Integration... Rocks!!!

One of my favorite examples of profit through vertical integration in a small business is about a hardscape installation company I did some work for.

They built patios, walkways, planters and so on out of stone and brick, mostly serving suburban homes. It started out as a side hustle for the owner, who was managing jobs and crews when he was in town from his full-time traveling job.

It grew to the point where he could work on the hardscape business full time, and he really put the pedal to the metal.

The business grew to a point where he was limited by his suppliers. Frustrated with endless promises and lackluster delivery, he was determined to do it better – so he opened his own stone supply company.

This is what business nerds call “Vertical Integration”.

It was no small task, but to him it would be worth the effort. He would be able to serve his installation business well, and also serve the rest of the market (in other words, his competition), because his current suppliers would be so easy to beat if someone just outworked them.

Before long, he found out where the real source of the industry’s pains came from: the stone quarries.

It turned out that the quarries that supply all of the stone products to the entire region had a long history of overpromising, and then delivering late or messing up orders.

On a quest to redeem the supply chain, he began looking into quarries, and eventually bought one that produced the most common type of stone he used in projects. Now his yard store gets the first and best pick of the product, and his installation company gets the first and best from the store – and he can control all of the turnaround times.

What I love about that story is that the end customer, the homeowner, is the heart of the entire effort.

Now this owner’s chain of businesses are running on all cylinders and dominating his market – but it was quite a toil to get it there.

Everything he did was so that his homeowner customers would get stone projects done on time and on budget.

Can you make a move to vertically integrate and improve your business?

This comes at you straight out of Trail 10 of Profit Hiker: 11 Trails to gain lasting elevation in your business. Find the book right here and the program over there.

By the way… yes, the title for this one was inspired by a New Zealand tourism poster from an episode of Flight Of The Conchords.