OPERANNG OPPORTUNITIES

WALLY LYNCH Paid Associates PO. Box 741623 Dallas. Tx.75243

I n vOU think your 1987 was trau- I matic. trv this one.

A banking executive and a storage and transfer operator teamed up in early 1986 to purchase and run a lumber yardhardware store. Their takeover was completed in August of 1986. The volume at that time was nominally $5,000,000. The split was 80% contractor and 20% consumer.

The facility was located on the main drag in the downtown area of a large suburb of a major southwestern city. Everything north of its location was bedroom communities; not a lumber yard or a hardware store existed in the northern half of their trading area.

Given this, it was their belief that something had to be done about that 200lo consumer share. Renovation of their 20,000 square foot hardware store was completed and then $100,000 was pumped into advertising beginning at about the time the price of oil died.

By March 1987 they realized that, despite all efforts, consumer sales were just holding their own and contractor sales were off by some 35%. This translated into a $1,000,000 loss in contractor volume from July through February

Although they immediately shifted their attention to the contractor, by June their contractor sales volume loss had blossomed to $1,500,000. But from March through May they had implemented a turn-a-round that took hold in June and recouped all the sales they had lost from July 1986 through May ($ I ,500,000) By November the contractor sales year wound up 270/o ahead.

Unlike most of you, these two guys were neither accomplished merchants nor knowledgeable lumbermen and they were faced with major league size problems in both fields. They credit their upstream performance to four actions they took.

The Merchant ilagazlne

First, they reduced staff. They went from 35 employees to 19.

Second, they went to their remaining contractor customers and asked what they would like to have in the way of sales representatives.

Third, they hired these sales people from companies with which they were competing.

Fourth, they put together a compensation and sales aid package they thought would generate good sized earnings for both the company and the employees.

As of this writing, the entire metropolitan area continues to be economically depressed, but the company is making money and expects a big year in l 988.

You figure it. The only thing apparent here is that it's amazing what can be done when you don't know it can't be done.

Lest you still think that there might not be any business in your area, try this exercise. On a large scale local area map, draw three circles around your location. One representative of a 10 mile radius, a second, a 20 mile radius and a third, a 30 mile radius. Next, make. a list of the cities within all three circles.

Major metro area lists like this will yield 100 to 150 city names. The yellow pages will tell you how many contractors, remodelers and commercial establishments there are in your area. Finally, make a list of the ones you aren't selling.