January, 2007

Entrepreneur of the Year 2007: Ward Lumber; Jay, NY

Ward Lumber’s president keeps his eye out for new opportunities—as his pre-fab home, alpaca ranch, and equipment-supply businesses indicate.

By Craig A. Shutt

As a fourth-generation, family-owned building supply business, Ward Lumber in Jay, N.Y., knows what it takes to succeed. Part of the company’s past success comes from understanding when to expand—and when to consolidate—as well as accurately assessing new opportunities that arise.

President Jay Ward embodies that "new opportunity” philosophy both in his professional and personal lives. (His alpaca ranch and livestock-equipment supply business attest to his willingness to explore new possibilities.)

"Whenever we look at a new opportunity, we ask if there is demand for the products and if we can supply the products profitably,” Ward says.

That approach, as well as a keen eye for gauging demand, has kept the lumberyard growing through the years. Today the company runs two building material yards, in Jay and Malone, N.Y.; a white-pine manufacturing division that draws on the company’s 6,000 acres of Adirondack forestland, and a prefabricated homes division. The company’s revenues exceeded $25 million in 2006.

Ward joined the company in 1988 after receiving a degree in computer science and working as an assistant director of admissions at Utica College in New York. Part of the fourth generation to operate the company since it opened in 1890, he felt no pressure to sign on. "The invitation to come back was there, but my parents didn’t pressure me to do so,” he says. "In the back of my mind, I questioned whether it was right for me to go back to work there. I always thank my parents for their approach, and it ultimately it made sense for me to return.”

The company prides itself on its strong customer service, including in-house estimating, job-site deliveries, incentive-based volume programs, special-order programs, and web-based account access. Ward adds a personal touch to the company’s service by visiting job sites to talk with customers every Friday from April through October, even barbequing on the sites. That close contact helps him keep a finger on the pulse of the market, leading to new opportunities.

Prefab Homes Under Way

One of those new opportunities arose in late 2005 with the establishment of Ward Lumber Homes, which provides prefabricated home construction in conjunction with local homebuilder Dave Ploof of Ploof Custom Homes. "[Ploof] came to us and suggested that there was a need in the market, so we investigated,” Ward says. Ward had operated a prefab-panel operation previously, but it had faded away as the company focused on other activities. "We didn’t have the skilled employees to make it work, and other opportunities had more potential so we let it go.”

This time, the program achieved rapid success. "We’ve partnered with someone who knows the business and who can do the field installations,” Ward says. "We know that we’re in the building-supply business; we’re not experts in construction so this format suits our strengths.” There’s great market potential in the area too, he adds.

"As builders have been able to locate less skilled labor, they want to buy more packages,” Ward notes. "The more complete components they can buy installed, the better they like it.”

In setting up the business, careful consideration was given to ensuring it didn’t compete with the company’s base of professional-contractor customers. Ward put special emphasis on assuring customers that the division was a service-oriented business that could potentially aid its own bottom line by helping it build homes faster.

The setup also potentially helps Ward’s customers build their business by finishing projects for would-be do-it-yourselfers, he notes. The company always recommends ‰ that customers work with a builder on their prefab home. "If they insist on doing all of the interior work, we definitely give them a leg up by producing a weather-tight, lockable shell on their foundation that allows them to focus on interior work,” he says. "But some of them don’t have as much expertise as they think, and certainly not as much as a builder, so they sometimes bring in one of our customers to help them.”

In the year since the division opened, six prefab homes have been completed. "Considering the first six months were spent planning and training our sales people so they would be comfortable offering the prefab home as an alternative, we think that Ward Lumber Homes is off to an excellent start,” Ward says.

Keeping his ear attuned to customer demands also led to the opening of two stores during his tenure, in Malone in 2000 and Plattsburgh in 1996. Openings, however, sometimes precede closings. That happened to the Plattsburgh store, a former Grossman’s outlet, this past October.

"The market had changed significantly in the 10 years since the store opened,” Ward says. That included both shifts in the housing stock as well as the opening of a Lowe’s store five years ago. The building also needed substantial repairs. "It would have been a big investment, and the potential in that location wasn’t there anymore.”

The store had 23 full- and part-time employees, and some of them were shifted to other portions of the business. A few others were snapped up by competitors. "I like to think that it’s a good reflection on our business that some of the people we had to let go could find work in nearby yards quickly,” he says.

Knowing When To Fold ’Em

Through the years, the company has also closed other operations, including its Mountain Log Homes division, a truss operation, and Ward Commercial Supply. In the latter case, the company quickly realized that it didn’t have enough space to inventory the vast number of SKUs such an expansion required, and it was discontinued. However, Ward thinks the the potential reward is worth those types of risks if they pay off, and each attempt at expansion has brought lessons for the future.

"The thing that stands out to me from these closings is that I probably don’t close them soon enough,” he admits. "There’s a certain amount of ego and pride in trying to make them successful and sticking with the dedicated, high-quality people who have worked so hard to make the businesses work. The people part is the hardest part of such closings.”

Despite those adjustments, Ward keeps an eye out for new opportunities, and that extends to his personal life as well. In 2003, his two daughters showed him brochures about alpaca farming, and he investigated the potential on the Web. His parents raised white-faced Hereford cows, he notes, so raising livestock has always been in his blood. His home had a pasture with a small barn and fencing, so he expanded by building a bigger barn and better fencing and started an alpaca ranch.

"It offered us livestock that our children can learn to care for and see babies born and grow, and it also works as a great investment,” he says. He sells the alpaca fleece as well as breeding animals, which is where the most profit lies. The ranch led him to create LightLivestockEquipment.com early in 2006, which operates as an Internet-based sales operation for alpaca supplies.

"I needed equipment, and I discovered there was no distribution in the Northeast,” he explains. "So I decided to start a distributorship through Ward Lumber to meet my own needs.” But he soon discovered untapped demand and watched sales take off. By stocking materials at the Jay yard, he takes advantage of the company’s warehousing and forklift capabilities, as well as the available marketing, website design, accounting, and shipping skills.

The variety of businesses under the corporate umbrella bodes well for future expansion, and Ward remains open to other possibilities. Each month, he participates in the new-employee orientation called Preparing Informed New Employees (PINE), discussing existing programs and challenges, and what lies ahead. "I’ve been telling them there are no expansions planned for now,” he says. "But you never know when some opportunity might come along.”

With more than 30 years’ experience covering the LBM industry, CRAIG A. SHUTT is senior contributing writer for the magazine and is based in Chicago.