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August 2008

Business Strategies

Staying Afloat

Keeping a business thriving is no easy task in today's economic climate, so how do businesses in the masonry industry continue to survive? Masonry talked to three companies to learn the business strategies that have brought and will continue to bring them success.

We spoke to the heads of Grout Grunt, Lang Masonry and Hydro Mobile about what makes their wheels turn, from marketing strategies and handling growth to their companies' cultures and how they've been affected by the rising cost of fuel.

A mason for 40 years, Giovanni Agazzi is joined at Grout Grunt by his two sons, Morgan and Steven. The Livonia, Mich.-based company is named for the senior Agazzi's invention some 30 years ago of the Grout Grunt, a device designed specifically for masons to place mixed grout or any other high-density material in CMU.

Today, while they also operate a masonry company, the Agazzi trio comprises the entire staff of Grout Grunt, a small business headed into its fifth year with great potential. They continue to find new uses for the Grout Grunt that have nothing to do with the original intent, including gardening, filling sandbags and feeding livestock.


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Grout Grunt's Morgan Agazzi says that while the company has felt the squeeze of a slow economy, it hasn't been debilitating.

We spoke with Morgan Agazzi about doing business in today's market, including the company's methods for marketing and branding such a specialty product.

"I didn't go to marketing school, so I'm trying my best to do what I can," he says, noting that they maintain a Web site, place a nominal amount of print advertising and rely on distributors and trade show interaction to spread the word about Grout Grunt.

Unfortunately, small businesses are often strained quickest when an economy slows. While Agazzi says they've felt the squeeze, it hasn't been debilitating. About the only sign he's seen is that retailers aren't ordering the product in quantities of 24 or 36 as often. Rather, they're only buying what they need to keep a few on the shelves.

The Agazzis know growth must come slowly, lest they become overwhelmed and unable to meet demand. Last year, Grout Grunt sold 8,000 units, and the owners hope to double that this year.

Agazzi says the company relies little on technology, though he has had customers inquire about using Pay Pal for transactions and ordering online.

"I'm lucky to get my emails and go on the Internet to get what I need," he admits. "I'm not a computer geek."

As the family prepares for the elder Agazzi to retire, Morgan and Steven are working on their own approaches to the business, looking to the future and hoping to carry on the company's reputation for a quality product for years to come.


Information for Masonry Contractors
 

"We never underbid to
get a job, because losing money is worse than not getting the job."


— Damian Lang, Lang Masonry

A mid-sized company, Waterford, Ohio-based Lang Masonry has been in business for more than 24 years, and owner Damian Lang says the success is based on a solid reputation for safety and quality as well as the company's marketing strategy.

"The companies and schools that hire us continue to do so because we've proven that we are price competitive, and we stand behind our work," he says. "So in terms of direct advertising, we do very little; we focus on our relationship and strive to maintain our solid reputation."

Regarding advertising, Lang Masonry does maintain a Web site and advertises in local and regional publications, something many mid-sized companies mistakenly cut from their budgets when the economy slows. Instead, Lang Masonry continues to advertise during a down economy as well as expand into markets that are more stable.

"In a strong economy, we can be a little more selective with the kinds of jobs we want to bid," he says. "We never underbid to get a job, because losing money is worse than not getting the job. We are aware that there are times that work will be slow. During those times, we make cuts in expenses and workforce as soon as possible to avoid tremendous losses. When work picks back up, we hire and gear right back up to handle the increased work load."

Like everyone else, Lang feels the squeeze of high fuel prices, but says the increased cost of materials is difficult to pass along to clients also struggling in a tough economy. Instead, the company cut trucks from their fleet and has adopted more conservative travel habits. In addition, they try to hire skilled labor in areas where they are currently working, so employees don't have to travel so far to the jobsite.

While growth is typically a good thing for any business, it's usually most effective when done at a steady pace, which Lang has learned from experience during the last 24 years. They aim for a 20 percent to 40 percent growth and know success is dependent upon the management staff and systems they have in place to handle the growth.

To keep things running smoothly, Lang Masonry hasn't been shy about investing in technology and has armed every foreman with laptops, digital cameras and cell phones. Ongoing training in the latest technologies is also provided, Lang says.

"We've incorporated electronic job clocks for more efficiency among field workers," he says. "And, our estimators use Tradesmen Software in the 3-D to bid their projects precisely. We employ a fulltime IT specialist to help us keep up-to-date on the latest programs and equipment."

Like many companies in this industry, Lang Masonry operates under a relaxed company culture, realizing that if employees are given the opportunity to enjoy a satisfying home life, they will be more likely to dedicate themselves 100 percent when it comes to the "second family" at work. Lang strives to employ a qualified and diverse workforce, but won't put the company at risk with an unqualified person just to fill a job opening. And the company motto is followed: "Safety, Quality and Production."

In the future, continued company growth is planned "by constantly developing better employees, ways and systems of doing masonry work."


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"We're a leader,
and we want to remain a leader, so we do
a lot of advertising,"


— Thierry LaChapelle,
Hydro Mobile


Largest of the three, Hydro Mobile in Quebec, Canada, continues to offer a framing work platform invented in 1987. The framing system creates a safer work environment, is more ergonomic and raises production by as much as 30 percent, says Thierry LaChapelle, marketing director.

The company holds 55 percent to 60 percent of the market share in the United States. "We're a leader, and we want to remain a leader, so we do a lot of advertising," says LaChapelle, adding that much of the advertising is corporate, using news releases and customers and clients to promote their products, with an emphasis on branding and image.

"Eighty percent of our revenue came from the U.S. market this year, but this year because of the slow down it might go down to about 70 percent," he says. "When we saw the residential (construction) side going down, it was a sign that the commercial and industrial sides would go down, too."

To combat a weak economy, Hydro Mobile strives to maximize the performance of the dealers they have in place while expanding their territory, both in the United States and in international markets.

Another consideration is rising fuel costs, from which Hydro Mobile has seen an impact on production costs, due to the higher price of supplies they use and the costs to ship their product.

"There's not much we can do about it," admits LaChapelle. "We need to get the equipment on the jobsite."

Through the changing economy, Hydro Mobile tries to maintain a steady workforce and, currently, employs about 135 people. For the last couple of years, the company's strategic planning has focused on where they are heading with the production plant. A decision was reached to keep in-house the main production aspects such as the major welding, product assembly and quality control. They do, however, subcontract some of the minor welding and the prep of some smaller parts, says LaChapelle.

"We'd rather work with people than robots, though a robot in the shop does some of the welding," he says, referencing some of the advanced technology used by the company. In addition, the company's three owners foster a workplace culture that values employees and their personal time, recognizing that employees who are happy at home are usually happy at work.

"Our president is a 43-year-old engineer who is very open-minded and team oriented," he says. "He really believes in balancing work life and personal life to help avoid burnout." Hydro Mobile's French motto translates loosely into "Communication. Respect. Integrity."

LaChapelle says the company's growth is measured with a target to maintain 15 percent per year, though last year they saw a jump of 25 percent. Looking to the future, Hydro Mobile plans to continue with new product introduction and is currently preparing to launch the fourth product created since 2000.



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