Moraware is sponsoring the Stone World and Marble Institute Stone Industry Education seminar series this year. The seminar on March 22nd in Charlotte, NC kicked off the season.
This event was held at American Granite. GK Naquin of Stone Interiors in Loxley, AL and former MIA president was the speaker in the morning. In the afternoon the conversation turned into a “fabricator forum” and local fabricators shared tips from their businesses.
The topics for this seminar were picked by the countertop fabricators in the audience. The most popular topics were focusing on efficiency, motivating employees, and countertop trends.
Best practices for becoming efficient and profitable
The bulk of the morning revolved around the financial metrics that drive a countertop shop. A big part of this comes down to the costs associated with the business. There are a few ways of looking at the cost, but it sounded like the overall labor cost, including templating, fabrication, and installation was around $20/sq.ft. GK was very specific about the costs in his shop, with the bulk of the labor cost being in installation.
Based on the conversation between shop owners, the average overhead cost, including the administrative staff was about 30% of revenue.
And one of the most important ways to reduce cost is by focusing on reducing the amount of rework, with most fabricators having a goal of less than 5% rework.
The best way to reduce the overall cost is first to measure it.
Ways to motivate and compensate employees
Several of the fabrication companies at the seminar have experimented with several ways to motivate both their salaried and hourly employees. Some are doing profit sharing plans on a monthly or quarterly basis.
Another innovative approach is paying the workers in the shop based on jobs in addition to an hourly rate. The way it works at Stone Interiors, is that the fabricators are given an hourly rate and a rate per job, and are paid the higher of the two rates.
That way, the very motivated employees have a way to drastically increase their pay. The system generates more focus on productivity and every employee has a much stronger incentive to reduce the number of mistakes in the entire process. For GK’s shop, this reduced rework rates from about 22% in 2005, to significantly less than 5% today.
Installers can also be paid using a similar model, again in the case of Stone Interiors, this means that the installers have a sq. ft. target every day, and once they exceed their goals they’re paid a bonus. There are also bonuses for handling large stone pieces, like a large island over 28 sq. ft., for example.
Trends in the countertop industry
Although over 60% of countertop fabricators are doing 1-2 kitchens per day, there’s a trend that the largest fabricators are getting larger. This seems to be happening because of increasingly larger coverage areas with big-box stores or having multiple showrooms and shops in one or more metro areas. It seems like the reason this is possible is because of more automation in the shop with CNC saws, water jets, and routers.
And of course, scaling this way isn’t possible without automation in the office with job management and scheduling software, too. I was surprised that everyone at the seminar was growing right now, and even companies that hadn’t needed software as recently as 6 months ago were starting to experience the pains associated with using whiteboards, file folders, and spreadsheets.
In terms of material trends, it seems that marble is very hot right now. The salespeople in attendance said there’s huge demand for marble, and they’re able to charge a premium for marble surfaces. There’s also more interest in travertine, limestone, and onyx than in the past.
Mitered edges are also becoming increasingly popular with homeowners. A few shops offer 3” mitered edges as part of their standard repertoire based on demand from the high-end designers among their customers. Some are even adding 6” edges as part of their design options.
It was great to see a full room of countertop fabricators who’re interested in managing their businesses better and share their knowledge with each other to bring up the overall level of quality and professionalism in the industry. We’re really happy that we could help make it happen. The next seminar in the series is in Chicago, April 5th.
Want to know more? At Moraware, we make software for countertop fabricators. CounterGo lets you draw, estimate, and layout countertops in just minutes. JobTracker is scheduling software that helps you eliminate the time you waste looking for job folders. RemnantSwap is a free place to buy and sell stone remnants with fabricators near you.