A little more than a year ago I attended FloorCon, the annual event hosted by Broadlume before the company was acquired by Cyncly. One thing I recall about those FloorCons (there were three, I believe) was the quality of the speakers and their presentations. One session that was especially enlightening was given by Jason Goldberg and Michel Vermette of America’s Floor Source. They had visited about 100 retailers and found a bevy of things they felt needed improvement. The presentation delved into three areas where they felt many retailers fall short:
1. Financials
It’s not enough to just know your numbers; timing is everything, Goldberg explained. “If you get your financial results a month later, they’re not helpful. Even if you get the best information, if you get them too late you can’t do anything with it. At AFS, we get our data within five days. The sooner you get the information, the sooner you can make decisions and correct something. If you have a new employee who’s not pricing product correctly, you can correct that behavior much quicker.
“One thing that surprised us was when we asked owners, ‘What’s the breakdown in your business?’ many didn’t know. ‘I think it’s so much retail. I think it’s so much builder.’ They don’t know. They don’t have any structure. ‘How much LVT do you sell vs. carpet?’ ‘I don’t know.’ ‘What’s your margin by product?’ ‘I don’t know.’ It’s hard to get better when you don’t know. If you don’t know where you’re making your money, where you can make that extra five points, it’s hard. And if you’re on Quicken, get off Quicken. Get yourself real software that fits the industry. It’s not overly expensive. And just getting that extra point of margin will be worth it tenfold.”
Goldberg stressed that dealers must get their information structured. “Get yourself a real process,” he said. “You need to know where your cash is. You need to know how much you owe people. You need to know where you’re making money, where you’re not making money. Some people don’t know why their margins are 30% when they should be 40%. If you can’t answer why, get the right tools to change it.”
2. Processes
Goldberg and Vermette saw dealers that basically had no policies and procedures in place. “A process is a preconceived way to achieve the desired result,” Goldberg said. “You want to change the result? Change the process. When that process is clicking and everyone’s doing it right, you’re hitting that desired result. When you want to get better, just improve the process.”
One faulty process is a severe lack of technology utilization. Many dealers are using software like QuickBooks rather than flooring-specific software, which Goldberg says is a mistake. Many have flooring-specific software but only use a small portion of it. “That is an inconsistent process,” he said.
3. Partnerships
Goldberg noted that some vendors simply want to place a display, which does not make for a good partner. “Make sure you have the right vendors who are true partners. More is not better. You want vendors that are committed to you. If you can’t explain why this display or product is in your showroom, how does it fit? And if you’re not excited about the product or display, don’t put it in. If someone’s not calling you back within the same day, that’s probably not a vendor you want in your showroom. Don’t be shy in being demanding. And make sure you’re important to them. It’s hard for them to be important to you if you’re not important to them.”
A vendor may simply want to sell you stock or a display. “That’s not what you want,” he said. “You want a partner who says, ‘Hey Joe, I’ll give you a special pricing on these five items if you’ll feature them in your store.’ That gives you an advantage in your local market. That’s a partner. If it’s just something here and there, that’s just a series of transactions and not a partnership.”
Partnerships extend beyond vendors to your business network. “Make sure you are involved in your community,” Goldberg said. “Make sure you’re involved with the chamber, a charitable organization, other partners, developers. Make sure you’re seen and connected to the people around you and they’ll help you.”
A couple of final takeaways from that session: Are you building a business or do you own a lifestyle? Where are you at? Where you want to be? Would a stranger see value in this business? Would they pay you for this business? And is there anything holding you back from what you want to achieve?
As your business grows, the needs and expertise you need to get it to that next level grows. When you’re trying to take your business from here to here to there, bringing in that expertise can get it done much faster without making a lot of mistakes.
