Starnet fall meeting: Commercial group positions for future growth

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November 7/14, 2016: Volume 31, Number 11

By Ken Ryan

Nashville, Tenn.—“Forward to the Future” was the theme of the 2016 fall meeting of the Starnet Worldwide Commercial Flooring Partnership. Based on statistics and anecdotal evidence, the future looks very bright indeed for the industry’s largest group of flooring contractors.

Unlike the spring meeting, which is mandatory, Starnet members are not required to attend the fall gathering. And yet, each autumn the attendance numbers continue to increase, as was the case this fall at the Omni Nashville, where 368 attendees turned out. This represented more than half of membership—and an uptick over last year’s meeting in Boston.

Starnet now has 167 members “with two more in the hopper,” according to Jeanne Matson, president and CEO, who celebrated her 10th year with Starnet at the fall meeting. Starnet members, which generate between $3 million and $130 million in sales, are closing out a year in which most of them are forecasting solid single-digit gains in revenue, with a healthy backlog of projects to start 2017. The group typically adds two to four members per year, and Matson suggested they might accelerate that pace going forward, although they will be choosy.

“This is not an easy group to get into,” she told FCNews. “We have what we call a ‘no-jerk policy.’ We want the right members. We set high standards, and therefore it can be a challenge to grow membership because all our members have to be full-service flooring contractors. But if we achieve our goals for 2016 we will be at an all-time high in membership.”

Matson has an explanation as to the reasons why the optional fall meeting is becoming a must-attend conference. “This event is strictly business and strictly education and they like that. In fact, some members prefer this show to the spring show. Also, we are getting tremendous support from our vendors and they are bringing more people to this meeting.”

The fall workshops included discussions on the future and family. More than 62% of Starnet members are family-owned businesses, and many of them are facing issues such as succession planning. One panel discussion was titled: “Leadership Planning for a Family Business,” which—as members have found—can be a contentious issue when one or more members of a family are interested in taking over the business while others are not interested. What might be the financial obligations to the non-participatory family members?

There were also forums on hiring, training and retaining, and on the financially healthy dealer. Chris Adams, owner of Value Carpet One in Salisbury, Md., joined Starnet this fall to reinvigorate his business. “We have a lot of competition in our area, and I felt like we needed to step up our game. It is easy to fall into a rut when you are a family-run business, and while we haven’t gotten complacent, I am concerned about that.” Roughly 50% of Value Carpet One’s business is commercial, with more than 50% of its profits coming from that side.

Starnet, which emphasizes benchmarking and networking at all of its meetings, formalized its leadership exchange program at the fall meeting. This program enables members to host other members at their facility, or in the field, for a few days to learn their way of doing business in a non-competitive structure. “It is bringing into practice what Starnet is all about, which is networking and sharing,” Matson said. “Basically the leadership exchange is speed dating. We’ve been doing it informally but this event is where we formalized it. It is much more structured today.”

Several members who have gone through the program said the experience was enlightening, gave them ideas that they could implement in their own businesses and was much more fun than they would have expected.

Panel discussion
The higher education segment continues to be one of the strongest in the commercial market, especially those financially well-endowed institutions. During the opening session, facilities managers representing higher education convened for a panel discussion hosted by Tarkett North America.

At one point cheers were heard when Dave Irwin, associate vice chancellor at the University of Tennessee in Knoxville, told audience members that LEED certification has become such a cumbersome process that he no longer uses it in projects. Irwin said LEED paperwork, which can amount to hundreds of pages of documentation, was costing an additional 3% to 5% in costs and delaying projects. “We also found that contractors and designers were chasing LEED points that were not necessarily beneficial to the end user.”

Irwin said the university will reinvest the 3-5% savings toward products that are energy efficient and carbon-neutral—so in the end the building is sustainable, it is just not LEED certified. Some Starnet members confirmed that the process of LEED certification has become tedious and needs to be dialed back.

Irwin said college students have become activists in environmental matters. “They’ll come up to you and want to know what will happen to the carpet that’s on the floor after the end of its life cycle. They are also asking about transportation costs of getting the product to the site. Our students are very focused on climate change and sustainability. There is not even a question about climate change with them—it is ‘what are we going to do about it?’”

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