Building a business: Minnesota couple learns how to market residential, custom iron art

THE FABRICATOR® JULY 2002

July 25, 2002

By:

Del and Sally Halling started a business together, selling the custom residential iron art they create. Through their process, they found that much marketing and research was needed before they could be successful.

Ornamental iron fence

Object

For one Minnesota couple, starting a business has meant relying on the steps they've taken, separately and together.

Del Halling, a welder and an ironworker since age 18, had always wanted to have a shop of his own.

Sandy Halling worked in her parents' Bovey, Minn., grocery store in high school, where she learned how to manage a business. She's a licensed realtor.

Together they pooled their interests and started their own business, Ornamental Iron Gallery, a shop that —when they purchased it—offered small pieces of work, such as railings for concrete steps.

Today they offer decorative iron railing for decks, gates, and fencing for homes and cabins, but their specialty is spiral staircases. Their approach to marketing their products and the research they conducted to start their business might help you if you're interested in starting your own business.

How They Make Their Products

Customer interest drives the variety of art the Hallings produce. In addition, Del and Sandy have collected catalogs and books on this type of ironwork to see what is available in the prefabricated products market. Del's skills allow Ornamental Iron Gallery to offer customization not available with prefabricated products.

At the shop, Del draws a blueprint, which he transfers with chalk to the work surface—large, steel-surfaced tables. From there he bends and twists the shapes and lays them in place over the chalked blueprint and proceeds to clamp the pieces in place and weld them together.

Del has manufactured his own equipment for bending and twisting raw stock. He said this is an economical choice for their business.

"I could buy a $6,000 machine to do the bending for me, but given our present size, the purchase would not be justified," he said.

They purchase raw stock and welding supplies from local vendors in Grand Rapids, Minn., located seven miles west of the shop. While they could purchase from wholesalers in Duluth, Minneapolis, or St. Paul, Del said the distance and shipping costs for the current volume of supplies and raw material outweigh any financial advantage they could get from a vendor in the larger metropolitan areas.

While the average manufacturing and finishing time for pieces like gates or spiral staircases is three days, installation can take as little as an hour, for two reasons. First, the blueprint specifies all the attachment points. Second, power tools enable Del to slip the finished piece into place quickly and secure it in minutes, he said. The last step is applying the painted finish.

To assess what clients want and what they're willing to spend, the Hallings show clients pictures of basic design shapes and eventually get down to the details. Some specific decisions might include whether or not a client wants plain-vanilla upright bars of round stock or twisted square bars with an ornate flower pattern and a pointed crest on the top with their initials.

Once those questions have been answered, Del provides an estimate. If the customer is happy with the price and wishes to proceed, Del takes detailed measurements and makes drawings on-site.

Starting Out

Expansion was the first step for the Hallings. The previous owner accepted only small-scale work, such as simple handrails for exterior steps. While the demand continues for this type of product, the total volume of this business was insufficient to meet their financial needs and goals. So part one of their expansion meant that Del simply started saying "yes" to larger jobs that the former owner had been turning away.

"If a customer calls and wants a Hollywood-style gate for his property, complete with electronic buzzer and remote opener, I would say, 'Yes, we can do that,'" Del said, adding that his skills allow him to tackle projects he's never done before.

Another part of the expansion was its location. After the Hallings purchased the business, Del began looking for a new building to house the shop, as the old building was in bad shape. In particular, heavy snowfall caused the roof to collapse in the spring of 2001, and it was razed. Fortunately, by then they already had relocated the shop to a former snowmobile dealership located just off Hwy. 169—a major northeast route to Lake Superior's North Shore and the Boundary Waters Canoe Area.

As they developed their company, the Hallings realized that the former business wasn't reaching an important market segment: the thousands of vacationers who enjoy Minnesota's north country on a year-round basis. Through Sandy's real estate background, she and Del also were aware that many of these vacationers maintained second homes in the area.

As a realtor, she was in contact with customers looking to purchase existing homes and cabins or lakeshore property for building purposes. She found affluent buyers who were building some of the most expensive summer homes in the area, running from the upper five figures to more than $100,000.

Turning Dreams Into Products, Profits

Sandy realized that since their work was tailored to the client, it was not easy to show someone an example from a catalog and say, "Is this what you're looking for?" So, being in charge of creative design for the business, she set out to convert the former dealership showroom into a miniature village, complete with scaled-down samples of their work.

She began by painting a two-story mural on the north wall of the showroom. Then she collected several wooden doors and gave them different exterior finishes. Her plan was to give each door its own distinctive railing and fencing samples. Del constructed a three-step section of spiral staircase as a sample for this display.

Before Sandy could complete the project, however, it became apparent that few people were visiting the shop. As she worked on the showroom, Sandy noticed a low volume of street traffic. At the same time she and Del observed that people dropping into the showroom would examine sample pieces and leave.

"Their reaction was, 'Well, that's nice. See ya,'" Del said.

Sales were not being made in the shop. The jobs they received were coming via phone calls for information and rough estimates, and then setting up appointments for on-site visits. Neither the cost to staff the shop nor the price of heating such a large space during a northern Minnesota winter was justified. So they decided to search for a new means to reach their tourist population market.

They looked for a venue that had exposure on one of the two major highways passing through the area, Hwy. 2 and 169, Del said. Sandy's travels while working as a realtor allowed her to notice locations along these routes.

After consideration, the Hallings decided their marketing plan required their return to school. They didn't choose a business college or trade school, however; they settled on a grade school.

Fifteen miles northwest of Bovey is the town of Warba. The town's consolidated school district left the community with an empty grade school, located on Hwy. 2. The town put the school on the auction block, and the purchasers turned the building into the Warba Antique Mall.

After spotting the mall, they visited it a few times to observe, firsthand, the traffic flow and the makeup of its visitors.

Coincidentally, a part-time clerk at the mall also was a long-term part-timer at Sandy's parents' grocery store, leading Sandy to feel she could rely on the employee's traffic flow observations. They realized that because of its location on Hwy. 2, the only direct east-west route across the northern tier of the state, the mall attracted a diverse body of visitors.

The Hallings also learned that the mall was interested in renting space to local artisans.

So the Hallings set up samples of their work at the mall. The former gym floor provided a corner where the Hallings could create a tableau of their fencing and gates. They also included smaller items like wall sconces, candelabra, and garden benches.

"We make no attempt to compete with the price mass marketers place on such smaller pieces they have imported from Mexico and China," Sandy said. "We put the smaller pieces in the display only to demonstrate the quality and variety of workmanship we are capable of.

"In most cases, people enter the antique mall with no thought of items like fencing or railings, and when they see the display, they say to themselves, 'Wouldn't a gate be marvelous for our home or cabin?'" Sandy said, adding that log-home owners have become a significant new source of clients.

The Next Step

Northern Minnesota winters are harsh, and with the ground frozen solid, sales of gates and fencing are nil. In its first year in business, Ornamental Iron Gallery had few sales during this period. Today log-home owners have opened up a source of indoor work, not only in the form of spiral staircases, but in custom fire gratings and decorative wrought iron pieces.

Although the Hallings don't compete on price for smaller decorative pieces, once log-home owners observe the quality of workmanship on a large project like a spiral staircase, they often ask Ornamental Iron to custom design and build decorative accessories.

The next step in the Hallings' marketing plan, based on their current success in reaching log-home owners, is to expand their reach by establishing business-to-business relationships with the log-home builders in the area.

Of course, the custom work they perform still will require on-site inspection and measurement, but a prospective customer visiting the Web site will be able to see examples of the company's work. They also plan to join the Northeast Builders Association, which Del believes will increase their company's networking with log-home and conventional housing contractors in the area.

For more information, contact Ornamental Iron Gallery, 115 4th Ave., Bovey, MN 55709, phone 218-245-3754.



Larry Welty

Contributing Writer

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