October 29/November 5, 2018: Volume 34, Issue 10
By Reginald Tucker
San Antonio—Raw, damp weather greeted many of those who turned out for the kickoff of the 2018 Starnet fall conference here earlier this month, but the unusually dreary conditions didn’t put a damper on the spirits of the convention guests in attendance at the sprawling La Cantera Resort & Spa.
“When we booked this venue three years ago, resort management told us it’s usually 70 degrees and sunny in San Antonio this time of year,” Jeanne Matson, Starnet president and CEO, said as she welcomed members during her opening presentation. “But when we arrived they said it was the worst October they’ve seen in years.”
Nonetheless, it was the group’s highest attendance ever for a fall membership meeting, according to Matson. Close to 400 people representing roughly 60% of Starnet’s 178 membership turned out for the event. “We believe it’s due to venue as well as the agenda,” she said.
The jam-packed conference meeting agenda and events schedule, by design, was predominately geared to foster networking amongst contractor members, vendor partners and Starnet staff; sharing best business/management practices; and, of course, education. There was also a half-day dedicated to instructional product demos focused on subfloor prep and moisture mitigation—a hot-button topic for many commercial flooring contractors.
It was all in keeping with the overriding conference theme, “Partnership for Growth,” which included member to member relations as well as alliances with the group’s preferred suppliers. “The members really like each other and learn from each other. Also, the vendor network is incredibly important to us,” Matson told FCNews. “When our members at the field level can partner with our vendors to create business and generate projects together, specify the materials and provide post-installation care—that’s where the partnership really comes together.”
Starnet vendors tend to agree. “As a charter vendor partner, Armstrong Flooring has benefited from Starnet’s ‘Partnership for Growth Initiative,’” said Shelley Ackerman, national sales manager, commercial groups. “Our partnership with Starnet affords us deeper and more meaningful access to their membership through board of director meeting participation, vendor roundtable meetings and meeting trade show opportunities. The partnership is truly a two-way street of collaboration, idea sharing and defining mutually agreed-upon goals.”
Starnet contractors also attested to this key aspect of membership. “Starnet has fostered relationships with key individuals within a manufacturer at all levels, from the local representative and regional vice presidents and as far up as the national sales manager and president,” said Dave Triepke, CEO of Universal Metro, based in Santa Fe Springs, Calif.
For other contractor members such as CB Flooring, based in Columbia, Md., the primary benefit of an affiliation with Starnet is the ability to network with—and learn from—dealers across the nation who openly share their best practices. “The camaraderie in our group is amazing,” said Chuck Bode, president. “Starnet is a band of brothers and sisters who have joined together to help improve their businesses and preserve the role of the independent entrepreneur in a fast-changing industry.”
Catherine Franzella of Sun Interiors, based in Harahan, La., leverages her company’s partnership with Starnet as a means to accomplish several key objectives. For her, the fellowship the conference provides valuable opportunities to learn from larger companies and vendor partners. “We definitely strive to reinforce our connections with our vendor partners and other dealers when we head out to train,” she explained. “This gives time to network, communicate and strategize on ways to separate ourselves in the marketplace.”
As a growing player in the floor prep/moisture-mitigation world, Franzella said she received a wealth of important information and hands-on/visual training to take back to her business. On a more personal level, actively participating in the commercial cooperative has enabled her to grow “tremendously in the nearly two years since I attended my first meeting, both in knowledge and in confidence,” she told FCNews. “I’ve met people from all over the country who are in similar positions coming up in the next generation.”
And that’s precisely the point—putting members in the best possible position to succeed, Matson noted. “Our No. 1 focus is supporting our members as they grow,” Matson said. “When you read our mission statement, it’s really about improving their profitability. Obviously, the revenue growth is going to be a big part of that. But the more services they can offer their end users, the more products we can offer them to give them that profitability.”
But make no mistake—it’s not a one-size-fits-all program. “I always say we have 178 members, but we have 178 different business models,” Matson said. “While some of our members do residential work, I would say 85% are committed to commercial flooring as their driver.”
Of course, it can’t hurt when positive market conditions support an environment that’s conducive to new business opportunities. In his presentation to Starnet members during the general session, Mark Bischoff, vice president, vendor relations, provided useful research findings and statistics that bode well for the non-residential market.
“This year, the strongest growth is expected to come from the commercial sector with spending in office, retail and other commercial and lodging all expected to see gains of 4%,” he noted, citing leading construction forecast data. “By 2019, the major commercial sectors will likely see slower growth, while industrial, healthcare and educational facilities are projected to see spending gains of 4% or more.”
Ample growth opportunities are expected to emerge in the healthcare sector in particular, according to Bischoff. Citing a phenomenon he calls the “silver tsunami,” he pointed to an aging segment of the population and the subsequent need for assisted-living facilities. “Follow the data,” he advised attendees. “Baby boomers are impacting the healthcare business. Senior-living facilities are going to be more and more in demand, and our members are well positioned to take advantage of that.”
But that’s not the only end-use segment worth watching. According to Matson, education looks like it’s going to be a big bright spot going forward (K-12) as well as higher education. “I’ve spent quite a bit of time over the past 10 years doing college visits; there are construction cranes all over campuses across the country. There are endowments to fund that construction.”
Matson also expects to see the hospitality sector further strengthen. “We’ve had a good run in that segment, and I think that will continue. There are a lot of hotels out there that require refreshing. The economy is doing well right now, but we know it’s going to soften at some point.”
In the meantime, Starnet contractors are keeping busy. Randy Rubenstein, president and CEO of Rubenstein’s Contract Carpets, based in Seattle, said he’s backlogged through 2020. “The hot sectors for us right now include multi-family high-rise and corporate, and we’re also seeing a lot of casino projects and hospitality work,” he told FCNews. Furthermore, these sectors have had an impact on the specific products being specified. “We’re doing a lot of ceramic, resilient and terrazzo, but not too much in the way of carpet.”
Hospitality and corporate jobs have also been providing contractors like CB Flooring with a lot of work. But the strongest growth potential, according to the company, lies in the healthcare arena. “Many members have a record sold backlog heading into 2019,” Bode said.
Starnet’s Fred Williamson takes a bow
Fred Williamson, executive vice president of Starnet, announced his plans to retire after 13 years on the board of the cooperative and 50 years total in the commercial flooring industry.
Jeanne Matson, president and CEO of Starnet, led the tribute to Williamson in her remarks to the general session on opening day: “There’s nothing I can say about Fred Williamson that you all don’t know already. He’s a true gentleman with integrity and intelligence—a tireless worker. He has really committed himself to building the partnership between our members and our preferred vendors, and somehow he has been able to do that with equal energy and honesty for all parties and a true commitment to making this organization better.”
Chuck Bode, chairman of the Starnet board of directors and president of CB Flooring, Columbia, Md., presented Williamson with a retirement gift—along with a few good-natured barbs—on behalf of the group. “Fred has the most unbelievable work ethic I have ever encountered. Smooth as silk professionalism, unparalleled moral compass. All of us will deeply miss his wisdom.”
Williamson, who received a standing ovation during his acceptance speech, thanked the group and attendees profusely. “The past 13 years for me have been an adventure. It certainly has been something I have enjoyed immensely because it meant meeting so many old friends, renewing friendships and, of course, building so many new ones. My thanks go out to all of the past board chairmen/chairpersons who have given me the opportunity to have an additional 13-year career that I was done with. It gave me new life and energy and was a great opportunity for me and my family. Thank you, I love all of you.”
Although this marks Williamson’s last go-round, Matson hinted at the possibility the group might see him again down the road. “This is Fred’s final membership meeting, but I don’t think you will ever find Fred to be a stranger.”