Business opportunity

[Stevepiii]

I am seriously considering buying a small granite fab business in ct. I am an entrepreneur from the home furnishings industry with plenty of experience in running a business and selling high ticket home goods but no experience in stone fabrication. The existing owners are willing to stay on board and train me in the fabrication and installation aspects.

I know there are a myriad of considerations I need to consider before moving forward on this particular business in this particular area. But I am wondering if anyone is willing to share the state of the industry as a whole. Is there still a place for a small independent shop without a 300k Cnc machine? It's a competitive business. What are your predictions for future stability? Any and all input would be sincerely appreciated!

Thanks.

[Dan R.]

Tough business.
Mistakes are expensive.
The buck will always stop with you.
It is not impossible, but it would one of the most difficult businesses to get into. My advice is to buy a sandwich shop, hot dog cart even better.
Work in the business for 2 months and then see how you feel about it.

A small business that is basically a subcontractor with not much equipment is a crap shoot , IMO. No real asset value and any goodwill may evaporate with the existing owners. What really are you buying or paying?

[VThartzog]

Dan hit it on the head. Work in it to see what it really entails. There is a pretty steep learning curve, especially when you get into cnc machines.

[Jesse]

I got into the buiz cuz I fell in love with the stone. That being said I learned everything myself and thru the school of hard knocks. There were many a late night, looming deadline or expensive mistakes that I really had to take a step back and soul search on if I wanted to continue down this path. There are a million ways to make a living in this country and right now you get to choose. I would really ask yourself why. Why do you want to own a granite business. If you think it is the fast road to easy money or a stabile future I would keep walking and check what door #2 has to offer. Is it because you want to put some blood sweat and tears into some really cool projects made with a very tough to work with product and walk away with pride when the job is done? If that is your real reason for doing it then the money will eventually come and you can make a living doing it. But really ask yourself why. Sales are great but that is not the tough part of this buiz. In our area new granite shops come and go like the changing of the tide. Doesn't take much to start one up and really easy to lose your ass.

[BellaTerra]

I got into the buiz cuz I fell in love with the stone. That being said I learned everything myself and thru the school of hard knocks. There were many a late night, looming deadline or expensive mistakes that I really had to take a step back and soul search on if I wanted to continue down this path. There are a million ways to make a living in this country and right now you get to choose. I would really ask yourself why. Why do you want to own a granite business. If you think it is the fast road to easy money or a stabile future I would keep walking and check what door #2 has to offer. Is it because you want to put some blood sweat and tears into some really cool projects made with a very tough to work with product and walk away with pride when the job is done? If that is your real reason for doing it then the money will eventually come and you can make a living doing it. But really ask yourself why. Sales are great but that is not the tough part of this buiz. In our area new granite shops come and go like the changing of the tide. Doesn't take much to start one up and really easy to lose your ass.

Couldn't say it better than this or the others. If you are good at retail there are 10000 different businesses you could get into that will give you better sleep at night. This is by far the hardest and most exacting business I could have ever imagined. Think long and hard because it's not a business you just get in and out of with a mood swing.

[Stevepiii]

Thanks everyone for the replies. The common sentiment is heard loud and clear. I have spent my life in retail which I expanded in to designing custom kitchen and dining collections. I doubled my companies sales within 3 years time. I grew too much too fast and when the recession hit I did indeed loose my ass. I've been working at a retail grocery company for the last 4 years and hating myself and my circumstances every moment.

At heart I am an entrepreneur. A builder. My passion has always been driven by what I can do and design for customers to help them create their ideal home and surroundings. When I met with the current owners and toured the showroom, it brought me right back to where I felt at home. I've never worked in a granite shop but it felt somehow familiar as I previously owned a kitchen and dining furniture company.

The current owners are unfortunately in a position where they need to exit the company due to health reasons. They are willing to stay on board to train and properly pass the torch. I believe I can apply my years of experience in to this business and develop the skill necessary in the shop. I know there will be a large learning curve but I am more than up for the challenge.

I'm not sure if that will convince any of you that this is a path I should pursue, but my gut tells me its right. What I'd like to know is where you see the industry going a few years down the road.

[Dan R.]

Trust your gut.
As far as prognosticating the industry trend, anyone's guess is as good as another, imo.

You do have the SFA to rely on for fab information.

If you feel good about it, go for it. It sucks to work in a job you hate every day.

[ash20ash]

I would work in the business before buying into it.

[ash20ash]

Not near as glamorous and fun as it may appear.

[GuyboR]

If you are looking at being hands on fabricating, then you can make a living at it. If you are looking at being the sales force and not fabricating, you could make more with less stress working for someone else. If you are looking at just owning it and thinking that it will generate enough money to pay you a return on your investment, it won't happen in my opinion.

As Dan asked, what exactly are you buying from the current owners?

[Stevepiii]

I am planning on being a hands on fabricator as well as driving the sales. As far as equipment, they have two vehicles, a fork lift, a showroom, existing inventory and sales. For fabrication it's all manual. There is one owner who works on the sales and running the business, another owner looking to retire who does the fabrication with a full time assistant. They said they average 6-10 jobs a month currently, all referral. No advertising. Thanks for all this input. It's appreciated.

[Dan R.]

Trying to replace both with you would seem tough. The owner running the biz and driving sales seems to be the key person, IMO. You are buying both out, or just the fabricator? Just the fabricator would be a mistake, IMO.

[RBatstone]

Run away as fast as you can

[Andy Ross]

Thats about the size i was last year. Two guys, myself included, and i made a comfortable living. Nothing crazy, some months were a struggle, some were good. I worked a lot of hours. You will probably have to grind a few years before you can add the next few employees.

As for the future of the industry- it appears to be gaining momentum at this point, but we all remember too well what happened in 08. Plan to grow, prepare for the storm.

I love owning a shop and i wouldnt trade it. Motivation is everything. Why do you want the business? As dan said, trust your gut.

[Ken Lago]

If I were to buy a existing business I would probably base it upon several things, here are just a few: People/ employees, the process, and profits ( Yeah I stole that from the tv show ) In your case you have no experienced people once the owners you are buying out leave, not good! The process you will have to figure out too, not easy or quick as you have no experience with stone. Last but most important you need to know exactly how much profit the business have been generating over the last few years and how much salary the owners paid themselves. DO NOT accept anything that is not on the books and have them checked out by a qualified person.
Buying a business on gut feeling is a gamble with odds I wouldn't play again.

[mark s]

Steve;

You asked about where the industry might be going. Assuming we're not in for another 2008 IMHO I expect a decent market for stone and quartz products based on the following:

1. The demographics of the baby boom are such that many many boomers are going to be retiring and most likely downsizing. These people will have money and will appoint their now homes nicely which will include nice countertops. Additionally, the wealthy among the retiring boomers will build extravagant retirement homes with lots and lots of high end materials. (I'm not guessing at this; I already do a lot of exactly this kind of work.)

2. Manufacturing costs will continue to decline as additional technology becomes available to the granite fabricator. (Park Industries, which is 10 minutes from me, is in the process of an $11 million expansion. They think they'll be selling a lot more machines.) The technology is a two edged sword as large "factory" shops will drive the bottom of the cost structure down such that small shop, even with a CNC, won't be able to compete on price.

3. On the flip side, the factory shops typically produce a quality and customization level that is well below what is possible and there will still be a market for custom work backed up by true craftsmanship. Look at the cabinet industry for a reasonably close model of where stone countertops will be some years in the future.

I would be interested to read what other SFA members think of my analysis.

Mark S.

[Mark Gamble]

The biggest issue will be getting and keeping good employees. Depending on the area, there may be few to be found. This means longer training times which means more work for you....then the retraining when that one leaves and so on. If you plan on doing the purchase, start by becoming a member of the SFA. It would really help learning to fab from some of the best the industry has to offer. You get stuck on a project, you have advice here...a lot of great advice. I got into it because I was fascinated with working with stone. Be prepared for your body to get permanently damaged from over lifting, repetitive motions......and so on. You will ache every day. The sales are the easy part. I only had a website and hit my monthly quota. Getting it out on time is the difficult part

[Ken Lago]

Steve;

You asked about where the industry might be going. Assuming we're not in for another 2008 IMHO I expect a decent market for stone and quartz products based on the following:

1. The demographics of the baby boom are such that many many boomers are going to be retiring and most likely downsizing. These people will have money and will appoint their now homes nicely which will include nice countertops. Additionally, the wealthy among the retiring boomers will build extravagant retirement homes with lots and lots of high end materials. (I'm not guessing at this; I already do a lot of exactly this kind of work.)

2. Manufacturing costs will continue to decline as additional technology becomes available to the granite fabricator. (Park Industries, which is 10 minutes from me, is in the process of an $11 million expansion. They think they'll be selling a lot more machines.) The technology is a two edged sword as large "factory" shops will drive the bottom of the cost structure down such that small shop, even with a CNC, won't be able to compete on price.

3. On the flip side, the factory shops typically produce a quality and customization level that is well below what is possible and there will still be a market for custom work backed up by true craftsmanship. Look at the cabinet industry for a reasonably close model of where stone countertops will be some years in the future.

I would be interested to read what other SFA members think of my analysis.

Mark S.

Exactly the opposite could be true as well, who knows? its a guessing game

[salesguy1]

Can the idea of buying the shop, with your sales background you'll be able to sell far more than you can produce and you'll be in a position that you will have to work 7 days a week, 15 hours a day. Learn how to sell granite and have a large shop produce it for you and do what you do best. I'm having a lot of my stuff fabricated by someone else and am really liking it. You can do this with some samples and a vehicle or a small space and bring in some slabs and you'll be in the granite biz without really being in the biz. After you sell enough then decide if you want to fabricate, you'll be exposed enough to it to know.

[Darryl Miller]

Can the idea of buying the shop, with your sales background you'll be able to sell far more than you can produce and you'll be in a position that you will have to work 7 days a week, 15 hours a day. Learn how to sell granite and have a large shop produce it for you and do what you do best. I'm having a lot of my stuff fabricated by someone else and am really liking it. You can do this with some samples and a vehicle or a small space and bring in some slabs and you'll be in the granite biz without really being in the biz. After you sell enough then decide if you want to fabricate, you'll be exposed enough to it to know.

x 2

This would be my suggestion as well. You will have to find a shop that will produce the quality you are looking for and work out the terms with them. You can pay them to template, fabricate and install. You will have a lot less headaches as well. Selling this product is the easiest part.

[ash20ash]

x 2

Selling this product is the easiest part.

If you do not have the fab skils, you could be in for a huge learning experience. What if your guys leave you? How will you know if what they are doing is correct?
And if you think you will walk in and fill 2 guys shoes right off the bat..............

Depending on the price, you will prob be better starting your own shop. If they close up their shop anyway, those new customers will have to buy from someone.



What are your goals? If it is to make more than a good living. I would suggest something else, as this business takes a bunch of time and money to grow. Although, there is money to be made. And the skill level has to be high. Say compared to spending the same coin and opening a coffee shop run by kids and one manager.
Way easier gigs to make money with less stress. Most all mistakes in the stone biz cost ya 1,000.00. Doresnt take long to cripple yourself with not much experience.

[Stevepiii]

Thanks everyone for all the great information.

The owners are willing to stay on for several months to train me - which is vital. I would certainly make that a stipulation of the contract. they are selling because of health reasons / retirement but I get the sense that they don't want to let it go. The truly seem like honest straight up people. I have yet to view the books which will give me more insight into the viability of the company itself. After all, it would need to support me and the transition time with the existing owners.

My goal is to own my own business again in a way I can feel proud of myself and what I produce. I owned a kitchen and dining specialty store in the past and this feels familiar, yet like there is so much more to be proud of at the end of the day than simply sticking something on a shelf and selling it. I hope to make a decent living again and I'm ready to put some hard work and long days (nights) into it. My biggest concern is what has happened to the furniture and many other industries. Is there still a place for the little guy or are all the little guys fighting over a few scraps of business that is out there?

[ash20ash]

I'm a 2 man shop (with cnc) and we get it done and stay busy and make some money here and there.
The big guys will/can hurt you sometimes. But there is always a place for the small guy IMO.

Look at any trade/ business/ store..............there is a niche in everyone. You goal will be to find your niche and then do what is necessary to fill it AND MAKE MONEY AT IT.


You're probably crazy enough to make it work, if your still interested in it, and haven't seen the books yet.

[Template whizz]

Most guys got in this business by accident. Its a very demanding and at times harsh business. Heavy lifting with gentle hands, cold wet uncomfortable conditions, very little room for errors, and often a lot of stressful deadlines. I cant tell you how many guys I have seen quit in weeks after hiring saying "its just not for me". But the people who remain in this business like many on this site have a genuine love and passion for it. IMO go work for this guy for a month, get down and dirty, se some highs and lows and then at least your decision will be an informed one. Good Luck

[Chris Mills]

There is definitely a place for a small shop.....IF.....you can deliver what they need and/or want that the big guys just don't. For example, you are not small, you are personal. You can't produce 4-5 kitchen/week. YOU DON"T WANT TO! Relay to the customer that you are a hands on owner and put your personal touch on every job like its your own. Then you have to show them examples of you outstanding work...work they don't see with the big guys. Find your customers and cater to them and only them. If you are going to sell outstanding work then sell that and only that. A small shop that has a reputation for being outstanding in their craft doesn't do commercial work in my opinion. You do jobs one way...The right way, not the cheap way. If you are going to be the low ball guy, then be that and sell that....lowest price; just don't try to be both! If your future is the first business i talked about I suggest what the other guys said and work for someone first and see what you can do and learn. Just like Harry Stamper said in Armageddon " I've been drillin' all my life and I still haven't got it!" Don't put the cart before the horse and send out work that isn't up to the standards you are trying to put your company on. You may not get a second chance to change peoples minds or opinions. I love what I do, as just about all of us here do. Otherwise we would not be doing it. If you are a seller and decorator like you said then find a way incorporate that love and knowledge in your pitch. People aren't stupid. "No need to hire a designer or planner. I have X amount of experience with that and let me show you what I can do for you in this one stop shop for all your needs"...something like that. You have to find your "place in the game." I wish you luck.