Better Business: Making a Buck is Sure Lots of Fun!

Better Business: Making a Buck is Sure Lots of Fun!

By Jim Walker, American Floor Covering Institute

It happened again! I constantly express my opinion concerning adequate compensation for the time involved and the work required for a professional installation. I recently read in one of the magazines the following: “There wouldn’t be a shortage of installers if workers out there knew how much money these guys make.”

I’m going to ask one more time: Does every penny that comes to the dealers for flooring sales go to the store owner’s personal use? Is there not overhead, such as utilities, insurance, employee’s compensation, taxes, the building cost, etc.? Of course, there is! All these things are paid before anyone talks about how much money was actually made. Is this not also true for the flooring installers? Yes, the check the dealer wrote might have been $2,000, but let’s remember to subtract the truck payment, gasoline, vehicle insurance, business insurance, taxes, supplies, the cost of the person who works with the owner, and other associated expenses and more!

When this is all deducted, don’t tell me how much money installers are making. There is a form on the CFI website called Do You Know Your Cost? Check it out. Change the figures to match yours. This is not a trade where the majority of installers are even making what they could at McDonald’s with benefits. Let’s just be fair.  I am extremely proud of those who are achieving their goals.

When will we learn that every step of the way, fair compensation for a job well done makes the difference?

All installers need a fair shake and adequate compensation to cover their true expenses resulting in more installers than there is work for them to do. Young people would want to be trained because they would see dollar signs in their future. Isn’t it strange that we don’t advertise like other trades showing just how much the independent installers actually earn after their overhead expenses are paid? It just might be embarrassing.

But, there is something extremely important that must be addressed – Flooring installers, do you deserve the price that compensates you for the labor required? What I mean is do you install the product according to the manufacturer’s directions and industry standards or are you “Shortcut Charlie?” Do you use the best supplies and the ones that are required? It is absolutely necessary to be at the top of your game and never take shortcuts. Delete and never cut corners.

Recently, I overheard, “Only the strong will survive in the years ahead. And the strongest companies won’t necessarily be those doing the most jobs – only the ones that are making money at it.”

Consider this story about a guy who was in the shirt-making business. He made gorgeous shirts that were stylish, colorful and on the leading edge of the fashion business. However, there was an unfortunate problem: As good as he was at making shirts, he was a lousy businessman. He failed to understand the critical difference between volume and profit. He was so caught up in his passion to produce exquisite shirts and overjoyed by his sales success that he lost complete sight of his shrinking margins and soon began to lose money.

His losses weren’t difficult to determine – he bled to the tune of being exactly $1 short per shirt. He assured his frantic accountant, “Don’t worry, I may be losing a buck per shirt, but I know I will make it up in volume.” (Ever heard this before?) Although he desperately tried to save it, the business failed.

Unfortunately, there are many flooring installers and business owners just like the shirt maker who work in the industry today. It seems characterized by suffering from an overwhelming drive toward trying to boost sales volume while maintaining low or even non-existent profit margins. It’s a volume is king mentality which keeps adding less efficient, under capitalized companies with poor profits and high failure rates. Maybe you know some companies like that.

They will tell you that cutting margins is the only way to stay busy. Sometimes, it seems they are in the flooring business for love rather than money. Competition is the reason given for lower profits. Do flooring installers need an attitude adjustment? Profit is not a dirty word!

Flooring installers should never take a job if they cannot make a profit. Profits are far more important than volume. Only the strong will survive. The strong won’t necessarily be the installers who are doing the most jobs – only the ones making money doing it.

I made a statement once that there is a predatory relationship between the manufacturers, dealers and installers. Each group seeks to blame the other for installation problems rather than accepting responsibility. Who suffers? Everyone involved. We desperately need to shift from fast and cheap to quality and commitment.

It costs dollars for the failure to commit to quality. Don’t tell me it doesn’t. This starts with the manufacturer who doesn’t ship first quality goods, to the dealer who knowingly purchases it, to the salesperson who promises that the carpet rolls out by itself and will be beautiful and to the installer who takes shortcuts because of a lack of proper compensation.

Installers are not in charge of quality control! Dealers who have the power to demand quality products from both the manufacturing and installation segments must take control. Why not expect the mill to produce quality and then only hire installers who can finish the cycle with a professional, beautiful installation?

There’s only one real boss…the customer! This is the one person who pays everybody’s salary and makes the final decision if a business is going to succeed. It makes no difference if the business has been operating for over 50 years. The minute it starts treating customers badly, they’ll put it out of business.

The customer bought your home, your clothes, your vehicle, your children’s education, that vacation and those extras. They pay your bills. We’re all working for the customer. If they don’t like the service we provide, they can simply spend their money elsewhere.

Time for Fair Compensation

When will we learn that every step of the way, fair compensation for a job well done makes the difference? Perhaps, rather than pounding away in trying to make the independent contractor position work, why not work for someone who takes care of the taxes, insurance, a 401K plan, supplies, gas, the installer’s pay who assists you and the operating expenses? Increasingly, you’ll find there are owners who are doing this. If you don’t know who they are, then drop me an email at jkansascity@gmail.com and I will gladly share their information. Dealers, if you are doing this, I commend you and let me know.

If you don’t want this type of situation and prefer managing your business, know that it can be successful only if YOU are aware of your costs and profit. Please, forget about volume and charge according to time and materials and you will be successful.

If you are not a company employee and you are responsible for the operation of your business, take it seriously. Sit down and do some figuring on some of your latest jobs and decide if you are really taking in enough money to meet your goals. Now, I didn’t say that you need the income of Bill Gates, but it doesn’t hurt to dream and you sure won’t get anywhere close if you don’t know your costs.

Further, if you don’t know how to start; look around at those you consider successful. Most of them would be willing to offer you some tips as to how they conduct their businesses. If not, there are numerous conventions that offer the opportunity to meet with others and talk business. The carpet, wood and tile associations offer opportunities for you to share ideas and pick the brains of others. There is just no excuse for not achieving your dreams. This is all in your hands and you must find a way. When 2018 rolls around, “you will always get what you always got,” if you don’t make some changes.

Floor covering installation is a great trade. I can’t imagine doing anything else. It gives us so many opportunities we could never have sitting behind a desk all day. We see the world. We visit homes and offices that give us ideas of how we can remodel or build our next home. We see ideas! We make people’s lives better by adding value to their surroundings.

And, when we are finished, we can view what we have accomplished with pride. Not everyone can do what we do, though they try. I am convinced that to be the best, it must come from the heart. Then it shows. You are the professional and you will be successful because you made the right decisions.

I write a lot about dreams and your future, but this poem by Paul Ziegler says it all:

Bite off more than you can chew; then chew it.

Plan for more than you can do; then DO IT!

Hitch your wagon to a star, hold on to your seat – and there you are!

If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. Guess what they planned for you? Not much.

About the Author:

Jim Walker of American Flooring Covering Institute, Kansas City, MO has a passion for the professionalism of flooring installation. He has dedicated his career to helping others achieve pride and professionalism and be recognized by the industry. He is CFI Master II flooring installer #11, a member of the WFCA Hall of Fame, a flooring instructor, speaker, writer and consultant involved extensively in all facets of the industry.

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