Contractors Weigh In on the Current Decorative Concrete Industry - Views on the Market

Upon returning from the city of "Lost Wages" after the 2009 World of Concrete, I found myself reflecting back on the events that took place and thinking about the general mood of everyone participating in this year's show.

As a bystander in several manufacturer booths and a couple cocktail receptions, it was interesting to listen to the sidebar conversations. Many of the discussions revolved around comments like, "Hey, did you hear that so-and-so lost their job after 19 years of service?" or "Did you hear that so-and-so pulled out of the World Of Concrete at the last minute because of finances and decided not to exhibit?" I don't want to detract anything from the show, which was certainly good, but the buzz seemed to focus around our flailing economy.

I asked two of the many friends I saw at the show how their companies were faring in these rough times. I figured it would be interesting to hear the perspectives of these two highly successful businessmen from two different geographical regions. Here's what they had to say:

Tom Ralston, Santa Cruz, Calif.

Tom: The current status of the economy has forced us to change our business radically. Our sales are down 40 percent. Changes have been made in three areas:

1. Cutbacks and spending. Our office staff has seen their hours reduced by 40 percent overall which obviously reduces payroll. We deactivated spare cell phone lines and office lines. The president's salary (Tom Ralston's salary) was also cut 40 percent.

We eliminated the company's San Francisco Giants season tickets and license. And Tom Ralston Concrete has temporarily taken away group medical insurance from all salaried and hourly employees, hopefully reinstating benefits when our economy recovers. Our company did assist and make sure all eligible employees made a seamless transition to individual medical insurance.

2. Bidding, job costing and management strategies. TRC has seen its prices slashed more than it ever has. Due to fierce competition and clients not wanting to spend extra money on "high end" decorative concrete, we have bidding to make as little as 1 percent net profit. We have sliced prices to the bone ... and hopefully we don't get into the marrow. Our job costing is very intense these days trying to hone in on labor overruns. Moreover, much of the labor for new jobs is budgeted by our foreman prior to starting the job, and we try to hold them to that; it actually has been a good motivator.

3. Marketing and value engineering. We have been pounding the newspapers with creative advertising to let the public know we are ready to work with as economically as we can. We are sending out mass flyers via e-mail and letting architects, contractors, developers, and potential and former clients know what we are doing and what we may be able to do for them. We are offering complete services around outdoor kitchens and "outdoor living rooms" offering to manage plumbers, electricians and carpenters and become the one-stop-shop in that particular area.

We have made cold calls to clients we haven't worked with in years and offered them our services at rates they would not ordinarily get. We try to show our potential clients the various ways to provide value to them; e.g. I offer free management on any time and material project. We also are eager to offer ways to save money and use concrete creatively yet economically with free design advice which can sometimes be as simple as providing various samples for a great color or simple decorative deep jointing to spruce up their slab.

Bob: If you could look into a crystal ball, what would you see in terms of your business over the next one to two years?