This week on The Huddle Daniel, Jose discuss the process as well as pro's and cons of an installer moving from residential installation to commercial installation.

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The HUDDLE is where the flooring industry can get together and talk about everything! Lead by Paul Stuart from Go Carerra who is joined by Daniel and Jose Gonzalez from Preferred Flooring.

https://www.preferredflooringmi.com

https://www.stuartandassociates.com

no Paul again this week he's actually traveling uh don't know where he's traveling to in

this time but he's busy somewhere cooler than the office right

well this week we're going to be talking a little bit about uh moving from residential to Commercial

and kind of how you go about that and me personally I don't really know because

I've been a commercial my entire career but this guy right here has actually

made the switch uh early on so he'll do most of the talking and

we'll see what uh what he's got to say so today if there's anybody out there

who wants to uh be included in the conversation please speak up and feel free to reach out and join the

conversation and like Daniel said the starting uh [Music]

[Music]

in commercial um never really chose a side

um until him and his partner split up and then then we veered over the commercial but uh for me the experience was

I'm gonna be honest residential is not for everyone um it wasn't for me I I don't feel like

uh the setting was my strength to begin with only because I

I know what it's like to have someone in your home and I just I felt like I was always invading when someone else's

privacy uh you know they went out and your home is supposed to be your your Sanctuary

um it's it's your kingdom and it's yours alone and I always felt a little odd

being in there to be honest um and maybe that's just uh my brain right um we want to be respectful of

other people's property um their area so when we did transition more towards

the commercial side I was extremely happy about that um

the commercial Society just there was just a lot more I want to say freedom but that's definitely changes in the

past 10 years or so but the uh the freedom on the commercial side was

not having to deal with the homeowners being like um I was just we were just talking about

this a little bit ago about how you see some of the pictures on Facebook and you know it's you know these guys working

over here and then the homeowner in a chair like five six feet away from them just

watching them all day long and a lot of uh sorry Mom our mother is over here copping yeah that's just her saying Hi

how long homes by the way um but it's like we call them helicopters we used to call them

helicopters right and they they used to bother me too up until uh

there there becomes there's a point in your career where you don't really care

who's watching you anymore because you're not doing anything wrong in it

even if you do mess up you know how to fix it it's not like it's a you need to try and hide anything it's like oops my

bad let me go grab this over here and fix this real quick usually my um

uh yeah I'll be right back um the the it's just it's just a different

setting um understanding the difference uh as far

as communication with the homeowner versus a commercial site when you're dealing with other trades in general

um the communication aspect is a lot different and I feel there's more

etiquette involved in residential and that's probably why in my younger years I didn't really like it right because I

there was too much structure that needed to be in place for me and now there's a

little rough around the edges when I was younger I was not um

I was not the easiest person to talk around I and I struggled with this to this day is

I I have a very very thin filter and back then I had no feel to it I didn't understand uh the

concept of utilizing building time and a place being able to turn it on and shut

it off at will yeah that was uh that was more difficult when I was younger

if you didn't like me then oh well chances I don't like you either like that was my mindset went out you know 18

19 20 uh probably 21 to that um

you go from from the household in the residential setting uh whether it's

um playing HUD homes or any of that type of work to you know the high-end portion

there's a very broad spectrum there right like there's a lot you can get away with in certain

scenarios but um I'll be honest I was never in those you know half million dollar homes or a

million dollar homes uh I don't think that our skill set that when I was that young and the gentleman that I worked

with were for um that wasn't something they went after either and

thank you I wasn't ready for that that could have put me in a different position for sure could have messed up a

lot more stuff yeah yeah it was a good kind of um and it's all mine so some guys man some

guys are just like built for for that like uh you know my buddy John steyer and styrofoor and I don't know that

that guy isn't built for the residential aspect um

he's just he understands people right and there's been his in his line of work and it

takes it takes a certain person to thrive in

in that atmosphere that environment um could I do it now yeah 100 I'm fine now

like I understand you know it's a little bit different you know I'm a little bit different a lot different

um and everyone is a little more understanding but the commercial industry is is where I

find my comfort and I would always re remain comfortable in any commercial setting

um and that kind of falls under the uh what was it called um

like assistive living I know that that that's where they live and there's you know their own residence but to me I

still consider that commercial projects um and then transitioning over was

super easy super helpful it was more our strength anyway give me

you know 50 000 square feet we're going to perform rather than a 5 000 square foot where I just

felt like you were in Japan even 5 000 square foot home is still a big home yeah and I think that's one of the things that Paul probably wanted to talk

about too was because you you get these guys that are you know strictly residential and they're one two-man

operations and then once you get into a commercial setting I mean there's some times where we have five six seven

people on one project for you know months straight and just one having the

manpower to be able to do something like that and not you know kill yourself work yourself to the

ground but also you know you're looking at

um the the cost of the product if you're selling the product you're going from you know having a house that's

a couple thousand square feet where you're coming out of pocket you know essentially a few grand to

I mean some some of these commercial projects are millions yeah that's uh

that's above what we're going to do right now you guys so don't get that wrong but still they can facilitate that

when you look at you know some of these groups it's um I mean even if you look at Home Depot

and you know the box stores and stuff like that they they want their money before they even

start any work right and you know a lot of the flooring stores are like that as well and probably the guys that are

doing residential it's like you're gonna give me my at least half of my money up front and then you know we're gonna get

payment incrementally or right after the work starts when you're working with

commercial um trying to do everything by yourself full service you're looking at you know

The Waiting months before you get any payment it's like there there's so much

more paperwork and stuff on the office and that you don't have to deal with when you're residential you don't have

to deal with you know um AIA billing and you know putting stuff on certain

documents in order and having to get it notarized even before you get paid that's you know something that we had to

learn as we went to yeah you know and it's crazy too thinking that you're more

our comfort my comfort your comfort whatever our comfort is in the commercial industry knowing that there's

more rules to follow when the part that I didn't like about the residential was

the rules you had to follow and it's just weird to think

so it was open space right like uh freedom to run so to speak

um in the commercial than it was in the residential and I guess that that does come with its headache and we're

learning as we go we're still learning and we're evolving um but you did set that one touch on

what you said too like the residential part like he's right like if you're of one two three-man operation and you can

find enough work for you guys to partner up you want to work together um

um then the residential is kind of right up your alley right so if you're one of those

individuals that likes working alone works for you by yourself or you want

help every now and then the residential is a lot easier to uh maintain uh or be

successful at than commercial um you know it all has its challenges and

so snitch um but if you are

um if you have ADHD you just need a thousand things to do on one project then commercial is where it's at

um I don't know how else to explain it but um some people are just uh love the the wide openness of the

commercials and people love their as eventual but um I think it might be transition line

if you think it's easier for a residential guy to transition to commercial or the other way around I think it's easier for a commercial guy

to transition into residential because we've seen that more often than we've seen residential guys going to

commercial because you you have to you have to be willing to

create a team if you're going to do commercial rights because if you're if you just want to work by yourself

then residential is the way to go because you're working in a smaller space

on projects that you can handle yourself with just you and a guy but if you're looking at you know some of these bigger

commercial projects that's when it takes more people so a lot of the guys that we've seen transition into the

residential from the commercial have not had

a hard time really and they enjoy what they do still and I mean you think about

a couple years ago when you we've seen the the residential Market shooting off

right and the commercial was not really you know tanking or anything but it was just steady so what did they do they

they were like man all these houses are being built and I know some Builders I'm just going to switch over and now you

know we're getting calls from some of these guys and it's like hey what do you got going on because I mean even through

the chamber you you go to the meetings and they that's what they'll say they see everything in the residential side

kind of uh slowing down a little bit and the commercial side is actually taken off a little bit more than it has been I

think especially the multi-family so and you know and that's one thing too with Healthy Families going to be able to to

feed both both uh monsters right commercial and residential because

essentially that's what I'm doing this this residential project and a commercial scale

I think that's that's a good one and you you get a mixture right because a lot of the multi-family that I've been seeing

come across the desk are like they'll still have the the stretch

carpet in the units in like the bedrooms but then in the kitchen and stuff it would be glue down lvp or shoe vinyl or

sheet vinyl instead of the the click stuff yeah but then the common areas we'll have uh commercial go down uh

carpet or resilient as well but I think um if you are looking to make a switch and you are doing residential even

you know full service selling the materials and everything I don't know a lot of these

guys I go through like Floor Source or something or they have partnership with the stores but if you're looking to get

in the commercial I'd 100 percent see it being beneficial for you to you know get

with the store that's doing most of the the legwork and then just providing the labor because

I mean that's how we did it for years and it and it worked right it's

you don't have that headache of chasing down the payments having to come up with

all the money up front I mean some of the projects that we've done lately they're not even big but it's still you

know 60 70 000 worth of material that you're pretty

much saying here and I'll see you in a few months [Music]

you know it's it's part of the process part of the learning right because I'm even the other day you know the thing

was yesterday the before yesterday had someone message me on Facebook and he's like hey I'm thinking about getting into

this multiply family type deal has 256 units and

I was just wondering you know he was asking me about measurements about you know how do I do pricing I'm usually not

doing stuff and it's like man at 256 units plus the hallways plus their stairwells I said you're probably

looking at you know quarter million dollars easy just the material that you're going to have to

flow it's like not only that it's it's he's working with someone that they want him to

supply the material and everything and it's like man do you even have the accounts to be able to

to order this stuff how are you going to leverage that too is when uh uh when they're at the

starting line and they Inspire the pistol what are you gonna do for labor you know

do you have all that in place uh can you have all that in place um I mean there's a lot of variables to

think about it you know and and I I go out like this and I tell people like this uh you know because we have we have

a size project that we know is outside of what we could handle right like we

understand everybody has limitations um even if we're giving out to our Network and try to to use some of the

guys in the installs that we know for uh for help there there is no project too small but

there's definitely a project that is too big and knowing your limitations on that right

away will help you a lot like I think that at some point we may have taken on more than we could chew

um and it always start like that because scheduling is all over the place in commercial

residential is actually fairly easy to schedule as long as you have the material uh but commercial there's a lot

a lot of variables that that pushing back around wants you to get pushed up

and and I think uh we've been to the point where we were working way too much to accommodate everybody else's schedule

changes I'm thinking that we were going to lose work if we said we can't accommodate

um and you know there's some cases we may have um and in some cases we probably do

right now but um it's okay to say no or I'm sorry that was I cannot accommodate that

schedule change right and if you're thinking about you know I definitely feel free to reach out to us and you

know like I said someone on Facebook reached out to me with questions and man this

all we want to do is give you the information to make you make the right decision but we can't make it for you

right you're going to do whatever you want to do so

just be informed right and that's what that's what we're here for to inform

everyone and just kind of let you know what we've been through and I think if you are making the switch looking back

um that's that's the best bet is to get with you know another a contractor a

flooring contractor in your area and start on the labor aspect only and

see how far that can take you before you even think about you know doing any at

least any big projects I mean we've done you know projects where it's just even at schools

when we were first starting to sew it's like you know a few rooms here and a few rooms there and it's like

when you're when you're self-funding it's hard to uh

hard to watch that money go out and not knowing when it's gonna gonna return it's easy to overextend your finances

because I mean it you can look at it like you're going to get it back but

when timing is very important extremely important timing can make or

break me for sure right so you know just going back to those those when they pay when

residential you're essentially asking for money up front you're getting it and then you're getting your money pretty

much as soon as you're done um we have commercial projects that we I've been waiting

for payment for probably two months now and you know we have some contracts or

some bits proposals that go out and they come back and it's like hey you you're asking for you know a net 15 or a net 30

and it's we pay net 45 or a net 60 is that okay and I mean that's a a matter

of absolutely we will work with you because

we want the work it's if we say no they probably are not going to change their

their pay schedule to accommodate you and and on the other hand you may

already have some relationships with contractors and they understand uh you know all these small or these large

contractors started out in a position where they they couldn't afford to to do what they're

doing now they weren't fsis and some of them understand but you know what like if they see value in you then they will

they may not they will they may bend the rules a little bit but I would not make it a habit on asking

um but just be transparent like 100 be transparent if you can you can if you can't you can't but don't

lead them to believe you can when you change um that's just nobody likes to have egg

on their face um and you know on another note um the new salesmen flooring stores out

there you know chances are one of your guys's uh installers or one of the crews

has someone out there who gets a lot of phone calls about uh work and selling

product they don't want to deal with it they defer that but if you guys have meetings with them and say hey

um if you guys ever get these uh phone calls or the clients asking you this or that about a product that they're interested or if you can or if you want

to um and obviously it's not stepping on your toes right like you know I'm right

behind the Fiji um it could generate more revenue for you guys too but to be honest give them a

piece of the pie you know what I mean yeah that's where we say Partnerships right that's what you're doing you're being transparent creating Partnerships

rather than creating someone that's trying to go behind your back and they're they're going to end up doing

doing it anyways you might as well take your piece while you can yeah I mean

you know for a long time I was in the field and doing all and I'll say oh doing a lot of office work as well right

and and I think at one point the guy's so busy uh me taking care of phone calls and estimates and labor votes and all

that that I was having um I was spending less and less time on the floor on projects when I needed to be

spending more and I was putting my guys from you know eight to ten hour day to a 12-hour day

um but also when I was uh on the floor doing the installs it was I was go go go

no lunch no break because I know I'm gonna get a phone call I know I have a meeting I know I got to leave for an

hour you know and I have a half hour drive you know I'm gonna lose three hours uh or I'm some of the guy's home

and I would stay and make up for the time so I was really not doing myself in favors but

my mom's trying to technology everywhere with a very easy twin [Music] is it out of paper

um anyway guys sorry um you want to help her a little bit no just leave it alone I will do it when

we're done um sorry spending too much time on the

phone and not enough time on the floor so and then the transition to the office

part was in order for me to justify being more available for

um our clients or Partners um I had to start

making additional funds on the sales portion and that's where the Partnerships come into play like hey I

have a client looking for this uh can I purchase material through you but leave

me a little bit of room for the margin and that's how it really started um

once again I wasn't responsible for the finances out of pocket but I did owe them the dollars and cents and something

was said and done so um that did help with a little bit of the transition from things from labor to

sales but the only thing that would help transitioning anyone from residential to

commercial would be know what you're getting into call

somebody ask questions do not partner up with another installation company and you know get your feet wet on a few jobs

because it's it is the the market from residential to commercial is totally different and

that's why you know we love commercial and that's why residential guys love residential yeah and um and just for the residential

guys who are who are making the transition hey just understand that there's a lot more science involved in

commercial there's a lot more of the mutual understanding to know in the commercial run and I'm not I'm not taking a shot at

any residential guy because or or office it's just there is way more that could go wrong in

a commercial setting than there is in a residential setting depending on what type of residential right because if

you're just doing carpet day in and day out and you're stretching you're not really worried about uh moisture

readings or anything but if you do wood you're all you're constantly having to check the moisture of the wood to make

sure that it's with intolerance of the product you're installing anyway so like you said it's it depends on what

you're you're dealing with but in commercial I mean you're dealing with concrete

a large majority of the time and if you're not if you don't keep everything

you know set and make sure that you have your readings and everything and something comes just pops up and

it's like oh what's the the moisture content it was like I don't know well or if you go what's

moisture content right sounds like it's your fault right away

we didn't we didn't start out like that like that we didn't start out knowing

everything we just uh ended up uh learning as we went we've been on that when someone

is like well what's the moisture content you're like don't know

like didn't know that was my deal and then once you start reading uh all the specs it's like yeah the installer needs

to know like you don't have to do the testing but you need to know what those uh moisture results are before you

proceed because as soon as you start spreading that adhesive you're owning that project yeah and you know he makes

a good point too so if you are a transition to the residential commercial in the residential World a lot of the

stores rely on the installer to give them information and they use that information uh for their their terms

with their plan right um and that's what pretty much rides up the contract is just an understanding that it's limited

um but when you move over to the commercial side and say you're doing labor only um if you don't really know what is

entailed or what's included in the contract between the flooring store or the flooring

contractor or trade partner that you are working through to do the install

um you could be putting yourself in a very very bad position um

because they may miss something and you need to be able to um to catch up to that you need to be able

to understand what the terms are so you understand what's in your scope because if you're not working with someone you

trust or who's reputable they may defer the failure or anything that goes wrong

right back onto you and that's not what you want well you're talking about you know stuff like that and change orders

with homeowners are pretty much on the Fly you're dealing with a homeowner already anyways and in the commercial World some of the

the documents I I've seen you know they state right in there you know any

additional work even if you get something signed is not going to be

paid to you unless a change order is issued so you have to you know go through more hoops and it just it really

does suck sometimes because sometimes it just puts you in a spot so you're if you're like if I don't do this I can't

continue so do I just continue and then worry about it later or

I mean they probably run into that on residential too but it's easier to get into contact with a homeowner than it is

to go through the chain of command on a commercial process yeah I mean the person essentially you are bumping albums with

the person who is paying the final bill um in residential unless it's an investor who's in everywhere right

um and you can get in verbal you can talk face to face say hey who ran into this situation hey look what we found

commercialist um I I wish it was that easy I do remember when it used to be a handshake uh in an agreement and then you're

you're good right but um there are times I've definitely changed uh there's no more I mean there

is pain shootings and there are people that you can still trust that will follow through on what they say they

will do um however there are still uh documents in place

and systems in place to make sure that there's just you can trust someone and give them a handshake and understand

that they are going to to come through without the documentation right then and right there then we can go ahead and

continue on and um move forward with progress on on the project itself

but I think this one's going to be a quick one today you've got to get your son over to practice Paul's traveling

and uh we don't really have any plus that was on here for a little bit he said

that he's uh making the transition right now and it's it is it's

a different world but I mean it's definitely a really good world to be in

so if you do want to get in the commercial like I said my advice is to get with a flooring contractor in your

area and start out with labor only so you're not eating the cost of all that material right away plus plus you know

well these manufacturers or Distributors even open wheel open account we when we

when we made the switch from you know labor only to full service there were some Distributors and manufacturers that

told us straight up no we're not gonna even open you an account because of the other people around you and it wasn't

until you know they start seeing seeing you constantly like hey this is

legit we're actually doing this then they're like all right we'll work with you yeah yeah we say hey

I really need this if you don't sell it to me I'm gonna go over here like I I need to figure this out and

just have a conversation with them because I understand their aspect right nobody wants to saturate the market with

uh with a sales team right they don't want you know an area that's got 20 stores

they don't want their product at 20 stories and have everyone bumping heads

against one or another I get it I understand

um however you know hey let their margin separately build right but their skills

don't believe that that's one of the things too is working with your margin because when you do get in the commercial a lot of it is low bid rule

is all until you have a strong hold on what your your Niche is right and

um there's been there was a project that we lost when was that last week or the week before when it's like

um it was like uh just over a 100 Grand and you know we were within four thousand dollars of the low bid and it

was like sorry like that's all it takes is you know less than four percent you put all that

work into getting these composers together they went through all of your details they bypass all that they look at the numbers say yeah

oh Yep this is the lowest one we're gonna go there um not always but that does happen more

often than not um you'll get the the because the clients that that love

you enough to where you know you're the you're the only person that they're gonna call and we love those things

so I guess uh I guess we're gonna I'm gonna have to fill this out on my end pretty soon pretty quick but in closing

for me is um here are my thoughts my opinions if you are in the residential

um Market as an installer or even sales uh just the margins there could

potentially be a lot greater uh than the margins in the commercial

um and I'm just saying like and we have a sale in a house and say the average house for flooring on what a

2 000 square foot house uh up and down is anywhere between fifteen and twenty thousand dollars depending on what

you're selling they're gonna have an opportunity to make a better margin on that project

um but if you go to a 2000 square foot commercial project um the margins on that uh hard

or no in comparison like they're just substantially lower because the the

market is a little more cut from I would say um yeah but I think you know depending on

the speed we can do personally we can do you know that 2 000 square foot commercial a lot faster than

we'd be able to do the residentials so right right and it all depends on what your strength

so if you're one of those people that just like to be wide open and feel throttle uh commercial is where it's at if you're

um I'm not saying don't be meticulous but um just having their freedom roam but if

you are one of the individuals that likes to donran and um have an easier

day or week so to speak right and take the time move things around um you know for the the customer the

client and your trade partner then residential is a little bit more um someone pays for individuals like

that uh to each their own um I I like where we're at in our percentages right now so

they're constantly working on those work in progress all the time but yeah if you guys got any questions

you guys uh should know where to reach us by now if not you know our first name's Daniel Jose at

preferred flooringmi.com or like I said before and we we shortened it so at

pfmi.team will probably be easier but a lot of people even after that they're like well

is there like a DOT comment yeah it's like no just dot team that's it but all right guys hope uh you enjoyed

this one and we'll catch you guys on the next one