It's a new year and a new decade - 2010 is here and upon us and what have we got to look forward to? Well, for starters - I didn't get a "bail-out" package like a lot of guys in the banking industry on wall street. I consider myself fortunate that I don't have the debacle of having to fret over where I am going to invest my millions of dollars in bonus money. (Should I go with IRA's, pop it into my offshore bank account in the Grand Caymans, or invest back in a mansion that i'll only visit a few times out of the year?) No, I'm glad I don't have to worry over all of those "little" things.
My guess is that if you are like me, your focus is on the more basic things like "survivability" and keeping the doors open, instead of the luxury items like that new Drophead Rolls you've had your eye on, or the Gulf Stream or Lear Jet that you've had on your amazon.com wish list ever since you got into the Natural Stone Industry. Sensing my sarcasm? Good, 'cause I'm layin' it on pretty thick!
In all seriousness, the ugly fact rearing its head more and more: this "economical" situation we all find ourselves in is pretty intense. I have (like you, I'm sure) watched countless companies close their doors and even just walk away from their mega shops-machinery left to be sold at auction to the highest bidder. This is not the way most of us envisioned the years to come when we were all "dizzy" from the incredible explosion of business that was evident in the first 6 years since 2000.
Being forever the optimist-looking for any water in the glass, regardless if it's full, half full, or containing just a few drops-I have noticed a few "industry trends" that we as an Industry can pick up on and use to our advantage, especially in these trying times.
Here's a prime example of how the housing industry has evolved into what we now have to deal with in 2010: I live in Arizona-one of the states hardest hit by the recent economic downturn. Along with Southern California, Nevada and South Florida, Arizona is one of these four prime locations that years ago - 2005 to be exact - was "white hot" with growth and potential to profit from demand in housing. Fast-forward to January of 2010 and these same four places are dead as a doornail, in economic terms. Sure there's still work to be had for Stone Fabricators, but the game has changed.
I live in the Phoenix metropolitan area where up until 2009, Granite countertops were about all that anyone would put in a new or existing home. Yesterday, my wife told me about a report she heard on the radio as she drove in to her office (she works in the Health Insurance Industry). She mentioned that now there are new homes being built, many right near where we live, on the Southeastern side of greater Phoenix. Those new homes, however, are not using Granite countertops as they would have (naturally) a year ago. The builders are opting for Laminate as the standard choice of countertops. Why? Because new homeowners can't or won't put in something that is as expensive as Granite (even at $30 or $40 dollars per square foot)! This tells me something as a Fabricator - that we should embrace other products in addition to Natural Stone. Am I saying that we should go as far as to become Laminate contractors? Maybe, if you want to keep your business going through these tough times.
Look at the Laminate industry: What are the most popular styles of Laminate? Colors and textures that mimic those found in Natural Stone! Surely I can't be the only person seeing this pattern. In an economy that restricts people's ability to buy what they want, they tend to buy the next best thing, an imitation.
Take the Harley Davidson motorcycle as an example. I have always wanted to have a big 1200 "V-Twin" hog to ride. I, like many other guys, have many other needs (financially), so my dream of having a big Harley to ride someday will probably be only that - a dream. But take the guy who does have some cash to invest in a bike, but not enough to buy the "real deal" HD Super Glide. What does he do when he can get a bike - just not the Harley? He buys a Honda Shadow or Kawasaki Vulcan or Yamaha V-Star. Not exactly Harleys, but close imitations. Now to all of you guys that do ride the Non- Harley "Metric V-Twins" - please don't take what I'm saying as a dig to your "rides." All I am saying is that (as for me) I've always wanted to ride the real thing - a Harley - but sadly, I think that day may never come, for me, that is.
This is the same "imitation" concept that I am seeing from both the Laminate and Solid Surface sides of the Countertop Industry. People really want Natural Stone, but for various reason, many of them economic right now, they "settle" for an imitation. Is this the way it's going to be forever going into the future, and especially right now in 2010? Certainly not for the long term - but perhaps for the shorter term (our immediate future) - this year, the answer is "probably.
So what do you do? Do you stand with your arms crossed, adamantly professing that you only fabricate Natural Stone, with fewer customers for you to work with, or do you expand your offerings to include things you've never worked with (let alone liked) before? Do you start looking at becoming a "multi-discipline" Countertop Contractor? Ask the guys that have already made the move and now offer all types of countertop products to their customers. My guess is that you find that they are glad they expanded their product lines, regardless of their personal preferences.
Organizations like ISFA (the International Surface Fabricator's Association) can help you determine if being a "multi-discipline" contractor is right for your business plan. ISFA deals with and promotes all countertop materials and can help you learn about other kinds of products for you to work with. Forget the "I only like Granite" mentality. In my opinion, I'd use that train of thought only when it comes to what goes into your own home-if you are so inclined. The wise move, for long term survival in these tough economic times, is to have an open mind, and offer as many product types as you can to your client base. ISFA can help you get to that point if that's where you want to go.
Whether it's the "real deal" or an "imitation," I would want to offer as many choices to my clients as I can, to insure keeping them as my clients, and not somebody else's. I think 2010 will continue to be an uphill battle - seeing more companies go away due to the shrinking market share in certain areas, but let not your hearts be troubled, things will turn around, and we will see better days. "If" is a given; it will get better, it's just the "when" part that everyone is waiting for with bated breath!
Until next month, keep thinking happy thoughts, and keep your chin up!
Best Regards & Happy Fabricating!
Dealing with Changing Market Conditions are subjects taught every month by AZ School of Rock. For more information, contact Kevin M. Padden at www.azschoolofrock.com by phone at 480-309-9422 or via e-mail at info@azschoolofrock.com
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