Performance Tile & Stone

The couple, who share both a marriage and the ownership of Performance Tile & Stone, went into business in 1994 convinced they could serve both large developers and single-family homeowners really well, regardless of whether the job was high-end new construction or more-modest remodels.
They’ve been able to do it, too … even if today’s economy has forced them to cut employee numbers and prices in recent months. What’s kept them going and growing is a nice mix of Eric’s abilities in the shop, and Judy’s skills in the office.

STRENGTH IN NUMBERS
When your first job is for an 80-unit development, it’s easy to see your business getting off on the right foot. And, when you start out with one-, five- and 10-year business plans, not to mention a goal of becoming known for your fabrication, you’re less likely to stumble over the problems of other start-ups.
A little bit of courage doesn’t hurt, either.
Judy Richardson’s background is in finance and business; after managing offices in San Francisco as an escrow officer, she was recruited for a job in Sacramento, Calif. – where she ran into Eric, a childhood friend.
“I started working as a tile helper in 1979,” Eric Richardson explains. “I worked my way up through three different companies between then and 1993, doing both tile and stone.”
At that point the couple was dating, and Judy Richardson recognized that her significant other wasn’t happy being someone else’s employee.
“I said, ‘What if we go into partnership? You get your license and I’ll write your business plan,’” Judy Richardson explains. “Eric’s expertise in the industry is what started the business as far as the product, and I had the business background to make sure we stayed on course with our business plan.”
It also helped that she had a good job and was willing to support what became their joint household, doing the books at night.
Along with those one-, five- and 10-year business plans, the couple’s goal was to become what Judy Richardson describes as “a heavy hitter in the Sacramento area for fabrication.”
Although long on ideas and business acumen, the pair lacked a large pool of start-up capital. For $10,000, Eric Richardson bought a a hand router and panel saw for wood that he converted to cut granite.
However, it was enough when the first big opportunity came along: an 80-unit subdivision.
“The project came from a friend of mine,” says Eric Richardson. “He had already gone out on his own, but he was afraid to take it on. He introduced us to the builder, we hit it off and it just blossomed from that. I had the confidence we could do the project.”
Working in their garage, Eric Richardson and their first two employees worked day and night to fabricate and install the job, starting a long process of referrals from satisfied builders and other customers.
With a start like that, it took a little more than a year before the business was ready to move into better quarters, at least according to Eric Richardson.
“I was really reluctant,” says Judy Richardson. “I was squirreling money away to make sure of the longevity of the business, and when Eric approached me about the idea of leasing space, I thought, ‘Here we go; this isn’t part of the plan and we’re not ready.’ But, I juggled some things around and realized it was what we had to do.”
The couple leased one of four 1,500 ft² units in a business property. As the other tenants left, they took over their spaces, as well, eventually expanding to the full 6,000 ft².

PLENTY OF EGGS
The move came at a very fortunate time for the business; the partners were chosen by Home Depot to do its fabrication in northern California.
“They wanted to inspect our site, and it was important that we impress them,” she says. “I think looking the part and the way you present your facility is another reason we got so many accounts.”
The Richardsons kept the Home Depot account for a decade, but Judy Richardson made sure to stick to her marketing plan, which still calls for a diversified customer base.
“Contracts like Home Depot can take over a business, but in my opinion that was a dangerous way to go,” she says. “I made a commitment to keep them at only 25 percent of our business. We tried to keep large builders being about 40 percent, and then we divided that other 35 percent between smaller builders, kitchen and bath shops and homeowners.”
Judy Richardson adds that even today she’s trying to keep about the same mix of accounts.
“Over the last two years that’s changed some because our large-builder accounts are down in the low 30s because they’re not able to sell new homes,” she says. “Still, that’s what’s been helping us in this down economy: not having all our eggs in one basket.”
They may have made a modest start, equipment-wise, but the Richardsons say another key component of their success has been automation. The company purchased its first Intermac MasterStone 4000 from AGM in 1997, and today runs three of the CNC machines, as well as two Campagnola e Fedeli numerically controlled bridge saws and a Comandulli Speedy System.
“We were one of the first in northern California to have this type of equipment, and it helped us get a strong hold on our market because we were able to do large production jobs with less personnel and time,” says Judy Richardson. “We could do the work faster and with a better finish.”
Obviously, with such an extensive inventory of equipment, the couple isn’t still operating out of those 6,000 ft². As the company approached its 10th anniversary, Performance took the big step of buying its own building.
“The end of our 10-year plan was to purchase our own facility, and we wanted a 20,000 ft² building where we could stretch out and get all our machines in a more-efficient production line,” Judy Richardson says. “We bought a building in Rocklin (until then, Performance operated out of Loomis, Calif.) that was kind of turnkey because it had housed a metal machining shop. A lot of the electrical requirements were here and in place; we came in, cleaned it up, and made it look like ours.”
She adds that about 3,500 ft² of the space is dedicated to administrative office and showroom space.
“What I wanted was to design the facility front entrance to feel like you’re walking into someone’s living room,” Judy Richardson says. “Instead of the typical tiles on the walls and samples displayed, you walk in on a really beautiful travertine floor. Our reception counter is more decorative than normal, using materials we’ve produced. Then, I have a conference room where people can look at samples of materials.”
The company also works with a cabinet firm who displays some of its wares – with appropriate tops, of course – and some of Performance’s tile work. Today, Judy Richardson says the company’s work is divided about equally between tile and dimensional stone, although a few years ago as much as 70 percent of the work was stone.
“I’m assuming people who want to do improvements but can’t afford stone are using tile a bit more,” Judy Richardson says.

HARD CHOICES
That leaves approximately 16,500 ft² of shop space in the building, although Eric Richardson says the amount actually dedicated to fabrication is closer to 15,000 ft² because of production offices.
That space also includes the operations of Classic Stone Works, a sister company the couple started early this decade to do dimensional-stone work, mainly from limestone and travertine.
“A gentleman we did work for was looking at doing some dimensional-stone fireplaces, and mantels, wall caps and door archways and he asked if we could do them,” says Eric Richardson. “I’m always up for a new challenge, so we did some jobs for him and that pushed us into others.”
His wife explains that by using a different company name and running out of leased space, Classic Stone Works gave her husband a creative outlet at a time when Performance was highly production-oriented.
“Classic allows him to be very artistic and create new edge ideas and CAD drawings,” says Judy Richardson. “For awhile, I ran Performance and we moved Classic into its own facility and Eric took care of it.
“However, because of the economy, it didn’t make sense for Classic to be at a different location, so we brought it back to our building,” she adds.
“A lot of the work is what’s known as ‘will-calls,’” Eric Richardson explains. “We try not to do too many installs on it. Installing it is really a masonry specialty, but we work with the masons and architects on designs and how they’ll work.
“And, because we have installation experience, we’re sympathetic to installers on how the work is going to be done and weight issues. We also do a lot of pre-fitting here at the shop.”
That certainly isn’t the first change the economy has prompted the Richardsons to make, and it’s likely not the last. Among the more painful savings has been cutting the company’s number of employees from a high of 80 down to the current 39, and lowering prices.
And, day-to-day operations are becoming even more-efficient.
“We’ve found we had room to improve,” Judy Richardson says. “You kind of get used to a certain manner of operating until you’re pushed by these times to rethink things. It’s been a painful process, but good.”
Systems put in place years ago are paying off. Judy Richardson says that, as company president, she’s reviewing historical data, gathering information from employees and running reports.
“Then, I meet with Eric and talk with him about what the numbers are showing,” she explains. “Then, he makes adjustments based on his experience and feedback from the shop on whether it’s changing a certain product that we’re using. He’ll test different things out to see if they’re faster or more efficient and if it makes a difference.”
The Richardsons are also relying on other things they’ve built over the years, such as their reputation.
“We have a long history of quality, and our reputation is to make sure we service the customer,” Judy Richardson says. “We take care of the customer, not just through the course of the job, but if they call five years later and ask for a touch-up, we take care of it because most of the time they’ll be referring us to a neighbor.”
She says a couple years ago she spent money on several different media, including television and radio advertising. However, when the return wasn’t as great as she would have liked, she opted to go back to a basic approach.
“I’ve gone back to the salespeople and said, ‘We need to pound the pavement again,’” she relates. “We’ve gone back to our suppliers and let them know we’re still interested in doing the work, and we’re spending more time with our customers face-to-face. We want them to feel a little more taken care of, and we’re making an extra effort to make sure they know we want the job.”
For example, the company doesn’t stock slabs except for large projects, relying on customers going to area suppliers to pick out slabs. Now, Judy Richardson says, someone from her staff is likely to go along with a customer to the suppliers to help with stone selection.
Although the company’s current five-year plan anticipated building another structure on adjacent land the couple owns and moving into more retail products, Judy Richardson says that’s been moved to a back burner. For now, the emphasis is on paying off the leases on some equipment, and doing a top-notch job on the work coming through the door.
“We’re at a point where we feel pretty settled,” she says. “The thing is, we’re busy. People are upgrading their homes. We just need to learn new ways to do things to make a profit.”
And, ultimately, she believes Performance Tile & Stone will continue to succeed because it has something not all its competitors can boast of: knowledgeable owners who are very involved in the hands-on operation of the business.
“I was recently told by a supplier that he doesn’t normally see an owner out working with customers,” Judy Richardson concludes. “We feel we bring a lot of integrity to our product and the industry, and even with the shifts and changes, we’re still lucky to be here.”

This article first appeared in the May 2009 print edition of Stone Business. ©2009 Western Business Media Inc.