StoneTalk Episode 21 – Scott Hanes

In episode 21, Patrick speaks with Scott Hanes, owner of Majestic Marble & Granite in Orlando, Florida.

Episode 21 Scott Hanes

Listen to this episode to learn:

  • Why it can actually be a problem to have granite become the standard countertop material in your market
  • How going digital can give you a strategic advantage over your competitors
  • The importance of simple things – like keeping your shop clean and having your employees look sharp
  • The importance of relationships – with your vendors and your customers
  • LEAN: If you want to increase your productivity, then decrease the downtime of your equipment

Be sure to subscribe to the podcast in iTunes… and please let us know what you think! You can leave comments for this show on the StoneTalk Facebook page or on this site.

If you have stories or insights that you’d like to share with other fabricators, please reach out to Patrick.

Transcript

Patrick Foley: Welcome to Stonetalk, the podcast for countertop fabricators.

Brought to you by Moraware, makers of job tracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley.

Today I’m speaking with Scott Hanes, owner of Majestic Marble in Orlando. Let’s give him a call.

Scott Hanes: Hey, Patrick.

Patrick Foley: Hey, Scott. How are you doing?

Scott Hanes: Good, good.

Patrick Foley: Well, let’s start with the basics. Can you tell me how big Majestic Marble is, whether it’s dollars, square feet, kitchens per week… Whatever makes sense for the way you think about it.

Scott Hanes: Okay. Yeah. Right now, this year, we’ll do about five million dollars in sales…

Patrick Foley: Cool.

Scott Hanes: …Roughly, between 8, 10, 12 kitchens a week. It depends on the week.

I’m sorry. A day. 8, 12 kitchens there.

Patrick Foley: On your website it says you have been in business since 1978. Have you grown to five million dollars steadily, or were there big ups and downs sometime during that period?

Scott Hanes: Yeah. Majestic Marble and Granite was created in 1878. I bought it in 2007.

Patrick Foley: Oh, okay.

Scott Hanes: We weren’t doing any granite in house in 2007.

Then, late 2007, we started fabricating our first labs. We went from one kitchen a week to two. Then we built it up to the point where we are now.

So every year, even during the recession, we have had increased growth.

Patrick Foley: Wow.

Scott Hanes: First year I think we did roughly $500,000 in sales.

Patrick Foley: Good for you. So what made you want to buy a company like this?

Scott Hanes: Well, my background is manufacturing. I got an engineering degree and a Masters in business, and worked for big manufacturing companies like General Electric and Siemens from pretty much throughout the country, and decided at one point that I was working for the big corporations and the politics within the corporations at that level… Wasn’t something I wanted to do, and continued to move around the country. So we looked for something where we could manufacture, which is where my speciality is.

And stay in Orlando. So we founded, basically, a countertop shop that is manufacturing, and that’s why we bought it.

Patrick Foley: Cool. Has it gone the way you expect it, or… You came in with expertise in manufacturing. Has your experience been, “Yep, this is what I expected”?

Scott Hanes: Well, has it gone as I expected sitting here now? The last couple of years, yes.

I bought it in 2007 in April. April was the worst month in sales in 30 years in the history of the company.

Patrick Foley: Oh, wow.

Scott Hanes: The market crashed almost immediately right after I bought it.

Primarily the company was manufacturing culture marble, so we made a quick shift over to the granite. But if you look back on that and where we are now, we’re very pleased at where we are and the decisions we’ve made and how we’ve done it.

Patrick Foley: Very cool. So you made a shift from cultured marble to granite. Tell me about your specific market.

I have heard people tell me that Orlando is a little bit different from other markets. How is your market different, in your eyes?

Scott Hanes: Well, from what we see and the conversations with all of the fabricators that we come in contact with… Design seminars and visits that we’ve done, we are, in the Orlando market, very saturated with fabricators. What has happened in the recession… That and the combination of companies like Masco and the big box stores coming and cutting prices, people are willing to sell in Orlando for sub $30 a square foot.

Some as low as… You’ll see signs for $18 to $20 of square foot installed.

So this market is a little different in that we struggle to push the price up. Granite, in this market, is a commodity, very much so like it is… Like formica would be in other markets. It’s a standard pretty much in every level of house, from your $100,000 right up to your multi million dollars.

Patrick Foley: Which, it sounds like a good thing, but I’ve heard, once you lose that luxury expectations, that’s not necessarily a good thing for fabricators.

Scott Hanes: Well, it’s not a good thing for any product. Once a product goes from being a luxury item to a commodity, it’s almost impossible to get it back.

Commodity products are low price products, typically.

Patrick Foley: Right.

Scott Hanes: So we as fabricators in the granite community, from the distributors right to the fabricators, have cut our own throat in the Orlando market. It’s gonna be a tough road to get back.

Patrick Foley: So how do you deal with that? How do you deal with a commoditized market and try not to be the low price provider? Or do you?

Scott Hanes: Yeah. We made a decision. I mean, obviously, during the recession we had to do what we had to do.

But once we saw the market coming back, when we made the decision to go digital, that’s the same time we put a strategy together that said, “Listen, we’re not going to go down and flame out with the rest of the pigs in the pig pen. We’re gonna try and separate ourselves from the heard.”

So what we did is, we took our digital transformation and really put that out there as a marketing tool to really show our customers and builders and everybody else that, by being digital, we are different from other fabricators. We can turn around kitchens in six hours from template to install, being fully digital.

Patrick Foley: Six hours?

Scott Hanes: Yeah.

Patrick Foley: You will do a six hour kitchen?

Scott Hanes: We have and we can.

Patrick Foley: My God.

Scott Hanes: Do we offer that free? No.

Patrick Foley: Right.

Scott Hanes: In the case of emergencies… If we templated it in the morning, and then my [sp] templator will email the template digital files back, within half an hour we can have the slabs ready and on the saw cutting, [sp] C & C, ready to go out the door, and the guy is rolling out the door in about six hours.

That’s an extreme advantage, but just being digital and being able to take the customers [in] the shop, show them how we do it… You compare them to the other places they’ve been, where they’ve got dust bellowing out the doors, they have no showroom… You can really start to show the customer the difference.

Most of our customers think granite is granite. It’s all the same and there’s not different grades. There’s no difference in fabricators. But once you start explaining that to them, we can pretty much sell a customer that walks in the door 80%, 90% of the time, even though we are more expensive and we do charge way more than the average person in Orlando.

Patrick Foley: That’s very interesting, and I have seen your shop. I attended a park industries event that you hosted. Tell me some more about what you do to make your shop inviting to customers, because that does seem to be important, especially if you’re…

Scott Hanes: Well, we try to keep it extremely clean. There were comments from people that came to the digital expo that didn’t believe that the shop was as clean as it was, and that that was just a pulling the wool over people’s eyes.

Patrick Foley: [Really?] Wow.

Scott Hanes: That’s not the case. I mean, any time people come in, we spend a lot of time keeping the shop neat and tidy and presentable to customers as we walk them through. It’s all about the image. We’re in an older building, an older location. We would like to be able to move to a new building here in the next couple of years as we continue to grow.

Just the presentation… Our website is done. Mark [inaudible 00:07:30] did a fantastic job on the website.

Patrick Foley: Oh, okay. Yeah.

Scott Hanes: We have a nice showroom. We try to be a little bit higher level in presentation than the rest of the guys in Orlando.

Patrick Foley: Yeah, and noticed even your employees, your fabricators, everyone in the office, wears a company shirt. Which, to me, I haven’t seen that often. I just thought it looked really nice, really professional.

I assumed that’s part of that overall strategy.

Scott Hanes: Yeah. I mean, we started out initially with just the installers having company shirts, and then we obviously… As we have been able to get the profit margins and have profitability in the last two or three years, we have been offering shirts to the guys. We offer them company shirts. They get five a year free.

Patrick Foley: Nice.

Scott Hanes: They can obviously buy more if they want. We tell them they have to wear the shirts. That’s part of the presentation package.

Patrick Foley: Yeah, and I asked a couple of them what they thought about them and they said, “Yeah, I like it. I don’t have to think about it in the morning. Just put it on.”

If anybody is thinking, “Oh, my people won’t go for that,” yeah, there’s a good chance they will.

Scott Hanes: Well, initially we bought polyester cotton shirts. In Florida, when it’s 115 degrees in a shop, it’s a little hot. So we switched over and paid a little bit of extra money, and now they all have Dri-Fit company logo shirts on. They like the Dri-Fit because it keeps them cool, and they don’t have to buy shirts that are gonna get ruined.

Patrick Foley: Definitely. They look sweet.

How important has your relationship to Park been, and is that something that, you bought your equipment from them and you happened to host an event? OR is it something that is more of an ongoing connected relationship, that you deal with them on a regular basis?

Scott Hanes: Yeah. Our first transition was going to the [inaudible 00:08:08]

We did a lot of due diligence. We settled [on] Park because we felt that what it all boiled down to was the ability to service. One of our criterias was, we wanted a U.S. based manufacturer and service organization.

It boiled down to really two companies. We did our due diligence. SFA members, other people we talked to, they were all moving to Park. We couldn’t find anybody that was moving away from them. So we paid a little bit more money.

Just like I try to tell my customers, we’re worth it to pay a little bit more money. We went with Park. At that point… I can tell you the relationship has been fantastic with them.

Patrick Foley: Cool.

Scott Hanes: They have been a great service provider. It’s equipment. It’s gonna break, and it’s all about how quickly… In manufacturing, especially in this environment, with low margins, we measure things in seconds and minutes. We don’t measure them in days and weeks and months.

So when the machine is down, it has got to get back. We don’t have redundant equipment sitting out there.

So that relationship over the last three years, going on three years, has been fantastic.

Making sure we have the right spare parts here, making sure we overnight and have available parts when we do get into an emergency situation. To be honest with you, equipment has run very, very well.

Patrick Foley: Very nice.

Scott Hanes: It has been very reliable.

So we’re gonna continue to grow with them. My second facility in [inaudible 00:10:33] city, which is now up and running since January, is reaching the point where we’re gonna digitize that probably in the next six to eight months.

Patrick Foley: Oh, very cool.

So I noticed… I was talking to one of your guys who was loading the C & C router, and apparently your approach to loading that is a little bit different from other people, how some others do it. Can you describe how yours is a little bit different, your approach?

Scott Hanes: Yeah. Once we got our feet on our centers of operating it and knowing how to run it and run it efficiently, one of the things that jumped out at us was, we started measuring and understanding what we were really getting off of it.

My programmer and everyone is saying, “We’ve got to buy another Titan. We’ve got to buy another Titan.”

So my question to them was, “Well, how much downtime? How much is this thing not running?”

The answer off the top of their head is, “Oh, not very much. It’s running all of the time.”

So we put a measurement system in and actually started measuring it, and over a 12 hour shift it was actually down six hours.

That was all due to changing over between modes.

So my background being lead manufacturing on the manufacturing environment, we started doing time studies. Standing out there and just observing what people were doing and calculating the time, we found that the majority of that downtime was the operators walking up and down the stairs carrying pods and hooking up pods in the back of the table.

So what we decided to do was, we noticed that the pods in the front of the table were being loaded two to three times faster.

Patrick Foley: Wow.

Scott Hanes: All they had to do was stand on the steps and reach down and grab the pods, and hook them on and hook them up.

So we did an experiment where we only load the front of the table. By doing so, we went from 30 to 45 minute changeover times, to changeover times of six and seven minutes.

So you’re running half a load. So the equivalent changeover time is now 6 to 18 to 20 minutes, versus 45. So that downtime went from is hours to two and a half hours in a day. So we were actually able to get more linear square feet off of the machine.

Patrick Foley: I find that just super fascinating, and the solution is very interesting. But even more interesting than the solution is how you arrived at it, by studying the problem and figuring out what was your bottleneck in your situation.

Scott Hanes: Yeah. The majority of people that I talked to, even Park, which, I think they are now seeing what we’ve done as a little different approach… Everybody wants to talk about tools and getting a faster [sp] Z wheel and a faster tool, and my tool can go five linear inches faster than the other one. At the end of the day, the runtime, if you focus on trying to reduce the runtime, you’re working on the smallest piece of that puzzle.

So the bigger piece of that pie is the downtime. You can make incremental improvements with better tools, but it’ snot the major impact. Most people spend a lot of effort and money on tools when the solution is easy and it doesn’t cost you anything. That’s just making it easier for your employees.

They don’t have to work harder. Just make it easier for them.

Patrick Foley: Yeah. I spoke with someone about Park about, well, the next logical step is, why not have… What is the thing called that the pods are on? The table?

Scott Hanes: The table.

Patrick Foley: Okay. Why not have two tables for one thing?

They said, “Well, we used to have that. But that didn’t sell all that well. That has fallen out of favor.”

I just find it interesting how people are figuring this out. There’s an element of figuring it out as you go along, but eventually, if your approach becomes more common, I would think that that will create a demand for something more like two tables, one tool, or something.

Scott Hanes: The double table with the old way of loading it doesn’t make sense.

Patrick Foley: There you go.

Scott Hanes: It’s a lot harder. You don’t get the bang. But if you look at it from the approach of, how do I keep the table running, my request to Park is, design me a Titan that has… Even the same size tables…

Patrick Foley: Just half.

Scott Hanes: …But allow me to load them quicker and just keep it running.

You can buy two Titans for $700,000, or you can buy one and run it to the fullest thing that it can give you.

Patrick Foley: Right.

Scott Hanes: I choose to spend a little less money and get more production off of it.

Patrick Foley: Again, I just think that’s super interesting.

Any other little tricks like that that you want to share with other fabricators? Other things that you do a little differently?

Scott Hanes: Well, I mean, not necessarily different. In going digital, one of the big things we look at, again, from the lean perspective, is how do we minimize the movement on the material in the shop? How do we get the machines as quick as possible?

I mean, you were in my facility.

Patrick Foley: Yeah.

Scott Hanes: It’s extremely small. To do 10, 12 kitchens out of there, most fabricators would find that almost impossible. But we actually have extra room. We only have 6000 square feet out there and about 3000 that we don’t even use.

Patrick Foley: Wow.

Scott Hanes: So it’s a matter of laying the machines out, having the right overhead cranes and safety systems in place for the guys to have minimal moves, but yet be safe, and be able to do one piece floor and get it out of the door.

Patrick Foley: Is there anything that you’re measuring now that you’re trying to optimize? Is there some specific bottleneck that you’re saying, “How can I get this less?”

Scott Hanes: Well, right now the bottleneck is still the Titan. We constantly monitor downtime and why it’s down, in trying to reduce that even further. We’re working on trying to set up some zero positions with the pods to make sure… That way, if we have known zero positions in the program, we can program to them to make the pod setups even better.

So our goal is right around three to five minutes of changeover time. So we’re doing some work on that right now.

Patrick Foley: Cool. Stepping back further, thinking about your business as a whole, what’s your biggest business challenge? Is there anything that you would change if you could? What are you working on?

Scott Hanes: I don’t necessarily if I would change it. We started off early on when we first started to get into the granite business, saying that we did not want to be 100% in bed with builders after what happened in 2007. When the builders stopped, they all stopped at the same time. There was no gradual slow down.

Patrick Foley: Got it.

Scott Hanes: You went from 100 miles an hour to nothing, which put a lot of the guys out of business here in Orlando. The bigger guys.

So from a strategies standpoint, we still try to do a healthy mix of kitchen and bath companies and retail remodeling mixed in with our builders. Trying to make sure we don’t have all of our eggs in that builder basket.

It is the biggest basket at this point, but we’re trying to make it mix so that, if something happened, we would still be able to survive the next recession.

Patrick Foley: Cool. How are you approaching that from a marketing and sales perspective? How are you trying to get more customers from these other customer types?

Scott Hanes: Well, at this point we do zero marketing.

Patrick Foley: Really?

Scott Hanes: And we do zero outside sales. We have been able to establish ourself in the Orlando market as a premiere manufacturer and producers. Right now I have builders asking me to do their work and right now, based on their pricing, we’re telling them, “No thanks. We have enough builders with the pricing we want.”

So right now we’re full on capacity. Our strategy is, we’re not just gonna add capacity for a zero margin builder. So we’re very selective. If someone is willing to pay for the service and quality that we give them, then we’ll add them on. But, for the most part, we’re pretty much set with what we have.

Patrick Foley: I notice you have just a great looking website. Who did you say to that? You said it was Mark?

Scott Hanes: Yeah. Mark [inaudible 00:18:39]

Patrick Foley: Yeah. I believe I’ve met Mark. So, I have to say, really nice job.

Scott Hanes: We took a very different approach to it. If you look at the analysis of websites, people only spend a couple of minutes on there, on average. The more words they have, the less. If it’s all full of words and explanations and a lot of click words… If it’s really garbaged up, people don’t spend time on your website.

So we took the approach of pictures [and] just a few places for them to go. Primarily showing people with pictures, and just trying to drive them to make the phone call and come in and visit the show room.

Patrick Foley: Okay. So your call to action on your website is either call us or directly come in?

Scott Hanes: Correct. They can do an online… Submit a request for quotes.

Patrick Foley: Sure.

Scott Hanes: But, at the end of the day, we’re not in a business with granite to be able to [inaudible 00:19:37] off the website. So it’s about presentation. It’s about making it easy for them to find out where we are and contact us.

If you look at a lot of the granite websites out there, they go into excruciating detail on edges. They’ve got explanation for everything under the sun. I really don’t want to explain stuff on the website. I want them to call us, that we can have a conversation with them and start discussing why we’re different and, while we’re answering their question, tell them at the same time why we’re different and why they should use us.

Patrick Foley: That makes a ton of sense.

Again, having a great looking website that has a point of view, do you think it has been important to your business or do you think it’s just one of those things… Well, you’ve got to have a website. How do you know one way or the other?

Scott Hanes: Absolutely. We get a lot of… The retail side of the business comes from the website.

Patrick Foley: Really?

Scott Hanes: That and Google reviews. We have a special program where we’re able to get a lot of reviews. Right now, with the website being designed the way it is, having the mobile access… Right now when you do a Google search in Orlando for marble and granite, Majestic pops up number one and number two.

Patrick Foley: Nice.

You said you made sure it was mobile friendly as well, which is [inaudible 00:20:49]

Scott Hanes: Correct.

Patrick Foley: I’ve heard as many as half of searches originates from people’s phones these days. So you could have a great looking website on your computer, but if it doesn’t look good on somebody’s phone the you just wasted a bunch of money, potentially.

Scott Hanes: Yes. That is very correct.

Patrick Foley: Very cool. Well, I know you have another meeting coming up here. So I don’t want to keep you too long. But I appreciate all the time you’ve spent here. Is there any other parting thoughts that you would like to share with your peers?

Scott Hanes: Yeah. I mean, there’s other parts of the business too. When we did the digital [inaudible 00:21:22] we kind of walked everybody through it. I mean, the equipment is one piece of the puzzle. My advice to anybody who is going from a manual shop to a digital is, make sure that you have processes in place to control what you have. You can buy the best equipment in the world, but if you still have crappy processes to control it and to process orders through, you’re gonna fail. It’s just, now you’re gonna fail a lot quicker because it does it quicker.

Moraware, we’re a big fan of the Moraware software.

Patrick Foley: Cool. Thank you.

Scott Hanes: Completely transformed the front office. If we took it away, my sales people would probably kill me.

It really enables us to point and click, keep people on track. We’re using it more. We’ve been on it, I think a couple of years now. About the time we went digital in the back shop we decided… We’re looking at it going, “Oh my God. We’re digital back there and we can process, but we can’t get the paperwork through.”

We’re trying to get completely paperless. Everything goes into the system, the work order… It’s amazing. A customer calls up from two years ago and you can quickly pull up the order and you can talk to them, exactly what they had and what edge, and all their information and all their walk in sheets. Having access at your fingertips is very, very productive in the front office.

Patrick Foley: Cool. So paperless means different things to different people. One of the things that’s an obstacle… Our customers are starting to ask for a feature. Let me ask you, just because, again, different people need different things. At the point someone needs a signature, when is that point in your business, when you want to get a signature or an approval from someone that, yep, we’re gonna do this job, or yep, this template is good to go and this is what we’re gonna build for you.

Where is that currently handled and how would you like that to be from a paperless perspective?

Scott Hanes: I hear all different people say where they’re getting signature. For us, when we do the quote to a customer, a retail customer, and we send them the quote via email, at that point we request them… If they want to go proceed, then they put the signature on and then they send it back. That’s their trigger saying, “Yeah, we’re gonna go. We’re ready to schedule you.”

From that point on, the only other signature we get is the one that’s on their check.

Patrick Foley: Okay. That’s the most important one. Yeah.

Scott Hanes: A think, a little different than most, is we stay in constant communication with the customer doing follow-ups, making sure all of the [inaudible 00:23:48] are correct and doing follow-up phone calls with them. We have not had seen a need at this point to tie a customer into a contract.

My belief is, if I’ve got to have a contract, a 50 page contract with you, then we are doing something wrong. My personal opinion, from what we’ve seen, if you have a relationship with the customer you don’t need to have the contract.

At the end of the day, if they don’t want the stone, am I gonna charge them for it? No. We’re not gonna risk our reputation because of something that happens… A customer changes their mind. We’ll give them their money back and we’ll let them walk.

Contracts are only for courts. That’s what those signatures… Right now we’re not in that litigious mode of suing our customers.

Patrick Foley: That’s awesome. Again, I’m so glad I asked. Again, everybody has a different perspective on this. I guess it’s a conversation I want more fabricators to have with each other, because it’s a super interesting subject.

Scott Hanes: Yeah. I hear people, “We made the customer sign off on the template.”

That’s fine, but we take a little bit of a different approach. We bring their template back. I mean, obviously we’re the experts and we know where the overhang should be, and we know where the standard should be of the refrigerator, and we know how far we can go with our [inaudible 00:25:02]

We’ll have those conversations with them, but with Slabsmith, we’re able to actually send customers the actual layout of what their kitchen is gonna look like. To me, that’s a lot more powerful in terms of setting yourself apart from the rest of the heard.

We can dazzle the customer. They can see their kitchen .They can have input if they want on how it’s gonna look.

I mean, obviously, [inaudible 00:25:26] it’s not gonna change. But you can get some really fancy, exotic colors. People care.

I guess it’s just a different approach that we take.

Patrick Foley: Yeah. I think you summarized it with communication. It all boils down to communication and setting those expectations, but that’s not the same thing as having people sign off. You can communicate more than you think, is how I would relate that.

Scott Hanes: Yeah. If you don’t want to talk to your customer and you want everything to be on paper and they sign off on it, and you are gonna do exactly what they said on the contact, I think you’re heading in the wrong direction in terms of servicing and getting a good reputation. There’s more to it. We tend to hold their hands. That’s our motto, and that’s what we’re going to continue to do.

Patrick Foley: That’s awesome. Again, I know you need to go, but thank you so much. I hope to do this again sometime. If you need anything from us, just ask. You know how to reach us.

Scott Hanes: Okay. All right. Thank you, sir.

Patrick Foley: Thanks a lot, Scott. Have a great day.

Scott Hanes: You too. Bye-bye.

Patrick Foley: Thanks for listening to Stonetalk, the podcast for countertop fabricators. If you liked this episode, be sure to visit stonetalk.org, or subscribe to Stonetalk in iTunes for more.

Visit the Stonetalk show Facebook page to join in the conversation, and follow @stonetalkshow on Twitter.

Stonetalk is brought to you by Moraware, makers of job tracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley, and I look forward to spending time with you again on the next episode of Stonetalk.

2 thoughts on “StoneTalk Episode 21 – Scott Hanes

  1. Pingback: StoneTalk Episode 21 – Scott Hanes | Moraware

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