Best Practices - October 2012

 

By Brian Hamilton

 

Scott Appel and brothers Bill and Joe Hamad formed Touch of Color Flooring ten years ago in Harrisburg, Pennsylvania and have grown the overall business into a $17 million enterprise this year. In addition to Touch of Color Flooring, the business added Touch of Color Design Group, and this year plans to get into the retail segment with the first of five Big Bob’s franchises that it plans to open over the next five years in the central Pennsylvania area. Much of the partners’ success has simply sprung from their willingness to work hard and take risks.

Touch of Color Flooring, which is by far the largest part of the business, serves the multi-family, builder and commercial channels, mostly with base grade carpet and vinyl, although recently there’s been a push into better goods and doing more vinyl plank, laminate and tile. Customers who want wood looks generally use LVT and the firm sells little wood. “During the downturn customers started to go backwards and were looking at price per foot rather than long term cost,” Appel says. “Unfortunately, there was a lot of short term thinking.”

Touch of Color Design Group serves remodelers, builders and designers with pricier products, including high-end custom porcelain tile, better carpet including Mohawk’s Smartstrand and Stainmaster products, and cherry, mahogany and other luxury hardwoods.

Last year the firm had $12 million in sales and next year it’s projecting sales of $25 million, with about 50% coming from multi-family, 30% from builders, 10% commercial, and the rest a combination of showroom sales and contractor cash-and-carry.

“Multi-family is a good channel for us,” Appel says. “This year it’s up 25% so far and in general is very healthy. Occupancy rates are at a ten-year high and customers are raising their rents.”

With the significant sales increases, as well as its impending entry into the retail arena, the company has been on a hiring spree, adding 12 people this year (total of 40 employees), including a director of sales, director of operations, and estimators and project managers.

Most businesses will say that their people are the reason for their success, and Touch of Color works hard to make sure they get the best people, according to Appel.

“We hire for attitude,” Appel says. “Someone might have 30 years of experience but if they have a bad attitude we’re not interested.”

New hires are put through an intensive interview process. The directors interview each candidate and there are second and third interviews. The company checks resumes and backgrounds.

“We used to hire quickly, on the fly, and sometimes a person wasn’t vetted well enough and we wished we’d never hired them,” Appel says.

“We look for people who fit our company culture. We make sure we take care of the customer first and foremost because without the customers, we don’t have jobs. We look for people who are committed to customer service, and not necessarily industry veterans. If they’ve been in the industry for a long time, we look for particular expertise because they can teach us and help us with issues that come up.”

Appel says his firm provides a lot of ongoing employee training and “Floor Expo has helped us tremendously.”

Most of Touch of Color’s promotional activities have fallen along the lines of networking. The firm doesn’t advertise in traditional media but promotes itself heavily through trade associations, such as area apartment associations, by sponsoring “Best of Living” events. It also does a lot of charity work.

That’s all about to change, however, as the firm gets involved with its Big Bob’s franchises. Appel says the firm will go full bore into social media, among other activities, for all its divisions. In addition, it plans to revamp its website, part of a rebranding effort next year. Appel admits that Touch of Color Flooring’s current website “isn’t all that effective.”

Appel overall describes his operation as “lean and mean,” perhaps reflecting the firm’s beginning. All three partners are very involved. Appel mostly handles sales, relationships and procurement. Bill Hamad, the former installer, runs the technical side of the business, along with the commercial division. Joe Hamad oversees the day-to-day operational activities. “We’re very efficient and we’re okay with being cheap,” Appel says. “We wear that as a badge of honor. We don’t like to waste anything,” he says, and office paper even gets reused.

 

 

HUMBLE BEGINNINGS FOR TOUCH OF COLOR

Touch of Color Flooring actually got started in a townhouse to service the multi-family market. The garage served as a warehouse, the office was Joe Hamad's computer and Scott Appel slept on a mattress in the corner. Before forming the business, Scott was a high school teacher, Bill Hamad was an installer, and Joe was in graduate school in psychology. "We started from the ground up, and we're scrappers to make the business what it is today," Appel says. "We're very dedicated and we work very hard. We've grown every year, even through the worst years of the recession."

A year after forming the business, the partners used a space in a bad part of town as a warehouse. They pulled rolls of carpet off the trucks onto furniture dollies since they didn't own a forklift. They also had no racks in the warehouse and carpet would often get wet during a rainstorm. Seven years ago they moved into their first real warehouse, 5,000 square feet with a forklift and racks but not showroom. That's when Touch of Color joined Floor Expo. Today, Appel serves on Floor Expo's Multifamily Solutions board and says the networking there is invaluable.

Two years later the partners purchased their first building and they're about to move their corporate office into larger quarters. Appel says the partners signed on with Big Bob's because they thought the company was a good fit and they give franchise owners wide latitude in how to run the business. "We realized we had too many eggs in the builder basket and were looking to diversify," says Appel, who describes that segment as still the worst channel, with the highest amount of overhead and headaches.

"We like the outlet store model and the cost of entry is low." He says the partners didn't hesitate to invest, even in this down market. "We're very aggressive and not worried at all. We have a good plan in place with a solid strategy and we're excited.


Copyright 2012 Floor Focus 

 



Other Archived Articles

National Retail Federation Expects Holiday Sales Boost   Full Article
Washington, DC, Oct. 7, 2014 -- Retail spending during the holiday season is expected to be the highest in three years, according to a forecast by the National Retail Federation.

Job Openings Highest Since 2001   Full Article
Washington, DC, Oct. 7, 2014 -- Job openings increased to 4.84 million in August, up from 4.67 million in July, according to the latest Job Openings and Labor Turnover Survey.

Builders Offering Incentives as Sales Soften   Full Article
New York, NY, Oct. 7, 2014 -- Home builders nationally have begun sweetening offers in light of slowing sales, according to a Bloomberg News story.

Domotex To Feature Installation Technology for First Time   Full Article
Hannover, Germany, Oct. 7, 2014 -- Domotex 2015 set for Jan. 17-20 will feature 1,300 exhibitors from more than 60 countries.

Fincibec Group Seeking Tile Award Entries   Full Article
Sassuolo, Italy, Oct. 6, 2014 -- The Quinquennial Tile Award, now in its fourth edition, seeking entries using the Fincibec Group's three brands, Century, Monocibec and Naxos, between Jan. 1, 2011 and Dec. 31, 2015.

Armstrong Raising Some Vinyl Prices   Full Article
Lancaster, PA, Oct. 6, 2014 -- Armstrong said it will raise prices in the U.S. and Canada on commercial vinyl composition tile and BioBased Tile by 4%, commercial wallbase by 4%, and select residential tile products.

Stifel Sees Stronger Hard Surface Sales, Weaker Carpet Sales   Full Article
New York, NY, Oct. 6, 2014 -- Analyst Stifel Nicolaus believes that third quarter flooring sales will show stronger sales of hard surface flooring and weaker sales of carpet.

NeoCon East Offers Education for Designers   Full Article
Baltimore, MD, Oct. 6, 2014 -- NeoCon East has announced its educational program for design professionals seeking continuing education.

Duncan Appointed President of Mannington's Residential Business   Full Article
Salem, NJ, Oct. 3, 2014 -- Mannington Mills announced today that Ed Duncan will replace Kim Holm, who is retiring, as president of Mannington’s Residential Business.

Services Sector Growth Slows in September   Full Article
Washington, DC, Oct. 3, 2014 -- The services sector of the economy grew at a slower pace in September, according to the Institute for Supply Management.

CRI Annual Meeting Set Nov. 12   Full Article
Dalton, GA, Oct. 3, 2014 -- The Carpet and Rug Institute's 2014 Annual Membership Meeting will be held Nov. 12.

Unemployment at Six-Year Low in September   Full Article
Washington, DC, Oct. 3, 2014 -- The unemployment rate fell to 5.9% in September as the economy created 248,000 jobs, according to the Labor Department.

Foreclosure Rate Lowest Since 2007   Full Article
New York, NY, Oct. 3, 2014 -- The foreclosure rate edged up 1.1% in August compared to July, according to CoreLogic's National Foreclosure Report.

CRI President Yarbrough Goes to Washington   Full Article
Dalton, GA, Oct. 3, 2014 -- Carpet and Rug Institute President Joe W. Yarbrough traveled to Washington, D.C. Sept. 17-18 for two days of back-to-back meetings with congressional representatives.

Dover Rug & Home a Finalist in Association Awards   Full Article
Cambridge, MA, Oct. 3, 2014 -- Dover Rug & Home said it has been named a Family Business Association (FBA) Awards finalist in the category of Fourth Generation Businesses.

Factory Orders Fall on Fewer Aircraft   Full Article
Washington, DC, Oct. 2, 2014 -- Factory orders fell in August on weakness in the aircraft sector, according to the U.S. Census Bureau.

Jobless Applications Fall Last Week   Full Article
Washington, DC, Oct. 2, 2014 -- Initial applications for unemployment benefits unexpectedly fell last week, according to the Labor Department.

National Floorcovering Alliance Elects Officers   Full Article
Maui, Hawaii, Oct. 2, 2014 -- The National Floorcovering Alliance (NFA) met this week in Maui, Hawaii for its annual fall meeting and elected a new slate of officers who will take office beginning in 2015.

Planned Job Cuts Hit 14-Year Low   Full Article
Chicago, IL, Oct. 2, 2014 -- The number of planned layoffs declined to a 14-year low in September, according to tracking firm Challenger, Gray & Christmas.

Metroflor's Aspecta Begins Reclamation Program   Full Article
Norwalk, CT, Oct. 2, 2014 -- Aspecta, Metroflor's new LVT brand, said it has launched a free one-call reclamation service called Revise.