By Scott Perron
With the exception of a four-year stint in corporate America, I have owned my own flooring businesses since 1993. During that time there have been hundreds of occasions where I have spent my Sunday nights contemplating what’s ahead and how to make positive changes in our business over the coming week.
One of the benefits of being a small business is—unlike a corporate ship that takes a long time to turn—most smaller businesses are nimble and able to move like a speed boat to stay ahead of the curve as the industry transitions. The present time is no exception with all of the movement in sourcing of new products, newly imposed tariffs and volatility in the supply chain.
We have spent the last several weeks explaining to all our clients, particularly the pros we serve, what effect these corrections mean to their product offering and the costs associated with them. Each day we get multiple inquiries to explain price hikes and product availability as countless orders are now being met with a back-order status. Many of our contractors are in a pickle as costs have risen sharply with minimal notice. And although most of their contracts allow for unforeseen price increases, it is still a difficult conversation with the end-line consumer. It forces them to spend more time redoing the project selections as people scramble to offset higher prices by changing their first choices.
Make no mistake—I really do not care what side of the political aisle we talk about as these changes are a reality and their effects must be dealt with. It’s a simple fact that when things cost more people can afford less, so we need to adjust our operations to accept these modifications. Remember, these cost variances do not apply only to flooring but everything that is imported from regions bearing the tariff. Price increases have extended to most building products, and freight is a moving target as well.
In the wake of these revisions, luxury vinyl plank has morphed with most suppliers moving toward manufacturing SPC vs. WPC. This approach allows the cost of material to be reduced while maintaining structural integrity, waterproof features and styling that is acceptable to the consumer.
We make it a point to physically shop our competitors on a quarterly basis and make notes of the differences we observe. Recently, while cruising one of our most formidable foes, I noticed it had moved the vast majority of its LVP line-up to SPC technology and in fact had effectively increased its profit margins while appearing to have lowered its costs at the consumer level. Although this company is a “big ship,” it had adjusted its offering in less than six months to stay ahead. Immediately following this visit I shopped two larger retailers within earshot of this big box and found they had not changed anything about their showroom, marketing or product focus in years.
Over the course of my career, a man much smarter than I am taught me the value of continuing to model ourselves after the most successful operators. Most business owners don’t anticipate changes fast enough and often bury their head in the sand, while progressive companies take advantage of their shortcomings.
Take a moment on Sunday night to contemplate your business, review feedback, anticipate change, measure, manage and then make a move to keep your business on the right track.
Scott Perron is the president of 24-7 Floors and Floor4Pros based in Sarasota, Fla. He is also an industry trainer and motivational speaker. He can be reached at firstname.lastname@example.org or 860.250.1733.