Flooring Contractors Corner: Vector Concepts

From Floor Trends Mag:


In 1991, my nephew, Jody Skaggs, and I had worked together for eight years for two separate flooring contractors building their commercial departments from one that was labor-only in the hospitality business and the other was a residential flooring company.

The first, Edwards Carpet Services, dissolved due to a tragic car accident where one of the owners, Terry Edwards, died. As a team, Jody and I moved to another flooring company that was only residential but wanted to pursue commercial. Edwards taught us installation methods and installation procedures. At the second, we learned more about business practices, especially managing people, projects and money. I worked in sales while Jody worked on the operations side, primarily in warehousing.

A Commitment to Commercial Flooring

Jody and I had already discovered that we both loved the commercial flooring business. However, our employer was reluctant to commit to commercial projects because of the upfront investment with a long-term return. Our employer decided Jody and I would move into residential and the company would no longer pursue commercial. We believed there was an opportunity to create a business which was solely dedicated to the commercial side of the industry. We developed a business plan and outlined the organization structure we needed to succeed. We were confident that we could attract experienced staff and our reputation was strong enough that we could launch our operation.

My brother Tom Watkins decided to join us and brought a strong financial background and his previous experience owning a trucking company. Tom also brought extensive value in sales and operations. The leadership team was complete!

Unfortunately, we immediately faced a new challenge. The Texas economy had struggled over the past several years and most of the financial institutions we approached for a line of credit had not extended any investment funds for several years. We approached several banks with no success. Fortunately, a small local bank (who hadn’t offered start-up money for almost three years) decided that we were a “good risk” and they offered the initial funds we needed to get started. We were ready to go!

Building on Strong Relationships

We chose the name Vector Concepts for our business. A “vector” is defined as a force/influence on an object and “concept” was idea/design. We believed that our mission and our business plan was to achieve success with a focused plan. We built our team through the personal connections we established during our previous experience in flooring. Also, we leveraged the extensive customer connections we developed over the previous decade with a focus on the tenant improvement segment. Jody and I had strong relationships with several general contractors in our area and we built on those relationships to capture our initial projects.

In the best sense, we were working with our friends and that approach really paid off. We continue with that attitude today – making sure each project is successful for our customers as well as Vector, keeping that team spirit and personal relationship to better our community and our businesses.

Fortunately, at the beginning, our largest customer was real estate developer Trammel Crow Co., a significant conglomerate with seven independent construction companies. Trammel Crow was fully aligned with our company and its business fueled the early years of Vector Concepts.

Our growth was rapid and exceeded our expectations. Jody, Tom and I remained firm with our commitment to grow our commercial business profitably and with integrity!

In 2006, Tom retired and, sadly, passed away five years later. His impact on the business was significant and we credit Tom with many great aspects of our business, and ultimately, our love of golf.

Focus on Increased Control

By 2000, we realized that a change to our business model was necessary to keep control of the rapidly-increasing volume. We remained tightly connected to our network of GCs and we knew we needed stronger control over the specifications that drive the projects. This required working more closely with the architects, designers and end-users, and increasing the number of projects for which we specified and purchased the materials. We shifted our selling focus and provided the training necessary for our sales team.

Today, 16 years later (and 25 years after Vector Concepts’ conception), 35% of our work is linked to designers and end-users. Not only have we been able to better control and maintain our projects, but we have also identified a number of business-building areas that have enhanced our profitability. We have learned the value of specialty floors and have been able to expand that business for Vector Concepts. We have also been able to explore new niche areas to grow our business.

Specialty Floors Leading to Business and Segment Expansion

Sports flooring has been the most significant specialty flooring opportunity for Vector. In 2005, we were approached by Gerflor. They initially wanted us to become their exclusive partner for sports flooring in Texas, New Mexico and Oklahoma. Later, our territory was expanded to include Arkansas, Louisiana and Mississippi.

As their partner, Vector Concepts markets, sells and installs the Gerflor Taraflex Sports flooring line. In order to maximize this opportunity, we hired Bill Austin who has extensive sports flooring experience and he was able successfully help us expand this business in our market area. By 2008, we had eight people working in sports flooring and they focused on the education segment for the majority of this business. For many schools, sports flooring is a great alternative to other flooring types.

Building off the sports flooring success, we have partnered with other manufacturers to represent their specialty flooring, including hard surface and wood products. We have also expanded into new business segments including corporate, public space/churches and healthcare flooring. A major portion of healthcare for Vector Concepts has been senior living, and we have worked extensively in that area, including managing projects on a national basis.

As we expanded our business with new manufacturers and in new segments, we set purchasing objectives with our suppliers, targeting $1 million as a minimum for the goal. We believe that we need to achieve this level to become meaningful with a manufacturer and to begin to work effectively together.

Starnet Commercial Flooring: An Important Business Partnership

Vector Concepts joined Starnet in 1998 with the specific goal of strengthening our vendor relationships. We also wanted to increase our network of successful commercial flooring companies who face similar challenges in their companies and have shared goals in terms of business growth.

We discovered that the value of our Starnet membership extended beyond those initial objectives. We have benefited by learning about our industry from some of the most talented and successful companies in North America. In addition, the training opportunities we have had are best-in-class and that training extends from technical installation and product information to more strategic issues such as new growth areas and management issues.

We enjoy the membership meetings and use the social events to develop strong relationships with many of our competitors so we can work together networking and learning from each other. It is refreshing to learn that we all share similar challenges and to have companies all over the nation that we can rely on. We also have intense training and a vendor trade show that allows one-on-one with our vendors at every Starnet meeting.

Looking Forward: Making Plans for Future Leadership and Growth

Vector Concepts has grown revenues at a steady rate. Like any business, as we approached important business thresholds, we evaluated our internal needs and carefully managed overhead expansion to ensure solid profitability while investing for growth.

We have learned what support is needed to better control the business and in what areas we needed more sophisticated automation. We have moved away from manual estimating and cost-planning by introducing software that supports our project manager and accounting system. We have become more focused on the strength of our bids and we are able to track information through the project execution. Our increased knowledge has improved our profitability.

More recently, we incorporated JobRunner software from Pacific Solutions, a decision that has significantly increased profits. We are better able to understand the internal workings of our business, leading to stronger control.

From an organizational perspective, we have moved away from a “vertical” structure (i.e., one person running a project from start to finish) to a team approach with four people working on each project. We have proven that a group can do more business together than individually. We have increased the number of sales people working on our business, driving revenue. Moving forward, our biggest challenge is to attract younger workers, particularly in installation. We believe that attracting this new talent is critical for Vector’s future growth.

As part of the talent search, Jody and I began interviewing and attempting to hire a younger team, always keeping the future of Vector in mind. Bringing in freshman with no prior flooring experience proved to be frustrating and time-consuming. Our director of business operations, Billy Dotson, Jr., presented us with the prospect of bringing our sons into the business. My oldest son and Jody’s youngest son expressed an interest in joining our team. We felt they had the qualities necessary to be successful and we have started them in estimating so they can learn the business. They are relatively new, but we are very optimistic.

Finally, throughout our journey, Jody and I have received guidance and motivation from an external business planner named Jan Mohamed. Jan mentors us on a quarterly basis and forces us to keep looking at the “big picture” in our business. We have worked with him for 25 years, and with a background in financial planning, he challenges us to make the tough decisions that are sometimes necessary in business. And he holds us accountable to those decisions. We work on a 12-month plan starting with 10 things we must do over that time horizon, and then we expand the planning process to include the next five and 10 years. Jan does not allow us to slip on our plans and he insists that we address those areas left incomplete. We give Jan a great deal of credit for our success.

Giving Back to the Community

Jody and I believe that we have an obligation to give back to our community. We work with an organization called Family Legacy, brought to us by a local architect. The focus of our work is the homeless children of Zambia where more than two-million orphans die each year. Family Legacy offers homes and cottages to house these children who have no adult family members. Our employees work with us on this project and some have traveled to Zambia to help first-hand. We find this project to be very gratifying and are appreciative of our employees’ involvement. Learn more at http://familylegacy.com.

The success of Vector Concepts has been a great experience for me and Jody over the past 25 years and we are looking forward to growth and success in the years to come. We believe that our faith has made us what we are today. We are proud of our team of 37 employees and an enormous goal for us is to develop them to their best potential. Finally, we are excited to take on new challenges.

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