January, 2008

2008 Entrepreneurs Of The Year

Tony Shepley of Shepley Wood Products took top honors in the $50-million-plus category. Meet our other two winners-Lumber One and The Remodeler's Choice.

By Staff Report

Meeting challenges in a tough economy requires creativity and the ability to move nimbly.  In today's lumber and building material industry, it’s not enough to just continue doing “business as usual.” An entrepreneurial mindset means never being satisfied  with “good enough” or accepting the lackluster wisdom of “but we’ve always done it that way.”

That’s why we’re pleased to present our selections for the 2008 LBM Journal Entrepreneurs of the Year—three companies that excel at identifying underserved markets, satisfying customers, and constantly searching for and finding new ways to grow their customer base, in spite of what the market at large seems to be doing.

New times call for new efforts, and a tough market demands a creative approach to every aspect of the business—from marketing to hiring to selling and beyond.

These three companies—Shepley Wood Products, Lumber One, and The Remodeler’s Choice—vary in size and age, but are alike in their fierce commitment to finding new ways to serve their client base.

We think they exemplify the very best in entrepreneurial thinking, and are each working hard to make sure that their services and products are the very best that the lumber and building material industry can deliver.

Riding the Tide

Cape Cod’s Shepley Wood Products makes headway in a down economy. 2007 Revenue: $80 Million plus Category: Sales of more than $50 million

By Cheryl Dangel Cullen

If family history can predict the future, Tony Shepley was actually destined to become an architect. For four generations, members of his family had pursued the profession, most notably, his great, great grandfather, who started the still thriving Boston-based architectural firm Shepley, Bulfinch, Richardson and Abbott 125 years ago. Not surprisingly, Shepley’s early career decision to play in a rock band, rather than pursue the “family business,” raised a few eyebrows.

Even more shocking than his career aspirations was Shepley’s decision to leave his hometown of Boston to play bass with a band on Cape Cod.

"Nobody did that,” says Shepley today. “I was the black sheep because I didn’t pursue architecture and moved off to Cape Cod. It was considered cute but everyone asked, ‘What will you do in the winter?’”Between gigs, Shepley, who had no experience in the lumber business, started a company with a partner selling pine boards off the back of an old flatbed truck. The business was so modest that every piece of material was hand-loaded and unloaded because they didn’t have a forklift.

Today, 29 years later, Shepley has grown his company, Shepley Wood Products, to the point where it is considered part of the establishment in the industry. Today, after buying out his partner in 1989, the company is privately owned by Shepley, who also serves as its president. Better yet, now neither Shepley nor his family wonders how he will make a living in the resort area’s winter months.

Building a Business

Today, Shepley Wood Products has grown into a variety of facilities and businesses that generate annual revenues of $80 million from a completely contractor-focused customer base. “The only way in which we sell to a retail customer is with their builder involved,” says Shepley. Sales for 2007 were up about 6% over 2006.

“The average in our market is down 15% to 20%,” notes Shepley. “We’re not bragging and we’ve had to reinvent ourselves a bit. Dimensional lumber sales are not up, but our door and window sales have been good.“The Cape has become much more of a year-round place,” says Shepley. “And, the seasonality works perfectly in our favor. We have two slow times—during the heat of the summer and the dead of winter. Those are two great seasons to have extra time on Cape Cod.”

An avid skier in the winter months, Shepley finds that he doesn’t have as much downtime as he may have originally thought. The area’s moderate winters still allow builders to pour foundations and there is no shortage of building and renovating. “This whole area has changed so much,” says Shepley. “Today, we have fewer hotel rooms here than there were in 1960. Instead, people are building second homes.”

Shepley’s business on Cape Cod accounts for 80% of his revenue. The other 20% comes from Martha’s Vineyard, Nantucket, and the South Shore of Boston—a radius of about 70 miles from the company’s base in Hyannis, Mass., which includes a full service pick-up and delivery yard. Administrative support offices are also located there, along with two sister facilities.

Adjacent to the main yard is the Shepley Marvin Showcase, which features the full Marvin product line selection along with an extensive selection of hardware. The showcase also has a state-of-the-art training center on the lower level, which will accommodate up to 200 people.

Completing the business triangle is the Shepley Andersen Showroom, which features the full Andersen product line selection. The upper level of the showroom is home to an employee orientation/ training facility.

 Other Shepley facilities include:

– Marvin Windows & Doors by Shepley in Oak Bluffs, Mass., on the island of Martha’s Vineyard, which specializes exclusively in Marvin product sales.

– Shepley in Nantucket, Mass., is a sales office with some showroom samples which takes daily deliveries from the Hyannis facility on the island of Nantucket. No inventory is kept at this location. Instead, Shepley relies on a freight depot that acts as a shipping hub, where large loads shipped to the island are broken down for job site delivery.

– Shepley in Wellfleet, Mass., is the newest yard, which opened in May 2007. It features an AutoStak rack system, allowing for efficient storage on a small site. It is a pick-up and small delivery yard servicing the Lower Cape area. Large loads are dispatched from the main yard.    

-The company operates three boom trucks, two trailer trucks with de-mountable forklifts, and 28 other heavy delivery trucks. Four service vans are often spotted on the road and the company’s service department has been recognized with performance awards. A global positioning satellite (GPS) delivery-tracking program monitors the status of shipments and drivers photograph every delivery, which then becomes part of that shipment file.

VPS-A Company Within the Company

Shepley employs 159 people across all of its locations. There are seven outside sales teams, each led by an outside sales person with inside support staff of up to four people, depending on the sales volume. There are also a number of vertical product specialists (VPS) on hand who concentrate on selling specific product lines, such as Andersen Windows & Doors, Marvin Windows & Doors, architectural finish hardware, engineered wood, structural steel, interior trim, roofing, and siding. The VPSs work hand-in-hand with the regular sales teams, who sell horizontally across all product bands.

“The general sales teams are in charge of customer relationships and overseeing all aspects of sales, whereas the VPSs are in charge of specific product expertise,” explains Shepley. “The idea is not to barrage our customers with a large number of contacts but to be able to create an intimate, small team environment with the resources of a larger company behind the team.”

The establishment of teams of VPSs changed the course of the company, according to Shepley, who had used the concept for years without giving the groups an official moniker. He says that 20 years ago, “We all sold standard offerings for pre-hung doors for mouldings, but then that began to change and people began to customize, so detail got more complicated. All of a sudden, it didn’t seem like the greatest idea to have a general lumber sales staff selling complicated, detailed jobs without doing it every day.”

At that time, millwork was a special focus, so the company started its specialized approach there. Today, Shepley has four different teams in the millwork department, including one outside salesman, backed up with one or two inside sales people. Shepley’s custom millshop is equipped with a six-head Weinig molder and in-house knife grinding, enabling them to match any profile. All together, the company can ensure a comprehensively packaged order from beginning to end. Staff members measure everything and label every rough opening, and when the material is delivered, it will be labeled by the type of opening. “That is great for the carpenter,” notes Shepley. “The waste factor is severely reduced and the time lost in looking for a moulding for an application is virtually eliminated.”

The specialized company-within-a-company approach is paying off big. “The ultimate compliment I get is when someone says to a general contractor or owner, ‘If you’re not using Shepley, we won’t do the job.’

“We have put much effort into finding the most qualified individuals to represent the product lines we sell. It has proven successful to have knowledgeable staff committed to the products they are expert in. It allows us, as a company, to offer quality services that are not typically available with other companies. Our customers rely on us to be more than order-takers—we must be their experts when they need advice.”

Dare to Care

Shepley has always considered his employees his greatest asset. “We have had customers say that a good employee wouldn’t stand out in our company, only a bad one would,” Shepley says. “Customers remark on our can-do attitude. Even in the current down economy, we have not cut resources or staff as many others have,” he says. “We remain committed to service and a down economy is a challenge for us to better ourselves.  We have found that this attitude draws employees who believe in the company philosophy. It’s a positive domino effect that weeds out negative personalities on its own. We ask a lot from our staff, as ‘no’ is not a word we use with our customers. We have always been and will continue to be very service-driven. Innovation is a part of our culture, too. We know that we will never be remembered for simply meeting someone’s expectations, only for failing or for exceeding those expectations. We call our company a group of passionate professionals who dare to care.”

Every employee undergoes a thorough interviewing process before being offered a job. In 29 years, Shepley has never had a layoff. “If someone is working hard for us, we will always work hard for them,” says Shepley.

Shepley looks for employees who are upbeat about their job. “An employee like that makes your experience better. That is what this economy is all about,” says Shepley. “If there is an advantage in this economy, it is that good stands out more clearly when people have time to study it.”

Meeting Challenges Head-On

Of course, that kind of focus on employee attitude is not always easy to carry through. Training, one of Shepley’s biggest challenges, is, in his words, “constant and perpetual.” Shepley employs a manager dedicated to employee training programs. There is a standard orientation process, which includes an employee Boot Camp. New employees meet with each department in the company to get a feel for what everyone does. In-house vendor training and sessions hosted by employees to disseminate information about products and the market fall under the name Shepley University.

Shepley says future challenges include pending building code changes, insurance reforms, and near build-out land conditions that are affecting the affordability of housing in the area. “We are becoming an area of exclusivity—which is an obstacle to many—but an opportunity as well.”

Attract What You Act

Shepley might be the eternal optimist. Just as he saw opportunity in the sleepy resort of Cape Cod nearly 30 years ago, he also sees opportunity in the current economy. “We have been preparing for this shift for many years and feel that the company is positioned in a way to take advantage of market share that is available because of some diminished competition. We have a strong, trained, experienced, enthusiastic staff that is committed to the success of Shepley. We do this as if our life depends on it.

“This type of economy teaches us the importance of calling everyone back and calling everyone before they call us,” Shepley continues. “It teaches us the importance of every detail being critical. It teaches us the importance of not talking ourselves into defeat. You can talk yourself into defeat, you know. We attract what we act. You want to have doom and gloom, start acting doom and gloom. We will not subscribe to the recession. They are inevitable. Times will go up and down, just like the tides. Just make any change work to your advantage.”

Keeping ‘em Guessing

Shepley won’t disclose his future plans for growth, preferring to keep the market and his competitors guessing, but he acknowledges that he plans to continue improving and expanding the company’s services and product selection. “New building code regulations, environmental concerns and safety considerations have forced products to evolve to meet the needs of these new specifications,” he notes. “Product selections are vast and installation and maintenance techniques are much more specialized than in the past. There is a need for education–not only on selecting the appropriate materials for specific applications, but using proper installation methods. We prefer organic growth to growth by acquisition. We also believe that quality trumps quantity so we want to grow sensibly, not recklessly.” 

Cheryl Cullen, of Frankfort, Ill., is a frequent contributor to the magazine, and has covered the LBM industry for more than 10 years. 

Lumber One

By Matt Bolch

Since two of the owners of Lumber One work as outside salesmen, finding time to sit down, review business, and plot future strategy can be difficult. That’s why Big Jake’s Cattle Co., a legendary steakhouse in Van Buren, Ark., serves as the unofficial company boardroom.

Every Tuesday at half past noon, owners Steve Gann, Bill Dodson, and Dennis Joyce meet with Lumber On General Manager Todd Green in one of the restaurant's corner booths to enjoy the casual atmosphere and talk about the company, which recorded its first invoice on May 8, 2002.

“We spend three out of four meetings talking about last week, this week, and inventory levels,” says Gann, who serves as Lumber One president. “We spend the fourth meeting talking about where we are today and what needs to be different six months down the road. The idea for installed sales came out of one of these meetings,” says Gann, who usually orders a grilled chicken with steamed vegetables.

Dodson, the senior statesman of the group at 52, and Joyce are both chicken-fried chicken men, and Green, whose guidance of the day-to-day operation of the lumberyard Gann calls “the glue that makes it work,” is partial to the Cowboy, the restaurant’s 12-ounce ribeye steak.

Opening and operating a successful lumberyard isn’t about a weekly luncheon at a steakhouse, but it is about the relationships the three owners have with one another and with customers after decades in the lumber industry. It’s also about building a dedicated team of employees, choosing them with care, paying them as well as possible, and letting them do the job they were hired to do.

“Service, service, service has been our mantra from Day One,” Gann says. “We work to be competitive price-wise, but we teach our customer base the difference between price and value. If someone is only looking for price, I’m probably not the right choice.”

The three men have long ties to the lumber industry. Gann has been in the industry since 1985, when he started working for a truss manufacturer shortly after graduating from high school. The following year, he joined Payless Cashways as the company opened a store in Fort Smith, Ark., where he started in the lumberyard.

“My father was a builder, and I remember being 10 or 11 with a hammer in my hand, helping him on weekends and walking rafters,” Gann says. “I guess it was the only thing I knew.”

Gann worked his way up during 12 years in the organization, gaining valuable management, sales, and operational experience during stints in Fort Smith, Oklahoma City, Springfield, Mo., and back to Fort Smith. A Van Buren native, Dodson had spent a total of 14 years at Payless and was named store manager shortly after Gann started working there.

Both men had a hand in hiring Joyce to the company. Dodson was store manager, and Gann hired him. “I walked in, and Steve asked whether I could work Saturday,” Joyce remembers. “I said ‘yes,’ and he hired me right on the spot.” The two became friends shortly after becoming co-workers.

“When Payless went out, Dennis and I talked about (starting a business) at that time,” Gann recalls when Payless left the Fort Smith market in 1996. “We didn’t have the business savvy and didn’t know where to look for money.”                

Instead of moving with Payless or opening his own company, Gann convinced Mark Sutherland of Sutherland Lumber Co. to let him open a contractor yard at its Fort Smith store, which recently had moved into an old Kmart location. Joyce worked in outside sales while Gann was commercial sales manager at the chain’s only location with an accounts receivable department.

In 2000, Gann went to National Home Centers as an outside salesman, where he competed with Joyce for business. Although he was making more money on commissions than he was paid as a manager, Gann was becoming bored, so he began crunching numbers on a possible new business, compiling information on known costs, product lines, and margins on an Excel spreadsheet.

Joyce and Gann began meeting weekly to discuss the possibility of opening a new lumberyard, and the pair quickly brought Dodson into the fold. Since leaving Payless, Dodson had worked as a store manager for Dyke Industries’ Fort Smith location and was a rep for Boise Cascade.

“We met at my house and talked about everything: building, utilities, employees,” Dodson says. “Steve was the guy who put it into motion. It was impressive, very impressive.”

What wasn’t impressive was the response Gann received from three local banks, which wanted the partners to put up significant capital themselves, money the trio didn’t have. “I got discouraged and picked up a loan package from the Small Business Administration, but the application was almost beyond our comprehension,” Gann says. “I remember driving down the road talking to my wife, who said, ‘Look, you’ve been talking about this for years. Either find a way to do it or quit talking about it.’ I need to add that she said this in a motivating way,” he says, smiling.

Founding the Business

As often happens in the close-knit lumber industry, Gann soon ran across a friend who introduced him to Fort Smith businessman Charles Palmer, who has financed many start-up companies. Palmer made Lumber One a reality following a meeting that lasted just 40 minutes.

Gann went in looking for a loan, but what he got was a business partner who fronted the company start-up funds and guaranteed a $200,000 line of credit at a local bank in exchange for one-third stake in Lumber One. Palmer even leased them space on an abandoned runway at the old Van Buren airport, where a trucking company had once operated. Thirty days after that fateful meeting, Lumber One was in business.

Lumber One had to be cash-positive from the time it opened it doors, which was a source of much consternation in the early days. Since the company is not in a retail area, nearly 100% of business is derived from the outside sales force, which currently includes Dodson, Joyce, and three other employees. That first month, the company sold $200,000 in materials, and Lumber One was on its way.

In 2004, Lumber One was No. 26 on Entrepreneur magazine’s list of Hot 100 start-up companies. That also was the year Lumber One opened a 31,000-sq.-ft. millwork facility about three blocks from the lumberyard. Finally, in 2004, Gann, Dodson and Joyce bought out Palmer, which was a planned and amicable parting. “He allowed us to buy him out before we got too big and couldn’t afford to,” Gann says. “We paid cash up front and a percentage of future earnings for a couple of years. He was fantastic to work with, and we couldn’t have done this without him.”

In September 2006, Lumber One began offering framing services, but Gann stresses that the company never wants to compete against customers.

Last year proved to be another expansion year as Lumber One diversified into installed services, which are sold as a value-adds to customers. Company employees handle insulation jobs, while the company hires sub-contractors to install windows and doors.

Lumber One recently purchased 22.5 acres about a half-mile from its current location and has begun building material storage sheds to accomodate the business, which will relocate in the next year or so.

The three men also have a partner for a new company called Structural Building Components, which will manufacture roof trusses, floor trusses, and prefab walls. That business opened in September.

Since Lumber One opened, two competitors have left the market and a third is facing challenges after National Home Centers hired away its outside sales staff, leaving just Lumber One and NHC in the market, along with a Home Depot and Lowe’s

The partners are amazed they’ve built a $14 million business from scratch in just five years and remain humbled by the entrepreneurial experience.

Dodson says that owning a business “was always in the back of my mind, but I didn’t think it would ever materialize.”

Quality employees are at the core of the company, and the owners are rewarded by virtually zero turnover.

“We’ve been blessed with good employees and loyal customers,” Gann says. “I was taught in hiring to do two things: Do your due diligence on the front side to hire good people, such as background checks, then pay them every dime you can afford and get out of their way and let them do their job.”

The company offers health insurance, an employer-matched retirement fund, and Christmas bonuses. Early parties were at Dodson’s house, but last year’s party for employees, spouses, and kids attracted 87 people, so it was held in the banquet room at Big Jake’s.

“We make sure everyone leaves with a little money in their pockets and smiles on their faces.

”Working for yourself and being responsible for the livelihoods of nearly three dozen employees “will absolutely change your prayer life,” Gann says.

“It’s hard to see one of my trucks go out or come in and not be moved by how fortunate I am and how blessed we’ve all been in the last five years.”

The Remodeler’s Choice–TRC

Category: Sales of less than $10 million

By Matt Bolch

Dave Klun likes to think big, as big as the voice on his answering machine that invites callers to “make it a day of YOUR … choice!”Dreaming big and having the wherewithal to act on those dreams is how Klun wound up at Fullerton Companies just a month before the Plymouth, Minn.-based lumber company launched The Remodeler’s Choice (TRC) in August 2006.

The division is firmly focused on the professional remodeling trade, serving as both a supply house and a resource center. Klun feels big box DIY retailers and lumberyards generally ignore remodelers, focusing, instead, on new home and commercial construction, which has lower margins but much higher volumes. But in a prime location in the right market, Fullerton’s management believes the concept has great merit and could be replicated in other markets. (The privately held parent company has been operating in the Midwest since 1882 and has 15 facilities in seven states.)

“A new homebuilder likes nothing more than to build four or five models and then repeat them time and time again,” says Jeff Howe, CEO of Fullerton Companies. “A remodeler walks onto the job site not knowing quite what to expect, but with the creativity to figure it out. Often, they don’t know what materials they need before tearing into that wall or floor, and that’s where The Remodeler’s Choice comes in.”

Klun, TRC’s vice president of sales and marketing and head of the TRC division, notes that many remodelers in the trade these days are coming from business backgrounds instead of more traditional construction backgrounds. Professionalism is on the rise, but remodelers created from this new mold need more industry information and guidance. That’s why TRC has positioned itself as a resource for remodelers. Not only is the showroom full of ideas, but the company can make referrals for subcontractors.

“New homes don’t do much for me. Commercial doesn’t do much for me,” says Klun, who helped develop a similar focus on remodeling for a previous lumberyard employer. However, now with TRC, he’s helping guide a lumberyard that focuses completely on remodelers.

Since nearly all remodeling projects have some component of deconstruction, uncertainty surrounds any job. While a tract builder can schedule a set of cabinets six months out, the remodeler might have a general idea of the materials needed, but that list won’t come into focus until after the work begins. Klun says dealing with remodelers—who need fewer supplies than do new homebuilders but who also have a tighter sense of deadlines—requires innovative thinking on the part of the supplier.

“For traditional builders, the driving factor is price,” Howe says. “For the remodeler, it’s service—especially in the inner city” where TRC opened its first location in uptown Minneapolis. The company has a 10-year lease at a facility on the site of a former lumberyard which went out of business, but which had served remodelers since the 1890s.

TRC is set up like a typical lumberyard, with inside and outside sales forces, a free-delivery pledge in most instances, and a variety of delivery vehicles, including a one-ton pickup, one flatbed truck, two cube vans that can accommodate patio doors, and one smaller van. Unlike a typical lumberyard, TRC can turn on a dime to serve customers immediately, and employees are dedicated to the remodeling trade. “When we hire, the first question is,

‘Do you like the remodeling industry?’” Klun says. “It used to be we wanted people who’d been out on job sites, but we are offering sophisticated products, and a successful employee is more like the conductor of an orchestra. In my years of hiring people, I believe that knowledge is power, but with the rise of the Internet, power comes from how resourceful an employee can be.”

In filling job openings, Klun will do the initial screenings and interviews, then turn the names of the top three or four candidates over to the appropriate department for final selection. “It’s not just Dave Klun doing the hiring,” he says. “When the sales team ultimately hires the people they’ll be working with, that’s ownership. We’re looking for the right chemistry to fit in with what we’re doing and the people who are here.”

During its first full calendar year of operation, TRC has grown to 23 employees and revenues of slightly more than $5 million. The employee count encompasses nine workers in operations, two office workers, four outside salespeople, six inside salespeople, and two employees in a specialty area who can replicate and rehabilitate existing pieces to preserve the character of a home.

Although the company still is approaching profitability, Fullerton stands firmly behind the concept. “How many lumber companies achieve profitability in their first year amid the worst housing market in 25 years?” asks Klun. “We’re building a new business from the ground up, telling our story time and time again, focusing on our eight guiding principles (see sidebar below) and aligning our operations to those principles.”

Passing out pizza and cold bottled water in TRC-branded packaging to remodelers on job sites and during open houses never hurts, either. While working out the details of the TRC resource center with an outside brand marketing firm, the group had been ordering pizzas to refuel while continuing to work. In one of those “aha!” moments that occur all too infrequently, the group hit upon the idea of using those same food items to feed remodelers and reinforce the company’s image. That program is known as TRC Special Delivery and features one pizza slice in a themed package that focuses on one of TRC’s guiding principles. Just as most round pizzas are divided into eight slices, when put together, TRC’s principles also form a complete circle.

“Taking the time to hand-deliver food and refreshments and getting to know clients helps to reinforce TRC’s reason for being and demonstrates to its clients why we are The Remodeler’s Choice,” Klun says.

Through an aggressive marketing and remodeler education program, there’s no doubt the remodeling trade in the greater Minneapolis area has heard of TRC, and Klun hopes that those who try the company will be sufficiently impressed to count on TRC as a trusted partner. “We truly want to build belief in the business one customer at a time,” Klun says. “When we get the relationship going, price still will be important, but service will be No. 1, and remodelers will pay more for that.”

Since the company deals with much smaller volumes than a lumberyard, selling at higher margins is imperative, so the perceived value of TRC must be higher in order to earn repeat business. Salespeople have some leeway on margins, but overall margins must be maintained to bring TRC to profitability.

The Remodeler’s Choice remains a small part of Fullerton Companies, but the effects of its marketing efforts are being felt throughout the organization. The lumberyard division, which generates two-thirds of the company’s revenue volume and is associated with the Do it Best co-op, recently has been rebranded as The Builder’s Choice.

The logo for Fullerton Building Systems, which accounts for the remainder of sales volume, also has been reworked. FBS was founded in 1964 as a custom fabricator of light commercial buildings. In seven to eight working days, a crew can take a building from its foundation to a finished exterior, including brick, stone, stucco and other finishes. Clients include large restaurant chains such as McDonald’s and Church’s Chicken. Howe says FBS recently built a McDonald’s in Atlantic City in the shape of a French fry container.

Fullerton’s CEO also says the idea for The Remodeler’s Choice occurred at the confluence of several events in 2005, which included Howe’s hiring to the top spot and the value of the remodeling industry surpassing that of new home construction for the first time in history. “Fullerton always is looking to serve specialty markets, and remodelers are the most underserved customers out there,” Howe says.

“After we opened in August 2006, we spent six to nine months putting together a marketing campaign, which we continually refine with feedback from customers,” Howe says. “Our customers get (the concept) 100%, and our competitors don’t get it at all, which is fine with us.”

The branding process encompassed all three divisions, with a focus on how to serve each segment better. “The mental attitude of a remodeler is, ‘Don’t treat me like a builder,’” Howe says. “They are much more creative and have a unique set of needs that aren’t being met by most suppliers.”

The key element is selling that relationship, which Fullerton Companies also does at its yards and in its construction division. Fullerton’s lumberyards are located in secondary communities, with many small and medium builders who aren’t as concerned about price.

“We have long-term relationships with those builders and those communities,” Howe says.

TRC opened its doors as the new housing market was starting to implode, but Howe is pleased with the company’s first year.

“The market is not where we want it to be, but the growth is what we expected, but from a lower starting point,” says Howe.

(And Howe has quite a bit of experience in planning for company growth. He is co-author of the popular Planning Guide for Small and Medium Size Wood Products Companies, and an expert on creating learning organizations and on implementing organizational change.)

Howe and Klun believe The Remodeler’s Choice concept is repeatable in other markets, “but the demographics must be right,” Klun says. “In the next five years, I see at least one or two additional locations in the Midwest, not in the biggest areas, but in niche areas where we fit in well.”

Howe compares the surging interest in the remodeling trade to the similar focus that’s arising in green building, which he is involved with as chairman of Dovetail Partners Inc., a Minneapolis nonprofit that fosters sustainability and responsible behaviors. “I’ve been doing green building for 25 years, and you don’t do commodity green,” Howe says. “The focus is on the end use of the project. Remodeling is the same way because there is no one-size-fits-all approach. "The American mental model is 80% to 90% about commodititzation, which is great for us because everyone else is focused on the bottom-line price," Howe says, "We'll take all of the remodeling business, thank you very much. There are significant growth opportunities to be involved in the creative, design-driven projects that remodelers do." 

Sidebar:

The Remodeler’s Choice focuses squarely on the professional remodeling trade, which accounts for 85% of TRC’s business. “Plumbers have wholesalers they go to; electricians have the same thing and so should remodelers,” says Dave Klun, vice president of sales and marketing. “We approach this business with the same kind of focus, using the direct, focused rifle approach instead of the all-things-to-all-people shotgun approach. With a rifle, you only get one shot.” The guiding principles TRC espouses to its remodeler clientele include:

– Save Your Energy –  Maximize Your Time –  Increase Your Efficiency– Improve Your Bottom Line –  Expand Your Knowledge –  Maintain Your Schedule –  Satisfy Your Clients –  Build Your Business 

Matt Bolch is a veteran business reporter based in Atlanta who specializes in business-to-business trade publications in a variety of industries, including manufacturing, healthcare, technology, education and specialty retailing. He can be reached at mbolch@mindspring.com. 

CV Image A: Tony Shepley, originally a bass player in a rock band, started Shepley Wood Products nearly 30 years ago by selling lumber off the back of a flatbed truck. CV Image B: Lumber One President Steve Gann and his partners devote numerous hours to discussing past and present performance, and planning future goals for the business. CV Image C: Dave Klun serves as vice president of sales and marketing for TRC.