Legacy & Growth: The Patella Flooring Story of Family, Commercial Success, and Smart Scaling

Audio Transcription

Mark Lamberth:
Hello and welcome to another episode of the Contractor Grow Show. My name is Mark, I’m your host, and today I have a great guest. It’s Anthony Patella at Patella Flooring in Youngstown, Ohio. Anthony, thanks for being with us today.

Anthony Patella:
Great to be here. Thanks for having me.

Mark Lamberth:
Fantastic. So man, I’ve done a lot of research here with the team and we looked at the history of the business. It seems like it’s a long interesting history, kind of multi-generational, would love to hear about history of the business and then where you guys are at today, what you guys are up to.

Anthony Patella:
So my grandfather started the company way back in the 1950s, long before I was even born, and it didn’t even have the same name. It was called Standard Floor Covering, and they were mainly a residential outfit. It was just him and a partner just doing houses like kitchens and bedrooms and some small commercial stuff for a local developer here in Youngstown. They kind of floundered, they were doing okay just getting by. And then in the eighties, my dad, who also has the same name, Anthony, he was actually a chemical engineer out in New Jersey and completely hated it. Decided to move home and get into the family business. At that time, a little bit of debt on the company and he had to actually take his wedding money to pay off the existing debt, buy out my grandfather’s partner. And then it became my grandpa and my dad changed the name to Patella Carpet, slowly got out of debt doing a little more residential. And over the years my uncle also got involved. So we have a lot of family players, but over the past 30 some years we’ve kind of morphed into full-blown commercial flooring contractor and commercial flooring marketing has played a significant role in that transformation, and the residential business has been left behind, but we’ve kind of morphed from really small residential outfit to a pretty big commercial player. We’ve incorporated commercial flooring marketing as a major part of our business strategy to reach new clients.

Mark Lamberth:
Interesting. Wow. So is your dad still involved in the business and your uncle as well?

Anthony Patella:
Yeah, we’re kind of in a transition phase. They’re still involved with some daily operations, bigger picture stuff, but we’re kind of onto the third generation. There’s me, my brother, and my cousin who kind of run 90% of the day to day.

Mark Lamberth:
And you guys are in three states, right?

Anthony Patella:
Yeah, so we’re strategically located, so Youngstown for people that aren’t familiar right on the eastern border with Pennsylvania. So it’s like I could drive 15 minutes from our office here and be in Pennsylvania. So we get access to kind of that western Pennsylvania market. Obviously the Youngstown market, we travel up to Cleveland as well. We’re kind of strategically located between Cleveland and Pittsburgh. Those are the main two states. I know before I was involved, they would mess around with some jobs down in West Virginia, but recently it’s mainly just been Ohio and Pennsylvania due to our strategic location. We’ve also utilized commercial flooring marketing to expand our reach in this region. Our commercial flooring marketing efforts have helped us effectively target and serve customers in Ohio and Pennsylvania.

Mark Lamberth:
Okay. It sounds like it’s all commercial, how you guys, what has worked for you guys? You guys have been around for so long. I mean just a ton of word of mouth. Are there new clientele that come on a recurring basis, just sort of word of mouth or is it mostly recurring business at some level? I mean, what’s the mix of new commercial clients that are totally new to the company versus, I dunno your referral and long-term basis you guys have had forever?

Anthony Patella:
Sure, great question. Yeah, it’s a pretty good mix, obviously through Covid, just on a macro level, a lot of businesses had to do that covid pivot and it wasn’t even something we really planned, but we went from even five years ago, probably 80% of our sales coming from specifically the Youngstown market within a 20-mile radius. And for whatever reason, through just word of mouth, finding some new installers in the Akron and Cleveland markets, which are anywhere from 40 to 70 miles from us, kind of pivoted. And now I would say two-thirds of our business comes from outside our actual hometown location in Youngstown. So we do have a lot of legacy contractors that we work for in Youngstown that my dad and uncle have built up over the decades, but more recently with my brother and my cousin, we’ve kind of branched out into different markets, and there’s some contractors that we’ve been doing work for that make up a pretty large portion of our sales that is a new relationship as of two, three years ago. With the help of commercial flooring marketing strategies, we were able to expand beyond our immediate location. Additionally, commercial flooring marketing has played a key role in solidifying new relationships and boosting our growth outside Youngstown.

Mark Lamberth:
Okay. And I see you guys across the commercial spectrum here on your site, patella flooring.com. I see education, healthcare, multifamily, government, athletics. Let’s say you guys have got a mix of all kinds of commercial jobs. Is there a certain type of commercial project that you guys favor that works well for you guys can specialize in or is especially ideal for you because of your skillset or just your business model?

Anthony Patella:
Sure. I don’t like saying I need to work on that. No problem. I would say education, I’d say anywhere on a given year, 15 to 30% of our total revenue comes from the education sector and that dates back. My uncle did a lot of schools back in nineties, two thousands and mid two thousands. So that’s always kind of been our wheelhouse, which kind of helped us grow initially. So I would say the majority, that’s definitely our largest sector

Mark Lamberth:
When we’ve had commercial contractors on the pod here. Something that sometimes it seems like it’s a part of work over in the commercial space is doing. Ultimately it’s submitting quotes and competitive bids and things, especially with government work and schools and things. I mean is everything that you guys do like a competitive bid situation or do you have some portion of your clients, it’s like no, they’re like these where the company that works with this school district or with this kind of government set over here, how does that work for you guys? Is it all competitive bids and does it create problems for you guys? I mean, how do you win those bids if it is like that for most of your jobs?

Anthony Patella:
Yeah, that’s another great question. That’s kind of the sweet spot that we’ve honed in over the years. So to start, I would say probably a good 75% of our business comes from that competitive bid work.

Anthony Patella:
So to hone in on that, yeah, you got to find that margin where it’s not super tight to where if one thing goes wrong, you lose money or lose your ass, but if you fluff the number up too much, you’re not going to get jobs. So that’s very unique about commercial contracting is like every bid is different based on location size. The difficulty the contractor honing in on is this contractor going to get 10 other flooring numbers or two and it changes the way you bid things. And I would say we have a handful of accounts, commercial accounts where it’s somewhat of a no-bid type of situation where we’ve serviced them over the years. We’re fair, we’re definitely not the cheapest, but we’re not the most expensive. But the product that we put out I would say is a great value. So what we like to do is if we notice we’ve done some repeat business, then we’ll kind of step up our level of service and maybe reaching out and networking to try and acquire them potentially as a no-bid type of situation, just to not completely hammer ’em, but just an extra few percentage points on the bottom line can make a pretty big difference. With strategic commercial flooring marketing, we can further enhance our visibility and ensure that these repeat clients are always aware of the exceptional value we bring. Additionally, commercial flooring marketing allows us to stay ahead of competitors when pursuing new business.

Mark Lamberth:
Sure, big time. And we noticed that you guys have got as of the last rating it looks like at 30 employees or so. I mean is it still about that number or is it more than that or is that about the right range?

Anthony Patella:
Yeah, between owners and office staff, we have a warehouse manager, two delivery drivers and administrator does payroll and paperwork. There’s nine of them what I would call office staff and then installers range depending on how busy we are at a given time throughout the year. So that range as of the past few years has been anywhere from 20 to 40 installers. So I would say 30 installers has kind of been the range. Maybe like 25 to 30 would be the average.

Mark Lamberth:
Okay. I mean this isn’t typical remodeling where there’s a big group of subs that kind of surround the company as well. Do you guys also work with subs that are another layer that would add some other percentage of folks as well?

Anthony Patella:
Sure, on some bigger school projects, the construction manager will list kind of a scope of work of things that we have to include. So sometimes on those bigger higher profile jobs, we’re almost like a flooring GC where maybe they want us to include the hardwood in the gym or the resonance flooring in the bathrooms or the sealed concrete. So at that point, those are things we don’t actually self perform. So that would lead us to finding subs that we have to get a number from plug into our bid and then turn that into the construction manager. So it does flow through us. Not a lot of the time, but a lot of those bigger jobs, the CM doesn’t want to deal with two or three extra subs just for the flooring. So they’re kind of like, Hey, you deal with it.

Mark Lamberth:
Yeah, I mean the reason why I ask is because we’ve talked with companies, successful companies and five or eight, 10 million range that have got 10 employees and they’ve got 80 subs, they come in on jobs and we’ve talked with companies the same size that have got 50 employees in house. And I’m always curious, how do you decide, you guys have got a nice mix and you guys obviously know your thing and been doing this for a long, long time and got your business figured out very well. It looks like you’ve got 30, 35 people, but I mean there’s some hardcore overhead, it’s management, it becomes a whole other layer of some middle management at that point, whatever. I mean, how do you decide as you guys are going along, as you guys move along in the next few years, for instance, how would you make a decision of, well, we’re going to keep our team at 35 people versus we’re going to actually plus say 10 or 20 subs that are parts of different jobs in different ways versus we’re going to grow to 40 people and bring those people and have that just as a part of our team that’s continuously here on staff.

Mark Lamberth:
How do you make that kind of decision of growing to have more people directly on the team or still working with subs, just sort of continuously on that level?

Curious about building a thriving business through referrals and exceptional customer care? Alfred Navarro shares how his commitment to client relationships has fueled over 33 years of success in high-end residential remodeling.

Anthony Patella:
Sure. So just geographically in this part of the country, we’re in that old rust belt like the Cleveland, Pittsburgh, Detroit up there on the Great Lakes. And as you know, way back when that was a big, big steel producing area, heavy union presence up in this area, and there’s still a lot of remnants from that. So a lot of the construction work, so we’re a union shop, actually our installers are in the union and our shop is signatory. So that’s kind of a necessary way of doing business here to do government work because a lot of the government work here is prevailing wage, which is normally set by the union scale. So kind of just a necessary item for us to do. The types of jobs we do is just to be signatory to the union. So that’s a reason our installation crews are in-house on an hourly basis in terms of growing, I mean that’s the million dollar question because

Anthony Patella:
If you do make that decision to grow, you almost have to take on the work when the contracts without having enough people to even do it because contracting can be months or years down the road. So it’s like, oh, I just took on this a hundred thousand square foot school, but it’s not going for a year and a half. It’s not like you can hire in the present moment for 18 months out. So you have to, if you want to grow, at least in our business is that risk of, hey, we’re kind of taking on more than we can handle. And then the weeks leading up to you mobilizing, you have to find installers or get on the phone, call the union hall, see if your guys know guys, and it can be kind of risky. And we’ve done it in a smart way where we haven’t really planned to grow. The business luckily has just been kind of flowing and it’s kind of been a natural progression. So we really haven’t made a conscious effort, but in the growth periods for sure, it’s like I don’t know where we’re going to find the guys to do the jobs. Honestly, it gets a little scary sometimes. Yeah,

Mark Lamberth:
Right. And I mean that’s something that also comes up a lot is there’s a shortage of labor out there these days and skilled, talented labor, especially kids, you’re doing really quality work. You guys got a serious long-term reputation. So I mean, that’s actually something that I wanted to get your take on is you’ve got a big team and what do you guys do to keep the culture and the morale sort of really alive and happening over such a long period of time? I mean, folks have got a lot of different opportunities out there. There’s a lot of folks probably trying to come in and push your guys at some level. We hear of companies, folks just text in, say they’re done, they’re not team members that maybe have been there with them for a year, just text say, I’ve got another job, what are you texting me for this? Right. No notice. How do you deal with keeping the team motivated and deal with that retention piece with your big team?

Anthony Patella:
Yeah, so that’s where things got a little hairy during Covid is almost a third of the guys we’d had for a while, either took different jobs, got into a different industry, went out on their own. So it got a little hairy there and that’s where we kind of pivoted and luckily just found some quality installers in the Cleveland, in Canton markets.

Anthony Patella:
But just in general, I think Covid kind of accelerated that shift where I’m younger, I’m 31, I’m millennial. I truly try and empathize and have an appreciation for people that work in the trades. Not that I feel bad in any way, but I’m saying working with your hands, that’s a tough job. I mean, they’re driving sometimes 45 minutes to an hour every single day to work. So kind of treating them just human to human where I think before construction used to be a very aggressive industry where it’s hurry up and why aren’t you moving faster? And there wasn’t that kind of element. So I think that plays a big factor is just treating them with the respect. I truly believe we’re equals, they need me and I need them. It’s truly mutually beneficial.

Anthony Patella:
And then honestly just rewarding efficiency in jobs that go very well in terms of just giving ’em a bonus or maybe paying them different. It just helps to, I truly think they deserve it. So instead of owners just keeping every dime maybe how it used to be, it’s like, Hey, you are out there every day. You just did a school project for 12 months. I mean, you deserve something above and beyond what everyone else is making, at least if you’re the foreman and then some trickle down stuff to guys that put a lot of hours in.

Mark Lamberth:
Yeah, sure. Love it. So man, I assume you’ve been reasonably active on LinkedIn. Have you seen some of the socials and things been helpful for the business? I mean, how does that kind of fit in for getting the word out? I mean, is that just sort of posting cool projects that you see and it looks like kind a lot of personal stuff that you see. Is this cool project going in over here at Tesla happening over there? I mean, do you give me any action on that? New clients or folks, existing clients calling you and saying, yeah, I saw you’re posting whatnot, or is that just stuff that you do just for fun and just update folks on the business and what you’re doing personally as well?

Anthony Patella:
Sure. I would say it’s more just on the personal end, expressing yourself, sharing with people might find to be cool. I mean, it doesn’t hurt if, for instance, doing a podcast like this, you’re able to look me up or look our company up. And I mean, it does show a level of legitimacy if you’re able to post things and share the projects that you do. So I think it’s more about not, at least for us specifically, I mean I’m sure there’s contractors out there where they actually gain hard jobs from what they’ve posted and shared for us, it just adds more of a legitimacy factor. You could look us up and see with your own eyes the quality of the projects that we do. Commercial flooring marketing plays a big role in ensuring that our projects are visible to potential clients. Additionally, through commercial flooring marketing, we can build credibility and trust in our industry.

Mark Lamberth:
Yeah, yeah, for sure. Do you think here in the next few years, I mean you guys have got a super stable business, got your thing down, been at it for a long, long time. Are you guys kind at the place that you want to be? I mean, do you have plans to grow some percentage or grow over the next few years or it’s kind of stable and it feels good really where it’s at right now?

Anthony Patella:
Sure. Well, just from a numbers perspective, I mean we’ve almost doubled in size over the past 10 years. So I mean there’s been a lot of, it’s been natural growth. I mean that’s 10% a year, so it hasn’t felt like super insane from an operational level. And we just had a really good year last year kind of record years up pretty big. So I would say kind of want to plateau a little bit, make sure this model, this size works for a few years before maybe taking it to that next level. So just we have already done the growth recently, and that’s not to say it couldn’t happen naturally again, but there’s no current planned effort like, hey, I want to do 12% more at three guys X, y, or Z. Just kind of like we’ve reached this plateau, which is a good plateau to be, let’s stabilize this for one to three years, make sure economy’s still good, our numbers are still good, we have the same employees, and then maybe plan to take off again in a year, a couple years or so.

Mark Lamberth:
Oh man, I love it. Awesome. Well, Anthony, a lot of great stuff here. I love the fact that you guys have been family business, third generation, now there’s other people on the uncles and brothers and you guys have figured out how to make that work. We didn’t get into the family dynamic and how that all works, but you guys have figured that out. I love it. And also just talking about how to take care of your team. It’s a union shop, and so that’s got its own kind of pieces to it, some more complexity there, but you guys have figured that out as well and how to keep folks here on the team and got 30 members, team members strong, made it through Covid and learned some lessons over there and now just kicking butt. I love the fact that it’s not, we’re trying to grow, we’re trying to figure out how to do that. It’s like, no, it seems like a wise place to say, we’ve grown a lot, we’ve been doing good, and last year was great and we’re kind of good and we’re just going to figure this out exactly where we’re at. And then maybe in a couple of years here look into more growth potentially.

Anthony Patella:
Well, yeah, because I feel like there’s a lot of mean, growth is good personally and professionally, but sometimes it is that American culture more like growth at all costs. There’s just a lot of, there’s a risk reward with that of just the growth at all cost mindset. So I think we have tried to take a more natural or holistic approach to it, like safe and natural, not because you start taking jobs for general contractors that suck or it’s not in your wheelhouse. I mean, you can run into a lot of problems.

Mark Lamberth:
Yeah, wow. Smart man. I love it. Well, fantastic. Well, Anthony, folks want to get in touch with you guys if they’re in the youngtown there between Cleveland, Pittsburgh, kind of in that Ohio area, want to do some work with you guys and or just chat a little bit more about the company, what you guys are up to, maybe potentially be a part of the team, what’s the best way to reach out to you?

Anthony Patella:
Sure. I mean through our website, patella flooring.com. We have a general email on there. We have an office number. You can look me up on LinkedIn, Anthony Patella, I forget if junior’s in my name on there because me and my dad have the same name. But look me up on LinkedIn if you want to reach out personally. But yeah, business-wise, hit up the website and love it. It’s a good way to get in touch.

Mark Lamberth:
Perfect. So that’s patella flooring.com. It’s P-A-T-E-L-L-A, two Ls on that. Fantastic, Anthony, well thank you for being on the show today. It’s been fantastic. And this will be live here in a few days, man. We’ll get a copy to you and I really appreciate you, Sharon, what you know, and Tchen our listeners, some cool stuff today. Thank you.

Anthony Patella:
Absolutely. Thanks, mark.

Mark Lamberth:
Okay man, talk to you soon.

Anthony Patella:
Take care.

Check out this episode where Tony Giesel shares how he scaled his remodeling business by building the right team and leveraging top-notch subcontractors.