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Tough Call: RunDown and facing competition

Your lumberyard is in need of repairs before a big chain moves in down the street. But ownership doesn’t see it that way. What would you do?

June 2022 marks your 20th anniversary with RunDown Lumber, and what an adventure it has been! When you joined in 2002, business was okay, but it quickly ramped up over the next few years until the boom in 2007, the bust in 2008, and the long, slow post-Great Recession journey. Like most other dealers in 2022, your business is stronger than ever, and it’s not uncommon to approach or set all-time revenue records.

Many things have changed from the boom in 2007 to today. From your perspective, the biggest change has been your advancement from inside to outside sales, then sales manager, to your role today as general manager. The products you sell have evolved somewhat—your company prides itself on carrying products that deliver high quality and strong value. You’re not the cheapest, and that’s okay. Your customers understand that spending a little more with you can save them time and money in the long run.

One thing that hasn’t changed, unfortunately, is your company’s physical infrastructure. The sliding door that didn’t work quite right when you started in 2002 continues to frequently fall off its track. The parking lot, which was new in 2002, hasn’t been maintained at all—and it shows. The trucks and forklifts are old and getting tougher (and more expensive) to repair. And your team is still getting by on an antiquated, green screen computer platform.

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As the GM, you’re proud of your team, and the fact that they continue to perform, and to make the best of increasingly outdated tools. Since you track the sales, expenses, and profits closely, you know that the company is very profitable. And you want the company to stay that way long-term, but you’re concerned that the lack of reinvestment into the business is going to start costing you customers.

It’s already costing you potential employees. Despite offering competitive wages and benefits, once young people navigate your bumpy parking lot and make it inside the showroom (which hasn’t been updated for two decades), you can see in their faces that they do not see a bright future within your dingy walls.

When you’ve approached the owners with a list of items needing the most urgent attention, along with proposals and bids on making needed improvements, there’s always a reason not to spend the money. “The parking lot is fine,” they say, “a few potholes aren’t going to kill anyone.” “That computer system was a big investment, and if it ain’t broke, why would we invest that much in a new system?” “If the sliding door opens and closes, then that means it works. Once it can no longer be fixed, then we’ll replace it.”

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You just learned that a large regional pro dealer bought up some land just down the road from you, and plans to break ground on a new lumberyard. Like you, they carry high-quality products and are known for their on-time, in-full deliveries. Unlike you, their state-of-the-art facility will have a freshly paved parking lot, shiny new trucks and lifts, and an up-to-date software platform.

When you brought this to the owners’ attention, they said, “sounds like when Home Depot came to town. Our world didn’t end then, and it’s not going to end now.” You disagree, and are concerned about your team, your company, and your future. What would you do?

– STAY THE COURSE. Trust that the owners of your company know what they’re doing. Do what you can with the resources you have and prepare your team for battle.

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– SHOW AND SELL. Move forward with some small investment/ high return changes, then show the owners the impact of the investment. Win them over with results.

– UPDATE RÉSUMÉ. You’ve had a great run at RunDown, but you can’t justify staying with a company that’s not going to reinvest in its future. Time to start looking.

– JUST DO IT. As the GM, you’re responsible for the livelihoods of a lot of people. Asking permission isn’t working. So do what needs to be done, then ask forgiveness.

What would you do?

SOMETHING ELSE?

If you’d take a different plan of attack, email your suggested solution to James@LBMJournal.com. If we publish your reply, we’ll send you an LBM Journal mug.

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