June, 2009

No Time To Lose

A to-do list to prepare for the economic recovery.

By Rick Schumacher

By this point of the downturn, there let’s assume that you’re running your business as lean as possible. That you’ve eliminated all expendable expenses and that you’re prepared for a long, dry spell. That’s a good and critical step. The fact is, no one knows when the homebuilding industry will recover. We do know, however, that the economy will recover eventually. My question to you is this: will you be ready?

Remember the good old days (circa 2006) when you were too busy to take a look at new product lines, or to talk to new vendors? Remember reading a column in this magazine by Bill Lee or Tom Fife suggesting improvements to your operations or management systems, and thinking how much sense that would make—if only you had the time? Remember learning about intriguing training opportunities for your salespeople, only to realize that time spent training would be time away from selling?

For the vast majority of lumber/building material dealers, 2009 looks very different from 2006, and time is the one thing you have to spare. If you’re spending your time wringing your hands in worry, and filling your head with the latest ugly economic figures, you’re missing a golden opportunity. Suggestion: the next time you’re tempted to pick up the local paper or read news stories online, take that time to examine your business, your operations, and your product lines. If business were to rebound tomorrow, would you be positioned to take advantage of it? Here’s a four-item to-do list. I’m sure you can come up with more.

1. Products. Are you carrying the ideal mix of products (brands, quality, price point) for your market? If you’re not sure, now’s the time to talk with old and new vendors, and decide what should stay, what should go, and
what new lines will help move you forward.

2. Services. Make it a point to talk with as many of your customers as possible. Emphasize that it’s not a sales call; instead, your goal is to learn what services you can offer to help make them more profitable. After all, you’ll succeed only to the extent that they’ll succeed.

3. Training. Use this downtime to hone your salespeople’s skills. Training needn’t be expensive. Ask your vendors about training on their products that you carry. Talk to your state or regional lumber association about training opportunities. When the market returns, the company with the best trained salespeople will win.

4. The competition. It’s never healthy to obsess over the competition, but it is critical to know their strengths and weaknesses, and to understand how you’re positioned against them. Now is the time to make or at least plan any necessary adjustments.

I’m especially pleased to have Bill Lee on the cover of this issue. In my experience, no one understands the LBM business like Bill. He has devoted his career to the art and the science of running a building supply business, and has earned a reputation in our industry for his expertise and ability to help dealers fine-tune their operations. He has written a monthly column for LBM Journal since we launched in 2003, and his contributions have helped LBM Journal grow and gain market share, year after year. Last, but not least, Bill is a nice guy and good human being. I’m proud of my association with him. For more thoughts on getting through this tough economy, I urge you to read this month’s cover story, which is based on research Bill conducted this spring.