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Backtrack to October of 2008: We are currently deep in the recession, and businesses around us are shutting down that have been around for years, leaving us in complete shock. Our main goal as a company is to keep our heads above water and keep us floating as best we can. Mentally, this was hard to do while everyone around us was sinking.
Our biggest headaches during the years 2008 and 2009 were increasing cash flow and how to reduce monthly expenses. Fortunately for us, this was the time when Craigslist became quite popular for selling things online. My dad and I took a walk through both of our location’s boneyards and we realized the number of leftover materials and overstock that we had acquired over the years was significant.
So, we decided to give posting and selling on Craigslist ago. I started taking on the task part-time while staying after hours to post the boneyard items on Craigslist. Over the next few months, we started noticing a drastic increase of $35,000 plus dollars just from these minuscule items. Thankfully, we were operating during an era where bargain hunting was often simplified, and many were taking on the task of finding the best bargain.
Once we discovered this innovation of being able to increase cash flow, we still had the task of figuring out how we could reduce expenses. At the time, we had our two Denver-based locations- 44th and Tabor Street. Our company was born out of our 44th location, so we knew we wanted to continue to have that be our primary location. However, our Tabor location was only a few years old and was solely purchased to support our Design/Build portion of the business, which at this point had dropped from 44% to 37%. Like I have mentioned previously, our total revenue was down 14%, with 83% of it being directly from our Design/Build division.
During the heightened time of our Design/Build division, we had multiple truck orders being delivered to our yards. We also had several delivery trucks on our roster due to the simple fact that we had deliveries that were at times 4-hour trips one way. We needed a location that was strictly for this division.
As we sat back and looked at the overall condition of our Tabor location, we saw eight trucks full of stock products and all of these delivery trucks for a division that was utterly crashing. So, our initial thought was that we could probably get rid of this location and cut costs drastically.
However, we bought the location at the height of the economy back in 2003- 2004, which in turn would have us walking away from upside down on the property. At the time, we didn’t have the cash flow to absorb it. I distinctly remember my dad sitting down, crunching numbers trying to figure out how much was needed to cover the rent payment, utilities, and at least one-yard guy. We needed to make about $10,000-$15,000 a month to keep it up and running. Real estate is always a good investment and we knew it was good to have in the long run. As of result of our decision to keep the Tabor location, we had one mission. How can we continue to get rid of dead inventory through Craigslist and increase the cash flow?
We started looking specifically for products that we could purchase and sell back to our clientele through services such as Craigslist, as well as continued to sell the overstock items we had in our boneyard. These products were increasing our cash flow to keep us going and give us that extra push.
This marks the start of our journey through the recession and pushing through. Stay tuned to read the following parts of this story where we added our current CCO Darren West to the team, the official kick-off to Craigslist and the dreams that I had for the company and its future. This is ‘The Truth Became Our Journey Part 3’ – check back for Part 4 coming soon!
– Shane Hoefer, CEO
Rocky Mountain Forest Products