January, 2007

Entrepreneur of the Year 2007: The Deck Store; Apple Valley, MN

Bob Heidenreich wanted only the best materials and service for his Deck & Door Company, but when local businesses didn’t meet his standards, he started his own yard.

By Cheryl Dangel Cullen

Who hasn’t received poor service and griped about it? Bob Heidenreich did, but he also did something about it.

Heidenreich was fresh out of high school when he realized that most lumberyards couldn’t pass his customer service test: he expected better service and higher quality materials than he was getting.

"I felt like a nuisance to the lumberyard that supplied us,” Heidenreich says, noting that he insisted on the best.

He eventually found his answer at Knox Payless Cashway Lumber in Eagan, Minn. There, the company’s employees knew the business and offered quality assistance and attention, making Heidenreich a loyal customer until the company went out of business. (Several of those employees are now on the payroll at the company Heidenreich eventually founded.)

"I was devastated,” he says of that company’s demise. "I tried other yards and was told that I was so high-maintenance that they didn’t want to do business with me.”

Heidenreich wanted arsenic-free lumber and quality service that would accommodate his fast-paced, growing business, which he officially incorporated in 1988 as The Deck & Door Company. With no one fitting the bill, he incorporated The Deck Store Lumberyard in January 2000, specializing in cedar decking and ACQ (alkaline copper quat) non-toxic deck framing materials. Heidenreich’s business now enjoys combined sales of $5 million.

While many lumberyards struggled to make money in the deck business, Heidenreich’s Deck Store thrived by specializing in well-designed, quality-crafted decks that were unapologetically more costly than the competition’s.

Today The Deck Store is one of the largest dealers of GeoDeck composite decking in the United States, and Northern Crossarm Co. Inc., his ACQ-treated lumber supplier, ranks Heidenreich as one of its largest dealers in the Twin Cities metropolitan area. Before Heidenreich opened his lumberyard, Northern Crossarm had the ACQ product available, but Heidenreich wasn't able to secure it from his local suppliers. Honoring the two-step distribution system, Northern Crossarm couldn’t supply the product directly to a deck builder.

"I did it just the opposite of everybody else,” Heidenreich says. "I was an installer first and then created a lumberyard.” He still has problems buying from some suppliers because they insist he is a deck builder, not a lumberyard. But that resistance has not hampered his company’s growth. In the past five years, The Deck Store has increased sales from $600,000 to $2.9 million. The Deck & Door Company’s sales are currently $2.1 million.

Heidenreich’s business is built on the philosophy that deck builders are important and require quality materials—fast. "The box stores and other lumberyards think price is the most important feature. Our answer is that quality is more important than price, and as a deck builder, I knew that.

Service to Site

"I also knew that when you’re building a deck, you can’t afford to wait for special-order non-stock products to come in,” continues Heidenreich, who stocks large amounts of composite decking, framing, and railing materials. "That’s why we have them in stock. The more time deck builders spend in the field, the more products they will consume.”

Heidenreich also sets his lumberyard apart by having full-size decks in his showroom rather than small-scale sample decks. He adds plenty of outdoor ambience in his showroom, too, including pine scent and the sound of chirping birds.

While Heidenreich’s business was founded on decks and doors, decks are his claim to fame. "Decks kept drawing my attention,” he says. "The margins were higher and I enjoyed the creativity involved in designing them. People aren’t looking for square spaces anymore. They’re looking for unique shapes that match their home and lifestyle.”

Interestingly, the material isn’t the single most important element of a deck, according to Heidenreich. Today, he says, the biggest attention-getter on any deck is the choice of lighting. In fact, he produces a deck light that has become so popular that he now has a robot producing them.

In 1997, a craftsman in Tacoma, Wash., conceived the idea for the cedar post lights and produced them out of his home. In no time, the business outgrew the workman’s basement and with the craftsman’s permission, Heidenreich turned the work over to a local job shop, which used a CNC (computer numerically-controlled) router and a refined concept to produce a much more popular light. Heidenreich sold the new product for $75.

Today, Heidenreich gives away an average of 10 light posts free with each installed deck purchase; otherwise, they retail for $75 each. He can afford to be generous because he has found a new way to make them. "When we made them by hand, it was a painstaking process. We had to find a new way to produce them fast and efficiently,” Heidenreich remembers.

The CNC router sped up the process but that’s not all: a little innovation helped, too.

When Heidenreich buys units of 4x4 posts, he sorts the material into two groups. Now the 5-10% of posts that are ‰ typically out of grade and which would generally be rejected as waste become the core of the light post, which Heidenreich outfits with a decorative sleeve that fits over the outside.

"Instead of throwing away the rejected material, which increases waste and costs, we have found an alternative use. We’re taking a waste product or something unusable and adding value to it,” he says. "We can produce posts that everyone is excited about. They are very inexpensive to make and by giving them away, we get an advantage that no one else can offer.”

When the work producing the lights became more than a full-time job for the job shop, Heidenreich purchased the CNC router from it for less than $20,000. He then brought all the work in-house, where he exercises even more control over costs and is finding other creative applications. The Deck Store now uses the machine to produce stair-riser lights using 4-foot pieces of cedar. It cuts in horizontal slots and installs a low voltage light; this also solves a requirement in the building code that calls for "all exterior stairs to be illuminated.” [IRC 303.4].

"Before, we were limited on design and patterns. Now the possibilities are endless,” says Heidenreich, noting that he can fashion designs as complicated as the Japanese symbol for wind, as well as create any number of other custom designs using the CNC equipment.

Bigger than the cash outlay is the investment Heidenreich is putting into training the people to operate the machine, which runs nearly eight hours a day. "We’re still gaining knowledge,” he says, adding that his goal is to make the machine more efficient than the job shop did. In fact, he’s developing a new process where, by turning the material around, he can produce 22 posts in a cycle instead of 11.

Heidenreich credits training and educating both employees and customers for his positive sales while other businesses in the area experience sales drops. "Because we are deck builders who became a lumberyard, we know the products and how to install them. When we get new products, we train and train and train until we’re experts. And even though there are fewer decks out there to build in this economy, we’re still getting the lion’s share. Those who can afford decks now go to the absolute best resource and we’re viewed as that.

"It is not that we discount the price; we don’t,” he adds quickly. "We sell our quality products for high margins. Because of our knowledge, people perceive us to be better so they are willing to pay top dollar to buy our products. We’re not a ‘jack-of-all trades and master of none.’ We’re very, very good at building and designing decks. It’s our niche.”

It’s a niche he expects to grow in the next couple of years when he opens two new 6,000-sq.-ft. Deck Store showrooms in the metropolitan area. He is already grooming people to take over the operations when the showrooms open in April 2008 and April 2009.

For now, the spotlight is on Heidenreich. He has earned numerous awards for design, and his work will be featured in a 2007 issue of Sunset Magazine. His designs also have appeared in The Family Handyman’s May and August 2004 issues.

Visit The Deck & Door Company, at www.deckanddoor.com, or The Deck Store Lumberyard at www.bestdeck.com.

CHERYL DANGEL CULLEN, of Frankfort, Ill., a frequent contributor to the magazine, has covered the industry for more than 10 years.