YOU'VE ALL SEEN THE ADS ON TV FOR THE AMERICAN EXPRESS CARD - THE "WHAT'S IN YOUR WALLET" CAMPAIGN - AND BASED ON THEIR "CATCH PHRASE" - I'D ASK FABRICATORS - "WHAT'S ON YOUR SHOPPING LIST FOR 2010?"
From my perspective, I get to see and talk to folks from all around North America, and the World for that matter, and I am seeing a "slow thaw" in the economy, and the way that people are dealing with business starting to "wake up" from the nightmare that we have been in since the end of 2006. Am I saying that the economy of the 2007 through 2009 is completely over and everything is back to normal? Heck NO! But, I am seeing signs of improvement, especially in consumer demand, which translates into more work and revenue for Fabricators that have been able to "weather the storm" that is appearing to slow to a "squall." The clouds are not all gone yet, however the sun is peaking out hear and there - so let not your hearts be troubled - if you've made it this far - the road ahead still has some pot holes in it - but the ride will get better.
I was very encouraged to read an article written by my dear friend and industry colleague Michael Reis, Editor of Stone World Magazine, which talked about how Fabricators were predicting improvement for 2010. The first conclusion that I drew from Mike's article in the January 2010 edition of Stone World, is that I am not the only guy seeing an improvement in the buying trends of Fabricators and other Stone Industry Professionals. This is a relief to me, as I didn't want to be known as some "Chelsea Cheerleader" trying to talk about stuff that wasn't really happening. The focal point of what Mike had to say is that 45% of all Stone Producers expect the market to grow in 2010. This is encouraging - especially at a time where guys in our industry have been dropping out of business left and right. Even more encouraging: almost 75% of all Fabricators responding indicated that they fabricate both Natural Stone and Quartz slab products.
So, with that said, what should you as a Fabricator focus on for new "stuff" in 2010? I get asked this question daily by companies that are both new and existing in our "community" (the Natural Stone, Quartz and Green Slab Industry). The first thing I will tell anyone, in light of the recent batch of guys getting over extended by buying big machines that were capable of generating lots of production until the bottom dropped out of the "demand" part, is that you have to be frugal with your purchases for 2010, and make every dollar count.
Don't be afraid to take a risk, but base your decision clearly on a full understanding of what will happen "if" the demand (that your new machine or system that you want to buy) suddenly drops. Can you still function with it? Can you function without it?
The guys that have "made it" through the "storm" thus far, have been the ones that were really aware of their own company's "debt to income" ratio, and created a business model (for themselves) that allowed their operations to grow with demand, but also had provisions for them to survive a contraction in demand, rather than just the upward expansion that many people thought would never end... those are the guys that have survived. The other companies that believed that the crazy days of 2000 through 2005 would never end have seen the light too - go off on their operations - after it was too late to back track and get out of the enormous amount of debt that the got themselves into.
Using that example, many guys are looking at buying machines, equipment, tools and supplies that will not make as a severe impact on their operations financially - yet allow them the latitude to expand their capabilities or do their work more efficiently, and at a lower overall cost.
I think the responsible approach to looking at any kind of capital expense for 2010, is to first examine the overall cost of any investment versus the immediate, short-term benefits. Don't forget that as a business investment, there are still a number of ways of "writing off" that investment over a period of years. Your accountant should be the first guy you call - of course this is (if you're like me) after you get "permission" from your wife to spend that money!
Since 2007, there have been a number of new tools, machines and products introduced to our Industry that are available through BraxtonBragg, and I'm sure that there is a lot of pent up buying "mojo" out there just ready to be unleashed for this year.
All that has to be there, too, is your justification in making the purchase. Just go into it with both eyes wide open and make your best judgment. Just look at one of Braxton-Bragg's machines they sell - the EdgeWise Saw and Sink machine systems. This is a perfect investment for a guy that's been doing things by hand up until now. With the versatility of the EdgeWise Systems, Fabricators can do pretty much any operation that would have normally required a bridge saw and CNC machine. Now, with the EdgeWise Systems, for a fraction of the cost that would be associated with "big" machines, Fabricators can have mechanization for a much smaller investment.
I have an EdgeWise System at AZ School of Rock, and I can tell you from first hand knowledge and experience, this is a system you will want to thoroughly investigate, as it's worth every penny.
Remember that every machine or tool that you purchase should be a "force multiplier" getting more "work" and "production" out of the same amount of effort and manpower. With the advent of a brighter year ahead - what's on your shopping list?
Best Regards & Happy Fabricating!
"Machinery Evaluations and Utilization" is a service that is provided by AZ School of Rock. For more information, contact Kevin M. Padden at www.azschoolofrock.com, by phone at 480309-9422 or via e-mail at info@azschoolofrock.com
The EdgeWise Saw and Sink machine systems are a perfect investment for a guy that's been doing things by hand up until now. With the versatility of the EdgeWise Systems, Fabricators can do pretty much any operation that would have normally required a bridge saw and CNC machine at a fraction of the cost.
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