Evaluating Your Business for Niche-Market Potential

 

Well, summer is now officially over, and as we travel into the colder months ahead, we reach a time to consider how the countertop industry has been treating us so far this year and where we expect it to take us by the end. When you finally have time to sit down and think about it, try analyzing some of the actual statistics you have on hand and ask yourself if you are satisfied with them. If not, it may be time for some careful planning and risk assessment.

 

One of the chief ways to drum up new business is to differentiate your business from the competition. Many business owners operate without clearly defined principles, mission or vision, and this is a good place to start.

 

Your mission statement not only lets your clients know what you are all about but also reaffirms your position to yourself. Your vision is just as important for the same reasons: It keeps you on the track to reaching your goals. Finally, a set of principles or business practices provides a framework for operating your company, and it serves as a guide for employees.

 

Some fabricators find that the above steps are all that is required to give their businesses they boost they need, but others take it to the next level and start to carve out a niche. One way to find the right niche is to study the market and discover where demand is strong and supply is short. However, others take a different approach by focusing on their personal skills and desires until they are naturally guided into a niche.

 

It may seem counterintuitive or, at the very least, bad business sense to let your personal desires drive your business without any regard to market data, but it can be done and used to an advantage. However, you will want to evaluate your plans before putting them into action in order to reduce the risk present in all such endeavors.

 

After you decide to enter a niche market, it then becomes necessary to identify the competition, and once this is done, you will still have to differentiate your business from theirs. This can be done in a number of ways. It can be as simple as being upfront about the time required for a job or as complex as creating an entirely new brand image.

 

The last step in starting a successful niche countertop business is marketing and advertising. Let your demographic and psychographic know who you are and what you do. If you have any experience in entering a niche countertop market, we want to know. Email us your story, and help others find success too.

 

Sincerely,

 

Brian Jones, Editor/Content Manager

CountertopResource.com 

info@countertopresource.com

Countertop Industry Market Update

Knowing all of the latest developments concerning the building/housing market is something all countertop fabricators and industry professionals stand to benefit by doing. As we transition into the final quarter of the year, this is a great time to take a look at how the market is doing. A quick scan of the latest trend predictions and statistics shows nothing but growth in the industry. While this is good news for countertop professionals, it may leave them wondering “How long will it last?” Fortunately, we don’t see an end anytime soon. The numbers look promising, especially when considering the positive outlook in our last housing-market report in June.

Last month, the North American Building Material Distribution Association (NABMDA) released their Spring 2015 Quarterly Sales Trends Report. The report provides analyses, forecasts and insights for manufacturers and distributors of building materials.  March and April were both very strong months according to the latest findings. As many as 70 percent of industry professionals said that this was enough for them to plan on adding personnel sometime during the course of the year.

Building-material distributors experienced 10 percent growth in the month of March with a forecasted growth rate of 6 percent for boards and panels, flooring, hardware and storage for the rest of the year.

 According to data from the U.S. Department of Housing and Urban Development (HUD), the National Association of Home Builders (NAHB) reported in August that housing starts increased by 0.2 percent to a seasonally adjusted annual rate of 1.206 million homes. This was just enough to mark the highest level of housing starts since October 2007.

The high demand of single-family housing is responsible for the increase in starts, which rose by 12.8 percent to a seasonally adjusted annual rate of 782,000 homes.

Looking at housing starts by region, the highest gains were in the Midwest at 20.1 percent and the South at 7.7 percent. However, starts decreased by 3.1 percent in the West and 27.5 percent in the Northeast.

Last week, the NAHB reported that builder confidence in new single-family homes continued its long and steady increase, which pushed the NAHB/Wells Fargo Housing Market Index (HMI) up one point to 62, which is the highest it has been since October 2005. “The HMI shows that single-family housing is making solid progress,” said Woods, noting that there have been some concerns about lot and worker availability.

The HMI is based on a monthly survey the NAHB has been issuing for the last 30 years. The survey asks builders to gauge the current state of single-family home sales and what they expect for the next six months. In addition, the survey asks builders to rate the quantity of prospective buyers on a five-point scale from very low to very high. Two of three components used to calculate the HMI showed increases in the September survey: Prospect traffic rose two points to 47 and current sales rose one point to 67. However, sales expectations for the next six months dropped two points to 68. Looking at the regional HMI scores for September, the West and the South each rose by one point to 64, and the Midwest increased one point to 59. The Northeast, however, dropped by one point to 46.

Just last week, Qualified Remodeler reported that a new remodeling forecast was launched by John Burns Real Estate Consulting in Irvine, Calif. The company is considered a major analytics firm for the residential construction market, and its first official forecast predicts that residential remodeling will grow by 7.8 percent in 2016 to $300 billion.

The survey also breaks down last year’s remodeling statistics. In 2014, the remodeling market totaled $266 billion. Of that, $113.6 billion was for large projects (more than $5,000) while $146.1 billion was for small projects, and $5.9 billion went to disaster repair. In addition, $108 billion was spent on building materials by professional contractors while do-it-yourself (DIY) homeowners spent only $69.3 billion. Contractors also brought in $88.2 billion for labor and other services.

The new forecast, dubbed Burns Residential Repair and Remodel Spending, is being called the “first true forecast of remodeling activity” in the United States. This forecast relies on intensive data gathering from several sources, including a proprietary model using data from property-management agencies, the biennial American Housing Survey, rental-home investment firms, apartment-building owner surveys and in-house pricing surveys. The closest we have had to it is the Leading Indicator of Remodeling Activity (LIRA) from Harvard University’s Joint Center for Housing Studies’ Remodeling Futures Program and remodeler sentiment as tracked by the NAHB.

 

Effective Safety Planning Part 1: Establishing a Culture of Safety

No fabricator wants to put his or her employees at risk, but at the same time, many do not take all of the precautions recommended by workplace safety organizations, such as the Occupational Safety and Health Administration (OSHA) and the National Institute of Occupational Safety and Health (NIOSH).

The main reasons for noncompliance are misunderstanding accepted safety protocols and cost. However, it is possible for fabricators to minimize risk in the workplace without digging into profit, and it all begins with establishing a written safety plan.

Avoiding Losses Through Safety Planning

When workers are injured on the job, the expenses for which employers are liable are very steep. In fact, occupational injuries cost U.S. employers about $170 billion in expenses and lost profits each year.

When your shop operates according to a sound safety plan, minimizing the impact on worker health and well-being, you can expect to experience several benefits, including the following:

• Low premiums for workers’ compensation insurance
• Decrease in direct medical expenses
• Reduced overtime expenditures

When your employees are happy, healthy and safe, they are more apt to be on your side in all business endeavors. This indirectly benefits your company in a number of ways:

• Higher quality products and services
• Increase in productivity
• Improved morale
• Improved worker-management relations
• Reduced turnover

The Purpose of a Safety Plan

While safety plans are great for spelling out company policy and letting everyone know about specific operating procedures in a variety of situations, the true purpose of a written and practiced plan is to help develop a culture of safety. Government agencies and private researchers have found that a company’s safety culture is the highest determining factor in the number of health and safety incidents experienced during working hours. Because of this, development of a strong safety culture in the workplace is vital in protecting employees and revenue at the smallest possible cost.

What Is Safety Culture?

Safety culture is a shared atmosphere in a workplace consisting of beliefs, attitudes and procedures that can shape the behavior of everyone in a company. Safety culture ranges from poor to strong, and it is created and nurtured by many of the following:

• Standard operating procedures
• Attitudes of management and employees
• Moral values
• Workplace myths and stories
• Priorities of management
• Personal and company accountability
• Employee motivation and involvement
• Job and safety training

In companies with a strong safety culture, everyone feels responsible for their own safety and the safety of others, and they deliberately practice all safety measures on a daily basis. In addition, employees in a strong safety culture will easily identify safety hazards, communicating their existence to supervisors. Supervisors, in turn, take all of the necessary steps to eliminate hazards promptly as they are identified.

Establishing and Improving Safety Culture

In most companies, strong safety culture begins with a strong and inclusive organizational culture, but improving safety culture also has the additional benefit of strengthening organizational culture because the process brings everyone together to meet a shared goal. Creating a strong culture of safety is not at all difficult because it directly benefits everyone, from the owner to new trainees, and no one is more aware of this than your frontline workers, which makes employee buy-in a simple matter.

Employees are more apt to jump aboard implementing safety procedures than they are to get behind initiatives focused on improving product quality, increasing productivity or expanding profit margins. However, building a strong safety culture indirectly improves quality, productivity and profit.

Getting employees to buy into safety improvements is simple when compared to top management buy-in. Many managers and supervisors resist under the idea that it will create more work and hurt productivity. However, it is essential to have all top managers aboard before safety culture can be improved. This may require one or more meetings in which planning is discussed and costs analyzed. In most cases, upper management can be swayed by educating them as to the bottom-line costs of safety incidents.

Tips for Building Safety Culture

• Continue working on buy-in at all levels in the company. The goal is to create a community that fosters open communication and willing acceptance. Try to spell out the exact reasons for building a safety culture and how it will improve the business for everyone involved.
• Build trust. Both workers and managers need to trust in the bigger picture and trust each other to make the workplace safe.
• Perform a self-audit. An initial self-assessment will provide you with a benchmark that lets you estimate just what needs to be done to develop a comprehensive safety plan.
• Form a committee. The most efficient and effective way to develop and implement a safety plan is by forming a focused safety committee.
• Create vision and mission statements. These will guide every effort in establishing a strong safety culture.
• Begin training. Key personnel should be given opportunities for general safety and health training.
• Assign responsibility and hold people accountable. Specific roles in creating and maintaining a safe workplace should be clearly defined, and the people assuming those roles should be held accountable for following through with their duties.
• Develop a system for receiving and discussing feedback at all levels in the business, and give recognition where it is due.

Countertop Companies and Fabricators in Massachusetts

Massachusetts: As one of the most important of the original 13 colonies, Massachusetts played a significant role in American history by leading the country in resisting British oppression. The Bay State was the 6th to join the Union and officially became a state on February 6, 1788.
Milford, Mass. is known all over the world for its unique pink granite. The granite was discovered in the 1870's and quarried for many years for use in the exteriors of museums, government buildings, monuments and railroad stations.
Here's an interesting fact: the Boston University Bridge on Commonwealth Avenue in Boston is the only place in the world where a boat can sail under a train driving under a car driving under an airplane.

The people of  Massachusetts need countertops too, and there are plenty of places to supply them! You can find a list of countertop businesses in Massachusetts here.

This is a sneak peek at our efforts to compile the most complete list of countertop fabricators in the United States from A to Z. We will be working on Michigan next and hope to give you a look at that list as soon as its available. And you will find it here first.

Looking Forward to Happiness and Prosperity

 

It has been said that happiness depends on satisfying three key elements: having someone to love, something to do and something to look forward to. This can be examined further and applied to specific portions of our lives rather than the whole. Success in business comes much easier when you are leading a happy life, achieved through having met all three of the above conditions, but they can also be used to guide your mission and business plan.

 

Having someone to love must always fit into the background when it comes to business, but it can be of help to have him or her beside you during trying times, especially when starting a new enterprise. If you want to take this to the extreme level, the person you love may become a vital part of the business, and it is important to have someone close to you that you can trust at all levels. Certainly family businesses are not uncommon in the countertop industry.

 

In finding personal happiness, we all need something to do, which may be having some sort of work, job or hobby we enjoy doing. For many of us, that would be our work. While some people see their business solely as a way to make a living, the most successful fabricators are those who truly enjoy what they are doing. Completing large projects or overcoming seemingly insurmountable obstacles can give you a sense of pride and accomplishment that leads to personal fulfillment and happiness. The work gives a sense of purpose to what many people may see as a meaningless existence.

 

The final, and arguably most important, of relating the three prerequisites for happiness to business is having something to look forward to. You have to admit that when you are simply trying to keep your head above water, the work can become monotonous and grueling, even if it is what you enjoy doing. However, when the sailing is smooth, you should have a point on the horizon that you know you will reach in a given amount of time.

 

For some of us, this means expansion. We can look forward to expanding our business because it opens the doors to greater opportunities and greater success. For those who have already been in the business for a great deal of their adult lives, the objective they are trying to reach is retirement. It is a great motivator to look forward to a time when all the work finally allows us a chance to relax and enjoy other aspects of life.

 

At CountertopResource.com, we believe that retirement would be nice, but it is a little too early to consider the prospect, so our efforts are focused on expansion. We have been blessed with a successful business, a team of like-minded individuals who give everything to their work and clients who are great to work with. However, we believe we can do more for the countertop fabrication industry, so be on the lookout for more exciting opportunities from us before the year is up.

 

How does your work bring you happiness? We always look forward to hearing your stories, so drop us line at info@countertopresource.com. See you all next month.

 

Sincerely,

 

Brian Jones, Editor/Content Manager

CountertopResource.com 

info@countertopresource.com

Has Caesarstone Caused its Own Misfortune by Ignoring Fabricators?

Caesarstone, founded in 1987, is based in Israel and has a large U.S. division headquartered in Van Nuys, Calif. It is known as one of the pioneers of quartz surfacing because of the patented Bretonstone process. It is the only publicly-traded stock for a company exclusively dealing in quartz surfacing. Its stock is traded on the NASDAQ as Caesarstone Sdot-Yam Ltd. (CSTE). After its stock plummeted by more than 25 percent this month, most of which occurred on two key days: August 5 and August 19, Caesarstone has been making big news in the world of finance. This has left many countertop industry professionals wondering whether the company’s business model, which practically ignores fabricators roles in the sales equation, is to blame.

In May, the company opened its first quartz surfacing manufacturing plant in the U.S. just outside of Savannah, Ga., and it includes some of the most advanced technology available for producing engineered stone, as well as a showroom/”community center” for displays, events and meetings.Overall, the last year seems to have been one of the company’s best to date. However, much of the company’s recent success is attributed to a 2013 deal in which Caesarstone partnered with Ikea US as the exclusive supplier of non-laminate countertops in its retail stores.

Second Quarter Financials Released

Caesarstone stock hit an all-time high on July 31, 2015,  when it closed at about $72 per share after remaining in the $60s range for most of the year. On Aug. 5, the company released its Q2 2015 financial statements . The stock had already dropped by more than 6 points by the time the market opened in the United States. At the end of the day it was down by more than 25 percent at 52.57 with 3.6 million shares having changed hands. The stock closed even lower at 49.59 after another heavy day of trading on August 6.

On the surface, the results of the Q2 2015 financial report do not seem too bad:

• Revenue increased by 9.9 percent to a new high of $127.5 million.
• S. revenue increased by 19.2 percent to $57.1 million.
• Diluted earnings per share (EPS) rose by 27.5 percent to $0.65.

“We are pleased to report another quarter of solid financial results,” said Caesarstone CEO Yosef Shiran when the Q2 financials were released. “Each of our major markets is healthy, even with the headwinds from currency exchange rates, and continues to present significant opportunities. We look forward to capturing those opportunities to continue driving long-term growth and value for our shareholders.”

A snapshot of Caesarstone stock performance over the last 30 days. Click this image to see a larger, more readable version.

After the stock price plummeted, financial analysts pointed out that top-line results were much lower than expected. Even though revenue increased to $127.5 million, investors were expecting it to be closer to $134.2 million, and management had cut revenue guidance by $20 million to a maximum of $505 million while analysts had projected the figure to be $521.5 million. Travis Hoium of the well-known Motley Fool stock-centric media outlet explained the drop in stock price to be a result of expectations getting ahead of performance, claiming there is “nothing to panic about for long-term investors.”

Caesarstone Under Attack

Caestarstone stock remained in the low 50s for the next two weeks, but on August 19, Spruce Point Capital Management, LLC., a prominent market-research firm, issued a scathing 54-page report accusing the company of lying about the quality of its quartz countertops, manufacturing substandard products,  and propping itself up on an unstable business model.

In the report Spruce Point states its belief that Caesarstone will continue to miss its goals to grow sales by 15 percent and that rising competition in the quartz surfacing industry will make it difficult for the company to maintain its share of the market. The firm also notes that Caesarstone’s controlling shareholder has reduced its ownership from 79 percent to 32.6 percent.

Spruce Point estimated the true value of Caesarstone stock to be in the range of $15 per share, which is 79 percent lower than its July 31 high. The firm had Caesarstone quartz surfacing independently analyzed, and it claims the product contains less quartz than advertised, so rather than demanding a premium price, the company should be selling at a discount, according to Spruce Point.

Caesarstone stock plummeted again shortly after this report was released,  this time to $39.77, the lowest it has been since October 2013. It had regained a couple of points to close at $44.61 by the end of the day.

Caesarstone Issues Weak Response

Caesarstone responded to the attack the following day, stating that the Spruce Point report is misleading, includes inaccuracies and draws false conclusions.

“We stand by all of our previous public statements, regulatory filings and presentations,” said Shiran. “We are proud of the honesty and integrity with which we have operated our business and categorically reject any suggestion to the contrary.”

“We are a strong company with a powerful brand that produces high-quality and innovative products through an efficient operation and state-of-the-art infrastructure,” Shiran continued. “This has enabled us to consistently produce excellent business and financial results and we believe in the Company’s capability to continue to do so.”

Fabricators Influence Countertop Selection

We here at CountertopResource.com believe that  by limiting fabricators’ roles in its business model, Caesarstone may have pushed itself off a cliff. The company has historically relied heavily on celebrity endorsements and its exclusive contract with Ikea. While the company does work with spec reps, architects and designers, some claim it has seemed to largely ignore the fabricator.

According to the results of our 2015 CountertopResource.com Countertop Survey, the furthest reaching of its kind, our audience agrees that fabricators are influential in the decision-making process. Caesarstone’s largest competitors, Cambria, Cosentino and DuPont, all work closely with fabricators.

In our recent industry survey, that received more than 500 responses, we asked, “How much influence do you feel fabricators have over what materials their customers choose for their countertop purchases.” 

Respondents had this to say:

• 3.4 percent said fabricators just sell customers what they ask for.
• 14.1 percent said fabricators have a little influence over what countertop materials their customers buy but mostly just sell them what they ask for.
• 28.9 percent said the influence of a fabricator can sometimes sway what countertop material is used.
• 26.2 percent said the influence of a fabricator can often sway what countertop material is selected by a customer.
• 26.5 percent said fabricators have great influence over what countertop materials a customer chooses.
• 1 percent said customers will almost always choose the material that the fabricator suggests.

Nearly 83 percent of respondents believe that fabricators are important to the decision-making process when it comes to material selection according to these results. Our opinion as an organization joins others that believe ignoring this may be adversely affecting Caesarstone, and any other company who fails to take the role of the fabricator into account. However, it may also be something more, as we have discovered the company has an F rating with the Better Business Bureau, an organization most companies do all they can to appease.

What do you think? Let us know in the comments below, or drop me a line at info@countertopresource.com.

Maine Countertop Companies and Fabricators

Maine: France sent explorers to Maine and established the first French colony on the St. Croix river in 1604. In 1607 England established Popham Colony along the Kennebec river.  During the French and Indian Wars, England and France fought for control of the New England area. French claims to the area ended with the Treaty of Paris in 1763. Maine became the 23rd state on March 15, 1820.
Maine has the highest percentage of forest coverage of any state and is one of the world's largest pulp-paper producers.

The people of  Maine need countertops too, and there are plenty of places to supply them! You can find a list of countertop businesses in Maine here.

This is a sneak peek at our efforts to compile the most complete list of countertop fabricators in the United States from A to Z. We will be working on Massachusetts next and hope to give you a look at that list as soon as its available. And you will find it here first.