Blog: Stone Fabrication Software and Business Articles

The Silver Lining of a Slow Season

No one is hoping to get their countertops installed New Years Eve, let’s face it. So, you’ve probably got a few weeks this month of downtime. You could browse the internet for the 100th time out of boredom or you could use these tips to gear up for a successful 2019!

Make Improvements to Your Current Process

Whether you are using CounterGo, Systemize, or other software to run your shop smoothly and efficiently, this is a great time to take a look and see what can be improved in your system. Making time to audit your process and learn your software thoroughly is hard to do when business is booming. Use this downtime to do some fine-tuning and get the most for your money!

Scheduling a call with us is a free and helpful way to see where improvements can be made in your current way of using Moraware. Want to make your forms cleaner or customize your quotes? Or maybe you’ve been wondering about upgrading from JobTracker to Systemize. Go ahead, give us a call – we really love being able to help!

The best part about doing this? You’ll be ready to go when things get busier!

Explore New Technology

We might be a little biased as a software company, but using some downtime to find new technology to help you run your business better sounds like the most fun! Technology is always evolving and improving, just like your shop. Keeping up with new trends will only benefit you. Just make sure to use your metrics to gauge how successful each is for you.

One emerging software that we’ve been watching this year is SpeedLabel. Working beautifully with our software, SpeedLabel is a great next step to becoming a paperless shop. Sounds like a pretty sweet New Year’s resolution!

Make Room for New Jobs

While you’ve got the extra time to get organized, it might be helpful to clear up some space in your shop for all those new jobs you’re planning on in the new year. Start listing your remnants on RemnantSwap, a free marketplace to buy and sell remnants with fabricators near you. 

Even if you don’t sell them immediately, at least you’ve started the process and done the hardest part – sat down and created the listings. 

And Most Importantly…

Enjoy your holidays and extra free time with your family and friends. We can’t wait to see what accomplish in the new year!

Fabricator Profile: Granite Perfection

 

Written by: Kristina

As newbie in this industry it is hard to fully understand all that encompasses fabricating countertops. When you see beautiful counters, you don’t think about the countless hours of work that goes into providing the perfect top you see everyday.

After visiting Granite Perfection I came to realize that the hustle is real in this industry and I was blown away at the quality work this shop sends out every single day. Thank you to David for showing us around your shop and providing a newbie with a new set of eyes to the industry.

Hard Work and Dedication

Upon walking into the shop we were quickly greeted by a furry face named Ginger. After giving her some pets, we were able to do a tour with David where he showed us around the shop and shared with us how long he has been in the business. I was blown away at the business David has continued to build tirelessly for 10+ years.

He started as an install helper with other top shops in the area and then quickly moved his way up to perfecting installation and fabrication. From there, it lit a spark for him to start his own business where he would wake up at 5:00 am and grind until 12:00 am in order to get the job done. He had one machine during that time in which he still has in his shop today.

Now Granite Perfection has a team dedicated in continuing that hard work and providing quality countertops all throughout Reno/Tahoe and surrounding areas both in the commercial and homeowner space.

Quoting Customers Way Faster

It was awesome to hear how much CounterGo has helped improved their quoting process and just the simple fact that they can quote customers way faster than before. Previous quotes used to take hours and maybe even a day to quote, whereas now, they are able to quote upwards of 20 jobs of a day. Being able to see the impact that we bring to businesses in this industry makes me so proud to be apart of this team at Moraware.

Visiting this shop was awesome and I am inspired by the work ethic and quality counters that come out everyday. Thanks again to Granite Perfection for letting us visit your shop!

Getting Involved in the Stone Industry Community

If you’ve ever needed an answer to a question or were looking for advice on a certain fabrication problem, you’ve most likely found the various resources out there for fabricators. Aren’t they great?

But, if you haven’t explored any of these yet – don’t feel left out! In this post, we’re going to dive into what those resources are, why they’re a great addition to the community, and why it’s so important for you to get involved.

Am I the only one who’s experienced this?

No way! If you’re facing some sort of challenge, it’s almost a guarantee that your peers have gone through the same thing at some point. Whether it’s a bottleneck in the installation process or the labor shortage struggle, we’re all in this together. Check out the Stone Fabricator’s Alliance where industry professionals like yourself come together to “learn, share, prosper.”

Why take the time out of an already jam packed schedule to participate?

Searching through the public forums, you’ll see a variety of helpful discussions and have access to insightful ideas to implement in your own business. Becoming a member also enables you to educate others with your experience which produces a strong sense of community among fabricators. One of the best ways to describe this comes from the SFA site itself, “We will strive to perfect our craft by continuing education and developing our individual skills, always sharing the experience.” In these forums, you’ll gain insight from your fellow fabricators and contribute to the movement by sharing what you’ve learned in your own journey.

Is it true that we can always be improving?

Can’t say absolutely loud enough. Want to improve your profitability? Or some part of your shop’s process? Employee retention? The use of technology? These topics and many more are part of various industry educational events that happen throughout the year every year.

The Natural Stone Institute and Stone World Magazine are two industry giants that have come together to create the Stone Industry Education series. With 10 events next year in cities across America, the series brings together a whole network of fabricators, installers, and distributors in the stone industry. A variety of topics ranging from financial benchmarking to management tips are covered by industry leaders at these educational summits.

Another series that we love going to is the Park Industries’ Digital Stone Expos. You’ll learn about digital fabrication but you’ll also get some fascinating shop tours where you’ll see firsthand how a fabricator runs his shop and get some great ideas. Many of the speakers will cover important industry trends and business practices like tracking metrics. Overall, these events are highly educational for anyone in the industry whether or not you work in a digital shop.

We can’t forget to mention the big industry trade shows like Coverings and The International Surface Event. These are great events to network with other fabricators and industry experts while learning all the latest trends.

And it’s worth taking off time from the shop?

If you’re learning something new that will only make your role or the shop better, then consider it an investment. You might be busier when you get back to work, but you’ll have fresh new ideas to implement that will create better success – whatever that may look like for you.

Does Moraware get involved?

We sure do! We’re looking forward to attending many of the events next year, participating more in the SFA, and continuing our relationships with industry leaders like Countertop Resources, International Surface Fabricators Association, and many more. If you see us at the events, say hi – we’re friendly, I promise!

Really, we speak with fabricators so often and our entire purpose is to help them run their business better. And we’re proud of our customers! Our goal is to showcase these journeys and share them with the stone community as much as possible. Whether it’s a StoneTalk interview, a Good to Great video, or a Q&A – we’re looking to showcase as many awesome fabricators as possible and be another resource for this industry.

Interested in sharing more in the community? I love to chat – probably too much – so please feel free to reach out because I’d love to get to know you and what makes your shop great!

Say Hello to Kristina!

Hi Everybody!

My name is Kristina Garcia and I am so excited to be apart of the Moraware team. The team has welcomed me with open arms and I am truly blessed to be here. Their commitment to providing the best possible product and service is why I love this place.

In my career I have worked in many different areas ranging from customer service, tutoring, case management, and various leadership roles. All of which have had the same component which is guiding and helping people better their businesses or lives anyway I can. With my servant mindset, I plan to continue helping people to the best of my ability because it brings me so much happiness.

I currently reside in Reno, NV with my husband and two big dogs. I was born and raised in Reno and truly love all that it has to offer, such as the great outdoors, mountains as far as I can see and Lake Tahoe to explore in the summertime. In my freetime, you can find me playing with flowers and creating unique arrangements for weddings and friends, hanging out with my husband and two dogs, reading and manifesting my best life.

I cannot wait to meet each of you over the phone, and if you ever have questions about how to keep cut hydrangeas alive, I am your gal!

 

  

Look Ahead with Throughput Accounting…and leave job costing behind

Written by Patrick Foley and Kathleen Teodoro for medium.com

Basic Accounting Principles

The main goal of a business is to make money. Obviously. But how do you know when you’re achieving that goal?

You make money by charging your customers more than your overall expenses — the difference between your Sales revenue ($Sales) and your costs (otherwise known as Expenses or $E) is your Net Profit ($NP). So if last year you brought in $1,000,000 in revenue with overall costs of $900,000, then you made $100,000 in profit (1,000,000–900,000). Simple.

Calculating Profit
Simple Example of Calculating Profit

 

To make more money, you can either increase your sales, decrease your expenses, or both.

An Example Countertop Fabricator

At the end of any month, it’s easy to tell if you succeeded. Let’s say you sold 10 kitchens last month for a total of $50,000 in revenue. You have $10,000/month in fixed expenses like rent, equipment payments, salaries, etc. (otherwise known as Operating Expenses or $OE). You also spent $30,000 on things like slabs, commissions, hourly labor, etc. (Truly Variable Expenses or $TVE) to deliver those kitchens, leaving you with $10,000 in profit (and a robust 20% profit margin). It’s common to separate fixed and variable expenses.

Calculating Profit (with separate $TVE and $OE)
Typical Month for Example Business (10 kitchens)

 

You probably already have a report or a spreadsheet that shows you these numbers on a monthly basis. If the numbers keep trending up, it’s confirmation that your business is growing.

Job Costing

But a monthly report inherently looks backwards. What if you want to make more money this month? What do you focus on?

Selling another job is what makes the most impact on your business day-to-day, so instead of looking at your business numbers for the whole month, it would be nice to look at the same numbers on a per-job basis. The goal is to estimate the impact of each additional job on your business as it comes in.

To get per-job averages for the example month described above, simply divide the totals by the number of kitchens. Your average kitchen last month was a $5,000 job that consumed $3,000 in variable expenses, accounted for $1,000 of your fixed expenses and $1,000 of your profits.

Per-job Averages for Example Business (10 kitchens)

 

This average is useful as a starting point, but it has its limits. What if you sold 11 “typical” kitchens instead of 10?

Your revenue would be $55,000 and your variable expenses $33,000 — but your fixed expenses are still $10,000, so your profit would be $12,000 (and your profit margin would improve to 21.8%).

Better Month for Example Business (11 kitchens)

 

Clearly selling “one more kitchen” each month causes good things to happen for your business, but it’s a little confusing to see how the averages themselves have changed. If you sold 10 “typical” kitchens, you’d average $1,000 in profit per job. But sell 11 kitchens instead and your average profit increases to $1,091 per job.

Per-job Averages / Better Month (11 kitchens)

 

Note the change in the average $OE and $NP when you calculate them based on 1/11 of the monthly total instead of 1/10.

As you can see, thinking about profit for an individual job is problematic, because you can’t know what portion of your fixed operating expenses should be allocated to each job until you know how many jobs you have! When you’re looking at an individual job (before or after the sale), it’s far more useful to think about throughput instead of profit.

Basic Throughput Accounting

We learned about throughput accounting from Ed Hill of Synchronous Solutions … Patrick even interviewed him for StoneTalk. (You can find that interview and many more at StoneTalk.org).

Throughput ($T) is calculated by subtracting your Truly Variable Expenses ($TVE) from your sales.

Calculating Throughput

 

Truly Variable Expenses are the things that you wouldn’t consume (or pay for) if you didn’t make the sale, including raw materials, commissions, outsourcing, etc. It doesn’t include fixed expenses like rent, insurance, salaried labor, etc.

Determining exactly what to include in Truly Variable Expenses ($TVE) vs fixed Operating Expenses ($OE) is actually trickier than it sounds, but here’s one way to look at it: If you shut down your business for a month and didn’t sell or fabricate a single countertop, the amount of money you’d have to pay out anyway (for leases, salaries, etc.) — that money adds up to your $OE. Everything else is part of $TVE and can be calculated (or at least estimated) on a per-job basis.

Now let’s look at those averages again. The typical kitchen is still a $5,000 sale. Truly Variable Expenses are $3,000 per job, which makes Throughput $2,000.

Throughput for a Typical Kitchen in our Example Business

 

That’s it. Fixed expenses — and therefore profit — are simply ignored when looking at an individual job. Instead, you look at fixed expenses and profit over some period of time (typically, monthly or yearly). You can even use throughput to calculate your profit for a period of time.

Calculating Profit from Throughput

Looking at the Impact of One More Sale

Throughput for a single job doesn’t change when you sell another job. In this example, a $2,000-throughput kitchen is a $2,000-throughput kitchen no matter how many you sell.

Again compare a 10-kitchen month to an 11-kitchen month, but this time using throughput. Ten typical kitchens would bring $20,000 in throughput (10 x $2,000), making it easy to calculate your profit.

Profit from Throughput (10 typical kitchens)

 

Eleven typical kitchens would bring $22,000 in throughput (11 x $2,000). See how much cleaner and easier this is?

Profit from Throughput (11 typical kitchens)

We can even compare various scenarios in a table, though our example gets a bit exaggerated. After all, it’s not likely that the throughput for each of your jobs is identical — but even if you used separate $T values for each row below (perhaps for your actual jobs, ordered by sales date), the results are still simple and meaningful … and note that $Sales and $TVE aren’t even needed here (in a real planning spreadsheet, I’d probably get rid of the $OE column as well and just reference a single, fixed cell for it).

WHAT IF: Impact of Selling More “Typical” Kitchens in a Month

 

Throughput makes it easier to evaluate the past and ask questions about the future! With throughput accounting you can ask questions like “what happens if I sell that 11th kitchen?” In this example, the throughput for your 11th kitchen is $2,000, and your profit for the month also increased by $2,000 because you’ve already covered your fixed expenses for the month.

This provides a useful and intuitive way to think about your business: You need a certain amount of throughput each month to cover your fixed operating expenses (this is often called the breakeven point, and it’s exactly the same as your $OE). After that, all additional Throughput will flow to your bottom line as profit for the month.

In this example, if you only sell 4 typical kitchens in a month, you’ll actually lose money, because your throughput ($8,000) is less than your operating expenses ($10,000). If you sell 5 kitchens, you’ll break even ($10,000 in $T, same as $OE). Sell 6 kitchens, and you’ll make $2,000 in profit — the $2,000 in throughput from that 6th kitchen is profit. 7 kitchens, and you’ll make $4,000. 8 kitchens, $6,000. Each additional kitchen you sell will increase your monthly profit by the throughput for that kitchen.

Profit is only true looking backward over a period of time (you typically look at this in your accounting system). Throughput lets you look ahead and focus on the part of your business you can actually impact each day. It doesn’t really make sense to say “we need to make more profit today” but it makes a lot of sense to say “we need to bring in more throughput today.” That’s a good rallying cry in fact.

Comparing the Impact of Different Jobs

Of course, not all your kitchens are typical, and throughput lets you compare the true business impact of different jobs.

Let’s say you sell a big, $25,000 job — but the material is so expensive that your truly variable expenses are $20,000, so your throughput is only $5,000. You also sell 5 “boring” Ubatuba jobs at $5,000 each, and the throughput for each is $2,000 for a total of $10,000 across those 5 jobs.

Comparing Different Jobs using Throughput

 

Throughput helps uncover the true business value of each job. The exotic job and the 5 boring jobs are both worth $25,000 in revenue, but the 5 boring jobs bring in twice as much throughput, collectively. In this situation, it makes good sense to focus on selling more boring jobs or to revisit your pricing structure so you charge more for exotic materials.

Next Steps

To get started with throughput, you can create a simple spreadsheet and pull numbers from your accounting system to calculate averages — but pretty quickly, you’ll find that we’ve been oversimplifying things a bit here.

There’s still a fair amount of guessing and averaging involved to arrive at your truly variable expenses. So throughput is only an estimate when you project forward, because you don’t know exactly how many jobs will require repairs, which slabs are going to break, etc.

Even so, thinking in terms of throughput for each potential sale is a big improvement over thinking in terms of profit. Start with your best guesses for material costs, hourly labor, and other truly variable expenses and refine as you learn more. Even with these guesses, calculating throughput will help you evaluate the real impact of each sale and learn which types of jobs are better for your business.

As you do this, you’ll soon discover that you need more information to make better estimates — perhaps the number of kitchens you fabricate or the amount of square feet. In a future article, we’ll talk about why those numbers are important, how to track them, and how to use them for forecasting and capacity planning.

In the meantime, if you want to learn more about throughput accounting, we strongly recommend reading The Goal by Eli Goldratt. If you want help applying it to your business, consider contacting Ed Hill at Synchronous Solutions.

How much does countertop software cost?

What a reasonable question to ask! This should definitely be your second or third question when researching countertop software. After learning what software can best help your business grow and run successfully, it’s a natural step to understand the cost and effort it would be for your shop. And most importantly, is it worth it?

The simple answer to this question is that it depends on what you are looking to do. What are your goals that software can help you accomplish? You may be a small shop who wants to be able to quote faster. Or you might be a larger shop who needs help streamlining your process from as simple as scheduling to as complex and detailed as sharing info with your installers in the field.

Pricing Examples

There are many different products available for your shop. Depending on what solutions you are looking for and the number of users, the cost will vary. And while there are other options for the same services we offer, we’re happy to share our pricing and give you an idea of what the cost could be for a some of the results our customers see.

If your pain point in your shop is an inconsistency in pricing or the need to create quicker and more professional quotes, then your best bet is to get a countertop quoting software. Our product, CounterGo, runs at $50 per user per month.

If your pain points include tasks falling through the cracks, a lack of communication and bottlenecks in your install process, then you need a job scheduling software. We offer our product, Systemize, at a monthly rate of $300 for the first 5 users. Each user after that is an additional $20.

Is it worth it?

When determining the worth of any software, there are certain questions to consider and maybe even a little bit of math. No algebra necessary, don’t worry!

Here are a few examples of what we know our customers find helpful in determining worth:

If things are falling through the cracks like installing the wrong sink or even the dreaded double install, how much are these mistakes costing your business? If they are avoided by using a job tracking software, would you consider that savings to be worth the monthly payment?

Your losing jobs to your competitors who are able to provide informative quotes quicker than you. Are you losing more money by missing those opportunities than you would by investing in quoting software?

Another thing to consider is that by using the right technology for your shop, you’ll streamline your shop’s processes. This will also lead to more jobs and happier customers. You know what happy customers do? They refer you and increase your revenue, hooray!

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