Hindsight With Tom Graf

Tom Graf is the owner of Concrete Arts by Graf Architectural Concrete, located in Hudson, Wisconsin. The company offers all types of concrete services—decorative, polished, traditional—you name it. Their piece de resistance is a huge showroom that includes the company parking lot, which features 30,000 square feet of decorative concrete and a topography of the St. Croix river, complete with a water feature.

This showroom has proven to be a tremendous selling tool for Graf. "We did patterns, textures and stains in various styles. The parking lot is all exterior stains and colors," he says with pride. The showroom also features a 20,000-foot interior space, and the entire center won the Wisconsin Ready-Mix Commercial Project of the Year in 2002.

Here are Graf's Hindsight tips culled over 11 years of experience in the industry:

Managing employees
"There are two types of employees," explains Graf. "Those who are paid a salary and those who are paid hourly. The wages of salaried employees should be based on incentive-driven goals—quality of work, volume of work and profit margin. With hourly employees, it's more important to focus on chemistry and find the right person for the job, versus just filling a job with anybody."

Graf adds that for salaried employees, the profit margin and volume should cover overhead.

Marketing/advertising
According to Graf, the most important type of marketing is word of mouth. "Unless you're looking to grow the volume of your business, word of mouth has the most impact of all, especially for repeat business," Graf says.

He also notes that any advertising should be in direct correlation to the size of the business. In other words, don't advertise in a national magazine if you can only handle one or two jobs here and there.

As for the one thing everyone should have?

Graf says that's easy—collateral material such as sales sheets. "Sales sheets are critical for small contractors," he adds. "Trade ads don't give you the bang for your buck, and you're better served with more face-to-face contact, and that's where sales sheets come in to play."

Graf also suggests using the Internet as another advertising vehicle.

"There's more information available to customers to educate themselves. Use the Internet as a media source, and direct people to sites like Concrete Network where they can see photos on their own time," he says, "and use the Internet as a source for educating your customers."

Customer relations
Graf has two very important pieces of advice where customers are concerned.

The first—get to call backs immediately. "The more promptly you get back to them, the more overall satisfaction the customer will have," he explains. "It could be something very minor, but if it's not looked at and addressed in a timely fashion, you end up taking a reactive posture rather than a proactive one. If they call and you go out immediately, it puts you on even ground."

The other tip Graf has picked up is how to read his customers.

"I can read them in a short time frame," he says, "which helps me ensure they are a good match for decorative concrete and they're not looking for something else or expecting something perfect, which concrete is not."

Graf adds that it's important to educate customers that concrete is a perishable product—there are elements out of a contractor's control on any given day, such as the weather.

Through the years, Graf says he's gotten very good at gauging customers as far as their level of expectation.

Pricing
It's all about niche and margin, according to Graf.

"Pricing should be based on your niche in the marketplace and your margin to be able to sustain business and cash flow," he explains. "Small businesses need to get a firm handle on overhead. Do you want to price to keep your guys busy? You should be able to massage your margins five to 10 percent depending on your volume. If you need to keep a lot of people busy, you need more volume."

Facility management
Not surprisingly, Graf recommends every contractor have a showroom, even a small one.

"It's very important, no matter what the size," he says. "You need a facility where you can show samples of your work so customers can get a visual on the product."

Job site management
According to Graf, the job site is make it or break it time.

"Your money is made in the field," explains Graf. "Labor and quality control is where money is lost. It doesn't matter how much you sell if it falls apart at the job site. Poor workmanship causes replacement work, and that's not only the loss of money on that project, but the loss of money on other potential projects you could be doing."

Graf says labor efficiency is another big issue. "It's not all about volume," he says, "it's also about managing labor efficiently."

Equipment
We've all heard the saying "you've got to spend money to make money," but Graf says that principle is doubly true in the decorative concrete industry.

"If you're in an established market, decorative concrete becomes a commodity," he explains. "You have to branch out and beyond what you're offering, which takes research and development, training, and new products and equipment, all in an effort to niche yourself."

Vendors/suppliers
Graf says that relationships have been the core of his business over the last 11 years.

"I use the same supplier, the same banking institution, the same insurance company, the same subcontractors," he says. "It's about maintaining relationships. In tough times, your vendors are your friends. If you treat them well and take care of them, you're building a foundation based on loyalty."

He cites this example: Who would you rather do a favor for, a total stranger you have no professional relationship with, or someone you've been doing business with for years, through thick and thin?

"Our concrete vendor is higher, but we work with them and they work with us," he continues. "Contractors underestimate the value of vendors. It's not all about price--loyalty and service are paramount."

"Relationships go both ways—how can you expect customers to be loyal to you if you aren't loyal to your vendors?" Graf muses. "It's a double standard."

Concrete Arts
575 Schommer Dr.
Hudson, WI 54016
(715) 386-8750 Office
(715) 386-8759 Fax
info@concretearts.com
www.concretearts.com

Read other articles in the Hindsight Series.