StoneTalk Episode 24 – Brian Johnson

In Episode 24, Patrick speaks with Brian Johnson, CEO of Johnson Granite



Listen to this episode to learn:

  • When it makes sense to expand into new surface types
  • How to develop commercial business when you’re used to retail/wholesale
  • Why designers are important and how to work with them
  • Using Facebook contests to get customers sharing their countertop photos

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: Welcome to Stone Talk, the podcast for counter-top fabricators, brought to you by Moraware, the makers of JobTracker scheduling sofware and CounterGo estimating software for counter-top fabricators. I’m your host Patrick Foley. Today I’m chatting with Brian Johnson, President of Johnson Granite in North Carolina. Let’s give him a call.

Brian: Hello, this is Brian.

Patrick: Hey Brian. Patrick from Moraware. How are you doing?

Brian: Hey Patrick. Doing great today. Hope you are.

Patrick: I am as well. Is this still a good time to talk?

Brian: Absolutely.

Patrick: All right. Well, let’s dive in then. How would you describe your business to other fabricators? What’s special about Johnson Granite, or not special? What’s typical about Johnson Granite?

Brian: Well, were a natural stone fabricator like most others. We started out with, obviously, granite, that was the big thing when we first started back in the early 2000s. And quartz came along and we started, obviously, fabricating quartz. About five years ago, we added solid surface, a little bit different than a lot of fabricators now. A lot of them came from a solid surface industry, coming over to the natural stone side. We were actually the opposite.

Patrick: Well, what made you decide to add solid surface?

Brian: Probably the main thing was we were just losing jobs. We were trying to compete in the commercial market, and we did granite and quartz. And we were losing some nice medical jobs like assisted living or even some hospital work. We decided that we didn’t want to lose those jobs anymore so we actually– a shop actually had went out of business. We actually went and bought the assets from them from the bank, and bought all the equipment.

We didn’t buy a CNC. They didn’t have one of those, but bought a nice panel saw and a lot of the other equipment that was needed to get started, and hired a representative from Corian to come and train us. And found a few guys to help us get started. It’s still kind of a small division of our operation, but we do do fairly well with it.

Patrick: So it’s been worth it? It was good adding that…getting the assets? It’s worked out well for you ultimately?

Brian: It did. It actually helped us obviously…another profit center for the company. But probably more so than that, it helped us secure some relationships.

Patrick: Interesting.

Brian: Some commercial guys we were working for, now they can count on me to do pretty much all their surfaces, except for p-lam. We could do that but a lot of the commercial mill work guys handle a lot of that themselves. They have a source now that they can rely on me for granite, quartz, or solid surface.

Patrick: Cool. So, I read the interview you did in Stone World, and you said you’d like to do more commercial work. Why is that useful for your business? Is that a function of your size or your market or a little of both?

Brian: Well, so back up with a little bit of history. Typically the majority of our business is dealer based, kitchen and bath dealers, interior designers. So that’s the majority of our business. Very little production builder work. That’s trying to grow as well, and the commercial side was kind of small as well. Just very heavy in the dealer business. So as learning from talking to other fabricators, talking to other people in business in general, even talking to my bankers…you might need to consider diversifying a little more. So I thought about that, and that’s kind of the direction that the company is moving toward now. The old term, “Don’t have all your eggs in one basket.”

Patrick: Sure.

Brian: So the commercial side is growing for us, and were being pretty aggressive with that side. That seems to be paying off. Actually we’re trying to target some select production builders. Even the retail side…we’ve always done a fair amount of retail work. We don’t live in a…the population here locally…obviously not a very large city so the retail work is somewhat spread out.

Patrick: Got it.

Brian: Patrick, just trying to diversify a little more. I think that’s healthy for our business.

Patrick: Makes sense. So that geographic aspect of being spread out is probably why you gravitated toward dealer work early on. Because they can reach into farther corners of geography that you can service. Does that make sense?

Brian: That’s kind of when my father and I started the business. We just knew how to fabricate. We didn’t know much about running a business. So we learned those lessons as time goes on. But that’s kind of the direction that we seen was working, and we kind of stuck with it.

Patrick: Cool.

Brian: So, we built a pretty good dealer network around probably a two or three hour radius of where we’re at. So that still provides a good portion of the profit and income for the business.

Patrick: Cool. So I have this instinct, tell me if I’m correct or not, that if the kind of work you would get from retail versus dealer versus builder. It’s a different source of work, a different source of business, but the work itself I wouldn’t imagine would be that much different. Where as comparing all of those versus commercial, even the work itself is quite different in commercial. Is that correct?

Brian: It is very different, you know. It can be different, but then again, the commercial side seems to be more the volume type work. You kind of get the design down and most the time it’s larger volume, larger square footage.

Patrick: Have you had to adjust your hiring practices or move people from one side to the other, or something like that in order to support that growth in commercial? Or can the same employees do both residential and commercial, either in the fabrication or the instillation or whatever?

Brian: Actually that’s an adjustment for us.

Patrick: Okay.

Brian: The past has been where people can’t really move back and forth a little bit. We kind of train them to do this particular job. We have not been as successful as I’d like to be on some cross-training. So we have started the spring of this year, several months back. trying to put a real focus on what we’re calling the “road-runner mentality”.

Patrick: Okay. What’s that?

Brian: Basically the road runner mentality is having several…numerous people in our organization that can do a lot of different jobs.

Patrick: Got it.

Brian: And so as the volume of work comes in, you give a large solid-surface job on the commercial side. Hopefully we can spread those out and make those all fall into the right time frame for us, but typically that doesn’t happen. So sometimes we have to pull people from the hard-surface shop…

Patrick: Really?

Brian: …and vice-versa. We’re seeing that more and more, and I think that the company will be the most beneficial and ultimately contribute to the bottom-line if those guys can go back and forth a little bit. So we’re trying to focus on that a little bit. And that has some challenges to it but I feel like we’ll be successful with it.

Patrick: Interesting. If it were me personally I would…if I were a guy working in the shop I would want to do more different things. Are many or most of your people like that? Or do you have people resisting, saying, “Oh, I already know how to do stone. I don’t want to do solid-surface.”? Is that part of the challenge?

Brian: A little…some resistance, but I think most the time, most people want to learn a new skill. They…as we went through the difficult times back with the housing market in 2008,2009, unfortunately we had to cut our work force by probably a third. Those people that could do a little bit of everything were the people that we chose to keep. So it’s important, in any job, to be the most valuable you can to your employer. Most of the employees that I have jump at the opportunity to learn a new skill.

Patrick: And are you in a growth mode where you’re adding employees at the moment?

Brian: We are. We are. We are in the middle of expanding our operation. We’re actually adding on to the facility. We are out of room.

Patrick. Nice. Wow.

Brian: So we have some material that we keep inside, that can’t go outside. So we’re adding another onto part of our facility to move that material out so we can have some capacity for some more machinery.

Patrick: But your not having to move into a whole new location at least?

Brian: No we’re not. Luckily we have a pretty large land available to us and so we have plenty of room to grow.

Patrick: That’s good. How many kitchens or square feet are you doing each week?

Brian: Each week we’re probably getting close to 2,000 a week, square feet. We measure that somewhat, but we probably measure another figure, another term probably a little closer, called throughput. I don’t know if you’ve ever heard of that or not before.

Patrick: Go ahead and refresh my memory.

Brian: Just a simple equation there. Throughput is basically…you know when you buy materials for different prices and that can vary and that can actually skew your numbers a little bit. So we try to basically take the sell price and deduct the material. Throughput is the value that we add to the raw material, what people pay for it. People will pay for that and so that…we try to measure that a little closer. That seems to be a little more accurate way to measure what we’re doing. It definitely helps us with measuring time a little more.

Most of our work is….I would consider it higher end work. We seem to do a lot of laminated and chiseled edges, mitered edges seems to be pretty popular of late. So that obviously takes a lot of time in your shop. So if we just measured that by square foot that wouldn’t….which we use to do…really we get ourselves in a lot of trouble with scheduling.

Patrick: And certainly for measuring the health of your business, I would think throughput is the most accurate to see growth because there can be volatility in the materials, but there shouldn’t be as much volatility in the throughput. Particularly if you’re doing both natural stone and engineered stone and solid surface as well as residential and commercial, throughput is still going to show you whether that value you’re adding is going up or down. So for example, if you all of the sudden took a huge commercial job and pulled a bunch of people off residential and it looked like a good deal from a revenue perspective. But in fact your adding very small amount of value on top of the material being purchased, it would show up pretty quickly and you’d see that commercial job isn’t as beneficial as I thought. Am I thinking about that right?

Brian: You’re exactly right. You know, we’re in this business to be profitable. Some people may think of it this way, but I think most successful business owners don’t think of it this way. It’s not about the volume that you do or the amount of the sales, it’s about how much money that goes to the bottom line. So we want to work hard and we want to earn that money that we get, but we want that to be profitable. We don’t just like to turn dollars. So throughput definitely helps us measure that more accurately.

Patrick: That makes sense. That makes sense. So looking at your residential customers, has there been any shift in popularity, comparing natural stone to engineered stone to solid-surface? Or have they stayed fairly constant over the last five years? Do you see one becoming more popular than the other or are there just kind of normal ups and downs?

Brian: Well in our area quartz definitely, engineered stone definitely seems to be becoming more and more popular. We’re natural stone guys by trade. I’m a third generation stone person. My grandfather worked for the local granite quarry here which is in Mt. Airy where we’re located. It’s actually the largest open-faced granite quarry in the world.

Patrick: Oh wow. Goodness gracious.

Brian: Obviously most of your granite quarries are in the side of a mountain or in a big hole. This is all on the surface so a lot of stone, a lot of granite guys around here. My grandfather, all of my uncles and my father were in the stone-cutters. Then obviously my father and I started this business back in 2000 and then we…counter-tops were the big thing and we were doing those.

We kind of avoided quartz for a little while. We don’t know anything about this product, but we kind of missed the boat a little bit. So we came on board with it, probably 2005, 2006. I think Caesar Stone was the first that approached us about their product and then we got on board. We definitely see the trend in our area, for sure, is quartz is becoming more and more popular.

Patrick: Nice. And you said…

Brian: Solid-surface not so much on the residential side. We particularly do that on the commercial side.

Patrick: I like solid-surface. I think it gets a little bit of a bum-rap on the residential, but I think everyone likes the….I guess stone seems more luxurious to people, but I like…I’m a fan of solid-surface and it’s repairability, especially. I love seeing what people can do to fix holes in it and things like that so I don’t understand why it’s not as popular in residential anymore.

Brian: It’s still a little bit of a newer product to us. We definitely…I actually like the product for certain applications and I like quartz for certain applications and natural stone for certain applications. I think it all has its place, just according to the application.

Patrick: Fair enough. And you said you started with countertops, implying that you’ve…what other than counter-tops has been increasing in your business? What are you doing in addition to counter-tops?

Brian: Something we’re trying to do is I have tried to come up with an idea for a concept of the grout-less shower. It’s a very expensive option so obviously we don’t do that a lot. We’re just using…quartz is probably the material of my choice for a wet area. And we’ve done solid-surface as well, but we kind of like that natural…the quartz look. And so we’ve been able to come and do walls, ceilings, benches, and even floors with these linear drains that some of the water-proofing people have come up with now.

Pretty neat. Pretty neat concept to do away with the grout lines and just have these solid panels in showers. So we’ve done several of those and they’re really nice and great projects to do but most people can’t quite…don’t quite put the money to put those in. That’s one thing I’ve been working with and trying to promote to my dealers, and letting people know…

Patrick: Is that typically an up-sale, where they were doing a kitchen and you get them to do that grout-less shower as well? Or is it typically it’s own thing where someone’s looking to redo their bathroom and a dealer brings you that kind of business?

Brian: Most of the time that’s kind of been it’s own things. They’ve heard me talk about it. Then they have somebody kind of interested and their client would maybe come in and say, “Look, I want to this. I want to kind of do that. Something kind of different.” Well hey I’ve got something different for you. And so they can start to talk to their clients about it a little more and we kind of go from there. We’ve done several retail projects where people have actually come into the showroom and seen a display that we’ve got and so that’s been successful as well.

Patrick: So that’s the most fun kind of marketing to me. When you’re creating new products or new ideas for people. What other kinds of marketing techniques have you been using that seem to work to drum up new business? Has there been anything that you’ve been able to identify? Either individually or maybe aggregate 20 different things that together seem to help. Is there anything that helps you drum up new business?

Brian: Well we’re probably a little slow to the table for social media, but we’re trying to really focus a lot of that…past several months we have…just getting ideas out there. I think that can kind of come back and people are interested. They can start asking some questions. Then can kind of come up with their own design. Patrick so many times people don’t know what’s out there until they see a picture of it or see a concept. And most people have a very difficult time visualizing what can be done.

That’s why they pay designers and kitchen bath dealers and interior designers to help come up with that, but still you have to have some type of….something for people to see and visualize. So we’re trying to do a better job of, number one taking good quality pictures and getting these out to Facebook and houses, seems to be a pretty popular site and trying to do a better job of marketing those ideas we’ve come up with. That’s probably not one of my strengths. That’s something we’re trying to work on.

Patrick: Is it’s something your trying to hire for? Find people who have that as a strength already? Or do you have employees who are developing those muscles or…? It’s so new. Is that something you’re developing inside or looking for people as you hire, for people who might be good at that sort of thing?

Brian: Well as I’m…when we’re trying to recruit, we’re kind of asking questions, a little bit about what their interest level is. Probably mostly trying to hire account managers and sales associates. I’m not quite…I’ve not proven it to myself that I need a full-time marketing associate, but I’m kind of getting some feedback from some of my team that, “Brian, maybe this is what we need. If we really want to take it to here, maybe this is kind of what we want to focus our efforts a little more.”

Because what we’ll typically do is I’ll focus on it for a small period of time, really intense, and then we’ll let it set for months. And it’s just not a consistent effort on our part. And I think that the challenge that we face just running the day to day business, if I had someone full-time doing that, I think it would be better. So I’m asking questions. I’m possibly trying to hire someone that can maybe do that a little bit and also sale. But I’ve done that in the past and most the time it’s not really worked. So I probably just need to go ahead and bite the bullet and hire someone to do that and I think we’ll be successful. I think it’ll turn out well. We’ve just not made that decision yet.

Patrick: Well that will be an interesting question. I’m no expert in that area. So I’ll be interested in your decision and how that turns out. I am intrigued by what you were saying about having everyone do a little bit of that. So people who currently do account management for example, I’m intrigued by the idea of getting good pictures, and if there was a way to encourage the home owners that you sell to, after the sale, after their successful. Seems to me they would be the best salespeople, if you will, to do the social sharing.

You know, if I see a friend of mine who has this beautiful kitchen that someone did, it seems…it’s not “sales-y” if I see a friend proud of their new kitchen, right? And if a company like you can facilitate a customer being proud and sharing things themselves. Any individual kitchen, that’s not going to get you new business, but if you do that over a hundred and then a thousand customers, I would think statistically some of those shares….one out of a hundred of those person’s friends is going to say, “Hey, we need to update our kitchen as well. Who did you use?” etc. etc.

Brian: Well that’s just referrals you know? And that’s just a different way to get a referral. Word-of-mouth is the best advertising that you can find. We know this. Then we just have another form of word-of-mouth. And you’re communicating…

Patrick: Yeah. It’s how to facilitate that.

Brian: And so we have…it was recently brought to our attention that maybe we should do some type of contest or promotion for these home-owners, that would…hey post your new counter-top pictures on our Facebook page and post them on your page. If you get so many likes we can send you some type of gift card. That was just kind of an idea thrown out. We need to kind of work through that a little bit more. Trying to get people…encourage people to do this, actually most people do. Most people love to show off their new product and their new kitchen.

So I have an installer that does a great job. He takes pictures, and he’s kind of a young guy. He’s big on social media. He’s posting pictures of his latest install. Gets a lot of likes and that gets a lot of buzz from different people. I know that I’m aware of probably half a dozen jobs in the past four or five months that they have heard about it from this installer posting it on Facebook. They brought people in our showroom.

Patrick: That’s awesome. Here’s one possible, inexpensive prize that I thought of. So many of the pictures that I see don’t have people in them. So something to offer the homeowner is, “Hey we’ll come over and do a little photo shoot.” It doesn’t have to be a super professional photographer, just someone who takes decent pictures and say, “We’ll do a photo shoot of you and your new kitchen and get you an 8 x 10.” Or something like that…of you in your beautiful new kitchen. That would be a cool prize that they would, again, be highly likely to share. And my understanding is that pictures that have people in them are way more effective that pictures of just granite.

Brian: Well Patrick that makes sense. I guess I never thought about that. I think that’s a great idea. I’m going to use that. So thank you. Do I owe you anything for that?

Patrick: An interview, which you’re giving me. So if it works, credit me. If it doesn’t work, you didn’t hear it hear.

Brian: That’s great.

Patrick: All right, cool. So before we wrap up. Let me ask you about one other question. Your move to digital technologies as a whole and how that’s changed your business. So you’ve got…I noticed in one of your interviews that you’ve got new CNCs and templates. I know you use our software. How has that gone and what have been the positive parts, what have been the bumps in moving from hard technologies to digital technologies?

Brian: Well the rewards…there’s just not enough time to talk about the rewards, really. It’s not a perfect road, obviously. You have to be committed. For example, what were currently working with, we’ve implementing Moraware. I think the enterprise edition…just about everything you’re offering. We had a discussion this morning about inventory. I have one of my men that’s not quite getting the notes. He needs to type notes in there. So they’re not tracking him down or he’s not having to track someone else down.

You have to be diligent and consistent and you have to be committed to a program like Moraware, a program like digital templating. If you are going to do that and put both feet in the rewards are just unbelievable because before we switched, Patrick, I did all of the shop drawings.

Patrick: Wow.

Brian: I approved all of those. I did train guys to go out and do templates. Obviously we measured. We knew how to find a right angle. Obviously we did a lot of stick templates. That takes so much time to translate to someone else. So it just really took us to the next level. We were about as far as we could go with that. So, now it give an opportunity for the company to grow. The business owner, or in my case the business owner, was so heavily involved in all the operations. It’s helped me to try to start work on the business instead of working in the business.

I still am in the business some, but I get to work on the business so much more than I ever have. It’s worth it. It’s a scary investment. We actually bought our first CNC machine in 2009, right in the middle of this crisis. We had an opportunity. We were committed, and that’s when we bought our first CNC machine. It’s definitely paid off.

Patrick: That’s cool. One thing about inventory in particular…obviously I’m happy to talk to you or your guys to get into it further, but of all the things in our software, and I think this goes for other packages as well, there’s no value to an inventory system that’s 95% correct. You’ve got to make the commitment to go all the way and keep it 100% correct or else it’s just…you don’t trust it. People just end up walking out and seeing what they have again. A lot of things, most sales things, most scheduling things you can fudge a little bit and it’s fine, but inventory especially, you have to get that trust that what I have in my system matches what I have in the yard.

Brian: Well you have to.

Patrick: And that’s a challenge.

Brian: You hit the nail on the head, and like I said earlier, you have to be committed to do it. It takes…some people grasp that very quickly. Others will fight it, until you have to find a way to convince them that this is the way we’re going to do it. Patience is important. Sometimes you have to have a heavy hand. This is the way we’re going to do it. I need you to be on board. If you do a good job at selling it and basically tell people, “Look, this will probably be a little bit painful, at first. It’s probably going to be a little bit harder than what you’re doing now, but I promise you that it will be short-lived, and it will pay off in the end. And ultimately it will make your job a little bit easier and ultimately help you be more successful. You’re more successful. The company’s more successful. It’s a win-win for everybody.”

Patrick: That’s cool. One tactical thing, I noticed you had a mix of the LT55 and the 2D, 3D templaters from Laser Products. If you had to start over would you only get one or the other? Or do you like having a mix of both of those?

Brian: Well obviously the 2D, 3D is, I think, an unbelievable piece of technology. We’re actually in the process of purchasing two more of those.

Patrick: So you are going in that direction. It is…

Brian: Well, again, it’s still the same company, the same technology, but just the way to capture the data is easier.

Patrick: Interesting.

Brian: There’s so many more things you can do with that rather than just being on that 2D plane with the LT55. And LT55’s a great tool. We’ve been very successful with that, but I’m glad they came up with this new design. And it actually helps speed us up a little bit, information’s a little more accurate. So it’s worth it.

Patrick: Nice. And I actually saw that you have a mix of digital saws and CNCs from different manufacturers. Does that cause any problems having to get maintenance from different sources? Or is it not a big deal having something from Park, something from Breton, etc?

Brian: Well, traditionally, we were a Park shop. We still love their machinery. We still have several pieces from them. Actually looking at a new piece from them right now. I was shocked that I bought the Breton machine…but don’t regret it what so ever. It’s a great machine. I was going to buy a Park and a CNC, but at the last minute we ended up buying a Breton, and we love it. There is a challenge sometimes with the maintenance side of things. They do a pretty good job there at their department, but they, like any company, have their struggles.

Once we figured out the best way to communicate with them, it’s a non-issue. They’ve been very helpful to us, a little bit of a learning curve at first, to get past the communication barrier. Not necessarily the language, just how to communicate with them and them also trying to understand our southern slang [laughter]. But it worked great, and I have another saw from another manufacturer. He was actually in my office right before your call talking about a few things we’ve got going. So I really don’t have a problem mixing the machines because it….very specific with what we were looking for and we got what we were looking for.

Patrick: That’s cool.

Brian: So I think that sometimes a manufacturer can’t offer everything that a fabricator needs. That’s not for everybody, but that’s worked well for us.

Patrick: Well, good. Glad to hear that. So, parting thoughts? Anything you want to share with other fabricators out there? Any wisdom, any questions that you are chewing on…wish you knew the answer to?

Brian: Well, I definitely don’t know all the answers. I’m far from it. I think that something that I have learned or trying to still learn through the years is just to…I really soak up what other people tell me. Some people like to brag, or whatever you want to call that. But I got a lot of information from just listening to others. And that, I think, has helped me more than anything is listening to my peers, listening to these podcasts that you’re doing.

Patrick: Great. Thank you.

Brian: Love to hear other people’s insight and to have an open mind about things. And that’s helped me probably the most. So if I had any advice for anybody, in this business or not, is just to have an open mind and talk to people. And you can just learn so much from them. I love to listen to people talk. This is really not my thing, I usually don’t like to talk a lot, but that’s probably what I would say.

Patrick: Well thank you for stretching beyond your comfort zone and talking to us here because you have a lot to offer too. And I really enjoyed chatting with and I’m sure other people will as well. So, thank you.

Brian: Thanks Patrick.

Patrick: Thanks for listening to Stone Talk, 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 Stone Talk Facebook page to join in the conversation and follow @stonetalkshow on Twitter. Stone Talk is brought to you by Moraware, makers of JobTracker 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 Stone Talk.