Contractors Corner: CCA Floors & Interiors
The leadership team at CCA Floors & Interiors (CCA) in Alexandria, Va., is not wasting time celebrating 2015 business results. Instead, their focus is on the business results they plan to create for the company three to five years in the future.
“Our success is built on the strong reputation created by our founder over 40 years ago and his ability to evolve the business to meet market demands. Looking forward, we will continue to capture market share by developing our team and equipping them with the knowledge, tools and systems necessary to compete in a market more complex and challenging than ever before,” noted Ken Hirshman, CCA’s CEO.
Creating the Team for Future Success
CCA started with a simple business model. In 1973, founder Daryl Reinke opened a cash-and-carry retail operation specializing in carpet remnants. While the focus was on retail rugs, his customer base eventually began to demand installation services and the business grew into a full-service operation serving the residential market. Soon, Daryl added resilient flooring to his carpet base and hired staff members to support the growing business.
“The early employees were lone rangers, each managing a project from soup to nuts by handling all aspects of the project including estimating, pricing, selling and project management,” Reinke noted.
In the early ‘80s, with the addition of Dave Stafford who had extensive experience in commercial flooring, CCA moved into the commercial side of the flooring business. Commercial began to grow impressively and, by 1991, the company secured its first GSA contract. At that point, its growth accelerated rapidly and the commercial business was meaningfully outpacing the residential business.
In 1993, Mike Reinke, Daryl’s son, joined the business. Starting as a showroom salesperson, Mike quickly progressed into the commercial business, controlling the largescale government and commercial business opportunities. The following year, Ralph Grove, currently a member of the Starnet Board of Directors, joined CCA on the commercial side. As the business grew, keeping the work in silos was not a reliable approach. Together, the management team established more specialized business processes and functional expertise.
Today, CCA’s project managers work with a team of estimators to create a plan for executing the project. Then once the project is sold, a group of experienced project coordinators manage the project details. Another critical element was the establishment of targeted installation field supervisors who work closely with owners and general contractors to ensure the installation process runs smoothly. For larger projects, field supervisors work on a daily basis to help manage that project.
Daryl and Mike Reinke decided in 2015 to bring a new partner into the business at the senior leadership level, and Ken Hirshman joined the team as a partner and CEO. Hirshman has a proven track record of success in developing a company’s capabilities and preparing it for growth. Prior to joining CCA, Ken served as the president, CEO and co-owner of Leedo Cabinetry, where he oversaw the company’s expansion from a regional-based supplier to the nation’s number-one turnkey provider of kitchen and bathroom cabinets and countertops to the multi-family marketplace.
“Ken brings a unique combination of experiences that we felt were complimentary to achieving our strategic as well as financial goals. I am confident that his leadership will result in an aligned team focused on our customers’ success as the cornerstone for our future growth,” stated Daryl Reinke.
Segmenting the CCA Business for Growth
At the onset of 2015, the business was divided into four groups: Commercial, Government, Residential and Builder/Insurance. With the dramatic growth of the Multi-Family segment (then part of Commercial) over the past several years, the management team decided to establish a separate group. Multi-Family business was officially spun off from Commercial in January of this year.
As a result, CCA now has five separate business units, each with its own individual leadership structure. Moreover, the company is in the process of centralizing support functions across all divisions to drive consistency and deliver exception customer service. They expect growth across all segments over the foreseeable future.
The Commercial group is the largest individual unit of the business and includes a range of segments including corporate, healthcare and education. With a geographic base in the Metro Washington D.C. area, corporate is the largest portion of Commercial and its focus is on the large number of office and administrative facilities, both private and public.
The Commercial group has an increasing business base in healthcare also, particularly with the expansion of special service clinics and assisted living facilities. Education is a strong segment as the group has a great relationship with several local school systems (K-12). The group also works in higher education, handling several local colleges and universities.
As a result of working in all levels of schools, the Commercial group also handles sports flooring as needed, which represents an expansion of their services in this segment. “We are very fortunate to have Ralph Grove lead the Commercial business. His overall knowledge of the industry is an incredible asset for CCA,” stated Mike Reinke, CCA’s President.
Government is the second-largest group of CCA’s business and is headed up by Peter LePage. “Peter’s ability to grow and position our government business is one of the most impressive accomplishments,” noted Mike Reinke. Its GSA contract status enables CCA to work on institutional projects throughout the United States and overseas. As an example, in 2015 the company serviced multi-location projects in Europe and Asia. In many cases, CCA is able to bring its own installers to these jobsites, thereby ensuring the highest quality of work.
Residential business contributes approximately 5% to the overall revenue. While small, this area remains important to CCA as it is the company’s heritage. Builder/Insurance focuses on providing restoration work in cases of damage due to fire, flood or other natural disasters. This business team works both with Residential and Commercial customers and experienced explosive growth in 2015.
Finally, CCA anticipates meaningful growth from its Multi-Family group, where the company expects it to deliver double-digit growth rates in the next two years.
New Services, New Revenue
Another key strategy for CCA is maximizing the return from its current customer base through incremental services. In terms of product offerings, the company has focused on growing the ceramic business in Commercial. Originally, the ceramic work was restricted to Residential, but the profile changed with the dramatic growth of ceramic products across all business segments. Ceramics now represents 8-10% of the materials purchased by CCA.
Beyond flooring materials, the company now offers a broader service offering to the Multi-Family and Corporate segments. Because much of this work is either tenant improvement or lease renewal, CCA offers painting services which allows it to control the full interior project more effectively.
The benefit for the facility manager is clear: he or she can rely on one supplier to control the schedule and manage a broader range of services. In some cases, these projects are extensive and can span over two years including planning and execution phases. Although these large projects require high levels of oversight there have been several tremendous success stories.
CCA offers a wide range of other services to its customer base including floor prep, moisture mitigation and underlayment as necessary, with the goal of providing best-in-class services to its customers and ensure a solid return on investment.
Broadening Its Geographic Scope
CCA is planning to expand the footprint of its business through contiguous growth based on the commercial growth in the area. Last year, CCA acquired a business in the Virginia Beach, Va., market and this acquisition will enable the company to expand its reach to Richmond, Williamsburg and the Tidewater area. CCA said it will continue to explore other acquisition opportunities that are consistent with its strategy and which offer incremental business opportunities to CCA.
CCA also plans to expand its National Account/Multi-Location work. Already the company has handled work on strategic projects which extend as far as Texas and St. Louis. Through its affiliation with Starnet Worldwide Commercial Flooring, CCA plans to align with other Starnet members to expand its reach geographically and handle projects on a larger scope.
CCA joined Starnet in 1998 and this affiliation has provided a terrific foundation for the company’s business growth. Through the sharing of best practices on commercial flooring issues, CCA has created strong connections with other Starnet members. The company has also learned very specific information about the industry and developed new services and revenue opportunities which have helped enhance its business. CCA has taken advantage of the training programs offered by Starnet and these programs have enabled the company to upgrade all levels of its employee group. CCA believes that, through Starnet, it is connected to the strongest companies in the industry and its association with Starnet has been critical to its success.
Over the next two years, one of the management team’s focuses is ensuring CCA has a strong technological foundation for the anticipated future growth. As an example, they are investing resources to create better systems which supply product information, price quoting and installation specifics to their sales team. By providing the right data to this team, they support their need to work within a range of market segments and better meet the needs of their customers.
Their goal is to increase the company’s efficiencies by inputting information throughout the selling process and ensuring this information transfers to the additional documentation required as the project progresses. With this technology support, CCA will minimize errors and deliver more profitability on the project. It will also enable the sales team to remain focused on their priorities of increasing revenue vs. troubleshooting issues on existing projects. CCA is investing in a Configure/Price/Quote (CPQ) system which is cloud-based and mobile. This system will enable its teams to work quickly and keep up with rapidly changing manufacturer information.
Additionally, these tools will help the sales team better communicate to end users the details of how the project will progress, what aspects of the project will be the most time-consuming and a more visual impression of the end result. In many cases, project issues arise when there is a misunderstanding on the part of the end user or facility manager. By providing information upfront, the customer will be better informed so there are no surprises at the conclusion of the project.
“With a growing economy and a tremendous foundation for our business, I believe the future is bright for CCA,” said Hirshman. “We have an excellent team of professionals supporting the business and we are working together to grow the business. I am proud to be part of this organization and I am eager to bring my past experiences to this team in order to succeed together.”