Al Stewart, president of Structural Buildings, Inc. based in Becker, Minn., describes his company as small. Small to some maybe, but this is one company that doesn’t act small or do anything with a small company mentality.
In fact, this self-described small company is a novelty among others its size because it is one of the few small builders in its area that is totally computerized. “We were one of the first small builders in our area to install a computer CAD system back in 1989, when we started doing computer drafting,” states Stewart.
Today, the entire company is computerized, including its pricing structure. “It makes sense. If one of our salespeople is sitting in a customer’s house, they can design and price a lot of different buildings at the same time. They can make changes on the fly. If the customer wants the building six feet wider or 20 feet longer, they can make the changes and come up with a new price in minutes,” says Stewart, telling the story about how he recently priced out a job for a lumber yard that took just three to five minutes. “My customer told us, ‘Wow! That would have taken us half a day to figure out the cost of materials and labor.’”
Gaining a Competitive Edge
To two or three of Stewart’s big competitors, taking a high-tech approach to doing business is commonplace, but in Stewart’s circles, his company is one rare entity. “Yeah, all the big guys are computerized but I would say that the majority of smaller guys like us are not,” admits Stewart.
Stewart started Structural Buildings in 1985. He had worked for a builder for 14 years when he decided to strike out on his own. “We were doing some subcontracting of building and we started a small lumberyard at that time along with a building division. There were three of us back then,” Stewart remembers.
Today, the company works from its headquarters in Becker, which is staffed with seven employees. Stewart has eight salespeople working throughout the Gopher State. About a year ago, he opened a second office in Pequot Lakes. The company specializes in building agricultural buildings, airplane hangars, garages, mini-storage, office suites, and warehouses using steel frame, post frame, stud wall, and masonry building systems.
Structural Buildings designs and builds most of its projects as the result of negotiated sales. Generally, Stewart works directly with customers as the general contractor and outsources the work to subcontractors, many of whom used to be employees.
Stewart went to computers to increase accuracy and efficiency. “They reduce the chance of mistakes being made. In addition, we needed the flexibility with times being what they are. We needed more speed, accuracy, and help in designing buildings,” explains Stewart,
The transition from paper didn’t happen overnight. It took about five to six years to have all of our data as good as it is today, says Stewart.
Investing Time to Save Time
It wasn’t a step Stewart took lightly. Computerizing the design and drafting portion was a big decision back in 1989, “and the cost was huge,” remembers Stewart, noting that finding the right person to use the CAD system was the biggest investment. “It wasn’t easy either. Finding the right draftsperson took a lot of time.”
Between 1995 and 1997, he set to work on computerizing the company’s pricing structure. Initially, Stewart relied on an employee who was computer savvy and teamed up with him to establish the company’s own pricing structure. “To get a price book updated on a yearly basis was time consuming and the accuracy wasn’t there,” says Stewart, noting the post-frame building business has many variables that have to be built in, including snow loads that make the process more complicated than building a standard house.
After a few years of intensive data input, the company was up to speed on the new system by 2000.
“It works great for us. The efficiency of having our salespeople be able to price a customer in 10 to 15 minutes is terrific. The payoff is the time we save and the accuracy in making sure that the prices are right when you price the building,” Stewart said. “We can price out 10 buildings a day now where before we had to break down all the variables and change everything to accommodate different widths, sizes and heights.”
Stewart finds he is more efficient in the design stages now as well. “If someone has to find an engineer to do the drafting for them, they have that expense and they have to deal with someone else’s timeframe. It can take you one to four weeks to get a drawing done and complete. We used to do them by hand and there is so much time and effort involved in that.”
Surprisingly, the system does not require a lot of updating; Stewart’s team simply spends four to five hours updating the pricing whenever there is a big change, which might occur every three months or so.
Poised for Growth
With the computer system humming long, Stewart can spend more time planning his next move to grow the business.
The key, according to Stewart, is to position Structural Buildings as a turnkey provider. It is a move made necessary by the evolving business climate. “Today, with the changing times and so few rural ag buildings being built, we needed to develop our commercial and industrial business and diversify, which I think most of the successful builders are doing today. We’re also doing more turnkey projects. We take the building from start to finish. We’ll do the excavating and get the permits and everything in between. When it is done, we’ll give the customer the key. Or, we’ll just do parts of the building, whatever the customer wants.
“Because a customer may be doing a small project, say between $100,000 and $150,000, he still needs the same kind of help as someone doing a $10 million project. You still have the same ingredients in the project but on a smaller scale,” says Stewart.
Go to the Business
In addition to diversifying, Stewart is also considering opening a third office this year in Bemidji or Grand Rapids, Minn. Which location he decides upon will hinge on finding the right person to head up the office. Stewart is an old hand at this. He opened his second office in Pequot Lakes not too long ago and that office made $3 million in 2006. The entire company had sales of $12 million.
Having a local office is important in the area, according to Stewart. “Being in the area and part of the community is a big thing. Northern Minnesota is an area where a lot of people come from the metro area that own property and build summer homes and cabins. You have an advantage if you’re a local contractor and you do need to develop relationships with other local contractors so you can put the right team together.”
Business is Local
Perhaps more important than computerizing the company, is finding the right people, says Stewart. “We have a great team of people that is making the possibility of expansion a lot more feasible. With the economy being what it is, we’re thankful that we have a great network of guys who have been with us for many, many years. It makes it easier when you have a good network of people working around you.”
Of course, opening any office doesn’t happen without its share of concerns. “We were very skeptical because the cost would increase our overhead, but it was a positive thing because we started to see people come into the office. If you can have that local presence, it helps people feel better about dealing with another local.”
Stewart’s approach to business — both from a technical and human resources standpoint — has paid off with growing sales and all signs point to the fact that 2007 will be just as prosperous. “Business has been good for us. We had a record year last year due to the expansion and it looks like we’ll have a good year again this year. The residential business has been really bad, but our end of the commercial business looks good for 2007,” he says.
“It all comes down to people. Yes, the computers help. But when you have a great team of people who can put a turnkey project together and handle the design build while designing the electrical and mechanical systems, you’re doing well. You need a whole team of people to do that.”