Startup in tough market survives with tight cost control
In business school terms, it’s possible to turn a profit in a recession if your costs reflect the reality of a tough market.
In real-world terms, it’s possible to stay in the black if the owner takes his turn pulling orders and the salespeople bring strong backs to the job of stacking heavy pavers onto pallets.
Launched last summer in the midst of the worst construction downturn in decades, Parker Hardscape Supply Inc. in Reno turned a modest profit during its first construction season, says President Eric Thompson.
And sales continue to grow slowly, perhaps, but growing this year as homeowners cautiously open their wallets for home-renovation projects such as patio pavers, retaining walls and outdoor fireplaces.
But Thompson, a 10-year veteran of the hardscape business who named the company after his son, keeps an iron grip on his costs.
For instance, the company outsources its trucking to Dayton Valley Turf, which itself has excess capacity during the downturn.
“That way, we don’t have any truck payments in the winter,” says Jerred Herrell, sales and operations manager for Parker Hardscape.
The company splits the cost of its yard space with Belgard Hardscapes, which wanted to stock some materials closer to northern Nevada customers than its paver-stone manufacturing plant at Stockton.
The arrangement helps Parker Hardscapes keep a close handle on its inventories, as Thompson knows that he can fill larger orders by simply walking across the yard.
Parker Hardscapes shares facilities, too, with Dustin Rand’s Safari Rockeries, a maker of large-sized rock sculptures such as the carved elephants at the entrance to the Whole Foods Market in Reno.
The two companies’ product lines are complementary, Thompson says, and they often share customers.
Largely, however, the effort to control costs at Parker Hardscape mostly translates into a lot of hard work.
“There are not big sales egos here,” says Thompson, noting that the three-person staff loads trucks, works with homeowners and contractors, sweeps up and keeps the books. “We knew we had to get our overhead very low.”
His business plan tight control of costs, aggressive pursuit of sales even in a down market convinced friends and family members to back Thompson when he launched Parker Hardscape last June.
Homeowners who are unable to sell their homes now are beginning to spend on upgrades, Herrell says.
The company positions its pavers as a cost-effective and environmentally friendly landscaping solution because paved surfaces, unlike lawns, don’t require water.
Working with Sierra Rockeries, Parker Hardscapes just completed an outdoor design center that’s a showroom for its products as well as the rock creation of Rand’s companies.
Thompson says the company will provide the outdoor showroom as a venue for business and nonprofit events, hoping to gain some exposure in return.
Still, he isn’t predicting a return to the go-go years of construction any time soon. Thompson projects annual sales increases of 10 to 20 percent for the next few years, but figures that will be enough to keep the company on solid footing.
Especially, he says, if Parker Hardscapes continues to keep tight control of its costs.
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