LBM Expo - by LBM Expo

How Important Is a Lumberyard to a Builder?

By Walter Tomala, President, TNT General Contracting

This contractor believes that his lumberyard is an extension of his workforce and is vital to his business’ success. How did this relationship become so important?

BUILDING KNOWLEDGE

When I first came into this industry 25 years ago, I was a young kid right out of high school with visions of being the next big thing in my area, the next go-to name in the construction industry. I knew I could do it better than those guys out there. How hard could that be? I knew how to return phone calls and finish what I started.

In those early days I thought I knew more than I did, but I also recognized that I didn’t know nearly enough. Luckily, I teamed up with a lumberyard that was close to home and that a couple of other guys I knew were using. I quickly got to know all the folks who worked there and would spend countless hours picking everyone’s brain to learn how things worked. That was my go-to place for education on products and costs. Every time I needed something, their pricing was spot on and so was their service. My sales rep was on top of things as far as my projects were concerned, and all the employees knew me by name. I felt like I found a good community within this so-called “cut-throat” industry.

When I started out, I wasn’t very good at job costing projects or thinking about how long they took, so profits were all over the map. My goal was just to land work and have a team that could get me what I needed as soon as possible. This model worked for me for the first year or two while I was establishing a name for myself and my company.

By year five, I had gone through some good growing pains. The trials and tribulations that came with not only being a first-generation builder, but also a kid with no business background, were intense. The only thing I had was grit, determination, and the strong work ethic my parents had instilled in me. I went from having no employees to having 15, and that lumberyard always had my back. I’m not going to say it was without flaws, as many times I wanted or needed product right away and it wasn’t available for weeks to come, but the gem was they took the time to educate me on what they stocked, could turn around in a day or two depending on when their distributors delivered to them, and what would take a week, two weeks, or longer so I could better plan and set reasonable expectations for my customers. I mean that’s all we could ask for, reasonable expectations so we could deliver on the promises and commitments we were making.

BUILDING SYSTEMS

The next five years really changed how I looked at the business as I made it through the honeymoon period and lived to talk about it. During year six I started thinking about ways to do things more efficiently and effectively. We had a good name and reputation under our belt, but I rarely had time with all the calls, to work on the business instead of just in it. Let’s face it; Swinging a hammer was way more satisfying at the end of a day then reading another spreadsheet. Money in and money out, everyone got paid and life seemed good. My lumber rep and I would still get together for end-of-day drinks once a week just to catch up on what went well, what did not, and what we could do in the future to make everything smoother. We both used this time to touch on new products, more effective ways of doing things out in the field, and lastly discuss how everything impacted the bottom line. He was willing to put the time in to make sure I was getting everything I needed and so he better understood how he could best service my account. He was more than a ticket taker, he was a part of my team, my growth, and my success, which was also a part of his growth and success.

Unfortunately, during this time, my company started becoming much like other ones in the area, with missed calls and deadlines getting stretched. Which in turn meant me putting in long hours and wearing too many hats. This often prevented me from having time to dedicate to my customers. Nothing stressed me more than that. I never wanted to become one of those builders who didn’t return calls. I took a hard look at all numbers, and just because we had growth in total gross revenue every year it didn’t mean there was anything more in the coffers at the end of the year.

I knew my business model had to change for my original vision and definition of success to stay relevant. So, I stopped adult babysitting and downsized to six employees. I sat down with my lumberyard manager and rep and started to seriously crunch numbers as to how I could get better buying options, not just service and timely deliveries. I also found out there was this cool thing called 2 net 10. What?! I could save 2% by paying my bill in full within 10 days of my statement every month! Why did it take me so long to discover this? When I asked my rep that exact question he said, “You never asked!”

We got past that, and I chalked it up to a lesson learned on the road of hard knocks. I still felt that my lumberyard had my back as my rep hired me to build an addition on his home for him and his family, the store manager hired us for some of their building repairs, and delivery guys would go out of their way to be in early or stay late if we needed something. I know they saw me and my company’s commitment to doing things right and wanted to support me. I felt a true sense of trust and respect that grew between our companies during this time and their commitment to supporting me above and beyond just sending me materials and taking orders.

BUILDING IN THE BAD TIMES

The next five years was an eye-opening experience for me as we hit some difficult times in the building industry; years that saw many companies close their doors because they couldn’t handle the downturn. During this time, I continued with my vision for the company and my personal growth, which saw me rise to not only become president of my local home builders association but also the youngest state president in Massachusetts. It came at an expense to the business, but one that also helped elevate it.

It took a lot of time and energy to learn my new roles and how to not just be a president but how to be present in a completely voluntary leadership role. I have always given 120% to whatever I’m doing, so these ventures came with a lot of support not only from my internal team but from my lumberyard as well. We had to continue to deliver on the company’s promises and expectations with or without me. During this time, I got to see how other companies and their lack of planning could catastrophically impact my business. How big companies and small companies alike reacted to the downturn. My good friend and longtime outside sales rep left his company as they cut back, and cut back hard, in order to keep the doors open. Many lumberyard employees were let go and the few remaining were asked to do the impossible with little-to-no resources. I had a big decision to make and one that would challenge my loyalty and, more so, my systems that were already in place. Could another lumberyard help me keep my business going and make me more profitable? The question remained, do I just leave and go to another yard?

I chose to support both; I followed my rep to the new lumberyard for the day-to-day operations and items we always needed, but also sent business to my old faithful lumberyard. Not all yards are equal as I found out and we saw a huge change in services and pricing. The new yard didn’t know me or care as much about my delivery schedule needs or what I was paying as they had their own business model that worked for them. I was a little fish in a big pond, or at least in a new pond and my rep didn’t have seniority or a yard guy or driver that was willing to go above and beyond. The “dating” process had to start all over, and some personnel there didn’t care if I got to know them or they got to know me; they just wanted to do their job as they were happy to have one. Working with the new yard while maintaining connection to my old one seemed logical at first, but when new faces kept coming and going at each, I found it to very difficult and more frustrating than it was worth. Once the manager of my old yard moved on, so did I. I couldn’t change that piece as it was out of my control; it was hard enough to keep the doors open, never mind find time to nurture new friendships that might be gone next year. I learned my loyalty to my sales rep had come at a cost, but one that I felt was worth it as I still had him in my corner. Let’s face it, exclusive loyalty in the other direction probably wouldn’t have changed the outcome that was to be. Now I was left questioning how do I make sure this doesn’t happen again or, more importantly, if and when it does how do I protect myself and my company.

BUILDING FOR THE FUTURE

Those of us who survived the crash of ’08, and the tumultuous years that followed, had a new or different outlook on life. How do we make ourselves better?

I spent almost every night after my 8-to 10-hour day in the field trying to work on systems to protect my clients, my employees, my company, and most importantly myself. I was spending so much time on my business that I had to deal with and accept a failed marriage. Juggling part-time parenting three to four days a week became a priority, and wearing more hats than physically possible in one day at work to still be productive and efficient was exhausting.

My rep was less than pleased at his new place of employment, and both of us were distracted from the well-oiled machine that we once were a part of. I gave him about a year at the new place before I let him know that I saw the writing on the wall and this wasn’t the right fit for us anymore. I then spent many hours and days meeting with different lumberyards in my area, trying to find the one that was going to be the right fit for my company. Our needs had changed and so had our expectations. If we were still standing when others had fallen, we weren’t going to accept less than what we delivered to our clients. We had to find a yard that understood us and believed in our vision. They might not have as many employees as they used to but there were a whole lot fewer builders to service as well.

I made it a point to not only meet with a potential rep with a set of plans but to ask to meet the manager and, better yet, the owner. I wanted to know their vision for their company and what was important to them. I wanted a tour of their yards inside and out so I could see how their employees interacted with each other. I needed to know moving forward that not only was the lumberyard capable of servicing our needs, but that they were also aligned with our vision and mission.

My long-time sales rep and friend moved on to another yard after his frustrations got the best of him. This is a yard that we felt fit us well and is still one we deal with quite often today.
I believe being family-owned and -operated fits us best as they feel what we feel every day. He did well there for a while but unfortunately moved on one more time and is back to his original company, a company that was much bigger and had the purse strings a guy with kids in college needs. Unfortunately, it was also a yard that could no longer provide the type of service that my company needed. He had become an order taker and really hadn’t progressed or evolved. Our friendship never wavered, and we have always stayed in touch as a friendship is worth way more than any unit of lumber.

My outlook on this article is the same as the remaining five years that would bring this timeline current. As we grow, whether personally or professionally, we must be focused on what is important to our overall well-being. To me, this means making sure my clients, employees, subs, and suppliers understand what we are about and what makes us tick. At my company, we value learning and education, and I want to surround myself with other businesses that share those values.

Every day we have an opportunity, every code change presents a hurdle and an opportunity, our ever-evolving technology tree gives us opportunities (frustrating ones to a guy my age).

I now use two to three lumberyards, depending on the physical location of where I’m building in New England, and they are all aware of each other because what works best for us is a team, one that understands we must be on the cutting edge and well-educated as it’s our job to educate others along the way. Our belief is the best house you can possibly build someone is one they understand and are connected to prior to you handing them the keys. Our team, our lumberyards, and our mission are to build, design, and educate. Together we don’t just build houses; we build homes that will last for generations.

About the Author:

Walter Tomala Jr. is an industry-recognized expert in professional home building, remodeling, roofing, and education. He is president of TNT General Contracting, Past President of both the Home Builders & Remodelers Association of Western Massachusetts and the Massachusetts association, and he was a director for the National Association of Homebuilders. Tomala served as advisor on two Extreme Makeover: Home Edition projects. He will be a featured presenter in the LBM Expo Demo Zones Feb. 6 and 7. Learn more at www.LBMExpo.com.