already made that leap, so I’ll put that smaller company in touch with a larger one that I think is appropriate, and they can talk to each other, discuss the successes and mistakes they’ve made in the past, and help get them over that hump. We have so many members, at so many different levels, that networking help for any member is available.”

Above: Inspiration in Action: Attendees engaged in the presentation given by Patrick Goebel, CEO of Star Lumber, as he unveils the journey behind his empire’s remarkable rise. Below: Behind the Scenes with Chris Gunn: Revealing the intricate process of capturing granite slab images and seamlessly integrating them into the ERP system.

Benchmarking

Another of the important programs available to members is benchmarking. Because Rockheads has so many member shops, Katzmann is able to do a financial comparison between companies, he explained. “On an annual basis, we do an extensive benchmarking analysis. Our shops will send us their financials, and we aggregate everything! For example, we’ve got 60 shops that I can look at, and tell what they got paid per square foot for an install, or what their gross margin is for custom builders in their area. We can do these extensive analyses that can allow a shop to compare themselves to not only a shop similar to them, but now they can see that if they want to go to $10 and then $20 million in sales, what those numbers will look like or maybe see why they can’t grow, because their numbers are off. Finally, because we are getting so many data points from our members, it allows me to slice and dice that information in different ways, and still make it statistically valid. Benchmarking also allows us to compare urban shops, suburban shops and big city, high density shops, regionally, while also doing cost per square foot and labor costs. We love it, it’s unique, lots of fun, and a high value part of what comes with being part of the group.”

Learning from the Best: Rockhead members are captivated by Chris Gunn of Star Lumber as he imparts his invaluable expertise and best practices.

Becoming a Member

To become a Rockheads member, the group does have criteria that a perspective member must meet. 

First, they have to be a fully automated wet shop with CNC and digital templating. This sort of ends the conversation right away if we are talking to a shop that hasn’t gotten there yet, said Katzmann. Next, they have to have a yearly revenue over $3 million. “By this point, if they’ve made it this far in our screening process, and this is very important, they have to be willing to share their best practices and benchmarking information,”  said Katzmann.

Finally, if a perspective member is within 90 miles of a current member, Rockheads will contact that member to make sure they are okay with that new shop coming in. Most of the time it’s fine, but now and then they’ll bring up an objection like: “Hey, that shop has poached employees or they have bad business practices, or they’re involved in a lawsuit!” Whatever the feedback is, Katzmann said, he will consult a few local shop owners to give him a feel for that new prospect coming in.

Once a perspective member has met the few qualifications, Katzmann aggressively gets the ball rolling, he continued. 

“Our ‘on-boarding’ process goes like this: Our operations team gets the new member set up with a portal with best practices information, past events that we’ve recorded, and a future events calendar. Then, we have a vendor on-boarding, where our vendor specialist talks to that shop, finds out what their needs are, and then recommends one or more of our 41 vendor programs to get them going and save them money. Then, to integrate that shop, we introduce them through emails and social media, explaining fun stuff like their hobbies, what’s unique about them or their shop, and push that out to the rest of the membership. Furthermore, we’ll assign an experienced member in the group to become a one-on-one mentor to the new member. It’s called our Concierge feature, and really helps a new member feel comfortable and not intimidated when coming into our group. New members are also urged to attend our weekly webinars, to further introduce themselves. Finally, we have about 4 live events every year. They are free for our members, and we want them there meeting everybody. It’s a great way for everyone to integrate and network with each other live, face-to-face.” 

In the Pipeline

When asked about the next five years, Katzmann said the goal is to hit the $2 billion yearly revenue mark. “When we hit $1 billion in our member’s yearly revenues, it was amazing. Companies like American Express and Wells Fargo all of a sudden wanted to talk to us, and we feel a similar thing will happen when we get to $2 billion. Getting to this mark will take about 30 new members, so we are going to push to get to that number. We currently have amazing vendors, and do not add many to the list each year, but when a new, innovative item comes up or a new solution to a problem, we definitely want to look at that vendor, qualify them, and give them exposure to our membership.”

In closing, if you want to fast-track the growth of your company, no matter what stage it’s in, consider what you stand to learn from some of the best minds, from some of the best shops in the country, and take a look at joining the Rockheads.

For more information visit www.rockheadsusa.com or call Rich Katzmann at 815-210-1006.