How do you spell success? D.I.V.E.R.S.I-F.Y

By Carla Waldemar

r|-tHIS isn't your father's business. And it isn't Ken I Morrison's father's business either. Not anymore. Sensing that times were changing and the six-day week of retail were becoming too demanding, nine years ago the senior gentleman sold the business he'd launched in 1972 in the small Georgia town of Nashville to his son.

Ken, flashing a degree from the University of Georgia, had taken up the banking trade in nearby Columbus. Butwell, who wants to count money when you could be counting 2x4s? "The family business had been in the back of my mind while I was growing up," he confesses. Seems like that's all it takes to succumb to the dual pull of nature and nurture that spurs a guy to grab the reins.

But it turned out that what he now owned looked a bit like a showroom as seen through a fun house mirror, a shambles of dead inventory and brain-dead employees. Ken's first task was to clean house. "We had to get 25 years of accumulation out of here," he says. "l'm a firm believer that junk breeds more junk. If you have disarray and disorder out there on the floor, the employees and customers get to the point where they don't care anymore' because nothing is organized and nobody knows where to find anything.

"ln l99l we didn't know what we had on hand, so first we had to get to that functioning level. I stepped back and looked at the operation-made a list of what's right (we had a good Activant computer system, for one thing) and what needed improvement.

"I had to replace all the equipment, too-trucks and loaders (we also handle sand and gravel)-a huge capital investment right off the bat, but it had to be done. We had five delivery trucks, but on any given morning, you had to work on four of them before you could get started. That was no way to compete with the boxes all around us' You've got to differentiate yourself by customer service, and we couldn't service customers like I wanted, show them what we can do for them. If a builder needs two boards, we get it to him."

That called for a major attitude shift among employees. For years those mice had been at play, but now a cat called Ken was on the prowl. "In the last years, Dad hadn't paid that much attention to the business, so it was run the way the employees wanted things-not," he stresses, "like it was supposed to. Employees weren't being supervised like they needed to be," so a shake-up came about-or, as Ken puts it, "a fruit basket upset" in which several valued 30year veterans stayed the course while others were replaced by fresh, new blood.

Ken set new performance standards "by basically rolling up my sleeves, going to work right with them, hands-on, not just assigning things. For instance, I'd tell a new hire, 'Look, I know it's not your job, but the bathroom is dirty. I'm not picking on you, but I clean it every week myself, so I'm not asking you to do something I wouldn't do....'I want to set a standard," he explains.

Diversification or Bust

Riding the roller coaster the nation's economy has hosted lately, Ken decided that the key to a more stable future lay in diversification. "There are too many downturns in the economy to be just a building material store. With diversity, I feel we're more recession-proof than most businesses. It makes me rest easier at night," he documents.

First off, he added floor coverings to his offerings-two carpet lines, two lines of ceramic tile and two of wood flooring, "and they're proved very successful," he says.

But success breeds its own set of challenges, leading off with the cramped conditions he thought he'd just solved. "Floor coverings require a lot of floor space to display, so in 2000 we expanded from 7,500 sq. ft. to 28,000 sq. ft. and doubled our warehouse capacity to 100,000 sq. ft. Now," he says, "floor coverings are our fastest-growing segment. and the margins are much better than in commodities."

Ken's foresight to diversify already has paid off. During September's devastating hurricanes, when roads became rivers, building came to a quick halt. "Nobody was buying building materials, but we had good days in floor coverings, a profitable new arena."

That's after he mastered a learning curve that smacked him in the kisser. Nobody-but nobody-was loading the stuff into a pickup. If he couldn't sell it installed, no dice. So Ken has contracted with a crew of subs, whom he pays by the square foot to install, and thus can offer his customersboth pro and d-i-y-the benefit of one-stop shopping with an outfit they can trust. "People know we'll be here, bricks and wood. not a guy in a van with a telephone," he relates.

Carrying diversification a few steps farther, Ken also rents 100 mini-storage units. And six months ago, he opted to become an Ace Rental Center. (ln 2004 he was honored as a Young Retailer of the Year by the corporation.) "I bought $250,000 worth of equipment. and business is growing every day. The closest competitor is a 30-minute drive for what might be a lO-minute job. That kills half a day. This helps ensure that we're a destination people come to. When they find a clean, well-lit, well-displayed store with good staff, it's a big way for your building material sales also to grow and get better," he's pleased to report.

Morrison's firearms department represents another niche you're not likely to find at the Depot nor the independent down the road. Big deal? It is for the loyalty program he offers his pros. Oh, he's tried the usual TV, golf and vacation prizes, but Ken has found that his builders are dedicated hunters. Here they can earn, or purchase, guns, rifles, deer stands, licenses, you name it. Today Morrison's boasts 19,000 accounts. The monthly customer count tops 9,000 in a town of only 5,000 people.

Another factor in driving those numbers. he says. is "bringing in new energy." That would be the boss himself with the fire in his belly. "I jusr took on an outside sales person, but until now, I was it. People love to talk to the owner, get a snap decision. But we don't sell on price. We're here to make money, meet payroll. Two years ago, 84 Lumber came to town and lowballed us, and already they're gone. It all boils down to personal relationships; they come to you and trust you. You find ways to make customers happy, make 'em want to come back.

"Yet we've got to remain competi- tive in price," he knows. "Customers have cars and telephones. In fact, I'm glad if they call Lowe's and Home Depot for quotes first. Then they talk to us, find out we offer free delivery and an experienced staff to give advice, and yet we cost no more."

September was one of those months straight out of Biblical trials, leading off with a hurricane taking out roads and power. Ken's wife was in the hospital, leaving him in charge of their two young boys; his dad was hospitalized, too, and a sister-in-law was killed in Texas. Yet by October all that became ancient history as the family healed and the aftermath of the nasty weather led to a boom in both new construction and repair. Ask Ken how life is treating him these days and he rebounds, "I couldn't imagine doing anything else!"

- A former award-winning LBM trade magaTine editor, Carla Waldemar writes Jrequently on the building material indusna. Contact her at cwaldemar@ mn.rr.com.