25 Tips Every Successful Concrete Production Business ... · 25 Tips Every Concrete Production Owner Should Know Global Machine Market TEL: 913-766-1025 2 Tip 2 – Study the Cost

25 Tips Every Successful

Concrete Production Business

Owner Needs to Know

By Bill Fleming

Want to Avoid Losing Your Shirt In The

Concrete Products Business and

Instead Make Millions?

Are you:

• Confused about all the equipment choices and don’t know who

to believe?

• Want to make sure you’re spending your money on the right

equipment for your business?

Hi, I’m Bill Fleming and I hate seeing

small and large concrete products

producers taken advantage of by being

sold machines that they’ll outgrow in a

few years or that provide capacity

they’ll never use. I don’t want that to

happen to you because with just a little

expert advice I can show you the right equipment for your

manufacturing operation.

If you want to discover which concrete equipment is right for your

business and be confident it will grow with you, then reading the

following is a must!

While, I’m not going to give you a bunch of hogwash and say I’m

not biased, I don’t exclusively represent one manufacturer.

Instead I have connections with all the big name plant producers

and can steer you to the one solution that truly meets your needs.

Everyone has opinions, and if you’re like most business owners

you’re looking for good advice on equipment selection and

strategies – that’s where I can help you.

Have you ever bought a house? When you work with a real estate

broker, that person wants you to find the perfect home, one

where you’ll be happy and can see your family grow.

I don’t sell real estate, but I know more about the wide range of

concrete machinery systems and equipment on the market today

and can give you all the information you need to make an

informed decision. This will enable you to choose the one you’ll be

happy with which in turn will help your business grow! Isn’t that

what you really need?

I can help you start or expand your business by lowering your risk

and not allowing you to make the same mistakes I have seen all

too many companies make in the past.

Who is this guy Bill Fleming and why should you trust him?

I am a third generation equipment builder and have seen

thousands of concrete operations and can help get your operation

up and running without spending a fortune or being frustrated and

confused.

I am glad to share a few of subjects that are vital to growth and

expansion of your company. The 25 Tips on the following pages

are just the tip of the iceberg in describing the events and work

that need to be done in expanding your concrete business. I hope

it gets you thinking of some of the keys questions you should be

asking yourself.

Do you want the least biased advice in the industry so you

can avoid making mistakes and get it right? Pick up the

phone and dial my direct number of 913-766-1025.

25 Tips Every Successful

Concrete Production Business

Owner Needs to Know

by Bill Fleming

NOTICE The book is licensed to the individual reader only. Duplication or

distribution via e-mail, floppy disk, network, printout or other means to a

person other than the original purchaser is a violation of international copyright

law.

@ Copyright 2007, Bill Fleming, Global Machine Market. All rights reserved. No

part of this book may be reproduced in any form, by any means (including

electronic, photocopying, recording or otherwise) without the prior written

permission of the publisher.

Published by:

Global Machine Market

6420 West 91st Terrace

Overland Park KS, 66212

913-766-1025

[email protected]

mailto:[email protected]

Contents:

Tip 1 - Have a Solid well Researched Business Plan 1

Tip 2 – Study the Cost of Sales and Where your Sales will come from in the Future 2

Tip 3 - Determine Costing of Concrete Products 3

Tip 4 - Proper Financing to start the business 4

Tip 5 - Research the Labor Market for Tax Credits 5

Tip 6 - Experienced Labor to Operate Plant 6

Tip 7 - Forecasting the Start up Timing of your Project 7

Tip 8 - Over Spending on the Investment 8

Tip 9 – Raw Material Source Selection 9

Tip 10 - Creating a Mix Design 10

Tip 11 - Accurate Estimates for Forecast Demand 11

Tip 12 - Balance Investment versus Sales Demand 11

Tip 13 - Marketing Materials Investment Cost 12

Tip 14 – Finished Goods Inventory Space 13

Tip 15 - Land Selection for Production Facility 14

Tip 16 - Plan the Building for the Future 14

Tip 17 - Commercial Zoning and Permitting 15

Tip 18 - Don’t get your Business Land Locked 16

Tip 19 – Correct Packaging of your Finished Goods 17

Tip 20 - Research your Electrical Requirements 19

Tip 21 - Manufacturing is a Capital Intensive Industry 20

Tip 22 - Research your Vendors and Suppliers 20

Tip 23 - Choosing the Manufacturing Equipment 21

Tip 24 - Be Careful Listening to the Sales People 22

Tip 25 - Research Used Equipment Carefully 23

25 Tips Every Concrete Production Owner Should Know

Global Machine Market www.globalmachinemarket.com TEL: 913-766-1025

1

What Should Every Successful

Concrete Production Owner

Know?

Tip 1 - Have a Solid well Researched Business Plan

Without a good solid plan I have seen companies waste time,

energy, and money and be delayed in getting started in business.

If you are serious about making real money, raising money or

attracting investors you need a serious business plan.

Once you start to put topics in writing the plan begins to take a

new dimension. Advance planning will increase your chances for

success and pre-planning your alternatives will minimize any time

delays.

Challenge yourself and do your homework. I can guide you

through a solid plan that includes Cost of Goods Sold Analysis,

Profit and Loss Statements, Sales estimates and Transportation

Costs. This will provide you with foundational strength for your

operation and give you the tools needed to market, create

budgets, make banking arrangements, forecast expenses and cash

flows, etc.

After gathering all the info and plugging in all the numbers

sincerely ask yourself, “Do I really want to do this?”, then go with

your gut!

Want a well researched business plan?

Contact Bill at 913-766-1025.



2

Tip 2 – Study the Cost of Sales and Where your Sales

will come from in the Future

Just imagine you have just completed your start up or expansion

and then you ask your sales manager how are the sales coming

along? He says we don’t have any sales! Don’t under estimate the

cost of creating sales with marketing materials and dollar

investment in people to get the sales coming into the business.

Where is your market now?

Where will it be when you are ready to start selling? And

where will it be 5 years down the road?

Build these factors into your business plan, be as honest with

yourself as possible and anticipate the ups and downs. In areas

where seasonal business is common, your plan is even more

important to get right. It will provide you with realistic numbers,

so you can make an informed decision.

Need help with determining your cost of sales or where

your sales will come from?




3

Tip 3 - Determine Costing of Concrete Products

If you’re in business to make money, don’t make the mistake of

losing money per unit and trying to make it up it volume. Knowing

the manufacturing cost of your product is a must to be successful.

Look around and ask a lot of questions regarding correct raw

material cost and availability.

Check out various suppliers of sand, rock, cement, fly ash,

color pigment and add mix chemicals (to enhance the

performance of the concrete mix). Keep in mind all the related

soft and hard costs that make up manufacturing, sales, shipping

and servicing in your business. If you don’t fully understand your

actual cost, you could end up, as companies in the past, having a

rude wake up call.

Do you need help in determining costing or finding suitable

suppliers?




4

Tip 4 - Proper Financing to start the business

If you don’t plan to secure sufficient funds by knowing how much

money it takes to get started in business, you’ll be sailing a boat

without compass or map. You’ll also have a much higher financial

risk in your overall business success.

Equipment selection is only one financial piece to the puzzle in

building and growing your business. Allow in your financing

budget to include installation and expansion costs of buildings,

land, equipment and inventory of finished goods. It is important to

factor in cash flow requirements.

For example:

Estimating the financial figure of paying your suppliers

before you have collected receivables from your customers.

One of the most stressful times in the journey of startup or

expansion is when the equipment is on order but not yet installed,

money is going out the door and you have a back log in sales. If

you know the amount of money it takes to begin the journey of

your business the more successful you will be without major cash

flows problems.

Want help in finding proper financing?




5

Tip 5 - Research the Labor Market for Tax Credits

Have you heard the saying “there is no such thing as a free

lunch?” Dealing with the government can be the closest free lunch

you can get with a little research. Start ups and expansions

require as much money savings as possible to be competitive to

today’s market.

If you explore the programs available today you might save a

great deal of money. Explore the possibilities with programs

available in government grants loans, county, city and state

enterprise zones credits which will allow possible credits for

companies creating or maintaining new jobs. In many cases in our

industry electrical rebates are offered for expanding companies.

Need assistance in researching the Labor Market?




6

Tip 6 - Experienced Labor to Operate Plant

My equipment isn’t operating correctly and when it does the

quality of my products still looks terrible. You ask yourself, what is

going on? Fast, call the equipment manufacturer; it must be the

machine’s fault!

Don’t believe any equipment manufacturer that states their

equipment is unique and easy to operate and you will have no

problems getting the equipment operating with unskilled labor.

Making concrete products with machinery is preventative

maintenance intensive and takes experienced labor to operate and

service equipment systems. Like any new piece of software or

hardware it does have a learning curve.

Qualified and well trained operators and maintenance

personnel can be the cheapest (insurance policy)

investment you can make in shortening the learning curve,

especially if you are a start up operation.

Today's production machinery, at the highest level, is highly

sophisticated and manufacturers often provide limited training on

how to operate their equipment, let alone, how to make the

concrete products. Although it may take a few trained, qualified

people to run the plant operation, ask yourself if you are allowing

for back-up personnel?

Need help in finding skilled labor to operate your plant?




7

Tip 7 - Forecasting the Start up Timing of your Project

I once heard a great baseball saying “if you don’t keep score,

nobody wins, nobody loses and nobody cares”. You need to know

and set the goals for startup timing or it is like not keeping score

in baseball and it will cost you money and time. It is not

uncommon for companies today to plan 2-3 years in

advance of their target start up dates on projects.

Many of the issues outlined in this book take years to confirm

before actual equipment and buildings can even be ordered. Keep

in mind the amount of time the equipment supplier will need to

manufacture ship, install and trouble-shoot your equipment.

Want to learn how to properly forecast your start up

timing? Contact Bill at 913-766-1025.



8

Tip 8 - Over Spending on the Investment

Remember what it is like taking your 5 old year child into the toy

store to pick out a Birthday present? Did you come out with more

than one gift? Emotion can lead you to paying to high of monthly

payments on your new investment and delay your payback on

making a profit.

Companies and individuals can over spend and theorize

emotionally why they think they want something when they can’t

understand the difference of need and want. The equipment is

only a part of the overall investment between land, building,

transportation, administration and sales. Be careful not to spend

too much on all aspects of the business for a start up operation.

Land, building, equipment, trucks…etc…everything.

It is easy to get in a trap of believing you require and need

more items than you really do to start up or expansion. One

wise customer told me he would always ask himself prior to

purchasing anything: “will it save my company time, money,

increase quality or reduce labor?” Simple questions can

sometimes make the decisions easier. What is really a required

need versus just another item to purchase?

Not sure how to determine your needs and

avoid overspending?




9

Tip 9 – Raw Material Source Selection

Why can’t I just go out and research the cheapest aggregate

supply and buy it?

Making concrete products is similar to the concept of making

cookies. The cookies are only as good as the ingredients that are

put into the mix.

The same applies to concrete. You can have the highest level

production facility in the world with advanced equipment, but if

the materials that are run through the system are not up to

standard the entire investment is not going to make you

quality products. Materials need to be available with the correct

property characteristics, and consistency, and then consider the

price.

Want assistance in sourcing raw materials?




10

Tip 10 - Creating a Mix Design

Don’t go to the extreme and wait till you are losing customers to

realize your mix design is not meeting quality standards. Many

times mix design is taken for granted but should never be over

looked to ensure you are making the highest quality products at

the best possible production cost.

Just having quality materials is one part of the journey. It is vital

to learn the proper ingredients proportioning of the aggregates,

sands, cements, add mixtures and colors to create a consistent

and value added quality product.

The last ten years in the concrete industry has shown blended

colors in concrete products can increase sales and your profit

margins. Obtain good advice in creating and maintaining a good

cohesive mix design which exceeds you markets ASTM

requirement for PSI strength, water absorption, freeze thaw and

wear ability. I always recommend making your quality standard

slightly above the industry standard to eliminate cost risk

variances of going below the standard.

I have seen these tips used through the years with successful

companies. Making a consistent quality product is your

company’s best advertisement!

Not sure about the ideal mix design?




11

Tip 11 - Accurate Estimates for Forecast Demand

Six months after completing plant startup and journey of your

expansion you ask your sales person (that put the estimates

together) Why are we at only 10% of our forecasted sales? You

hear no response?

Do not over or grossly under estimate the market demand you are

in when adding new facilities and do not assume the good times

will last forever. Look at the existing products in the market and

either decide to stay on the same path other successful companies

have taken and continue on their success, or it may be a path of

downward momentum because the product has outlived its

lifecycle.

Need to understand how to create accurate estimates?


Tip 12 - Balance Investment versus Sales Demand

There are two ways to go out of business: no sales or too many

sales at one time. Many times equipment systems will make a

wide variety of concrete products and it is important for you to

research the sales of the most profitable items.

Buying equipment and matching your financial investment to what

your market area can absorb is the direction to success. Having a

sales and marketing plan that makes sense and determines which

items will make you the most profit, is vital to your research.



12

Want to learn how to balance investment versus

sales demand?


Tip 13 - Marketing Materials Investment Cost

Imagine you just lost a huge sale because your biggest potential

client asked for color samples and specifications of your product.

He also wants to have them this afternoon so he can award the

contract.

The problem is your sales manager didn’t get time to work on the

project and two days later you’ve lost the sale. You, as the owner,

can’t understand why you just lost the biggest possible sale on the

schedule.

Often times it is not just the actual materials or web site cost but

the management’s investment time to create the marketing look

and direction of the marketing materials. What is the manager not

doing while researching marketing materials and how much is this

costing you?



13

The customer needs to know what products and services your

company can provide. Ten to fifteen year ago a typical concrete

plant could invest in a facility and never have to think about

providing marketing and advertising materials for their business.

With increased competition in today’s market those days no

longer exist.

Don’t under estimate the importance of your allowable man power

requirements involved in creating marketing materials.

Want to learn how to develop the right marketing materials

for your dollar?


Tip 14 – Finished Goods Inventory Space

I have seen it happen where companies will spend a huge sum of

money on a production operation only to begin loosing sales in

two years because they don’t have enough storage for the

finished goods.

They can’t deliver goods to the client because they don’t have the

inventory. Be aware of the costs of Land and the impact to your

overall project value along with inadequate consideration to

inventory finished goods to support your manufacturing

production at optimum output. Allow for additional land, finished

goods, storage, trucks and repair and service area requirements.

Do you require assistance with finding inventory

space?




14

Tip 15 - Land Selection for Production Facility

Don’t wait one year after you are set up in operation to find out

your plant just got flooded with water and you are out of

business. Research contaminated soil conditions, flood

plains and earthquake fault lines.

Many other factors also go into the site selection such as access to

the highways, zoning, distance from your raw materials and

shipping distance from your targeted market place….etc. Generally

it is more favorable to be closer to your raw materials source than

it is being closer to your target market. In today’s world rail road

access for deliveries of material are allowing companies to position

themselves in areas normally not achievable ten years ago.

Want assistance with researching the best land for

your production facility?


Tip 16 - Plan the Building for the Future

You see the most exciting new machinery product line that will

make your company tons of money. Oh no, I don’t have the

proper size building to accommodate the expansion.

Selecting an existing or new building that is too small in over all

dimensions including height of ceiling can limit your production

output and growth of your business. If you are in this for the long



15

haul, your land allocation and building should be planned for

expansion, particularly if you are producing a product line that is

extensive and experiencing consistent growth. Always try to have

an alternative plan so you can continue to grow your business

without the costly mistake of a building that’s too small.

Buildings are available today with end walls that are easily

collapsible and expandable. Often, during the designing stage of a

facility, it is possible to incorporate options in batching and

mixing. You can supply a phase two production line for the

future, with little upfront cost in batching.

In today’s world, the majority of the equipment is installed for

production inside a single building. With all the new types of value

added products coming on board in the market today, the need

for additional processing lines may be required for growth.

Need advice on planning your building?


Tip 17 - Commercial Zoning and Permitting

You are ready to get started with the expansion. You’ve finished

the building plan, secured your future sales, secured your

financing, chosen the equipment and are ready to write the

checks to get it all started! Then you check into zoning and

building permits only to find it may take 6-12 months to get

approval. Delays in zoning and permitting are real life. If you

don’t plan ahead on these issues the market may pass you up

before you can get in business.

The 25 tips take time to complete, but will save much more time

in the long run. All of your permitting requirements, such as

air quality approvals, conditional use permits, and city and



16

county zoning approvals can take time. Try to get these

issues completed well ahead of your construction dates and build

these possible delays into your plan.

Need advice on commercial zoning and permits?


Tip 18 - Don’t get your Business Land Locked

Don’t cut your land needs short. There are too many stories of

companies that have become land locked preventing their

business to grow. Running out of land and not being able to keep

up with demand can put you out of business. Too often producers

run out of land space because they did not fully understand what

the land needs would be when the business grows from Level 1

though Levels 2-3-4-5.

Having the ability to start small and possible options to purchase

or lease property adjacent to the existing facility will help you

continue growth in your business.



17

Need help in understanding your land needs?


Tip 19 – Correct Packaging of your Finished Goods

It has always been amazing to me how much money is wasted by

not having the properly sized and designed shipping package.

If you neglect pre planning for packaging you could end up with a

packaging line of equipment that does not meet your

requirements. To correct this later could mean costly additions in

equipment and redesign of your packaging line.

To design a packaging system that flows smoothly, I

recommend determining how your customer receives your

goods, and work your way backwards. This will help

determine you’re casting machine output.



18

The majority of concrete products are shipped by flat bed trucks in

many different skid sizes. Also, there are several wrapping

alternatives such as stretch or shrink wrapping, steel or plastic

banding. Determining your ideal shipment package type and size

is important because it is a major economic issue in your cost.

Knowing the various sizes, shapes, weights and

configurations of your packaged finished goods will allow

you to create a standard. Once you have established a

standard, your designs in palletizing automation become clearer to

you and the equipment manufacturer. Your package design can be

your companies’ best advertisement.

Want to know how to create the best packaging?




19

Tip 20 - Research your Electrical Requirements

Want an easy way to delay your project by two to three months

and spend a lot of unexpected money? If there is one unexpected

delay I see more than any other in expanding and starting a new

facility it is electricity completion by the Utility Power Company

and internal wiring under estimates and delays. Because most

equipment is operated on 3 phase electricity, delays can

occur in obtaining the needed amount of electrical service.

Utility Companies are often never in a hurry to upgrade existing or

new facilities. Pre planning your electrical requirements and

installation locations can save you a lot of time and money.

Want assistance in researching your electrical

requirements? Contact Bill at 913-766-1025.



20

Tip 21 - Manufacturing is a Capital Intensive Industry

What extra support and auxiliary items, in addition to my concrete

machinery, do I need to get the plant up and running? You might

be surprised how big the list is just to maintain the concrete

machinery on a daily level?

Research your capital requirements, including a realistic amount

for auxiliary plant equipment, delivery equipment, handling and

packaging equipment, spare parts and start-up capital. Consider if

your start-up will be during a traditionally slow or busy time of the

year. This will have an effect on working capital requirements.

Want a well researched plan for capital requirements?


Tip 22 - Research your Vendors and Suppliers

Have you heard about the concrete producer that bought millions

of dollars of equipment only to find out, 6 months later, the

equipment manufacturer was extremely late on delivery and had

been in Bankruptcy for 12 months?

The cheapest price is not always the best price. Make sure the

plant you are going to build fits the output levels of production

you are requiring. If expanding, try and use the same equipment

so spare parts, molds, etc. are interchangeable with existing

equipment systems.

A very wise producer once said, “Recognize what each

machine produces best and worse and don’t commit the

weaker products to the system”. Often times it sounds great



21

to have a flexible machinery system but be careful not to over

commit the number of product lines to manufacture in a single

production facility.

Want a well researched vendor list?


Tip 23 - Choosing the Manufacturing Equipment

You can benefit from purchasing equipment similar to what you

may already own. If purchasing new equipment consider putting

penalty clauses in your offer for delivery dates. Equipment

manufacturers are seldom correct with delivery dates.

Recognize that most equipment manufacturers don’t

understand the daily aspects of how to operate and make

concrete products with their own equipment.

Want assistance choosing the best manufacturing

equipment?




22

Tip 24 - Be Careful Listening to the Sales People

Jokingly, I often ask my customers the question.”How can you tell

when a salesman is lying? The answer is …”when their lips are

moving!” Be careful and know the sale persons’ character,

reputation and knowledge of the equipment and the industry,

before taking his words for absolute fact.

Ask to talk to users of the equipment and attend plant tours

of similar equipment set ups making the variety of products

you need to produce. Don’t be led down the path by a sales

representative to overselling untested equipment or technology.

Want assistance on dealing with sales people?




23

Tip 25 - Research Used Equipment Carefully

The best advice I can give, when you’re looking at used

equipment, is Buyer Beware! Be careful buying used equipment because it often misses focuses your labor talents and takes too

much time to make it work in your application.

Even if a used machine worked well for the previous owner,

by the time it is taken apart and reassembled performance issues can arise.

Ready to Grow Your

Concrete Products Business?

Contact Bill Fleming at:

Global Machine Market

6420 West 91st Terrace Overland Park KS, USA 66212 TELEPHONE: 913-766-1025

FAX: 913-273-0400 EMAIL: [email protected]

mailto:[email protected]

Documents

25 Tips Every Successful Concrete Production Business ... · 25 Tips Every Concrete Production Owner Should Know Global Machine Market TEL: 913-766-1025 2 Tip 2 – Study the Cost