When you’re comfortable with your product mix and installation focus, it becomes easy to shut the door on opportunities that are knocking on your door -- profitable ones. In this tight economy, competition is fierce and you have to take advantage of every chance to make a profit. Yes, this does mean taking some risks.

So, here is my story on a risk I took and what happened. While the amounts and the client may be different, I am sure you will be presented with similar situations throughout 2009. Learn from the mistakes I made and the lessons I learned.

I was always much more comfortable with carpet than I was ceramic. This was due to my early experience with flooring. While I did some small ceramic tile jobs, I found there was not the margin for error I had come to expect with carpet. Frequently, if there was a carpet problem, I just sent the installer out to trim a seam, re-stretch to remove a bubble, or maybe even feather-dye when there was a side-match problem. Even with patterned carpet and a mill defect, the visual problems could be cured with reinstallation or an “accommodation discount.”

Not so with most ceramic jobs. If you ended up with a bad job, you fixed it with a hammer, and then replaced the entire job. I listened to a government client who said, “Dave, I’m impressed with what you’ve said about the commercial carpet, and I’m convinced you can do the job. In fact, I have enough money in the budget to do the entire project. Here’s the thing, though, I only have six weeks to get this project completed. I want you to provide and install all of the ceramic tile entranceways in my 199 room entrances.”

I went from joyous enthusiasm to despair when I heard those words, “ceramic entranceways.” I stammered, “That’s not something we specialize in, and I really wouldn’t be interested in that part of your project. I’d like to help you out, but I’m not comfortable with ceramic, especially since I see you have epoxy grout and setting material specified. Why don’t I call a couple of people and see if they will give you a bid on this, or perhaps you can have this done locally?”  I could see by her face that she did not like what she was hearing.

Debra, the contracting officer, looked me in the eye and said, “Dave, you are not listening to me: I don’t want to hear that you don’t want to do the ceramic part of the job; I don’t have the time to work with other contractors on this time-sensitive, high profile job.” And here was her final shot, “Do you want the job for 9,900 yards of carpet or not?  If you do, then you’ll accommodate me by also doing the ceramic tile (about 3,200 sq. ft.). This way, I only have one contract and have one person to call if things aren’t going the way they should.”

In most sales situations, there comes a turning point when you know you can get the order or lose the order. This was one of them.

I was cornered. Yes, I wanted the job, but how was I going to get the ceramic done? The only stories I had heard about epoxy grout and setting material was not to use it; it was supposedly a nightmare. I didn’t even have ceramic mechanics in that area of the country.

Well, Debra wanted an answer. “So, to make sure I understand, Debra, if I agree to supply and install the ceramic along with the carpet we’ve discussed, you’ll give me the entire project?” With a grin, Debra responded, “Yes, I have the authority and the money to do the project and I can justify this award without further competition so long as your prices are at or below the government’s estimate of what the project should cost. So, I’ll give you the award within 48 hours on the condition that you’ll be responsible for the whole thing.” 

I went back to the office and started learning about ceramic tile and what to offer Debra insofar as product choices. I confronted my fear of epoxy grout and setting materials directly and talked with a couple experts about the do’s and don’ts (buy plenty of epoxy cleaner to remove epoxy grout from the tile surface). The amount of ceramic tile didn’t sound like a lot at the time, but when you are looking at five different buildings and 199 entranceways, it does become a challenge. I also started looking for tile mechanics interested in doing the job.

When I mentioned the approximate amount of tile, most were interested, right up until I mentioned an average of 16 sq. ft. per entranceway, and the specification for using epoxy grout and setting materials. Some said “No” immediately while others just gave me a price that seemed to be three times what it should have been. Finally, I got my cost numbers together, had a team of ceramic installers ready to join my carpet installers. I sat down to price the ceramic part of the job.

I did an above average commercial markup for overhead and profit, but after waking up at 3 a.m. with a panic attack, I increased that markup by another 50 percent. After a final review of all materials, labor, travel expenses, the amount of project management time and the hassle and risk factor, I put another 8% on the whole job. I wrote everything up, included a tight scope of work to cover unexpected site conditions, and sent in the submittal samples to Debra. 

I was holding my breath at this point; I still wasn’t sure whether I wanted the job or not. When Debra called, she said, “Your price is higher than I expected. However, it wasn’t that much out of line, so I got the extra money. Here is your purchase order number and I will fax out the document later today for you to sign and return.” 

I wish I could tell you the job went off without a hitch, but I’d be lying. Delivery, storage, and materials handling was a chore. I had five different installation teams on-site at any one time; halfway through the project, the ceramics mechanic nearly came to blows with the carpet team leader acting as my project supervisor and walked off the job; the new ceramics crew did a good job of installation, but a poor job of cleaning the epoxy grout off the tile (it can only be removed with a hammer and chisel when dry). There were a few carpet side-match issues as well as cleanup and disposal. I finally stationed a full-time project manager on-site to backstop the project supervisor who turned out to be a great installer and a poor manager.

Bottomline, we were over budget on labor costs and travel expenses, but finished the job with two days to spare. The project got done, looked terrific, and Debra looked good for her colonel. She approved a substantial change order for floor prep, signed off on the project and we got paid in full.

So, what did I learn from my first big foray into commercial ceramic?  I guess the most valuable lesson I learned was, “Don’t tell them ‘No’, just tell them how much it will cost.” By the way, this was the single most profitable commercial job we sold during the entire year! I had nearly missed selling it because I didn’t want to do ceramic tile.  

If you’re looking for business in 2009, and are not selling commercial ceramic or other hard surface, take the time to learn about it. Look at each commercial opportunity as a way to sell a package; don’t stay one-dimensional. Make use of your mill reps to help you isolate your costs; don’t use low-ball installers because they will not do a great job. Pay a fair price for the right product and qualified, certified installation. I promise you that you’ll sleep better at night.