Any professional fabricators that manage to keep a business profitable in the long term learn a lot along the way about what works (and what doesn't). For anyone wondering what it takes to make it as a stonemason, we got the inside scoop from a couple of artisans that double as skilled businessmen. They shared five main components that help them achieve continued success.
The Right Stone Cutting Equipment
You don't have to have fancy stone cutting equipment to be a professional fabricator, but boy does it help. Both Billy Patrick of Billy Patrick Construction LLC and Ruben Nunez of Travertine Artisans were clear on how big of a difference the right equipment can make to doing business.
Ruben has invested in a number of important equipment items, including a bridge saw, an in line polishing machine, and a forklift. While these items can be expensive, Ruben is quick to credit them with helping his business thrive. "You become more efficient with equipment." he explains. "You become less reliant on people who, at the end of the day, are your biggest expense and your biggest problems."
And that efficiency pays off. Ruben says with the right equipment, he now completes jobs at more than double the speed with half as many people and is confident the work he does is better. With more efficiency and lower costs, his equipment makes him around 200% more profitable.
Billy's experience is similar. He invested in a Maya bridge stone and now says where he used to do one job a day with two people helping out, he can now complete three in the same amount of time with just one person. His only regret is not splurging for the more expensive bridge saw from Park Industries, even though it would have cost $30,000 more "Even though they had the same reviews, I've had nothing but problems with the one I bought."
The lesson here is that the right equipment can pay for itself many times over and, if anything, spending more in this category is better than pinching pennies.
The Right Tile and Stone Materials
Part of the service you provide as a professional fabricator is your expertise in finding beautiful, high-quality stone and tile for your customers. Both Ruben and Billy supply the stone they cut for their customers. Finding the best stone to offer is a big part of the job and a way to differentiate yourself from competitors.
Each of them have specialties in the type of stone they work with. Ruben primarily focuses on quartz from China and also buys granite from Brazil. Billy specializes in granites from Brazil and also sells marbles from Italy and Madagascar. Both of them have relationships with multiple U.S.-based slab dealers that source high-quality stone from other countries and sell exclusively to fabricators - meaning they have access to materials clients couldn't get on their own.
Buying stone materials from slab yards is the most common option for professional fabricators, but Billy goes one step further and also flies down to Brazil to get stone directly from the source. He has a relationship with a Consentino, a company that has a Brazilian quarry there. Once a year, they fly him down and he's able to handpick exclusive granites. Because he buys 100-200 slabs at a time during each trip, he gets a better deal on the stone per square foot than he does from local slab dealers. And he can pick granites that he knows the company won't be sending to other slab depots in the area, "so I'll be the only company on the East coast that has that product."
While this kind of exclusive relationship isn't necessary to be successful as a fabricator, anything that sets you apart from competitors gives you an extra edge and that definitely doesn't hurt.
As with stone cutting equipment, both contractors were clear that having plenty of stone in stock is something worth spending some real money on to keep your business competitive. Ruben mentioned have about $300,000 worth of slabs in stock and still feeling like it would be better for his business to have more. This is one more area where anyone hoping to work as a professional fabricator should expect to spend money to make money.
The Right Workers
A successful stone cutting business can't run on the back of one man alone. Both Ruben and Billy have employees to help with the work of both the stone cutting and the other aspects of running the business. Ruben has six employees. Billy has eight. But finding good people can be tricky and, as any business owner knows, labor is one of the biggest ongoing costs every business must face.
And anytime you're saddled with workers that aren't reliable, that can cost you as well. As Ruben so clearly expressed above, when you run a business, people can be your biggest problem. The more dependent you are on employees to get work done, the more you have to deal with jobs being affected by people showing up late, coming to work hungover, or demanding more money at times your budget doesn't allow it.
Nonetheless, you need to be able to find good employees who can do the work they're responsible for, and you need to be able to keep them once you find them. Once again, that means having enough money on hand every month to cover payroll. Even if you make investments in equipment that reduces how many employees you need, you have to be able to consistently pay the workers still required to keep your business running and efficient.
The Right Customer Generation Strategy
No business can get far without customers. You have to figure out a way to get the word out about your business so that people will hire you. There's no one right strategy here though - different professional fabricators will find success with different tactics.
Most of Ruben's marketing budget goes toward social media ads. He doesn't bother at all with print, TV, or radio advertising. Facebook, Instagram, and Craigslist have been some of the best channels for bringing in new business. He also has a relationship with Costco. The company sells quartz and hires him to do the cutting and installation any time a customer buys quarts through them.
At this point though, a good amount of his business comes from customer referrals or repeat customers who were so impressed the first time they hired him. Once your business is established and you've done a number of jobs successfully, customers start to find you.
Billy's reached that point in his business as well, with 70-80% of his customers coming from word-of-mouth recommendations. But he also generates new business with newspaper ads, TV commercials, and some advertising on Facebook and Google AdWords.
This is another big budget line item for running a business. Billy says he spends on average around $35,000 a year on marketing expenses - and that's with a well-established business that already gets a lot of customers from referrals. Anyone starting out will have more of an uphill battle for getting the brand awareness needed to start getting regular work and may need to invest more in marketing and customer generation.
The Right Financing
One thing that becomes clear after hearing from fabricators about the job is that it takes money to make money. That's true in most types of businesses, but in a trade that requires expensive equipment and high-quality materials on top of the typical business costs associated with employees and marketing, the need for access to sizeable amounts of cash to keep the business successful is that much more important.
Both Ruben and Billy talked about the role financing played in getting their business to the point it's at now. Both of them used equipment loans to finance the bridge saws and other high-cost equipment items that enabled them to cut labor costs and speed up the rate of getting through projects.
Ruben also uses working capital to buy stone slabs, pay wages, and cover expenses. Having access to extra cash makes it that much easier to keep things running and make the investments that help him to take on more work when it comes his way.
Professional fabricators have access to four main types of financing that can make a big difference in business.
- Working capital loans - These loans provide business owners with a lump of cash they can put toward all the day-to-day expenses of running a business.
- Equipment loans - These are often easy to qualify for, since lenders know that you're putting the money toward something that will make you money. You can use them for tools that make your job easier and save you money.
- Factoring - If you ever find yourself waiting on clients to pay outstanding invoices, you can use invoice factoring to get the money you're owed in hand faster and then pay the lender back (plus a fee) once your client payments come through
- Line of credit - A line of credit is useful for all those day-to-expenses you'll face to keep your business going: the stone slabs you keep in stock, the marketing expenses you incur, and any supplies you buy to get your jobs done. A line of credit essentially works like a credit card, but with longer repayment terms and lower interest rates.
You may be able to get some of the financing you need from traditional banks, but expect to wait a while to actually see the money if you do. Billy looked into financing from a traditional bank when starting the process of getting an equipment loan, but says they took way too long. He knew the equipment he wanted and was ready to make a purchase right away.
Working-Capital.com provides lender reviews and access to a marketplace of over 75 small business lenders that can provide all four types of financing and can get fabricators like Billy and Ruben approved within a day. When the money you're borrowing leads directly to more efficiency, bigger savings, and higher profits, every day you wait is money lost. Professional fabricators that know the importance of making the right spending choices to build and grow the business know that access to capital is crucial for long-term success.
Whether you're starting a new stone cutting business or looking to grow the one you have, APPLY NOW to see how we can help you out.