ADAPTING TO CHANGES IN THE INDUSTRY
“Since Larry has been in the floor covering business 42 years, naturally there have been changes. Larry no longer dictates his labor fees and has been continually forced to take unreasonable rates. The industry hires inferior labor and the good guys have to clean up the mess. The industry ends up paying much more than if they would have hired experience labor in the beginning.
“Larry knows there is work at fair labor prices but the good installers have to be put back in charge of the price per yard. It seems that the companies are hiring only college-educated people to fill the managerial jobs and it should be a situation where you work your way up to those positions.
“In 2004, Larry was getting $12 per square yard for heat-weld flash cove and around $2 per foot for seams. Now it’s $8 per square yard and $0 for seams. Installers are also required to keep outrageous insurance coverage and are paying the companies to do their jobs. Larry has managed to keep going, because he can charge a decent price to clean up the mess of the inferior installers.”
What do you guys think? Is Larry’s case of a professional veteran having to accept rock-bottom prices an isolated incident, or is it an all-too-common problem in the industry? What can we do to fix it?
Our second letter this month comes from Ernie Ekberg of Weatherford, Texas. When the recession hit, he moved into a new market segment where he found newfound success. He writes:
“I started in the flooring business in 1972 as a helper. My father-in-law was the installer. I worked with him for two years and he said I was good enough to be on my own. Forty-one years later, an owner of two retail stores, I’m still going strong.
“When the recession hit, residential and commercial opportunities evaporated. I had been an RV owner for many years and refloored all of my RVs. I started looking at the possibility of flooring RVs fulltime. Then I launched my website, www.ernieekbergflooring.net. I also perfected adding engineered wood flooring to coaches with slideouts.
“I am the only one in the country that I know of doing this. I’m involved with a dozen RV forums. Lots of research has been my credo, and if I was 25 years younger, I’d really pursue this. But at 65+, I install two coaches a month.
“Instead of just waiting for folks to call, I went the extra two miles to generate a business that has huge potential. Now, if some of these installers could think outside the box of square foot or square yard pricing, then they could get busy, also.”
In my opinion, that is the true spirit of the entrepreneur. At 65+ many people would probably think of retirement if the business climate got too tough. Ernie decided to get tougher, and enter a whole new area of expertise as a result.
Feel free to sound off with your insights and opinions anytime. I’d love to hear from you. You can reach me at firstname.lastname@example.org, or visit us on our LinkedIn forum, by going to www.fcimag.com and clicking on the “Discuss” tab.