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After turning away potential customers who enter your showroom asking for natural stone or quartz countertops, you've decided to take the plunge. You have made the decision to start offering these materials and have decided to evolve your business from a solid surface fabricator to the premier countertop supplier in your market.
So, where do you start? First, take pride and comfort in the fact that you already have several advantages over someone who is looking to start a stone or quartz shop from scratch. You understand the countertop business and the challenges that can arise as well as how to interact with a variety of customer types including suppliers, contractors and homeowners. You also know how to run a successful, profitable business and even though fabricating stone or quartz is different than solid surface, it is still a countertop.
There are three basic options to consider in diversifying your business — all of which have their advantages and disadvantages. One option is to sell the natural stone or quartz countertop and outsource the templating, fabrication and installation. There is very minimal capital required, which makes this the low risk way to "test the waters" of your market. One of the major disadvantages to this option is that you are relying on others and don't have control over the quality and time. Your reputation may be on the line if the outsourcing business doesn't deliver the quality and can't meet the timelines you agreed to and that your customers expect.
A second option is to sell, template and install, and then outsource the actual fabrication. Minimal capital is required and you now have control of the servicing aspect of the business. Some of the disadvantages include potential warranty issues between you and your fabricator (does the issue stem from fabrication or installation); another is balancing the definition of "quality" between you and your fabricator.
The final option is to sell, template, fabricate and install. You now have complete control of the entire process and have the best opportunity to maximize your profits. In this option there are upfront investments in regard to building, machinery and staff. Some of the disadvantages can be the time it takes to enter the market with your new offering as well as capacity balancing. Do you have the financial resources to construct and equip your shop to match your anticipated volume?
As you view these options keep in mind you are not forced to pick and live with one forever. Many people start at the selling stage and advance as the business or demand builds. Some of the many advantages and disadvantages to each diversification option are shown in Figure 1 (click to see the full-size chart). Many people find that by starting at the selling stage and advancing through the steps they are able to maximize the advantages and minimize the disadvantages.
If you have decided to fabricate in-house, here are a few points to consider. Before you make any machinery purchases, it is important to understand the market you are servicing — inside and out. What are your competitors offering? Is there more demand for high-end custom work or more opportunities to fill the track home niche? A thorough market analysis will be worth the time and money spent. Too often, people dive into the industry because it's a "hot" business, but a lot of time and resources are needed to get into the business. Make sure you do your homework.
Once the market analysis is complete and you are confident you are making the correct move, it's time to start looking at adding on or building a new facility. Before you start your building renovations or break ground, it's important that you have a clear understanding of what your equipment needs will be, based upon the market niche that you are targeting. A reputable equipment supplier should be able to help you with the correct equipment mix for your specific situation. It should also be able to provide you with payback analysis of each machine to make sure each piece of equipment is going to pay for itself in terms of labor and time savings, as well as making sure the equipment mix will align with your quality objectives.
Figure 2 (click to see the full-size chart) is a generalization of the equipment needs based upon your target production. Please evaluate your short-term goals without losing sight of your long-term objectives in regard to growth. It's important to outline how you will grow and plan accordingly. One of the major mistakes we see businesses do today is to only look at short-term objectives and not plan for the future.
