October 23/30, 2017: Volume 32, Issue 10
By Reginald Tucker
Atlanta—The momentum generated at Starnet’s spring conference and silver anniversary celebration earlier this year (FCNews, May 8/15) appears to have carried all the way over into the group’s fall meeting here this month as members expressed widespread optimism that business will finish strong to close out 2017.
“2017 has been good for Starnet members overall,” said Jeanne Matson, president and CEO, citing collective growth in the single-digit range. “Members have been busy this past summer and we expect a strong finish for the year.”
In terms of product categories, Matson said much of the action has been driven by hard surfaces. “We’ve been experiencing the shift from carpet and that’s been an ongoing trend. But this year I feel it has been a little more marked, especially with the LVT explosion and so many of our vendor partners getting into that business and hard surface in general.”
Ceramic is another hot category for Starnet members, Matson reports. When she joined Starnet about 11 years ago, roughly 30% of membership was active in the category; today that number is probably close to 60%. “We’ve had consistent good growth with Daltile, and a lot of that has come from more of our members doing ceramic work. Some of our members—particularly our larger ones—have built their ceramic business to about $1 million within a year. It’s a different kind of product to install, you need different technical labor and skills in estimating, but it’s very lucrative and it gives the end user a one-stop shopping experience.”
Contractor members like Randall Weis, CEO of New York-based R.D. Weis, can attest. “There is a visible shift from soft to hard surface. LVT and ceramic are the big winners and continue to take more share.”
That’s not to say that carpet is no longer desirable. “Carpet is being impacted by hard surface for sure, but we believe it will always be a factor,” Matson stated. “Obviously there are certain environments where soft surface is necessary. The area rug category, for example, has generated opportunities for our vendors and members alike.”
Starnet members are also benefitting from thriving end-use markets. “For our membership overall, corporate is a very strong market,” said Leah Ledoux, director of strategic accounts. “Hospitality is up and education seems to be coming back. Multi-family housing is still very strong, but that’s kind of at its peak right now. Healthcare, however, is down a little bit but continues to be an important market for us.”
But given the fact membership varies by region, it’s hard to paint the market in broad brush strokes. “Because our membership is so diverse, you may have some members doing a ton of work in education and others doing well in hospitality,” Ledoux said. “But we continue to look at the progress we’ve had in all these categories so we know where we need to be.”
Common interests, goals
Many longtime Starnet contractors attribute some of the success they have achieved over the years, in part, to benefits that group membership brings. Attending conference meetings also provides members with an opportunity to share practices that they might bring back to their own businesses. “I enjoyed meeting with my peers and manufacturing partners,” said David Meberg, president and CEO of Consolidated Carpets, New York. “Catching up and discussing the current events of the industry was the most valuable part of the conference.”
In that spirit of cooperation, Meberg shared some of his insights with the group during the lead-off session, “Building profitable and sustainable business relationships,” along with Max Cavalli, director of education, Mannington Commercial; and Kathi Kennedy, business developer, Howard’s Rug, San Diego. Starnet’s Ledoux, who moderated the panel, explained the thought process behind the group session format. “The goal of the presentation was to put a member’s perspective on the three different positions of being a flooring contractor. For owners like Meberg, you’re driving business and specifying materials. A lot of the owners within Starnet are part of the process, they have their own accounts and they’re driving their own businesses and engaged in the process.”
It’s a position other longtime Starnet members can readily appreciate. “In my business I’m managing the cash flow, scheduling jobs and setting the strategy for the growth of the company,” said Jason Adams, president of Kingston Tile Co., Romeoville, Ill. “The points I stress within the company are awareness of business opportunities, measurement of our initiatives and holding people accountable.”
The key to success for other members like Chuck Rajner, owner of Ohio-based Commercial Flooring of Toledo, hinges simply on taking care of the customer. “Our gross margin is enhanced by our relationships with our customers. If we make our clients’ jobs easier, then we’ll usually get the business.”
Regardless of the particular strategy, members stand to take away something of high value by learning about other contractors’ experiences. “People told me it was interesting to hear about different business models during the sessions,” Ledoux said, citing presentations that touched on various topics such as profitability, technology, management and environmental issues. “We may have 174 members but that’s really 174 different business models.”
It’s precisely that sharing of experiences that keeps members coming to convention. As Weis explained: “A key benefit of two live Starnet meetings per year is for the members/shareholders to get an update on where we stand with our vendor partners, and how the co-op is doing overall. For me, one of Starnet’s biggest values is it provides professional training, education and networking that no other group provides its members.”
Even new members are already reaping some of the benefits of aligning with Starnet. Such is the case with Athens, Ga.-based DCO Commercial, which joined the group back in January. “The networking and relationships we have built with vendor partners, members and Starnet staff over the past 10 months has well exceeded our expectations,” said Curtis Blanton, vice president. “The networking amongst like-minded individuals is always the best part of these events. It is tremendous for companies to come together, network and share best practices for the good of the overall industry and to strengthen our alliance.”
The main goal, according to management, is to put members in the best position to succeed. “We’re always looking to grow the group both organically and in terms of our vendor base,” Matson said. “I think we’re poised for growth into 2018 and 2019.”