• Joey Marcella, Mario & Stone, Lake Liberty, WA
• Marco Duran: Atlas Marble & Granite, Springfield, NJ
• Ron Hannah, Cadenza Granite and Marble, Concord, NC
• Tony Malisani, Malisani Inc.,
Great Falls, MT
• Michael Reis, Stone World, Paramus, NJ (moderator)
We are seeing more slab shower installations, with full-sized panels of granite and marble. What’s the best way to secure those?
Malisani:That’s a cladding application, so if you’re familiar with a resource called the Marble Institute Dimensional Stone Design Manual, it will explain anchorage of full-height panels. It explains how many anchors you need to have and preferred locations. After you get past panels of 12 square feet, you’re going to use an anchoring system.
Hannah: That isn’t the type of installation where you want to cut corners. You have to sleep at night. Whether it is chemical or mechanical fasteners, it is very important that you follow the manual.
Duran: Also, you need to know your stone, and to consider if the material is fiberglass-backed.
Reis: When you’re expanding your product base like that, away from the traditional granite countertop fabrication and production, what is the learning curve? How long is it until your workers are up to speed, and you know they can do it well when their only prior experience is countertops?
Malisani:We’ve always done it, so it is a bit different for us. But we’ve seen plenty of failures [from other stoneworking shops]. It does take some time to learn, but there are resources out there to help you learn. It is a very expensive type of work to be making mistakes, especially if you’re installing ceilings, soffits and things like that.
Hannah:One of the resources that we use a lot is the Stone Fabricators Alliance. It is an organization of fabricators helping fabricators and we discuss what we do in situations like this. When you have an opportunity to quote such a job or install such a job, you can go to other fabricators and have them come to your respective town and walk you through that first job. That really cuts down on the learning curve. You watch a professional do it the right way, and then you take it from there.
So when you say anchoring system, can you describe a few of those?
Malisani:There are split-tail anchors, which involve using a slot in the material. The concept of mechanical anchoring is that there will be movement outside of the system, so you’re avoiding the sheer that would cause the material to fall off the wall.
For interior panels, the most common anchoring system would be a copper wire tie, so a hole would be set in the material, and a recess is made. The copper wire is positioned in the material so that it could not be released without something being removed, so it is held in place by the other material.
Audience Member:I am in a ski resort town, and every other job I am doing these days is a slab shower. A lot of the showers are being done in onyx, and the homeowners want it backlit. That gets very pricey; the last shower we did was $42,000. You absolutely have to do it the right way. If you don’t, it’s just a liability. That $42,000 shower could cost you your company if it goes bad.
Malisani: If it is a big enough job or an important enough job, I wouldn’t hesitate to hire an engineer. A $5,000 investment in an engineer could prove to be a very smart move depending on the job.
Hannah: Along those lines, if you feel like a job is over your head, don’t be afraid to hire an expert and subcontract it out. Don’t wing it.
We are struggling with staffing right now. Can you break down the number of employees that you have versus the size of your business?
Marcella: In 2008, before the crash, we were at 45 employees. Now we are at 25. We have a heck of a time finding quality people. We find that the work force coming up is getting younger and younger, and these kids are more tech-savvy, but they don’t want to roll up their sleeves and work hard.
We do mostly retail work and mostly residential. In 2007, our sales were over $7 million, and now we are half of that. In terms of salespeople then, we had one in the field and four in the showroom.
Duran: We are at about $2.8 to $3 million in sales, and our sales staff is composed of three individuals. In terms of our staffing, right now we are experiencing a little bit of growth within the next six months, and we have had to increase our staff. Like all of you, we scratch our heads trying to figure it out and weight whether to hire people from the industry or taking people in and training them.
We have reached out to colleges to give internships and see if people want to build a career that way. We were lucky enough to get one individudal that way, and he is doing well with us.
Altogether, we now have 22 employees, and most of them are in our shop.
Hannah:Our sales are $2 million, and we have one full-time salesperson, two administrative people who also sell out of the showroom, five in the shop, and the rest are templater/installers. One of the biggest issues we are experiencing right now is poaching of our employees as the industry starts to improve. In our area, it is known that we have the best employees, and the number one recommendation for retaining them is to keep your people happy. We’ve had people quit in the morning and then come back in the afternoon because the grass isn’t always greener. Sometimes it is okay to lose people, because then you find that they were the dead wood anyhow.
In 2008, our volume was pretty much the same as it is today, and we’re now working with half the amount of people. If you are still alive today, you’re running your business more efficiently now than you were five years ago.
Malisani:Our business is probably skewed in comparison because of the contracting work we do. We deal more with core competencies. If you ask if we’re a stone company or a terrazzo company, I would tell you that we cut, polish and shape things and make them fit. That’s what we do with tile, terrazzo or stone, and all of our employees are cross trained with the exception of my sawyer. We may do a large terrazzo project where we may pull from our stone side, but those core competencies don’t change.
As far as sales, we only have dealers, so we don’t have any salespeople. I have one person who interacts with those dealers, but he isn’t really a salesperson; he’s more of a babysitter.
Hannah: Cross training is incredibly important in your shop. You do not want to have one guy who has a monopoly on a given task because he will hold you hostage. It is always good to have two or three guys that can handle every task in your shop.
Malisani: The same goes for equipment. You don’t want only one person who can run a piece of equipment.
Marcella: One of the things that we struggle with as an industry is that if you look at pretty much every other industry, when young adults are coming up through the ranks, they are going to schools for these trades. And they’re really coming in vested in what they want to do. So when they go to work as a graphic designer or something like that, they look at it as their career. We don’t have people coming out of stone trade schools, where they are already committed to the stone industry. We are basically pulling people off the streets and hoping that they get infected with the desire to be here, and it is difficult.
Duran:That’s what inspired my idea about going out to the colleges because there is an abundance of young individuals that are about the graduate, and the market is thin for them, so it is better to have some job than nothing at all. We sift through them, and hopefully get someone that wants to start a career.
Audience Member:I think we struggle with how many people are appropriate for the different parts of our company. I think we are a little heavy in sales, and I am trying to benchmark that. We do 500 square feet a day, and we have 10 people in our shop.
Malisani: The MIA just completed a benchmarking survey that has some of that information.
Hannah: Our industry is one where it is difficult to do comparisons by square feet because the materials are so different, and so is the complexity of work, complexity of edge details and so forth. So when you are saying you have 10 people in the shop doing 500 square feet per day, there are so many things that go into that, it’s really tough to get a baseline as to whether or not your staff is operating efficiently. A large part of it is gut feel. Are your people producing efficiently on a day-to-day basis?
Malisani: What you do to track your production is probably as important as anything that any of us can say. Your metrics or statistical analysis is very important. Then the benchmarking is nice to see where you are at by comparison.
Reis: Do you measure production from station to station, so you know how much is going through the saw per hour, or through the CNC or being processed by the fabricators over a given time?
Malisani: We track overall. I used to track day to day, and I found it to be a waste of time.
Hannah: I agree. I used to track everything and every individual, and I could get no trend whatsoever. I just realized that it was a waste of time.
Duran: I have my supervisor give daily reports on how much we are cutting on the saw. I like to know how much material we cut at the end of each day and what that material was. When it comes to nesting jobs, I can figure out what took longer, and what my menu for cutting will be for the day.
Marcella: We used to track everything, and I mean everything. Over the years, we’ve changed because that exercise became counterproductive. Everyone gets obsessed with how many square feet they are doing in a day, and that helps you a little, but 500 square feet of Ubatuba is different from 500 square feet of Magma. It is a whole different animal. What’s important to us is how much money we bring in every day. It is the revenue, and that’s the main metric that we look at every day. We want to make X amount of dollars every day, and we compare it to the past.
Malisani: I would agree. You can spend time and effort — along with your employees’ efforts — tracking everything, but in the end, you have to consider what is important to your business. Like Joey, we look at our quotes and what we’re producing.
Reis:When you’re tracking overall production, how are you able to tell who is your dead wood? How do you know who is responsible for the bottlenecks?
Malisani:That can depend on any part of the day. Seriously, we’ve been doing this a long time. We are a third-generation company, so that’s something we’re used to watching. We are working on a hotel project right now, and these guys need to produce a laminated 5-cm marble ogee edge. We have to do 500 square feet per week, and I am tracking whether or not my people responsible for that work are reaching that number.
Marcella:When we evaluate one employee from the next, or who is working harder than the other one, we used to track that as well. It is so difficult for us to find quality help that we’ve abandoned that. We are having such a hard time finding quality workers that our feeling is that as long as an employee is doing a good job to his ability, we will cut them some slack. Some guys are faster than others, and we have to deal with that. You can figure out when someone is milking it, and you have to let those ones go. I have slow guys and fast guys, but all of them are good.
One of the challenges that we have is customer awareness and when they have unrealistic expectations when it comes to natural stone. How do you handle that?
Hannah: I think you said it right with the term “unrealistic expectations,” and it is the responsibility of your showroom and sales crew to educate the client. We are dealing with a more educated customer today than we were five years ago, but that being said, your salespeople cannot create an unrealistic expectation. If they are saying to the customer that they will see an absolutely glass-like surface with Delicatus, they’ve just sunk your ship. You have to set the expectation, and if the customer is unhappy with that expectation, then maybe they’re not for you.
Malisani: We use the Countertop Design Manual from the MIA as a basis. It shows tolerances for jointed surfaces and things like that. I don’t try and promise to match anyone else’s seam, but I do work to those guidelines. We are an MIA-Accredited company, so if we don’t meet those guidelines, there are repercussions. We promote that in our marketing, but it doesn’t have to be absolutely perfect.
Commercially, it is a different situation. We’ve done mock-ups and other due diligence.
But we’re dealer based, and it is not our salespeople that are face to face with the homeowner.
Malisani:I would honestly give each and every one of your dealers the Countertop Design Manual because in the end, the homeowner wants the job done well. Their ignorance isn’t their fault; it’s just that they haven’t been given the opportunity to review the right information. You have to be able to say, “That’s not what you’re going to expect from this particular material.”
Marcella: I feel your pain. We dealt with Home Depot for 12 years. They sold the countertop, and we got the ramifications of it.
Hannah: We also worked with a Big Box store for many years, and I was amazed at some of the call-backs. Some of the seams would be the width of a human hair, with the grain matching perfectly, but the customer is saying, “Well the salesperson said it would be invisible.”
Reis: How do you handle call-backs? How soon do you get out there? Where do you draw the line when someone is being irrational, but you know that if you don’t do something, you will have an unsatisfied customer that might go on Yelp or Facebook and say how terrible you are?
Hannah: It really depends on what the issue is. If it is Christmas Eve, and the sink has fallen out with a turkey in it, you get out there immediately. We try and ascertain what is an “emergency.” Very few people die from a bad seam.
One of the call-backs we see often is from new construction, where a year later the cabinets shift, and the seam lets go. It is a good call-back because the stone didn’t break. The seam was engineered to let go first, so the next time we are in that neighborhood, we will swing by and fix the seam.
We let the Big Box work go because that work represented 43% of our volume and 85% of our call-backs. In most of those cases, the customer was playing the game of trying to get a break on the price or not pay at all. Now that we’re back to self-driven retail, we get very few call-backs.
There are negative call-backs like bad fabrication or a bad install, but there are also positive call-backs, like them needing an additional faucet hole that you can charge for. Maybe they stained the marble because their kids were making lemonade, and you polish it out, and you can charge for it.
Marcella: Customers are very timid, and when your installation crew is out there, they don’t want to say anything. They wait until the installers leave, and then they call the shop. We have our crews go around the block and wait for 15 minutes. We know that as soon as the crew leaves, the customer is going to be all over that countertop. That’s when they are going to have an issue, and we have our office call and ask how everything went. If they say there’s a problem, we can say, “Well, our guys are still in the area, so let me send them back over there.”
Hannah: Along the same lines, finish the job. If you leave something unfinished, that customer will be all over it the first night, and that opens up a can of worms for a hundred issues. But if you finish the job, the customer will be pleased with how efficiently and quickly it went, and they will sign off. Maybe have your crews do something extra. If they see a loose hinge on a door, have them fix it. Also, when the templater comes out to the job, have him take pictures of everything — not just the cabinets. If there is a broken lamp, your guys may ultimately get blamed for it.
We’ve also learned in retail work to let the customer know that when the install is completed, please be ready with a check. Once the customer pays, they will rarely call you back for anything. But if you give them 30 days, that gives them 30 days of intensive inspection of their kitchen.
Malisani:You can also have your customer sign a document that confirms that it was the material they selected, the edge is right, the sink is in the proper position, the seam is acceptable and so on. It is similar to a punch-list in commercial construction, where you will note any and all complaints on a job. We do the same in residential, where we call it a Customer Complaint Resolution Form.
Duran: We do a walk-through with the customer, and we try and make it a positive situation as opposed to just saying, “We’re done,” and getting out of there. We have a checklist that we fill out. We head off a lot of call-backs by doing slab inspections in our warehouse. It shows them where the fissures are, and there are no surprises at the jobsite as far as the stone is concerned.
Marcella: We rely on contracts. A lot of times, we will be told by the customer that the salesperson told them this or that. We have a clause in our contracts that says anything that was discussed about your job is irrelevant unless it is in writing. They can jot down some notes before signing, but discussions don’t count.
Hannah:Never assume anything. We were doing a slab of Ubatuba, and it had a black inclusion on the slab. So when they did the layout, I told my guys to put the sink cut-out there, so it wouldn’t be in the finished countertop. So when the job was done, the customer said, “Where’s my seal? There was a beautiful black shape on the slab that looked just like a seal, and I really loved that about the slab.” So maybe the customer wants what you think is ugly. Take your White-Out, and mark the slab.
Duran: Absolutely. It is very important to show the material to the customer. Don’t just break a piece of the corner off the slab and tell them that’s what the finished countertop will look like. You need to ask what they want eliminated or what they don’t like.
Is anyone able to get 100% payment from a homeowner before the installation is completed?
Hannah: I wish we could get that, but for us, it’s 25% at contract signing, 50% at template and the remaining 25% upon completion. So at the end of the day, only 25% is in balance. Honestly, if you can’t get a deposit from the customer, you don’t want that customer, because in the end, they’re going to find a way to avoid paying.
We also don’t charge by the square foot. We give a final turnkey price for the finished job. That way, we’re covered if we’re doing some crazy shape, or there will be material waste, or something that’s hard on our tooling, or anything else. We’re not going to quote a square-foot price just because that’s what the guy down the street did.
Malisani:In order to be successful, rather than the final price, you need to know what price point you need to be at in order to make money. You need to know what works for you. What price will make you profitable?
Hannah: I completely agree. You can’t compare yourself to your competitors. Maybe they inherited their building from their grandfather, or maybe they got their equipment at an auction for 20 cents on the dollar. When it comes to pricing, you need to know what works for you. This is a business, and if you’re not making money in your business, then it’s just a hobby.
When you do commercial work, and you’re working with a general contractor or a millwork company, do you adjust the language in your contract to get paid for change orders as they occur?
Hannah:No. I’ve tried that, and I’ve been unsuccessful. Even when your contract says you’re going to get paid in Net 30 days, and you’re getting paid in 120 days, there’s not much that you can do.
Duran: You really have to be in a position to absorb that type of thing, because it won’t change.
Marcella: We typically shy away from those jobs because we don’t want to be someone’s bank.
Malisani: Regarding change orders, you need to have that in the contract up front. We’re always changing something in a contract from a general contractor — whether it’s the payment or something else. Sometimes you have to be creative, so rather than make them pay on time, create a penalty for late payment. If you charge 1.5% per month, it adds up. You can put whatever you want in a contract. They may cross something off and sign it, and then it’s up to you.
Hannah: Tony is right. And even if you redline parts of the contract, like requiring that you get paid in 30 days rather than 120, they may still take 120 days to pay you even if they sign it. The bottom line is that if it looks bad up front, walk away from the job.
What are you going to do? Take them to court and get a judgment? Then you’ll never work for them again. If someone pays me in 120 days and they want another quote down the road, I may throw an extra $10,000 on the job because I know that I will have to wait to get paid.
Duran:I am in a project now where we are doing vanity tops for a hotel in New York City, and I struggled with a way to make sure I got payment. It is a niche job with a lot of miters and intricate work, and the general contractor knew that I had the equipment and ability to get it done within the time constraints that were set. So we agreed that upon every phase completion, we get paid. We are getting paid for every completed 30 vanity tops in each phase, with payment for material before the next phase. That’s because of the leverage we had because of the complexity of the job. We worked with him before, and he knew of our ability to do the work and have it done when he needed it.
Earlier, we touched on tracking what you produce, and for this job, we are counting 12 slabs cut per day, X pieces to assemble, and our fabricators producing six to eight vanities per day because we needed to have 30 tops done by a certain date no matter what.
When you invested in technology, how hard was it to move from doing everything by hand to using automated technology?
Marcella:We started 23 years ago, and it was just my father and I with some hand tools. We now have a 44,000-square-foot facility with three CNCs, a CNC saw, waterjet, Breton automated rack system and more. Automation has been huge for us, and there came a point for us in our market, where granite was just getting popular, where it made sense for us.
But at the same time, there are plenty of shops that are comfortable doing it by hand. A few years ago, I thought you would be crazy not to have a CNC, but I don’t feel that way anymore. Machines come with their own responsibilities. The decision is personal, and if you’re happy with what you have, then that’s great.
Hannah: One of the things about investing in new technology is that your workers must embrace it. Initially, they will reject it because they’re under the impression that it will replace them. But ultimately, it makes their jobs easier, and it makes the shop more efficient. Machines don’t have marital problems, and they don’t drink too much on the weekends. If they’re maintained properly, they just produce for you day in and day out. At the end of the day, my crew loads up the CNC one last time, and they hit the green button, and it produces one more kitchen before I leave.
How does a CNC do better work than working by hand?
Hannah:It does incredibly precise parts. But it depends on what you’re working on. If you’re doing nothing but galley kitchens, you don’t need a CNC. But if you’re doing complex work with complex edges, the lines, the curves and the sink cut-out are perfect every time. Once you download a DXF file for a sink, it goes into your library, and it is always right. The quality of your seams will go through the roof because the flat polish on the edge is perfect, and the angles will fit perfectly.
The thing about using digital templating and CNC technology is that your installs will take half the time because everything fits.
Is anyone having problems with distributors selling or giving out slab prices to the general public, like you see on some of the home improvement shows?
Marcella: It is a problem for us because we import as well, and it can be difficult when distributors are giving prices to the public. But it is happening.
Reis: I’ve heard of something like this happening with a distributor in Virginia, and the local fabricators boycotted that business. Can’t you avoid dealing with distributors that operate that way?
Hannah:I really don’t care. If it was up to me, the homeowner would always know the cost of the stone. We are in a bizarre industry where we send our customers to the raw material provider. What other industry does that? And then the customer gets upset because they weren’t treated like royalty in the warehouse, and they are angry that the distributor wouldn’t tell them the price of the slab. So then the customer gets the feeling that something shaky is going on.
I’d rather the customer know the cost of the material, and then I can charge them a 15% markup for handling the stone, and then I attach my fabrication and installation price.
People can get prices on the Internet as well. They will find a stone warehouse somewhere selling 3-cm Luis Blue for $39 a foot. Well, where I live, it costs $95 per foot, and I’d rather they know that.
It comes down to education and transparency. You need to earn the trust and confidence of your customers. We have a distributor in the Charlotte area that sells Typhoon Bordeaux for $12.95 a foot. We pay $28 per foot, and it isn’t the same material, but both are called Typhoon Bordeaux. In the quarry, when they pull a lower-quality block out of the ground, they may put it aside, but they don’t change the name. If that happens in the wine industry, they would still liquidate it, but they would have to change the name.
Marcella: One of the problems with that in our market is that there are a lot of low-end fabricators, and maybe they’ve blown their credit lines up, so they’re sending customers directly to the distributors with the authority to buy on their behalf. It isn’t a huge problem yet, but it is starting to be.
Malisani:Another thing to consider — and that many homeowners probably don’t know — is that a particular stone will come in different qualities and grades. So what Ron said is true. Customers want to see transparency in pricing, and they want to pick from options. They don’t want to feel like they’re getting ripped off when they’re not being told the cost of the stone.
Hannah: Price generally isn’t the deciding factor for most customers. The person who buys stone on the basis of price is typically a Walmart-style customer, and they will kill you with call-backs. So maybe you don’t want that customer.