QFloors: Bolstering your business against uncertainty
(This article was provided by QFloor, an easy-to-use flooring software designed to streamline the operations of small, medium and large flooring stores. It’s edited for style and clarity.)
A few years ago, the flooring industry faced the uncertainty of a global pandemic. Fortunately, most floor dealers turned a blind eye and saw business flourish during that time. Today, flooring professionals face a different kind of potential threat. Many headlines warn of the impact of inflation and possible economic downturn. Some retailers are already reporting a drop in traffic. However, the CFO of QFloors software, Trent Ogden, says that, as with the pandemic, dealers can adapt and make changes to successfully withstand whatever is ahead.
“One of the most important things you can do to prepare for an uncertain future is ‘sharpen the saw,'” Ogden said. “Sales may not come as quickly as they used to, so you need to fine-tune the other parts of your business. Getting better at just a few small things can result in big dividends when it comes to running the business and the financial health of your company.”
Kathy Hyland, owner of Bay View Flooring & Design in northern Michigan, said small changes she made had a big impact on her profitability. “The past few years have been phenomenal. Not only has our traffic increased, but profitability has skyrocketed. Some of that I attribute to the changes we made after a benchmark class of QFloors users in late 2019. They showed us that we needed to get our net profit higher and talked about some steps we could take to do that. We took on that challenge and made a few changes that increased net profit to double digits.”
For example, Hyland said the company has implemented settings in the QFloors flooring software that allow it to be calculated more accurately. “That had to happen. We have also adjusted our committee schedule. Job costing is essential, and we do it consistently. I really can’t imagine running a business without it taking work.”
Ogden said he believes the key to making wise decisions to successfully navigate your business through calm or rocky waters is to ensure you are aware of your financial statements and use them to guide your decisions. . Hyland does just that using QFloors flooring software. “It was helpful to be able to view and track things with the great reports in our software system,” she said. “There are comparison reports for different time frames. We can keep an eye on costs. And at any given moment I know exactly where we are. With the changes we’ve made over the past few years, combined with the tracking we’re able to do through our software, our net profit is in double digits and our gross profit around 40.”
Another beneficial adjustment Bay View Flooring made was the realization that its business was in a “use tax” state and adjusted its tax practices accordingly. As Hyland explained, “Another important thing that helped us was converting sales tax to use tax. That single change brought my profit to 1-2 points. I’ve been a retailer for over 30 years and I had no idea I already should have used use tax that time. I think a lot of retailers are in the same boat. We thought we knew exactly what we were doing, fiscally speaking, but when QFloors started talking to me about use tax, I was floored. But I talked to my spoke to an accountant and we did research together and saw that it was good and legal.”
Of the 44 states that have sales tax laws, 28 of them implement use taxes in the flooring industry and similar industries. In these states, unlike sales tax, usage tax is applied to the cost of installed materials by the dealer and no sales tax is charged to the customer. Some states only apply the use tax to certain types of flooring (carpet vs. hard surface), and some only apply it to certain types of jobs (commercial vs. residential, new construction vs. renovation, etc.). So if you are in a use tax state, Ogden advises you to research how exactly this is applied in your state. It will pay off, literally.
Another way to empower and prepare for the future is through automation. “Basically, you want to run your business as smartly as possible to give yourself some breathing room for the inevitable slower sales,” Ogden said.
By automating operations within your flooring business, you can run things lean when needed. “You need good flooring software to keep everything organized and in order,” explains Hyland. “You can’t do it without good floor software. If you have that in place, pay attention to your numbers and be vigilant. Look to the future and determine where you are going as much as possible. And you need to prepare for what’s to come. Our first flooring company survived the recession that hit after 9/11. We had 80 employees and four stores – and that was difficult. But as an owner (at least as a successful owner), you have to look at your business as a whole and make tough decisions about how to stay afloat and move forward. Sometimes it feels really hard to do that, but you need to know your business and be prepared and determine where to make those cuts first. Not only with employees, but also with costs in general.”
When times get bleak, floor dealers may find themselves running their flooring business with fewer resources – humanly and financially. The use of time-saving floor software in your business processes can help you with this. And now it’s time to start, according to Ogden.
Of course, no one knows for sure whether a recession is on the way or not. Either way, taking the necessary steps to run your business smarter and more efficiently will make a significant difference both to your bottom line and to your resilience as a business.