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Pricing for Profit

New Tax Law: Should You Be a“C Corp”? It’s Complicated.

“No problem is ever solved in the same consciousness that was used to create it.”

Albert Einstein

A Solution for Jobsite Documentation


Since starting Atlanta Flooring Design Centers in 1985, the WFCA has helped build my business into the success it is today through building relationships with other industry leaders. Additionally, with their offerings of online sales trainings to meet consumer needs, understanding the latest installation methods, or hearing about the newest technologies being introduced into the ooring industry, the WFCA has been, and will always be, an invaluable resource for business owners. The WFCA responded to our industry-wide shortage of quality, trained installers through their relationship with CFI. I encourage all ooring companies to explore all that WFCA has to offer to make your business the best it can be. - Donny Phillips President/Founder Atlanta Flooring Design Centers

Your Voice. Your Support. Your Resource. Your WFCA.

ONEMOREVOICE

Envision. Engage. Excel.

Learn more at wfca.org or call 855.330.1183 to become a member today.

ONEMOREVOICE

Envision. Engage. Excel.


Q3 2018

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Playing to Win Scott Humphrey, CEO, WFCA

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Behavior Economics Theory Can Boost Your Bottom Line Lisbeth Calandrino

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What a Great Way to Shop! Tom Jennings, VP Professional Development, WFCA

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Distribution: Double Your Pleasure, Double Your Savings Phil Zolan, Executive Director fcB2B, World Floor Covering Association

16 With the New Tax Law, Should You Be a C Corporation? Not So Fast—It is Complicated. Jeffery W. King, Outside General Counsel for the WFCA Hive in the color Swarm Luxury Vinyl Sheet by Mannington

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US Floors: COREtec® SPC and WPC Comparisons Both are 100% waterproof and dimensionally stable

28 How To Get The Most Out of A Tradeshow 30 Outsmart the Competition 32 Oregon’s Imel & Sons Hardwood Floors Reveals the Secret to Avoiding Costly Flooring Failures Larry Loffer, Wagner Meters

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B2B Ecommerce Usage Continues to Grow with New Vendors, Web Services David Marshello, CFP, CPA, RFMS, Inc.

40 SEM Group — manufacturing, innovation, quality, and value 42 Seeing the Big Picture Could Be the Big Difference Trent Ogden is the co-founder and CFO of Flooring Technologies

44 Not All Flooring Businesses Are Alike Are You Adapting to Your Software, or is Your Software Adapting to You? The RollMaster Web Portal has translated into far fewer errors on the order taking side

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How a Measuring App Can Transform Your Flooring Business Steven Wang, CEO and founder of Measure Square

52 56

ROGi: A Solution to Proper Jobsite Documentation Speedy. Strong. Schönox. Schönox has a variety of self-leveling solutions for every type of project

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Do Your Tile Installers Use Spot Bonding? Scott Carothers, Director of Certification and Training, CTEF

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Pricing for Profit Your merchandising system is a silent way to talk to the customer on the floor. What type of impression is your floor making?

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Building a Barrier-Free Shower The addition of an increasingly popular barrier-free shower can benefit every person in a household

Premier Flooring Retailer | Q3 2018

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TAKING THE LEAD

Playing to Win

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Scott Humphrey CEO, WFCA

ne of my current focuses is simplifying my life. I am further convinced that one of the greatest ways to build loyalty is to help simplify the lives of those who rely upon us. With that in mind I have chosen this month to help you look at your business a bit differently. If you read my most recent blog at wfca.org, you already know that I am a huge college football fan. I am not one of those who knows every stat of every player on every team, but I do love the competition and overall energy of the game. With that in mind, using the field of play for a college football game, I would like to challenge you to draw some parallels between what it takes to win on any given Saturday, and what it takes to win in the place where you live and work. You are likely all familiar with the phrase from Forrest Gump “Life is like a box of chocolates. You never know what you’re gonna get.” Life may be like a box of chocolates, but you can know what you are going to get. “Life is like a football game.” Have you ever wondered why some teams win consistently and others don’t? Those who win consistently, always do the things that others don’t do. Their success is in no way an accident. If you are reading this, and you are the owner or manager, you are the coach. It is your responsibility to evaluate the success of your team, evaluate performance, provide feedback, and determine corrective action when necessary, to change their course. Your leadership will determine their level of success; our lack of leadership will assure their failure. The game and your team all have the following:

The Field of Play This field has boundaries and goals that allow you to measure your success; measurement is essential for success. If there were no end zones, the game would be total chaos. The measurements are there to show how the team is doing. Often teams that struggle are lacking a report card. Simply put, they don’t know how they are doing.

Starting Line Up These are offensive and defensive players who are actively involved in achieving success. It only makes sense that the coach would play them in a position that aligns with their strengths. Great coaches know their players strengths and weaknesses, and put them in positions where their strongest attributes can be best utilized for their benefit, and that of the team. One of the best ways to know your team and their strengths is to take the entire team through a behavioral tool like the DISC profile. The DISC is the most utilized, and will give you a clear snapshot of where you and your team should perform best. 2 Premier Flooring Retailer | Q3 2018


Players on the Sideline This represents those waiting to get into the game, or hoping they never have to play. It is important to know which players are looking for more opportunity. In fact, one of the primary reasons people change jobs, is because they are not being challenged in their current positions. By challenging an employee, you are basically casting a vote of confidence that says, “I know you can do more!” You have to be aware that you also have those on the sideline that are happy there. They like the fact that they are being paid, but don’t have to do anything but show up for the game. We call these people the “Quit and stayers.” The greatest risk of this type of teammate is not directly to your bottom line. It is true that they are underperformers who do not carry their load by positively impacting revenue, but more important, they are morale leeches. They suck the energy away from your entire team. One further detrimental impact of these underperformers is their ability to destroy your credibility with the remainder of your team.

Coaches If you are reading this, you are likely the coach of your team, and the coach is the key to success. Their involvement, insight, and interest drive the performance of the overall team. The reality is that we are all the byproducts of the people who have coached us in our life, good and bad. I have been blessed to have many positive coaches, and here are some of the things they did to make a positive difference in me and my performance: 1. They cared about me. The old statement “They don’t care how much you know until they know how much you care,” is spot on. Their investment in me as a person gave them the right to stretch me and help me see what my fear would not allow.

2. They provided honest feedback about my strengths and my weaknesses, and both were important. Their honesty kept me from wasting time in areas that were not my strengths, and allowed me to focus my time and efforts in areas where I could make a positive difference. 3. They modeled the desired behavior. The best coaches are not afraid to say, “watch me.” No one had a greater impact on my work ethic than my mother and father. Dad modeled commitment as he worked tirelessly in the flooring industry to provide for my family, and my mom worked for minimum wage to put food on the table, during those weeks and months when dad couldn’t afford to negatively impact the business by taking a paycheck. 4. They invested in me. They provided access to training that allowed me to expand my possibilities. This is one of the greatest areas of weakness I see in our industry. We have an epidemic of people in positions of leadership that are unwilling to invest in themselves by attending training, and resist sending other leaders in their organizations to do the same. 5. They believed in me. I am so thankful for the numerous people and organizations who took a chance on me at various stages of my life. Without their encouragement, I would not be where I am today. Winning can be defined in numerous ways: Strengthened relationships, money, power, title, influence, etc. Though some would like to paint it that way, winning is not a bad word. Winners are influencers, and they have the potential to change lives, and communities, and industries, and maybe even the world. I challenge all of you to play to win. If you are seeking help in improving yourself and/or your team, the WFCA would like to help you. If you are a member, tap into the resources available at wfca.org. If you are not a member, there is no time like the present to join. ❚

Your leadership will determine their level of success; our lack of leadership will assure their failure. Premier Flooring Retailer | Q3 2018

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FLOOR ED

Behavior Economics Theory Can Boost Your Bottom Line! Imagine you’re in the office, and you overhear your boss saying he wants to give you a raise of $400. How happy would you be to find out about this unexpected gain? How about glad? Now imagine a different situation.

Y Lisbeth Calandrino Flooring Specialist and Associate Publisher and Director of Social Media for Fabulous Floors Magazine

ou’re making a coffee when you hear your boss talking to HR manager about cutting that same $400 from your salary. How would that make you feel? Do you feel sad, angry, or how about furious? Interestingly, research has shown that the feeling of losing and gaining the identical thing is much different. We would rather choose not to lose over gaining. In other words, the negative feelings coming from the loss, are much stronger than the positive ones coming from the gain. Really, we hate losing, and this leads to loss aversion. (We take very few risks with anything from what we eat to buying dish detergent.) Loss aversion is a very powerful marketing and sales tool. What has this to do with marketing and selling, everything? We talk rationally to the customer about features and benefits; how good the product will be for them, and then they say, “I have to think about it!’’ You’re thinking, what? Wouldn’t it be better to explain to them why not having the product will create a terrible loss? I know you’re asking, how would I do that without insulting them?

Really, we hate losing, and this leads to loss aversion.

4 Premier Flooring Retailer | Q3 2018


A great example is Farmers Insurance and their ‘Wall of Claims.’ Very humorous but scary about what can and has happened to their customers the minute you see the commercial you want to run out and make sure you’re covered for these types of disasters! If you haven’t seen it, Google the commercial.

What is this all about? In the 1990s, Dr. Richard Thaler, an economist, began challenging the view that people are rational thinkers. Thaler’s research into these anomalies in people’s behavior found they couldn’t be explained by standard economic theory. His discoveries have led us to believe that we are not rational decision makers. We can have all the facts in the world and make a totally irrational decision. This science is called Behavior Economics. Thaler, for his research, was awarded the Nobel Memorial Prize in Sciences in 2017. His award-winning book is called “Nudge.” Once you understand the basic principles of what motivates people, you have a huge opportunity to move them in the right direction.

Science-based marketing and sales focus on the most important part of any sales process — The buyer and what the buyer is feeling! Over the last few decades, a wealth of scientific research has emerged about how the human brain makes choices, and which factors can influence what we say and do, including what we buy. Research into Behavioral Economics has given us new insight into the minds of customers and what is influencing their decision making. A couple of these powerful tools are the kinship of belonging, temporary ownership, and fear of loss. These are all dominating principles that are leading our decision making. ❚ SIGN UP FOR A $500.00 “Science Based Marketing & Sales,” trial coaching session, at no cost to you today! Reach me at Lcalandrino@nycap.rr.com or at (518) 495-5380.

In the 1990s, Dr. Richard Thaler, an economist, began challenging the view that people are rational thinkers. … His discoveries have led us to believe that we are not rational decision makers. We can have all the facts in the world and make a totally irrational decision. This science is called Behavior Economics. Premier Flooring Retailer | Q3 2018

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EXHIBITS

23-25 January

EDUCATION

22-25 January

MANDALAY BAY CONVENTION CENTER • LAS VEGAS 2019 • #TISE2019 • #mySURFACEstory

THE EVENT

intlsurfaceevent.com/register The International Surface Event (TISE): SURFACES | StonExpo/Marmomac | TileExpo has exciting news updates for the industry coming to this year’s event. TISE 2019 is sizing up to be another incredible event. The exhibit floor is wallto-wall packed with over 800 brands and thousands of products, while the event spans nearly a million square feet of exhibits, education, product showrooms, show features, and more!

CONVERGE EDUCATION

intlsurfaceevent.com/converge Replacing the previous conference programming, the new CONVERGE education program at TISE will offer the industry a whole new way to gain training, knowledge, and information. With flexible scheduling allowing for the busy trade show atmosphere, persona interest groups (CREATIVES | SUITS | HAMMER & NAILS) for immersive, targeted discussions, and the freedom to pass freely between session topics to gain exactly the knowledge needed.

#mySURFACEstory intlsurfaceevent.com/mysurfacestory

TISE wants to get to know you through the #mySURFACEstory campaign. Simply download and print a hashtag sheet, take a photo of you or your team in your ‘SURFACE’ environment (that’s your fabrication shop, retail store, your installation project, designer room, etc.), and post on social media using #mySURFACEstory and #TISE2019. TISE will be choosing the best photos to receive prizes from the event!

Architecture, design, retail, dealer, remodeling, building, installer, fabricator stories all start at the surface; Find your surface story at #TISE2019.

CONTEST RETURNS

intlsurfaceevent.com/install-comp The industry has asked and TISE has answered as they announce the return of the National Installer of the Year Installation Competition (The Nationals) to occur LIVE on the floor at TISE 2019! SCAN THE QR TO WATCH THE 2019 PROMO VIDEO

TISE19 Editorial_PFR.indd 1

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9/19/2018 4:26:10 PM


ston

xpo

STORIES

ARCHITECTURE • DESIGN • RETAIL • DEALER • REMODELING • BUILDING • INSTALLER • FABRICATOR

START AT the surface

JOIN US AT THE LARGEST FLOOR COVERING, STONE, AND TILE EVENT IN NORTH AMERICA

EXHIBITS

JANUARY 23-25

EDUCATION

JANUARY 22-25

MANDALAY BAY CONVENTION CENTER • LAS VEGAS 2019 • #TISE2019

Visit www.intlsurfaceevent.com/pfretailer for registration information!

OTHER TISE EVENT SPONSORS: Allied Stone Industries I American Monument Assoc. | Canadian Stone Assoc. | Elberton Granite Assoc. I Indiana Limestone Institute | Marmomac I National Building Granite Quarries Assoc. | NW Granite Manufacturers Assoc. I Stone Fabricators Alliance I StonEx Canada | Certified Floorcovering Installers I National Wood Flooring Assoc. I North American Association of Floor Covering Distributors

Premier Flooring Retailer | Q3 2018

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IT’S YOUR UP

What a Great Way to Shop!

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Tom Jennings VP of Professional Development Tom Jennings is a lifelong member of the flooring business. Since selling his family’s retail business in 2006, he has served the industry as an educator and speaker. He is a past board chairman of the WFCA and is currently the board chairman of WFCA Services, Inc. and WFCA vice president of professional development. He may be reached at tjennings@wfca.org.

requent readers of mine know I believe that before we can be good customer service providers, we must first learn to be good customers ourselves. By that, I mean we must pay attention to how we are treated when we are spending our hard earned pay checks. By doing so, you will learn a tremendous amount about both the service provider and their management. Please allow me to share two very different experiences I had on the same very day. My first stop was a large national chain grocery store. I stopped to mail packages at the customer service desk; a task we all perform regularly. Not far away, I observed someone in a business suit, likely a corporate manager, dressing down a small group of department managers for clearly not following some arcane procedure. Right on the sales floor in front of customers! The employees were all looking either at their shoes or the light fixtures, while this little leadership school dropout was attempting to showcase his authority. (You can only imagine their spirits when out of his presence). Managers like this are toxic and undoubtedly create a higher rate of employee turnover. They somehow believe that underlings work for them. Wrong! All involved work for the customer! I couldn’t wait to get out of this store. And to think that the only reason I was there in the first place, was to avoid going to the post office. Some choice! My next stop was quite different. Needing to purchase a gift, I visited one of my wife’s favorite shops, Weaver’s Department Store in my hometown of Lawrence, Kansas. Upon entering, I was greeted by the general manager with a warm handshake and smile. Next, a sales associate personally walked me through the process of selecting items I have no qualifications to select. Once my decision was made, my purchases were gift wrapped at no additional charge! The treatment was fantastic, and it appeared to be the de facto standard for everyone who walked in the door. The employees dealt with customers in the same happy, respectful and helpful fashion as their boss, and the cash register was clearly ringing. I spent at least twice as much as I had intended, yet left feeling great despite having done so. While I had entered the store somewhat confused as to what I was seeking, the resultant purchase both excited and energized me.

First of all, it is impossible for staff to treat their customers any better than the way they are treated themselves. It can’t consistently be done. We mirror the attitudes that we receive from above. 8 Premier Flooring Retailer | Q3 2018


…the best way for a local store to survive and thrive, is to never forget the personal touch. Great Customer Service Always Pays Big Dividends! Is such customer service feasible in today’s marketplace? Perhaps I should mention that Weaver’s is the oldest department store west of the Mississippi River, founded in 1857! How many competitors do you think have come and gone in over 160 years? How many “new” forms of merchandising? How many recessions and depressions have occurred? How many wars? How many forms of delivering and communicating both products and messages to prospects and customers alike? It would seem like taking great care of the customer would be the only constant over time. There are two important lessons to be gained from relating these experiences. First of all, it is impossible for staff to treat their customers any better than the way they are treated themselves. It can’t consistently be done. We mirror the attitudes that we receive from above. Second, the best way for a local store to survive and thrive, is to never forget the personal touch. Product was, is and will always be available for less elsewhere. Neither product nor price alone will attract every buyer. Remember that since there are many different types of customers, the opportunity will always exist to serve them in many varying fashions. While the definition of service will always be changing, being well served is still a great way to shop. My belief is that future generations will eventually realize what past ones came to know. How do your customers feel about their time spent with you? ❚

Premier Flooring Retailer | Q3 2018

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ESR Commercial Your Cost-Free Real Estate Resource

By Garrett Aries

DO YOU KNOW WHAT YOUR LEASE SAYS?

M

any of you reading this might not know whether or not you have a personal guaranty on your lease. Others might not see why having a personal guaranty is a big deal. After all, aren’t you responsible for the lease no matter what? Why is it beneficial to not have a personal guaranty? The vast majority of landlords ask for a personal guaranty of some kind when signing a new lease. A personal guaranty says that “you,” and not just your company, partnership, or LLC, are liable for the rent and triple net charges of your space. In a perfect world and perfect scenario, this will never affect a tenant. A tenant pays their rent and the landlord never has to go after anyone for unpaid monies. But what happens if something goes south and you are unable to pay rent? Can the landlord then come after you, personally? Can they go after your personal bank accounts, house, or other personal property? The answer is YES, they can.

A personal guaranty says that “you,” and not just your company, partnership, or LLC, are liable for the rent and triple net charges of your space.

ABOUT US ESR Commercial is the country’s largest trade association brokers. With over 30 years of real estate experience, we are your one stop, cost-free real estate resource. Contact Us: Garrett Aries (818) 519-5040 Garrett.aries@esrcommercialrealty.com.

10 Premier Flooring Retailer | Q3 2018


The solution to this is to either try to completely eliminate, or more likely limit, the personal guaranty.

The solution to this is to either try to completely eliminate, or more likely limit, the personal guaranty. This is something that we try to negotiate in all of our deals. If you have owned your store for many years, have good credit, and no history of being delinquent, why does an owner continue to need to have a personal guaranty of the lease? It’s not something that every owner will go for, but it can be a very important item that you might not think of at the time you’re signing the lease. You want to limit your personal exposure as much as possible, which could make a big difference at some point in the future. ❚

If you have owned your store for many years, have good credit, and no history of being delinquent, why does an owner continue to need to have a personal guaranty of the lease?

A Special “Thank You” to all the manufacturers and their marketing departments who provided outstanding editorial to make this publication a success. Publishing Staff Margo Rodgers Locust, Publisher Karen George, Managing Editor Lisbeth Calandrino, Associate Editor Stan Michelson, Communications Director Barry Briskman, Senior Copy Editor Ray Stewart, Production Manager Toelke Associates/Ron Toelke, Creative Director Editorial and Advertising Offices: Fabulous Floors Magazine, LLC Phone: 678-761-5002 | Email: Margo@pfrmag.net Columnists Annette Callari, Leah Gross, Lisbeth Calandrino, Paul Friederichsen, Jeffrey King, Brett Miller, Tom Jennings, Scott Carothers, Chad Ogden, Scott McGillivray WFCA Scott Humphrey, Chief Executive Officer Tom Jennings, Vice President, Professional Development Freida Staten, Vice President Marketing + Communications Steve Abernathy, Chief Financial Officer Kay Wiley, Executive Assistant to the CEO The World Floor Covering Association (WFCA) Phone: 855-330-1183 | Email: wfca@wfca.org Premier Flooring Retailer is a joint initiative of the World Floor Covering Association and Fabulous Floors Magazine, LLC. Copyright© FABULOUS FLOORS MAGAZINE and WFCA 2018. All rights reserved. No portion of this publication may be reproduced in any way without written consent from Fabulous Floors Magazine, LLC or the WFCA. Change of Address: in order to ensure the uninterrupted delivery of Premier Flooring Retailer, notice of change should be made at least 5 weeks in advance. Premier Flooring Retailer is published quarterly in print by Fabulous Floors Magazine, LLC located at 995 Main Street, Andrews, NC 28901 and the World Floor Covering Association located at 855 Abutment Road, Suite 1, Dalton, GA 30721. Postmaster: Please send address changes to WFCA, 855 Abutment Road, Suite 1, Dalton, GA 30721.

Premier Flooring Retailer | Q3 2018

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PILLAR TALK

Distribution: Double Your Pleasure, Double Your Savings

Y

ou can categorize the Distribution business a lot of ways, but they are in the unique position of being in the middle of it all. Manufacturers mostly just (and “just” is not meant to be dis-

paraging in any way) make and sell their products, and retailers just buy products, but all those distributors that keep our flooring industry happy and healthy are getting it from both directions. They have products coming in from manufacturers, and they also have products outgoing to retailers. Being in this position, distributors have the largest opportunity for streamlining their businesses via B2B automation. As the flooring industry continues to catch up with other industries in letting computers do the work for them by maintaining product catalogs, sending and receiving purchase orders, and sending and receiving invoices, these hard working distributors can be the key to accelerating the adoption of eCommerce between manufacturers, distributors, and retailers.

Phil Zolan

The savings are clear. Past research by the WFCA and the Floor Covering Business to Business Association (fcB2B), found that a Distributor who can completely transition their business

Executive Director fcB2B

from fully manual to fully automated B2B, can save hundreds of thousands of dollars a year. This

World Floor Covering

is made up of time savings, allowing them to put those people who are answering phones, tak-

Association

ing orders, printing invoices, mailing checks, etc, into much more productive and revenue producing roles within their companies. Error rates on POs would drop dramatically, which directly translates into less claims. Customer satisfaction also typically increases significantly, as you and your people are able to see their orders real time in your system. What’s stopping many Distributors, retailers and manufacturers for that matter, from making that transition? Good old inertia. The mindset that holds businesses back is the “that’s how we’ve always done it” approach. That phrase alone is sand in the gears of progress. Believe me, I’ve heard all the reasons (ok, they’re really excuses) for not making the transition:

“We can’t” “It’s too difficult” “We get such great service when we call Mary in customer service, they know us there”

Past research by the WFCA and the Floor Covering Business to Business Association (fcB2B), found that a Distributor who can completely transition their business from fully manual to fully automated B2B, can save hundreds of thousands of dollars a year. 12 Premier Flooring Retailer | Q3 2018


And as eCommerce is becoming more and more a part of our daily lives, not being able to do business electronically will look so unusual, it will cause you to lose business. Think about your business. Are you the one holding your business back from moving into the 21st century of progress? It’s unusual for technology to just happen on its own. It needs a sponsor, a driver, a mentor, someone who sees and understands the huge benefit it provides; someone who can define what the end state looks like, and then is just consistent and stubborn enough to insist that it happens. That’s not as difficult as you might think.

Change Offers Real Value Change is challenging, and ultimately change is rewarding. And as eCommerce is becoming more and more a part of our daily lives, not being able to do business electronically will look so unusual, it will cause you to lose business. Do you really want to be that business? And finally, to all you Distributors and Retailers out there, I continue to make this pitch. For every supplier you deal with, if you want them to do business with you electronically B2B, every time you see someone from that business, ask them when is it going to happen. The more they hear it from their customers, the quicker they’ll get on board. If you need help getting started and don’t know where to turn, the WFCA and fcB2B are here for you. Drop me an email at pzolan@wfca.org and we’ll make the time to talk and get you going! ❚

Premier Flooring Retailer | Q3 2018

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Hydra-Skin™ is a high performance feature unique to Healthier Choice Cushion; it is the only film-less, breathable moisture barrier, which stops liquid spills from penetrating into the cushion while allowing moisture vapor trapped underneath to evaporate and escape.

Healthier Choice Cushion is infused with Ultra-Fresh® Anti-Microbial Protection to inhibit the growth of harmful odor causing mold, mildew and bacteria. It provides permanent protection.

No Odor - Low VOC’s Healthier Choice is the only carpet cushion which is UL GREENGUARD® Gold Certified for low chemical emissions. Breathing high levels of volatile organic compounds (VOC’s) is linked to health problems including allergies and asthma. Our product is also CRI GREEN LABEL Plus Certified.

Made in part with soybean oil and other natural resources, which reduces the consumption of fossil fuel petrochemicals while supporting sustainable agriculture.

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The World’s Best Carpet Cushion

TM

Why is Healthier Choice the world’s best carpet cushion? The secret is our Never Crush Foam Technology. We manufacture the only carpet cushion made from 100% High Density Memory Foam. Most carpet cushion today is made from waste or scrap pieces of low density, light weight foams which are glued or bonded F E AT U R I N G

NEVERCRUSH FOAM TECHNOLOGY

together. Our patented, Never Crush Foam Technology offers the luxurious comfort Premier Flooring Retailer | Q3 2018 you want while providing the lasting support your carpet needs.

15


LEGAL MATTERS

With the New Tax Law, Should You Be a C Corporation? Not So Fast—It is Complicated. Part I

W

Jeffrey W. King Outside General Counsel for the WFCA Jeffrey King has more than 35 years’ experience in complex litigation with a focus on contracts, employment, construction, antitrust, intellectual property and health care. He serves as general counsel for WFCA and other trade associations, and is a LEED Accredited Professional. For more information, contact him at (561) 278-0035 or jeffw@jkingesq.com.

ith the enactment last December of the 2017 Tax Cuts and Jobs Act (Tax Law), many flooring dealers are asking whether they are better being taxed as a C corporation in light of the new flat 21% federal income corporate tax rate. The answer, unfortunately, is not simple. While most small business owners will be better off continuing to paying taxes a pass-through entity, such as an S corporation or partnership, each business will need to discuss the various issues and considerations with their tax advisors. This article is designed to help you understand those issues and considerations, so you can make informed decisions. Part I of this article will provide a brief examination of the recently enacted Tax Law, and its impact on the tax liability for both C corporations and pass-through companies. Part II, which will be published in the next issue of Premier Flooring Retailer, will review the various consideration that could impact your taxes and your decision on whether it is best for your business to pay taxes as a pass-through entity, or as a C corporation.

Corporate Tax Options The first step in analyzing which tax structure is best for your business, is to clarify the various options a business has in paying its taxes. There are essentially two broad types of corporate tax structures: C corporations and pass-through entities. C corporations pay taxes on the corporation’s income. When a C corporation distributes its income to its owners, the distribution will usually be taxed as qualified dividends, and the owners must pay taxes on the distribution. The rate on such qualified dividends is 20% plus an additional 3.8% net investment income tax. These dividend taxes are not due until the corporation distributes the income to its owners. It is the tax on C corporation income and the tax on the dividend distributions, that results in the double taxation for C corporations. “Pass-through” entities do not pay corporate income taxes. Rather, all income from the business is passed through to the owner(s) who pay taxes at the individual rates. All the business’s income must be allocated to the owners each year, whether or not the money is actually distributed. The most common pass-through entity for retail stores is a S corporation. An owner of a S corporation must pay themselves “reasonable compen-

There are essentially two broad types of corporate tax structures: C corporations and pass-through entities. 16 Premier Flooring Retailer | Q3 2018


There are also partnerships and sole proprietorships whose income is passed-through to its owners. Like S corporations, all the annual income from these entities is passed-through to the owners, whether or not distributed. sation” and pay employment taxes (FICA and Medicare contributions) on their salaries. Any remaining net income must be allocated to its owners who must pay taxes at the owners’ individual rate, but there is no employment tax on those amounts. There are also partnerships and sole proprietorships whose income is passed-through to its owners. Like S corporations, all the annual income from these entities is passedthrough to the owners, whether or not distributed. These types of companies do not have a reasonable compensation requirement, but self-employment taxes are owed on all of the income allocated to the partners, or the sole proprietor. Finally, there are Limited Liability Companies (LLCs). These companies are not a form of business that has a set tax status. Rather, LLCs may elect to be taxed as C corporations, S corporations, partnerships (if more than 1 owner) or sole proprietorships. There are limits on when an LLC must make its election and, once an election is made, when it can change that selection.

Overview of New Tax Law The second step in assessing the best tax structure is to understand the recently enacted Tax Law and how it impacts each tax structure. For C corporations, the Tax Law lowers the income tax rates to 21%. The prior rate was between 15% (for corporations with taxable income up to $50,000), to 39% for corporations with taxable income over $100,000).*∗ In exchange for the lower rates, the Tax Law limited certain deductions, such as interest deductions, net operating loss offsets, and business-related meals and entertainment deductions. Pass-through companies lost the same deductions as C corporations. The small reduction in the individual tax rates, which lowered the maximum rate from 39.6% to 36% and the broadened rate “brackets”, will offset some but not all of the loss of these deductions.

*The prior rates varied for corporations with income over 10 million from 35% to 38%.

Premier Flooring Retailer | Q3 2018

17


Without other adjustments, pass-through entities would likely end up paying higher taxes under the new Tax Law. The World Floor Covering Association (WFCA) lobbied Congress on behalf of its members to ensure the passthrough companies were not unfairly treated. Ultimately, Congress adopted the Senate version that was supported by WFCA. The Tax Law provided that pass-through companies could deduct 20% of “Qualified Business Income” (QBI) to lower their taxes. Coupled with the lower individual tax rates, pass-through entities at the top individual tax bracket could see a reduction in their effective tax rate from 39.6% to 29.6% that is, reducing the new high rate of 37% by the 20% QBI deduction.

The 20% Deduction of Qualified Business Income The 20% deduction of QBI is not simply a matter of reducing a pass-through business’s total income by 20%. Rather, the Tax Law imposes some limit on what is included, and how much can be deducted. Moreover, what is excluded from QBI can vary by the type of pass-through entity.

Specified Service Trades or Businesses The Tax Law limits the deductions to qualifying trade or business. The Law provides a list of specified service trades or businesses (SSTB) that are not treated as qualifying trades or businesses. The list includes health, law, consulting, athletics, financial services, brokerage services, investment activities, and several service type companies. Flooring companies and installation businesses qualify as a trade or business. Interior design and delivery services are also likely to be considered a qualifying trade or business. Although beyond the scope of this article, individuals would be allowed to deduct 20% of qualified real estate investment trust (REIT) dividends, qualified cooperative dividends, and qualified publicly traded partnership income and rental income.

Taxable Income The 20% deduction is taken from a business’s net income, that is, the income after all business deductions, including all wages, have been claimed. For example, consider 18 Premier Flooring Retailer | Q3 2018

a flooring dealer with gross income of $500,000. After taking all available deductions, assume the net income is $250,000. The 20% deduction is taken on the $250,000 net income for $50,000, not $100,000, based on $500,000 of the gross income. There are also income exclusions from QBI. It is only the QBI of a pass-through entity that is eligible for the 20% deduction, not the taxpayer’s total taxable income. If the taxpayer has other sources of income that is not from a passthrough entity, that income is not included in calculating the 20% deduction. Generally, passive investment income such as capital gains, dividends and interest income does not qualify as QBI, unless the income is from a pass-through entity. If these types of income are from a pass-through entity, then it may be included in the QBI. To illustrate, if a flooring dealer charges customers financing fees or interest, that income would be in the dealer’s QBI. Each item of such income needs to be reviewed by the business’s tax advisor to determine whether it is part of the QBI.

Deduction of Owner’s Salaries The deductions that must be taken in calculating QBI, can vary by the type of pass-through entity. For Subchapter S corporations, the Tax Law specifically excludes “reasonable compensation” paid to the owner-employee of a S corporation. While S corporation owners might be tempted to reduce their wages in 2018 to create more pass-through income, they will still have to adhere to the reasonable compensation restriction. The reasonable compensation requirement is not new, but given the impact on the calculating QBI eligible for the 20% deduction, it is likely the Internal Revenue Service (IRS) will increase its review of the salaries paid to owners of S corporations. This is a significant restriction to being an S Corporation. On the other hand, entities taxed as partnerships do not have a reasonable compensation requirement. The Tax Law, however, does specifically exclude from QBI “guaranteed payments” to the partners. Partnerships, however, can voluntarily eliminate guaranteed payments, and may be able to take the 20% deduction on 100% of the passthrough income While it may sound like a flooring dealer should be a partnership, there are some significant downsides. It is


The World Floor Covering Association (WFCA) lobbied Congress on behalf of its members to ensure the pass-through companies were not unfairly treated. Ultimately, Congress adopted the Senate version that was supported by WFCA. likely that the IRS will issue regulation requiring some type of reasonable salary, or guaranteed payment deduction for partnerships. Moreover, all net income from a partnership is subject to the individual and self-employment taxes. In contrast, only the W-2 wages paid to an owner of a S corporation, are subject to employment taxes. There are no employment taxes on any distribution over an owner’s salary. Finally, as explained below, paying an increased wage may actually save taxes in some circumstances, given the limits on the 20% deduction. A flooring dealer or installer can also be a sole proprietor. For these entities, all its taxable income will be QBI without any deduction of the owner’s salaries. The major downside is that a sole proprietor may not be protected, if the business incurs any liabilities. Moreover, all net income from sole proprietorships is subject to the individual and self-employment taxes. Employees who are considering setting themselves up as sole proprietors to convert wages to QBI need to be cau-

tious. To prevent employees from claiming to be sole proprietors, the IRS recently issued proposed regulations that provide individuals will continue to be treated as employees, unless they can prove they are independent contractors under the IRS standard. This would require the former employee meet the multi-factor test, which would include working for other companies, supplying its own tools and equipment, and independent from control by their former employer.

Limit on Deduction There is an income restriction on the 20% deduction. To deduct the full 20% from QBI, the taxable income cannot be higher than $157,500 for an individual, or $315,000 for a joint return. The thresholds are based on each business owner’s total taxable income, not the total taxable income of the pass-through entity. For example, consider a taxpayer who has income of $250,000 from an S corporation with $125,000 from the business pass-through income, and

Employees who are considering setting themselves up as sole proprietors to convert wages to QBI need to be cautious. Premier Flooring Retailer | Q3 2018

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$125,000 as reasonable salary, made $75,000 from investment, and has a spouse with income of $125,000. The total taxable income for the married couple is $450,000. Even though the taxpayer’s QBI for the S Corporation is below the $315,000 limit, the taxpayers will not be able take the full 20% deduction off of the S Corporation’s QBI. For such taxpayers whose incomes exceed the thresholds, the calculations become more complicated. The deduction is the lesser of (a) 20% of QBI, or (b) the greater of (i) 50% of wages paid, or (ii) the sum of 25% of wages paid and 2.5% of the unadjusted tax basis of certain tangible depreciable property used in the qualified trade or business. To put it another way, the deduction 20% of QBI cannot exceed the 50% of the W-2 wages paid, or the sum of 25% of the W-2 wages paid plus 2.5 percent of the tax basis of qualified property, whichever is greater. To illustrate, consider a flooring dealer that has taxable income of $1.250 million in 2018 and pays $300,000 in wages. The business would only be able to take a QBI deduction of $150,000, since 50% of the total employee wages ($300,000 x 50% = $150,000) is less than 20% of the taxable income of the business ($1.25 million × 20% = $250,000). This example shows the dilemma regarding what to pay the owners of a pass-through entity. If, for example, the owners could have increased their own salaries by a $100,000 to increase the deduction. The federal income taxes, even with the self-employment tax, on the additional $100,000 in the owner’s wages, could be less than the tax benefit from the additional $50,000 increase in the deduction. Similarly, if the owners hired installers and increased its W-2 wages by $100,000, the business would have been able to take a $200,000 deduction. The total wages would have been $400,000 and 50% of it is $200,000. The increased costs would be partially offset by what the flooring dealer was paying its independent contractor to install, but the business would now have to contribute to payroll taxes, which in this example may be as much as $8,000. As these illustrations show, paying themselves higher wages, or taking on new employees, can actually reduce a business owners’ taxes. Each floor covering dealer will need to confer with its tax advisors to consider various alternatives to determine the best way to minimize their taxes. 22 Premier Flooring Retailer | Q3 2018

Multiple Pass-Through Entities The IRS recent proposed regulation would allow a taxpayer to aggregate certain businesses together for purposes of calculating the QBI deduction. The Proposed Regulations permit, but do not require, taxpayers to elect to aggregate separate trades or businesses, for purposes of calculating QBI. This election generally cannot be revoked once made. To aggregate separate pass-through entities: (i) None of the businesses can be an SSTB, (ii) the same owners must own at least 50% in each business, and (iii) the businesses satisfy at least two of the following factors: (a) The businesses provide services or products that are customarily offered together, (b) the businesses share facilities or significant business functions, or (c) the businesses operate in coordination with, or reliance on, each other.


Each floor covering dealer will need to confer with its tax advisors to consider various alternatives to determine the best way to minimize their taxes. Under this proposed rule, a flooring dealer that has separate pass-through companies for its retail store, and its installation, design and delivery services, can aggregate the income of each to determine the QBI. This may prove beneficial by allowing related businesses to share the W-2 wage limitation, and netting of income and losses for purposes of calculating the overall QBI deduction. For example, consider a flooring retailer that sets up an installation pass-through entity that uses subcontractors. The deduction for the installation company could be minimal, since it has few W-2 wage earners. By aggregating the installation company with the retail facility, the retail W-2 wages could be used to increase the deduction. The proposed regulations also would allow a flooring retailer to aggregate the income from a entity that rents property or equipment to another commonly owned business. Accordingly, if the flooring dealer has a separate corporation that owns real estate and rents that to its retail

stores, the owners can consolidate the taxable incomes to determine the aggregate QBI. This is a significant inclusion for such businesses. Generally, a rental or licensing business is a SSTB, and not qualified to take the 20% deduction on QBI.

C or Pass-Through Corporation The final step in analyzing which tax structure is best for your business is to review various consideration and questions that will impact the taxes of a business and its owners. As will be explained in Part II, how these issues are answered will help determine whether a business should pay taxes as a pass-through entity, or as a C corporation. â?š The information contained in this article is abridged from legislation, court decisions, and administrative rulings, and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.

The final step in analyzing which tax structure is best for your business is to review various consideration and questions that will impact the taxes of a business and its owners. I want to thank Peter A. Wilhelm, EA, MS Taxation, for providing guidance, information and review for this article. Mr. Wilhelm is a tax expert with years of experience helping all sorts of businesses in dealing with complex tax issues. Mr. Wilhelm can be reached at Wilhelm & Associates, Ltd., 256R North Washington Street, Falls Church, VA 22046, (703) 356-5005 ext. 202, www.wilhelmcpa.com Notice: IRS Circular 230 Disclosure: To comply with certain U.S. Treasury regulations, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication, including attachments, was not intended or written to be used, and cannot be used, by

any taxpayer for the purpose of avoiding any penalties that may be imposed on such taxpayer by the Internal Revenue Service. In addition, if any such tax advice is used or referred to by other parties in promoting, marketing or recommending any partnership or other entity, investment plan or arrangement, then (i) the advice should be construed as written in connection with the promotion or marketing by others of the transaction(s) or matter(s) addressed in this communication and (ii) the taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. To the extent that a state taxing authority has adopted rules similar to the relevant provisions of Circular 230, use of any state tax advice contained herein is similarly limited. Premier Flooring Retailer | Q3 2018

23


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US Floors: COREtec® SPC and WPC Comparisons

A

s the leader in the industry, USFloors and COREtec want to educate the consumers about composite core flooring. We like to compare the differences between WPC and SPC to the

different types of carpet out there. In the world of carpet, there are many types of fibers, constructions, pile heights and weights. A thick, plush carpet feels heavenly under foot, but in a corporate or retail setting, it’s not so good! Conversely, you wouldn’t install a commercially rated carpet into your bedroom or family room where you want the most comfort. The carpet you choose depends upon your intended use and personal preference. We like to apply that same mindset comparing the differences between our COREtec® (SPC) Solid Polymer Core and COREtec® (WPC) Waterproof Composite Core flooring. Both are 100% waterproof and dimensionally stable. Both feature a wide range of beautiful decors and textures. Both install easily and straight out of the box, with no need for acclimation. However, each is constructed to suit specific needs, based upon the requirements of the intended installation. COREtec® PRO PLUS is a high-density rigid core that was developed to withstand impact and resist indentation, due to its high mineral content and dense core. While COREtec® PRO PLUS will perform great in your mudroom or basement, it is tailor-made for commercial settings such as boutiques and offices, anywhere that there may be a high traffic load. Although COREtec® PLUS is frequently used in moderate commercial environments, it is better suited for residential use. During the manufacturing of WPC, we add foaming agents that create tiny air pockets to improve sound quality, insulation and cushion. This WPC core is combined with a thick luxury vinyl top layer and attached cork underlayment, to create a truly comfortable floor. Both SPC and WPC categories offer features and benefits that lend themselves to a wide variety of installation options and end-use. It merely comes down to customer preference, fashion/ design, installation application and budget. The choice is yours… ❚

Both are 100% waterproof and dimensionally stable. Both feature a wide range of beautiful decors and textures. Both install easily and straight out of the box, with no need for acclimation. However, each is constructed to suit specific needs, based upon the requirements of the intended installation. 24 Premier Flooring Retailer | Q3 2018


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27


IT’S YOUR UP

How To Get The Most Out of A Trade Show

As an Attendee

As an Exhibitor

1. G  et exposure to and information about the hottest trends of the year while also finding out what might be fading out of style. Keep an eye out for various resources and new products that your company, wholesale or retail, just can’t do without.

1. Make sure you’re comfortable with small talk. Don’t be afraid to proclaim as much about yourself as you do about your product. Welcome attendees with a smile and genuine interest in how they’re doing.

2. Use the tradeshow as a networking tool, taking the chance to introduce yourself to vendors and retailers you might otherwise not have met. You might have the chance to learn from them, but you might also garner business from them as well. 3. Use what you learn about your competition to your own advantage. Make comparisons and evaluations based on what you find out. More importantly, you will have accomplished this without going to any great extra lengths. 4. M  ake sure your wholesale or retail business is exposed to the press who are present, then make it stand out as unforgettable to them. 5. Participate in everything you can, including seminars and events. Get answers everywhere you’re able, from vendor and retailer alike. Educate yourself on industry standards and most of all — HAVE FUN! Turning a tradeshow into a good time increases motivation exponentially.

2. Learn about the latest social media outlets. To say, for instance, that you’re not on Facebook presents your business as outdated and not ready to move forward. Make a showing at the Tradeshow and on social media. 3. Utilize the press every chance you get. While they may be looking for something themselves, you stand to gain from their exposure. Offer a scoop on what you know and they’ll remember your company name. Additionally, don’t be shy when photo ops come your way. Be ready by looking the part and seeking those opportunities out. 4. Draw people in by being ready to listen or making plenty of small talk. Giveaways are another great way to engage attendees, but make it something they’d really like to have, such as a refreshing drink. 5. Maintain contact to finalize an already great impression. Following a Tradeshow up with a complimentary phone call is one thing. However, if you’ve taken a photo with a particular customer, send them a card or even a video, letting them know they were important to you.

Use the tradeshow as a networking tool, taking the chance to introduce yourself to vendors and retailers you might otherwise not have met. 28 Premier Flooring Retailer | Q3 2018


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29


FLOOR ED

Outsmart the Competition

Find Ways to get connected to the community.

Encourage your employees to take part in the community.

Put programs together that involve your customers and your

Pay for their memberships as well as give them time off to be

staff, so they get to know one another. Have customer clubs

part of the community. Tell them that you want them to determine

for those that have purchased lots of products from you. Rec-

how their attendance will benefit the agency and your business.

ognize these customers with special thank you notes from the owner, special gifts, a gift certificate to a nice restaurant, or tick-

Plan attendance at the local home show.

ets to a sporting event.

Have product demonstrations; set up demonstrations and giveaways every hour. Be sure and ask every customer if they

Take part in a cause that has meaning to you and your staff.

are now in the market for flooring, or if they will be in the near

What is important to your staff, who would you like to support?

tos of your installations with you, as well as your awards and

Help the organization raise money, take part in their fund rais-

your company certification.

future and, if so, can you contact them at that time? Have pho-

ing events, or have your own fund raiser for them. Involve your customers in your event; find out what is important to them, and

Develop a kids program.

then get them involved. This gets you closer to them and you

Kids grow up to become customers as well as employees.

become a trusted friend, rather than just the nearby retailer.

Make sure they have their own special spot in your store with a video and games. When they leave, give them a manila envelope filled with some fun stuff. Tell them if they come back again, you will have another gift for them. â?š

30 Premier Flooring Retailer | Q3 2018


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WFCA Floor Covering Mag Spring 2018.indd 1


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Oregon’s Imel & Sons Hardwood Floors Reveals the Secret to Avoiding Costly Flooring Failures When it comes to installing hardwood floors, Mike Imel of Imel & Sons Hardwood Floors in Grants Pass, Oregon, knows from 35 years of experience the importance of measuring moisture and humidity. “It’s absolutely critical,” Imel declares. “Humidity can easily cause a floor to expand and contract during the installation process. And keeping track of what’s happening with the humidity is more critical today than it ever has been, because just about every species in the book is being used for wood floors, and every species reacts differently to humidity.” “In fact, a job can fail very easily if you don’t know, and control, the ambient humidity and sub-

Larry Loffer, Wagner Meters

floor humidity,” he adds.

Larry Loffer is a senior

That point was driven home clearly when Imel narrowly avoided a costly flooring disaster a

technician at Wagner

couple of winters ago. Upon arriving at the job site, he made sure the furnace was on and work-

Meters, where he has over

ing, before bringing in the wood flooring. He also checked the temperature and ambient humidity

30 years of experience in wood moisture measurement. With a degree in Computer Systems, Larry is involved in both hardware and software development of wood moisture measurement solutions.

to determine that conditions were right before starting the job. Since everything appeared in order, Imel installed 2,500 square feet of 5-inch white oak flooring with expansion gaps every eight feet. Allowing for acclimation, he returned three weeks later to begin sanding. Halfway through the sanding, an extremely dry cold snap blew in dropping the humidity. As was his custom, Imel continued to monitor the humidity and temperature. Although the thermostat was set at 68° Fahrenheit, he discovered the temperature was actually 63°. Upon further investigation, he learned the home had a two-part heating system; a heat pump for normal heating, and augmenting heat strips for extremely low temperatures.

Call Wagner Meters today

The heat strips were working, but unbeknown to Imel, the heat pump wasn’t. Although the

at (800) 634-9961 and ask

system was on 24/7, it was running at half capacity while sucking humidity out of the air. This,

for Larry, or visit www.wagnermeters.com.

coupled with the unusually dry cold weather, dropped the indoor humidity to 30%. This caused the entire floor to shrink significantly. Imel installed humidifiers and, after running them for three weeks, they raised the humidity to 45%.

Monitoring Moisture and Humidity “We had to re-acclimate the floor, and try to find that equilibrium moisture content. We also had to monitor the subfloor, the wood flooring, and ambient humidity all over again,” he says. Imel contends that if he had failed to monitor conditions in the house, a $40,000 floor would have been destroyed. Continued on page 34

32 Premier Flooring Retailer | Q3 2018


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“I use a Wagner pinless meter. … It has a species feature that works great with many different species of wood. I can easily change the settings, so I know precisely how each species will react to humidity,” he says. Contunied from page 32

“We saved the floor because we continually monitored the

If the flooring is in reasonably good shape and simply needs

temperature and ambient humidity using a Wagner Thermo-

some added protection, Imel says he can make it look like new

Hygrometer. Otherwise, we would have been tearing that floor

in only a few hours, using the Bona System.

out, rather than saving it. “Knowing exactly where the humidity is all the time helps me protect myself and my client,” he declares. Another valuable tool he carries with him to every job site is a moisture meter. “I use a Wagner pinless meter. It’s fast, easy to use, and accurate for measuring wood floors and wood subfloors.

“It’s the first and only guaranteed recoat system in the industry. In the past, I could recoat a floor, but not guarantee adhesion if I didn’t know what coating was on the floor. The Bona system safely removes all contaminants from the floor, and prepares it for optimal adhesion of a new coat of Bona Traffic or Bona Traffic HD. “Another big thing with this system is that we can now recoat

“It has a species feature that works great with many different

all aluminum oxide prefinished floors with 100% success, ver-

species of wood. I can easily change the settings, so I know

sus the 50% failure rate I used to have. I can also do hand-

precisely how each species will react to humidity,” he says.

scraped floors, which nobody else can do,” he adds.

He especially likes the fact it’s a pinless meter. Many times he wants to monitor pre-finished flooring, or even check walls and finished carpentry for possible water leaks.

Old World Craftsmanship, New World Technology

“Those aren’t things I want to stick a bunch of holes in. So, the Wagner meter’s especially handy for that.”

Imel & Sons Hardwood Floors is a forward-thinking, progressive company, continually learning new technologies, and offer-

Recoating Preferred

ing new products and services to its clients. Yet they construct floors in the Old World tradition embodying the heritage of the

While skilled in everything from basic installations to extremely

village craftsman, who creates beautiful objects, borne out of a

complicated designs involving custom stains, borders, dye-ins,

love for his work.

and laser inlays, as well as wood floor repairs, floor coating, and

They never forget that the success of their business is

refinishing, Imel says he specializes in site finish. He also says

defined by the satisfaction of their clients. So they promptly

he does things that set him apart from his competitors, and that

return phone calls, show up on time, and take care of things

takes his floors to the next level.

that need to be taken care of after the fact. They also carefully

“For one, I’ve got all top-of-the-line equipment and the best sander in the business,” he says matter-of-factly.

educate clients on how to keep their floors beautiful for years. “We’re not the kind of company that’s interested in being the

“I have a multi-disc sander from Bona, which allows me to sand

cheapest, or just slapping floors down and walking away. We

in different directions. So my floors are smoother and flatter than

want to be known as the best in the business,” he says with

people hope to achieve with the traditional sanding method.”

deep conviction.

He also invested in Bona’s proprietary Recoat System, to help build his business recoating floors. He discovered recoat-

“That’s been my approach with everything I’ve ever done.” To choose a wood moisture meter that’s right for all your

ing is much preferred by businesses that cannot afford to shut

projects, compare Wagner wood moisture meters now.

down for the 3-5 days required to refinish floors.

www.imelandsonshardwoodfloors.com ❚

34 Premier Flooring Retailer | Q3 2018


We understand the challenges that installers face day in and day out. Your opponents are dirty, mean, and looking for a fight. You take on subfloors when most would just throw in the trowel. With Schönox in your corner, you have the products, service and technical support to help see you through the final round. Enter the Schönox Annual Man vs. Floor Worst Subfloor Contest to prove you’ve got the grit and determination to be a champion. Go to hpsubfloors.com/worstsubfloor or your Schönox app for more details. Take your business to a whole new level. Call 855.391.2649 or visit hpsubfloors.com to learn how your projects run smoother with Schönox Ön It.

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from-$159.20

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"The Rugs.Shop concept is a great fit for us, as we do not stock area rugs. This gives us an opportunity to encourage our customers to shop on our website for rugs. It opens up a category for us that we were not actively participating in and it gives us an opportunity to better serve our customers." - Jim Macco, Macco's Floor Covering Center

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Premier Flooring Retailer | Q3 2018

37


The Next GIG

B2B Ecommerce Usage Continues to Grow with New Vendors, Web Services

David Marshello, CFP, CPA, RFMS, Inc. Dmarshello@rfms.com

B

2B E-Commerce continues to grow rapidly in 2018 as new

mation regularly to keep the retailer’s data accurate and up to

mills, distributors and clients implement this proven technol-

date. They are adopting B2B because it is faster, cheaper and

ogy solution. ECommerce enables a flooring dealer's computer

more reliable.

to quickly and accurately exchange business transactions with the vendor's computer across the Internet. Dealers using B2B

Web Services

realize significant people efficiencies and accuracy in managing

The Floorcovering b2b association (fcb2b) and many key ven-

pricing catalogs, purchase orders and invoice processing with

dors are pushing the use of a new web service technology, to

the major mills, and many key vendors in the flooring industry.

support electronic stock checks, price requests and order sta-

B2B has become an integral part of a retailer’s business

tus updates in a real-time environment. This allows sales staff

operations. This functionality has added significant value to

and purchasing agents to click a button in RFMS, and get an

front-line sales staff, by having a product/price/color informa-

up to date status in seconds! This cutting-edge technology is

tion available to quickly build a quote or order. Back office staff

simple to use and provides the same real time updates as the

use it to place orders electronically and get PO confirmations

vendor’s website.

back quickly, as well as to process invoices without opening the

Many of the leading flooring software packages offer web

mail, and entering the invoice details manually. Errors associ-

service capability that allows a retailer to connect with Shaw,

ated with telephone, fax or email orders are eliminated. B2B =

Engineered Floors, Adleta BPI, BR Funsten, Herregan, Louis-

fewer errors, faster processing.

ville Tile, Ohio Valley, RA Siegel and WM Bird. Other key vendors are planning to offer web services technology in 2019.

B2B Vendors

RFMS has been a leader and key contributor to the devel-

There are now almost 40 vendors providing B2B with an addi-

opment of fcb2b standards, regularly adds new features to the

tional 8 vendors in testing, and commitments pending with

software, has an experienced help desk to train and assist cli-

10 additional companies. Vendors also recognize significant

ents, and has helped onboard many new vendors, by providing

efficiencies in processing orders electronically, while saving

technical advice and industry knowledge.

on printing and mailing costs to distribute price catalogs and

If your flooring operation is not currently taking advantage of

invoices. It also avoids having to process orders manually. They

this low-cost, high tech option for managing transactions with

send their clients the latest products, pricing and drop infor-

mills and suppliers, it is really time to consider it now. ❚

RFMS has been a leader and key contributor to the development of fcb2b standards, regularly adds new features to the software, has an experienced help desk to train and assist clients, and has helped onboard many new vendors, by providing technical advice and industry knowledge. 38 Premier Flooring Retailer | Q3 2018


Premier Flooring Retailer | Q3 2018

39


SHOWIN’ OUR STUFF

SEM Group — manufacturing, innovation, quality, and value

S

SEM Group’s products combine high quality with the best value, while always maintaining environmental responsibility.

EM Group is a privately owned business headquartered in the heart of the flooring industry—Dalton, Georgia. SEM Group manages more than 12,000,000 square feet of inventory in over 200,000 SF of warehouse and distribution centers in Northwest Georgia, and over 3,000,000 square-feet of manufacturing facilities throughout the world. SEM Group is comprised of four different yet synergistic companies: Savannah Stone and Tile, Excelsior Global, and Muchsee Wood. Our vast product offering includes Engineered and Solid Hardwoods, Luxury Vinyl Planks, IWP Engineered Vinyl Planks, Laminate, SPC Rigid Core Planks, Ceramic and Stone Tile, and a full line of Cushioned Underlayments, Adhesives, and Trim for all applications. SEM Group’s products combine high quality with the best value, while always maintaining environmental responsibility. Recent investments in technology, enable SEM Group to ship any of its 2800+ SKU’s quickly, and most often within 24 hours. Which in turn, provides an exceptional customer service experience including order entry, shipment tracking and information reporting. Since inception in 2009, SEM Group’s goal is to become the most recognized manufacturer, importer, and wholesaler in the hard surface flooring market. The formula for success is simple. Adhere to our core business values—excellence, innovation, and integrity—but quickly adapt to changing business conditions and customer demands. ❚

40 Premier Flooring Retailer | Q3 2018


Luxury Vinyl Plank

Cushioned Underlayments

The SEM Group has over 50 running line colors of LVP in click and glue down versions. We carry thickness from 2mm up to 4.3mm, and many wear layer thicknesses to meet your product needs and price points..

SEM Group offers 18 different underlayments for LVT, IWP, Floating Hardwood, and Laminate flooring. Whether you need an underlayment for a moisture barrier or just for acoustical reasons, we have the products to meet your requirements.

IWP Engineered Vinyl Plank From entry level to high end constructions, we have the Engineered Vinyl Planks to meet all of your consumerâ&#x20AC;&#x2122;s needs. With and without attached pad, and wear layers all the way up to 22 mils SEM Group has the engineered vinyl planks to meet the most demanding environments.

Engineered & Solid Hardwoods We offer solid and engineered hardwoods in Birch, Hickory, Oak, Elm, European Oak, and Acacia. With appearances from handscraped to wire brushed, and thicknesses from 3/8" to 3/4", SEM Group has the product to fit any type of project.

Laminate

Adhesives SEM Group stocks a full line of Adhesives for engineered woods, LVP, and carpet tiles. We offer trowel applied, roll on, and spray options for glue down LVT installations. Moisture Cured Urethane and high moisture wood adhesives for engineered wood, and also a premium carpet tile adhesive for PVC and smooth backed carpet tiles.

Trim and Moldings The SEM Group maintains inventory of a full line of coordinating trim products for all of our running line colors.

Since inception in 2009, SEM Groupâ&#x20AC;&#x2122;s goal is to become the most recognized manufacturer, importer, and wholesaler in the hard surface flooring market.

For more information on our products, please contact your local sales rep or visit www.semgroup.us (706) 277-0195

Stocking both 8mm and 12mm products, with over 50 color/pattern options. The SEM Group has been manufacturing environmentally friendly laminate with the most durable core material for more than 20 years. Premier Flooring Retailer | Q3 2018

41


The Next GIG

Seeing the Big Picture Could Be the Big Difference

F

looring retailers are typically stretched very,

For example, in creating the QView tool, we

very thin. Business owners are incredibly

identified what would be the most helpful infor-

busy, wearing multiple hats, and it can be diffi-

mation for flooring dealers to see at a glance.

cult to step out of the rat race long enough, to

QView shows graphical representations of the

see if your company is actually headed in the

reports, so people get a quick snapshot, but

right direction.

each graph can then be drilled down into, to

But it’s essential. Otherwise, you might be running at a sprint, and not getting any closer to your end goals.

see the details as needed. Here is a list of the reports we felt were important to see. Whether you are a QFloors customer

QFloors had that in mind when developing

or not, these are important financial reports

Trent Ogden

QView, a new tool that allows owners or man-

everyone should be reviewing, which give a good

Trent Ogden is the

agers to quickly see vital, real time information

read on the health of your company.

co-founder and CFO of

about their company, in easy-to-read graphs

Flooring Technologies,

and charts. The visual aspect of the graphs

Aging Accounts Receivable — It’s impor-

developers of QFloors

highlights trends and gives a good overall

tant to monitor the amount and (perhaps even

and QPro business

snapshot, of what is happening in your busi-

more important) the age of your receivables. In

management flooring

ness. Looking at this data regularly helps keep

QView, you see at a glance which receivables

software. Trent holds an

a finger on the pulse and direction, strengths

are under 30 days out, which are more than 90

MBA, and a Bachelor

and weaknesses of the company. That, in turn,

days out, and everything in between.

of Science degree in

allows owners to make the best decisions pos-

Accounts Payable — The Accounts payable

Accounting. He has over

sible, as they manage and navigate their busi-

report shows bills due for the upcoming week,

30 years of experience in

ness into the future.

as well as a list of bills due day by day. Know-

the flooring industry.

My father built a successful flooring busi-

ing exactly how much you need to pay out,

Contact Trent at

ness. But I can see now that in many ways,

and when, is helpful for cash flow planning.

trent@qprosoftware.com

he ran his business “off the cuff”. In the past,

Ratios — Ratios represent important metrics

or 801-563-0140.

if he had money, he’d purchase more inven-

of your business operations and financial via-

tory. If he ran into a good deal, he’d buy it,

bility. For example, working capital (also known

even if it wasn’t necessarily a good product for

as current ratio) is a very important metric. It

his audience, or store, or installers. Sometimes

compares your current assets with current lia-

that hurt him. But in today’s information age,

bilities and tells you if you have the capital to

no one should be running their company blind.

spend on fixed assets or investments. Profit-

And no one should have to wait until quarter

ability ratios show your gross profit and net

end, or year end, to know if they made money.

profit (in dollars and percentages) for the pre-

Everyone should be taking advantage of the

vious rolling 12-month period. This gives you

technology that makes it possible to click a

the most up-to-date picture of what has hap-

button, and instantly see what is happening in

pened over the previous 12 months instead of

your business.

the traditional fiscal year report. It also helps

42 Premier Flooring Retailer | Q3 2018


identify seasonal trends. Turnover ratios indicate how quickly

In the past it was hard to find the time. Even if you did know

you are selling and installing your inventory. The more often you

how to find the information (which many owners don’t), the time

sell your inventory, the more profitable you will be.

it takes to run reports and scour through pages of informa-

Quick Glance of Bank Accounts — It’s important to be able

tion and compare it with historical reports and so forth, made it

to know how much cash you have at all times, especially as it

impractical and time-prohibitive.

relates to the accounts payable coming due.

In the past (and even today, depending upon the software

Sales Reports — QView illustrates two beneficial sales reports.

you use), business owners couldn’t produce or depend on the

The Sales chart line graph gives you 5-year histories at a glance.

accuracy of these types of reports. Or, the hoops that had to

You can look at it by month (a snapshot of that month for the

be jumped through in order to get the information into the sys-

past 5 years), or the year totals. You can see trends and seasons,

tem, made it too cumbersome. But that no longer should be

and identify buying patterns. The Sales by Salesperson pie chart

the case.

shows you who your most effective and least effective salespeople are. You can adjust date ranges as desired. Access to these charts are customized to the user, so that the owner will see sensitive information that the sales manager will not.

Being able to click a button and have these beneficial graphs instantly compiled, up-to-date, and accurate, is truly powerful. So, every flooring professional should take advantage of that gift handed to you by technology. Some charts can warn you of problems that may have crept into your business over time that you didn’t recognize through

Why Does Looking at These Charts Matter?

your traditional financial statements. They can be a red flag that without course correction, problems can arise in the future. Or

Sometimes a business owner is hyper-focused on one partic-

they illustrate very clear trends. Tools like QView provide an

ular number or ratio. For instance, perhaps she looks at the

accurate, big picture snapshot of multi-faceted areas that affect

sales per month, and bases her decisions on that and only that.

your business.

However, there are so many other moving parts that impact the overall performance of a business. It is important to look at them all.

It’s all about really seeing what is happening. And then making course corrections as needed. No more flying blind. ❚

Premier Flooring Retailer | Q3 2018

43


The Next GIG

Not All Flooring Businesses Are Alike Are You Adapting to Your Software, or is Your Software Adapting to You?

A

good flooring software can run the front and back end of your business, process orders, receive customer payments, handle purchasing and receiving of flooring goods, and then

pass that data on through to your accounting processes and financial reporting. However, does it truly provide specialized functionality for how you do business? While a great many flooring businesses operate a typical residential sales operation, plenty also, or primarily, have other business focuses, like Multi-family, Commercial, Builder, and Wholesale. These segments are quite varied, requiring specific functionality for order processing. â&#x20AC;&#x153;Multi-family flooring is one of the fastest growing markets in the industry today. By delivering programming that allows our dealers to more quickly and efficiently process orders, weâ&#x20AC;&#x2122;re giving them a huge advantage in their market place,â&#x20AC;? says Kelly Oechslin, Marketing Coordinator for RollMaster Software. Because technology is what it is today, the phone order taking of the past has transformed into multi-family dealers interfacing with their various properties. They do this via a dedicated website to place online orders, receive status updates, and track billing. Continued on page 46

The RollMaster Web Portal has translated into far fewer errors on the order taking side.

44 Premier Flooring Retailer | Q3 2018


M U LT I - F A M I L Y FOCUSED FUNCTIONALITY

RESIDENTIAL

BUILDER

MULTI-FAMILY

COMMERCIAL

INSTALLATION HOUSE

WHOLESALE

In addition to being a complete flooring business management software, RollMaster has unique and exclusive features and tools for mid-to-large size Multi-family flooring businesses. Here are a few: • Web Portal – online and mobile ordering • Web Calendar – connect with installers • RM Mobile – link to outside sales

• Advanced Template System w/ easy updates and Quick Order feature

• Rebate Report for Quarterly Reporting of paid Invoices

• Property grouping for ease of analytics, reporting, and pricing

• RealPages/Ops Technology Integration

• Wireless Barcoding

• Auto Email Invoices & Statements

RollMaster Software—for the way you do business. Schedule a demo online or on site.

info@rmaster.com | 866-822-4904 | www.rmaster.com Premier Flooring Retailer | Q3 2018

45


“Multi-family flooring is one of the fastest growing markets in the industry today. By delivering programming that allows our dealers to more quickly and efficiently process orders, we’re giving them a huge advantage in their market place,” says Kelly Oechslin, Marketing Coordinator for RollMaster Software. Continued from page 44

Dennis Brasher of Southwest Texas Floors has seen the

“The perks to our multi-family oriented business that our

benefits first hand. “The RollMaster Web Portal has translated

software provides are too numerous to list. There is literally

into far fewer errors on the order taking side; a decrease in

a mind boggling amount of information at our fingertips, and

our staffing needs; and improved customer service. Because

if we’re not at our desktop, the dashboard feature on our

of this, we’ve seen an increase to our bottom line in an already

mobile phones is great for accessing information when out of

competitive market.”

the office. The key for us is that RollMaster lets us function in

Other key multi-family technology features available from flooring software today include:

a way that accommodates our business model and work processes,” stated J. Carol Dumm of United Carpet, Inc., a RollMaster client since 1994.

■ The ability to create and replicate hundreds of templates based upon property floor plans

RollMaster can be delivered via their cloud-based platform, or via onsite installed server(s). Both allow anytime/anywhere

■ Programming customer-specific pricing with easy update

access to business data from any Internet connected computer

■ Private labeling with cross reference to inventory

or laptop. RollMaster also provides onsite or Internet-based

■ Management of installation schedules online

training, regional workshops, complete documentation, and

■ Key mobile-based tools for outside salespeople

ongoing support from their team of industry professionals.❚

■ Bar-coding software and equipment ■ Integration with Real Pages/Ops Technology

Contact: info@rmaster.com / www.Rmaster.com / 866-822-4904.

There is literally a mind boggling amount of information at our fingertips, and if we’re not at our desktop, the dashboard feature on our mobile phones is great for accessing information when out of the office. 46 Premier Flooring Retailer | Q3 2018


Why Certified Installers are Important

I

nstallers are an important part of your business. It doesn’t matter whether they are on your payroll or subcontractors; they are most valuable to you. Although stores hate to admit it, installers will either make or break their business. Since they are the last person the customer sees, whatever impression they leave with the customer, it will be lasting. Despite this, how many stores actually spend time certifying, training or differentiating their installers. If it were my business, I would change my department to “custom installation.” There is no “one size fits all” so why not talk about custom. Besides, the term “custom” signifies something made especially for the customer. It also implies that the service is worth more money. I know one company that called their service a “white glove instal-

lation.” There installers would go into the customer’s house wearing white gloves and taking them off during the installation. Apparently customers think that it’s quite unusual and love the treatment. Apparently they get better tips also! Installers can be included in your product and customer service training. The more they are included in your business and understand how you do business; the more they will be able to add to your business. Certifications upgrade the level of your installers. Consumers understand that trades are licensed and the more training someone has the more they’re worth. There are various installation certifications avail-able. We have included several agencies in the back of this publication that certify and provide training for installers. ❚

Smart Salespeople Don’t Sell Products, They Sell Solutions. Installers provide solutions and turn ordinary products into works of art. They should be urged to take photos of their jobs and get customers to give them a testimonial for their work. Why not give installers a couple of dollars for every testimonial or photo they get from the customers?

Pack your bags and get ready to be floored! DOMOTEX Wor

ld Tour

PICK ONE:

Enter to win. You pick. We pay. domotexusa.com/worldtour* *See website for contest terms and conditions.

DOMOTEX Hannover, German y

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***** THANK YOU ! *****

Premier Flooring Retailer | Q3 2018

47


Left: REVOTEC Axis, Haute Right: TRIUMPH, Bella Sera, Palazzio

Live life to the fullest. We can handle it. engineeredfloors.com 48 Premier Flooring Retailer | Q3 2018


REVOTEC™ and TRIUMPH™ from Engineered Floors Hard Surfaces™ represent the latest innovations in flooring technology. Thanks to REVOTEC’s click and lock installation method and the incorporation of a grout line into the design, you get the beautiful look of tile or stone, without the hassle of the installation. TRIUMPH’s waterproof, pet-friendly and stain resistant planks are engineered with a durable top layer that helps protect floors from scratches and everyday wear. Together, they give you the style you want and the resilience you need.

Premier Flooring Retailer | Q3 2018

49


The Next GIG Steven Wang, CEO and founder of Measure Square

How a Measuring App Can Transform Your Flooring Business

N

owadays consumers are quite savvy when it comes to shopping for flooring products like carpet, wood or kitchen tile. They often first go online with Google searches, and then check out their social media. And yes, consumers will check out a local Home Depot or Loweâ&#x20AC;&#x2122;s to talk to reps to get product tips and pricing information. But there is something that needs to happen before a sale is closed, that is, a sales person or estimator needs to visit the home for onsite measurement. As should be no surprise, this process has changed little over the years, despite the tremendous advances in technology. A local rep will show up with a few sample books, a sketch pad and a measuring tape. And of course, there are often errors and issues, which wind up costing the consumer money and valuable time.

But there is something that needs to happen before a sale is closed, that is, a sales person or estimator needs to visit the home for onsite measurement. 50 Premier Flooring Retailer | Q3 2018


In light of all this, the flooring industry really needs to make the transition to new technologies. The fact is that home owners are wowed to see a rep who has a laser meter and measuring app. It instantly builds the trust. But this approach is starting to change. With the ubiquity of tablets and smartphones, onsite measurement is entering the 21st century. This means that not only the error rates drop and there are better customer experiences, but there is often a higher rate of closed sales. It’s a win-win! Oh, and it should be no surprise that flooring shoppers are using Internet (like www.carpetcalc.com) and mobile technologies (such as the M2 iPhone app) as well. The irony is that they may be even more effective than sales reps!

In light of all this, the flooring industry really needs to make the transition to new technologies. The fact is that home owners are wowed to see a rep who has a laser meter and measuring app. It instantly builds the trust. What’s more, a homeowner can check out different what-if scenarios (say which product goes to which room, looking at the upgrade options and so on). All this can happen in a matter of seconds. OK then, so you want to give all this a try for your own business? Well, the first place to start is our Measure Square iOS app, which has a 14-day free trial.

Premier Flooring Retailer | Q3 2018

51


The Next GIG By ROGi LLC

ROGi: A Solution to Proper Jobsite Documentation

I

f you represent a flooring/construction firm, you understand how complex a building project can be. There can be hundreds of people working in different capacities to complete it. As part of the project management team, you are responsible for supervising employees, managing the schedule and budget, as well as overseeing the actual project. Additionally, proper jobsite documentation is crucial for your company and the client.

Why You Should Document Your Jobsite When an individual or business contracts with your firm, you become legally responsible for budgets, timelines, materials, and the final product. Such liability requires impeccable recordkeeping for every aspect and stage of the project. Here are the benefits of complete jobsite documentation:

When an individual or business contracts with your firm, you become legally responsible for budgets, timelines, materials, and the final product.

â&#x2013; Virtual history: Each day, your documentation paints a present picture of your teamâ&#x20AC;&#x2122;s accomplishments. It is like an official scrapbook, starting with contracts, blueprints, ledgers, up to the finished product. At any time, you or your client may peruse the documentation for questions about finances or deadlines. Project documents are just as important as the blueprints.

52 Premier Flooring Retailer | Q3 2018


Keep your notes organized by date, and distribute copies to clients and appropriate team members as needed. ■T  roubleshooting: If there are any problems during construction, it is easy to go back and review the past procedures. Documentation may show your clients how to save money in some areas, or a construction change that they may consider. It might minimize the chance of repeating costly mistakes. ■S  cheduling: Building projects depend on schedules for contractors/employees, purchasing, and project deadlines. As you document daily activities, it gives you a checklist of projects that have been done, and what is left to do. Documentation creates a visual sequence of labor, materials, and time management. ■ I mpressing your clients: When you present updated and thorough jobsite documentation to your clients at planning/review meetings, they will see notes, jobsite pictures, budgets, and everything that has been accomplished so far. When they have questions or concerns, you have documentation to back up your professional opinions. Efficient documentation is part of being a good steward of your client’s trust and resources. ■L  egal protection: If a disgruntled client would bring a lawsuit against your company, your defense will be only as good as your jobsite documentation. Over-documenting is much safer than under-documenting. In a courtroom, there are no assumptions made. If something was not documented, then it was not done. If a document got lost in your filing system, then it does not exist in the eyes of the court. When you have adequate documentation, it will stand for you.

What Kind Of Jobsite Documentation Is Recommended? Although contract laws may vary from state to state, they all have basic requirements for documentation. County and municipal ordinances often have additional paperwork that must be filed. Some of your documents must

be kept in duplicate or triplicate. These are some common jobsite documentations to consider: ■ Jobsite notes: Your daily routine should include keeping copious notes about the entire workday. Do not wait until the end of the day for a recap, because you may forget an important detail or a sudden idea. Write as you go. Try this helpful template for your jobsite notes: 1. Date 2. Weather conditions 3. Temperature high and low 4. Conditions of the jobsite 5. Site visitors: Name and purpose 6. Subcontractors (business names and how many laborers) 7. Construction equipment (owned, rented, condition) 8. Receivables (materials) 9. Inspections/testing 10. Summary of what happened during the day, including communications, changes, or delays. Every accomplishment should be documented. Keep your notes organized by date, and distribute copies to clients and appropriate team members as needed. If you make notes on a computer or another mobile device, be sure to back up your files, or make a hard copy. ■ Jobsite pictures: As you make your daily notes, feel free to draw diagrams and pictures. These may be helpful to the architects or other team members to explain a problem or an idea. Keep your digital camera or smartphone in your pocket, and snap lots of pictures. You can download them onto your computer and print them as needed. If you have any problems or an accident, you need plenty of photos. Your client wants to see each stage of your work. It is simple to turn your jobsite photos into a PowerPoint presentation, Premier Flooring Retailer | Q3 2018

53


with text and interactive screens. When the building project is complete, your client will have a sequential catalog. You might consider some of these pictures when you update your professional portfolio. ■V  ideos: Take your pictures to a higher level with video documentation. It is an extra way to keep your client informed about progress at the jobsite. During meetings with your construction team, videos may help you identify problems or discover more efficient ways of doing something. They can also be integrated into a PowerPoint presentation. Many flooring/construction companies have discovered better ways of completing their jobsite documentation with innovative computer applications, such as ROGi. This simple yet powerful app keeps your notes, photos, videos, and scanned documents organized, and ready at the touch of a button. ROGi runs on both a PC and a mobile device, iOS and Android. ROGi also allows managers to add their crew, assign jobs and get real-time information. You can also generate reports of the project and share with anyone or add to your portfolio. More information is available at www. myrogi.com. Search for ROGi in Apple and Google app stores. When you keep thorough documentation and stay organized, it benefits you and your client. It can help the job process run smoothly, and can stand with you in case of legal problems. The road to construction success starts with your paper trail. If you have questions about jobsite documentation, you should consult an attorney who specializes in the construction industry. ❚

Impossible deadlines? You need ZM Rapid ön It.

SCHÖNOX ZM RAPID SELFLEVELING COMPOUND IS INCREDIBLY SMOOTH, FAST, AND STRONG. ZM Rapid was developed with time-sensitve projects in mind. Suitable for a variety of substrates, ZM Rapid offers a final PSI of 7550 while being ready for covering in as little as 1 1/2 - 2 hours. With this combination of strength and speed, you might say that ZM Rapid does make the impossible possible.

Take your business to a whole new level. Call 855.391.2649 or visit hpsubfloors.com to learn how your projects run smoother with Schönox Ön It.

54 Premier Flooring Retailer | Q3 2018


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Premier Flooring Retailer | Q3 2018

55


SHOWIN’ OUR STUFF

Speedy. Strong. Schönox.

S

ubfloor issues? Schönox has a variety of self-leveling solutions for every type of project. Even for the most time-sensitive jobs, Schönox has developed quick-setting, high-strength

solutions to help you stick to the deadline. Schönox ZM Rapid stands as one of the most popular quick-setting solutions. It is designed for fast leveling of interior floors and provides smooth pours. Schönox ZM Rapid can be installed from 1/16" up to 1". It has a coverage of approximately 60–70 square feet per unit at a thickness of 1/8" (depending on substrate conditions and aggregate used). It has an exceptional compressive strength of 7550 PSI. Schönox ZM Rapid allows floor covering installation in as quickly as 90 minutes. Schönox ZM Rapid is designed for leveling, filling, and smoothing on various interior cement and gypsum substrates including concrete, flexible coverings, wood, ceramic tiles, and even old, water-resistant adhesive residues. Schönox ZM Rapid is also suitable for underfloor heating systems, castor wheel loadings, and forklift truck traffic above 1/8". For a more detailed summary of technical data regarding this product, visit our website: https://hpsubfloors.com/portfolio-items/schonox-zm-rapid/

Schönox ZM Rapid is designed for leveling, filling, and smoothing on various interior cement and gypsum substrates including concrete, flexible coverings, wood, ceramic tiles, and even old, water-resistant adhesive residues. 56 Premier Flooring Retailer | Q3 2018


NeeD subfloor solutions? Schönox has the answers from a to zm.

SCHÖNOX CEMENT BASED SELF-LEVELING COMPOUNDS Schönox has a variety of self-leveling solutions. Our Schönox US, XM, ZM and ZM Rapid are all suitable for cement and gypsum substrates. Each is designed for fast leveling and provides a smooth substrate with exceptional strength. Schönox ZM Rapid was developed with even more time-sensitive projects in mind, and is ready for covering in as little as 1 1/2 - 2 hours while providing a compressive strength of 7550 PSI.

Take your business to a whole new level. Call 855.391.2649 or visit hpsubfloors.com to learn how your projects run smoother with Schönox Ön It.

Premier Flooring Retailer | Q3 2018

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FLOOR ED

Do Your Tile Installers Use Spot Bonding?

I

f your tile installers use spot bonding or “five spotting” when installing ceramic tile, it’s time you find new installers. Spot bonding compromises every industry-recognized recommendation for the proper instal-

lation of tile as detailed in the TCNA Handbook and the ANSI Specifications. During spot bonding, the installer places a dollop of mortar on each corner and one in the

Scott Carothers Director of Certification and Training, CTEF Scott is responsible for the creation of the Certified Tile Installer (CTI) program, involved in the creation of the Advanced Certifications for Tile Installers (ACT) program and provides training to others in the tile industry. He has been immersed in the ceramic tile industry for over 36 years and was the owner of a successful retail and installation firm prior to coming to CTEF. Scott has served as President of the NTCA, Chairman of the NTCA Technical Committee, been named the NTCA Tile Person of the Year in 2005, and the Ring of Honor recipient in 2013. He is a voting member of the ANSI and the TCNA Handbook committees.

middle of the back of the tile. This process fails every time because the majority of the tile is not supported or bonded to the substrate which creates voids under the tile. The result is a hollow sound which is not acceptable or, even worse, broken tile. Most times, the installer makes little attempt, if any, to key (physically force) the mortar into the substrate with the flat side of the trowel resulting in a questionable mechanical bond. The tile is then placed onto a dry, unclean, un-mortared substrate which doesn’t encourage any type of mechanical bond that is absolutely essential for success. The reason installers use spot-bonding to install tile, especially large format, is that it virtually eliminates lippage (where one tile is higher than the adjacent tiles). With the mortar concentrated in these five areas, the installer can easily push down one corner of the tile and get it to flatten out with the adjacent tiles. Continuing to push down on the other three corners usually yields a lippage-free installation. Although spot bonding with mortar may be easier to set tiles flat to each other during the installation, it’s only a matter of time before just the slightest force causes a failure!  The ANSI Specifications, Section A108.5-2.2.2 describes the approved method for installing floor and wall tile as follows, “Apply mortar with flat side of trowel over an area no greater than can be covered with tile before the mortar skins over. Using a notched trowel of type recommended by mortar manufacturer, comb mortar to obtain even setting bed without scraping back-

Spot bonding compromises every industryrecognized recommendation for the proper installation of tile as detailed in the TCNA Handbook and the ANSI Specifications.

58 Premier Flooring Retailer | Q3 2018


Although spot bonding with mortar may be easier to set tiles flat to each other during the installation, it’s only a matter of time before just the slightest force causes a failure!

ing material. Cover surface uniformly with no bare spots and with sufficient mortar to insure a minimum mortar thickness of 3/32" (2 mm) between tile and backing after tile has been beaten into place. Tile shall not be applied to skinned-over mortar.” Using the above ANSI method, the mortar is keyed into the entire substrate yielding a good mechanical bond with no bare spots. Spot bonding doesn’t even come close. ❚

Certified Tile Installer WANT TO BE THE BEST?

The Certified Tile Installer (CTI) program is the only third-party assessment of a tile installation professional’s skill and knowledge that is recognized by the tile industry. 864-222-2131 info@ceramictilefoundation.org www.ceramictilefoundation.org

Most times, the installer makes little attempt, if Visit our website and put yourself above the competition. any, to key (physically GET CERTIFIED! force) the mortar into the substrate with the flat side of the trowel resulting in a questionable mechanical bond. Premier Flooring Retailer | Q3 2018

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FLOOR ED

Pricing for Profit Your merchandising system is a silent way to talk to the customer on the floor. What type of impression is your floor making? 1. Please! No hand written tags. Handwritten tags mean they can be changed at a moment’s notice, perhaps even by the customer who’s carrying her own marker! (a true story)

Compare your products and pricing with those of your competitors.

2. Keep samples in a color sequence. Most have a numbering system that shows the colors in their best value sequence. This helps the consumer make a comparison buy and keeps your store looking professional. Make sure you have additional samples that you can loan out to customers. You don’t want to be left with the best products and colors on display only in customers’ homes. 3. Encourage team buying. Involve all of your staff when making product selections. Who would know what sells better than your salespeople? Ask each person how they would promote or merchandise the item. 4. Compare your products and pricing with those of your competitors. What are they carrying and what’s their pricing? Do you really need to be carrying the same things? If you think you need the same things, can you merchandise, or pair them with other products to promote them? 5. Eliminate duplicate products. Are you buying the same price point from different manufacturers and none are selling well? 6. Reward your salespeople for selling margin items and more expensive products. This is one place where you’ll see quick growth for your business. 7. Buy products for what you can sell them for, not what they cost. This is a mistake that most retailers make. Instead of determining what the product is worth, they always ask “What does it cost?” This is a self-defeating way to play the price game.

Buy products for what you can sell them for, not what they cost. This is a mistake that most retailers make.

60 Premier Flooring Retailer | Q3 2018


Please! No hand written tags. Handwritten tags mean they can be changed at a moment’s notice, perhaps even by the customer who’s carrying her own marker! (a true story) Do your suppliers offer ways for you to demonstrate the features and benefits of their products? Provide a checklist for the customer with the common “unrealistic expectations” that if explained prior to the installation, it will lessen your callbacks. Most of these can be found with the manufacturer’s literature within the installation instructions, with your fiber warrantees. This detail will cut down on lots of after installation problems. Do a walkthrough with the customer when you go to measure. Look for hidden rooms, other possible sales or installation possibilities. Maybe a re-stretch or repair can be done when you go to do your installation. What about cleaning possibilities, window treatments (changing of window treatment cords to present injuries to children and pets), changing countertops, redoing the bathroom (putting in a new shower or tub surround with tile). Make yourself a checklist that you bring with you, so you don’t forget to ask the questions. Being in the customer’s house should be a good time to offer the customers many possibilities for a home update. Do your suppliers offer ways for you to demonstrate the features and benefits of their products? Do they have literature that will help you sell the product? Do they have some “clever ways” that allow them to demonstrate the value of their products or comparisons? What about films or tapes that you can use to demonstrate the product to

your customer? Do they have some great stories about products, and how they have held up, that might help you sell the next customer? Are you selling cleaning supplies? If you aren’t selling floor cleaning supplies, you are sending your customer to your competitors, or to the supermarket where they may purchase a product that will ruin their flooring. Look for proprietary floor cleaning supplies, give out sample bottles with your name on them, so the customer remembers where it was purchased, and comes back for more. How many customers actually think about backings when they purchase carpet? High performance backings that actually give additional no-wrinkle guarantees make it easier to install carpet, as well as create additional sales opportunities for the salesperson. If the customer has ever heard of carpet being installed that damaged walls, this will be still another good reason to have the product. Carpet cushions with moisture barriers that will protect sub floors from being damaged by spills, as well as providing enzymes that actually fight odors from these spills. Also, look for cushions and carpet systems that when used together, actually provide the customer with an additional carpet warranty. ❚

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Arthur Mintie, LATICRETE Senior Technical Services Director

SHOWINâ&#x20AC;&#x2122; OUR STUFF

T

Building a Barrier-Free Shower

he addition of an increasingly popular barrier-free shower

preserves the structural integrity and safety of the bathroom as

can benefit every person in a household thanks to end-

well as the home or commercial space. This may require the

less design possibilities that are limited only by the consumerâ&#x20AC;&#x2122;s

services of a qualified design professional, such as an architect

imagination, budget and available space.

or engineer.

Before installing a barrier-free shower, itâ&#x20AC;&#x2122;s important to under-

When the shower is still in the design phase, this is also a

stand the basics of sloping, different methods of waterproofing,

good time to consider what type of slope to use. For a bonding

as well as the design elements that have put this installation on

flange drain located in the center of the shower, multiple slopes

the map.

are required to ensure correct water flow and drainage. A linear drain is more highly recommended because it requires only a

Building a Base

single slope, making it easier to install with a linear pre-sloped

The slope of the floor is the most important aspect of a barrier-

shower pan. This design is also more aesthetically pleasing,

free shower to control proper water flow. Without the correct

thanks to its ability to act as a base for large format tiles and

slope, water can infiltrate the rest of the bathroom and cause

other grand designs that would otherwise be limited to small

damage to surrounding areas. A key thing to remember is that

tiles because of the curvature.

recessing the floor of a shower must be done in a way that

62 Premier Flooring Retailer | Q3 2018


Before installing a barrier-free shower, it’s important to understand the basics of sloping, different methods of waterproofing, as well as the design elements that have put this installation on the map. Waterproofing

For installers who prefer to use a liquid waterproofing mem-

Unlike traditional shower systems which place waterproof-

brane, it is vital to apply the required number of coats and mils—

ing membranes at the bottom of the mortar bed, barrier-free

which measures thickness—to prevent failure. This number

showers place the waterproofing membrane underneath the

varies depending on product and manufacturer. To help mea-

tile or stone finish. This installation method provides a com-

sure how many mils thick a liquid membrane is for a guaranteed

plete waterproofing connection between the membrane and

successful installation, there are many wet film gauges available

the drain, eliminating the need for a full bulky 1¼" to 2" (31mm

on the market. Another consideration if choosing to use a liq-

to 50mm) thick mortar bed.

uid waterproofing membrane is the cure time. Cure times can

Because barrier-free bathrooms do not confine moisture to the shower alone, it can be difficult to separate the “wet area”

vary by manufacturer type and are influenced by project site conditions.

from the “dry area”. As such, the bathroom must be sufficiently

Alternatively, for a shorter wait time without having to worry

protected against water and moisture as a whole. Installers

about mil thickness, a sheet membrane is typically preferred.

can choose to use either a liquid waterproofing membrane or

Most manufacturers require sheets to overlap one another

a sheet membrane, which both result in the same protection

by 2” (50 mm) to ensure proper coverage. Additionally, some

while utilizing different methods.

sheets will come with banding materials that are made to over-

Premier Flooring Retailer | Q3 2018

63


lap and seal the seams, even in preformed corner shapes.

seats, benches, niches and shelves are also options for creat-

The main challenge for installers when using a sheet mem-

ing additional customization and comfort.

brane is to avoid wrinkling the sheets. If present, the wrinkles

The open nature of this design also maximizes accessibility

can cause issues with the tile installation due to the added

to all users regardless of age, size or physical ability. Because

thickness.

of this, barrier-free showers are one of the requirements for a

If openness and sight lines are not a concern, a heavy

bathroom to be compliant with the Americans with Disabili-

shower curtain or a frameless glass shower door can also be

ties Act (ADA). For small spaces, the minimum size guidelines

installed to capture moisture.

issued are a modest 36” × 36” (914 mm × 914 mm) and the seamless flow of the floors maximize square footage and can

Accessibility and Design

make bathrooms appear much larger.

The endless amounts of design possibilities are one of the main reasons barrier-free showers are becoming so popular.

Future Outlook

When barriers are removed in the shower, a seamless look is

The number of Americans ages 65 and older is projected to

achieved throughout the entire bathroom.

more than double from 46 million in 2016 to over 98 million

Although barrier-free showers are often thought of as

by 2060, according to the Population Reference Bureau. In

being a modern design because of their zero point entry

regards to accessibility, this is a significant reason why barrier-

profiles, there are shapes, sizes and colors in the barrier-

free showers are expected to continue to increase.

free category that blend with a variety of style aesthetics,

With consumer preferences continuing to lean towards

whether that be contemporary, traditional or somewhere in

a sleek, no-nonsense aesthetic throughout commercial and

between.

residential spaces, the pristine tile lines and zero point entry

With the ability to extend nearly any type of tile from the

profiles of a barrier-free shower make these installations desir-

floor directly to the shower, homeowners and commercial

able and a standout feature. In the current real estate market,

property owners are able to create a spa-like retreat with

these designs can also help increase the overall value of a

less visual clutter to keep the bathroom light and airy. Built-in

home or business.❚

The endless amounts of design possibilities are one of the main reasons barrier-free showers are becoming so popular. 64 Premier Flooring Retailer | Q3 2018


Introducing

The most advanced floor heating system in the world!

Thermal Pack

Wi-Fi thermostat for total control from your smartphone.

Utilizing Thermal Diffusion Technology ™, heat generated from the STRATA_HEAT™ Wire is uniformly distributed throughout the adhesive, providing faster floor heat-up and a more comfortable and energy efficient installation!

Mat

Uncoupling mat for easy and secure wire placement.

Allows multiple wire spacing combinations.

Wire

STRATA_HEAT™ is the perfect complement to your kitchen and bath tile designs by adding innovative performance and luxurious comfort at an affordable price. You can add incremental sales and profit to your projects by offering these innovative floor heating components and exceed your customer’s expectations, all from a single source – LATICRETE.

www.laticrete.com

l 1.800.243.4788

A-8578-0918 ©2018 LATICRETE International, Inc. All trademarks shown are the intellectual properties of their respective owners.

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Premier Flooring Retailer  

Premier Flooring Retailer is the face of the specialty flooring retailer. It is the only publication dedicated exclusively to the success of...

Premier Flooring Retailer  

Premier Flooring Retailer is the face of the specialty flooring retailer. It is the only publication dedicated exclusively to the success of...