Challenges and Opportunities For LBM Dealers

By / 4 months ago

Challenges & Opportunities

Here’s what you, as an individual LBM dealer, can do to make a difference for your business and our industry.

When I think about the state of our industry, I see several major challenges as well as clear opportunities for us to make meaningful progress on the issues that are most important to our members.

First, the current structure of the healthcare system in general, and the Affordable Care Act in particular, currently impose an incredibly difficult and costly burden on small businesses and small business owners. The taxes and penalties associated with the ACA have been hammering the most vulnerable companies in our industry for years and we need a major change in policy. There is good reason to be optimistic on this issue though; both President Trump and congressional leaders appear to be on the same page in terms of the need to fix or remove the ACA. So while healthcare is still a major challenge, we now have a great opportunity to begin repairing the system and easing the financial burden on small businesses.

Second, the regulatory regime as it existed under President Obama was beyond onerous and made normal business operations the subject of overzealous regulation from Washington. Obama-era regulations have needlessly constrained our industry, so I view President’s Trump actions regarding regulations thus far to be very promising. President Trump strongly emphasized his opposition to burdensome regulation during his campaign and has already taken several steps that show me that he is serious about restraining the regulatory regime that President Obama helped build.

Third, we are now presented with the best opportunity for comprehensive tax reform that has come along in years. President Trump and Congress are in broad agreement regarding the necessity for reforming the tax code. Some of the specific policy proposals from the White House and Congress differ slightly in terms of rate reductions, retention of deductions, and elimination of brackets. However, they agree in broad strokes that corporate tax rates must go down, the estate tax must be eliminated, and the number of brackets must be reduced. I applaud those efforts and view these proposals as a great way to increase the growth of small businesses. Our tax code is too complex, burdensome, and unworkable; we need to take the brakes off of our business community and unleash its full potential. I do, however, view discussions regarding reducing or eliminating the mortgage interest deduction as part of a tax reform package with alarm. This deduction is vital for homeowners, the maintenance of home prices, and continued business for our members. Repeal of the deduction is misguided and NLBMDA must make our opposition to that specific provision clear.

Fourth, our industry is struggling with an ongoing labor shortage. The industry has shed a large amount of jobs over the last decade as a result of the downturn and we are still dealing with the aftermath. We are relieved that President Obama’s New Overtime Rule was blocked by a federal court and now appears unlikely to become law; the stipulations of the Rule would have exacerbated the labor situation even further. Looking ahead, the labor market will continue to be a problem for the foreseeable future.

Goals as NLBMDA Chair

Above all else, my goal as NLBMDA Chair is to grow the membership of our association. It is without a doubt my number one priority. In my view, the strength of our association is directly linked to making sure our membership grows at a vibrant pace. When we have a larger membership base, we are better able to aggressively advocate for our positions and much more likely to sway Washington figures to our point of view. Simply put, the more companies that we have speaking in one, unified voice, the more likely it is that our politicians actually listen to us. Besides amplifying our voice in Washington, increased membership increases our pool of resources that is available for advocacy, our annual meetings, and other member benefits.

I also want to increase our membership’s engagement; I don’t think we’ve always properly emphasized how vital it is for every member company to be engaged and feel as though they are getting clear value out of the association. I want to make sure that even our smallest members realize that consistent and informed engagement can result in enormous benefit. I feel especially strongly about this now, given the current political situation and President Trump’s pro-business agenda. This is a wonderful window of opportunity for previously-unengaged members to become involved in setting the terms of a new era in Washington.

Finally, I want to strengthen our intra-industry relationships with our partners at the National Association of Home Builders (NAHB) and Window and Door Manufacturers Association (WDMA). There is opportunity for increased partnership and collaboration and I hope to play an integral role in seizing those opportunities.

You Can Make an Impact

I can say without any equivocation that individual LBM dealers can and often do have an impact on legislation and regulation at the national level. Throughout my career, I have seen firsthand the impact that individual dealers can have on relevant legislation and regulation, if the dealers are motivated, aggressive, and consistently engaged. When a lawmaker is familiar with an individual dealer and has been educated on specifically how a given law or regulation will hurt or help a business owner, they are far more likely to vote our way. Something as simple as a phone call or a letter can help shape a lawmaker’s attitude and build a narrative that is favorable to us.

The reality is that often when lawmakers make decisions that we vehemently disagree with, it is simply because we did not do a good enough job of educating them on our industry and how specific rules can be harmful. As Chair, I always try to emphasize that if you are a dealer or business owner interacting with lawmakers, you must keep in mind that you are the expert in that conversation. We cannot assume that our politicians understand our industry and the challenges we face the way that we do. In fact, politicians are often almost wholly reliant on industry experts providing the information they need to make the correct decision on a vote or a regulation. This is where individual dealers can have their greatest impact; providing expertise to politicians and personalizing the issue at hand.

NLBMDA’s Annual Spring Meeting and Legislative Conference in Washington D.C., that we hold in conjunction with our partners at WDMA, is a key way for dealer members to make an impact on a national level. This conference provides our membership with numerous opportunities to get updated on the state of politics in Washington, to meet and influence lawmakers, and to learn how to continue engagement with politicians after the conference is over. I believe firmly that it is the responsibility of all NLBMDA members to attend this conference.

To quote an old phrase, “There is power in numbers.” When we speak in a collective, sustained voice, our leaders in Washington will take notice. One engaged member can help alter a lawmaker’s idea on an issue. Hundreds of engaged members can build pressure that is overwhelming. If NLBMDA is consistently and aggressively engaged, our politicians will be forced to take our concerns and comments into account. Our membership has the power to influence legislation and re-make the regulatory climate into a form that is more to our liking. Combined with the pro-business attitudes of congressional leadership and the Trump Administration, NLBMDA has an opportunity to become an even greater force in Washington. I believe that this is an eminently achievable goal and I will continue to urge all members to become more engaged.

George Lester

In addition to serving as 2016-2017 Chair of NLBMDA, George Lester is Chair and CEO at The Lester Group in Martinsville, Va. Established in 1896, The Lester Group’s LBM division operates four diverse building supply dealers as well as a door plant in Fredericksburg, Md. Learn more about NLBMDA at www.dealer.org, and more about The Lester Group at www.lestergroup.com.