etitive ence li Champion in the Box-ing Ring

By Carla Waldemar

LTAMPA is the fastest-growing I \ community in Idaho, says Roger Kotter, who grew up there. He's seen the before and hastened the after.

Following graduation from college with honors and a two-year stint in South America, Roger opted to return. He already knew why hordes of Californians were following their MapQuest printouts in that direction, searching for a slower, saner pace of life.

The migration wasn't lost on Lowe's and Home Depot, either. A year ago they both invaded Nampa, a mile down the road from Stone Lumber Co., where Roger serves as president.

Sure, Stone lost some business to the boxes-the d-i-yers who dropped in for a paintbrush or a couple of bolts. But Roger's not worried. "They can squash the best yard in the beginning, but over time, they need to show a profit and can't sell below cost," he knows.

And he's more than happy with the strong pro business (75Vo and growing) that's always been Stone's mainstay. Maybe they might cherry-pick Lowe's for hardware, but they retum to Stone's for lumber and building materials, the backbone of any contractor's budget, where prices on those items are 25Vo lower than the boxes'.

Yet Stone doesn't depend on price as its ace in the hole. Armed with 32 expert employees, for whom "turnover" means stock, not people, Stone trumps the boxes big time. "Our customers need the knowledge we can offer vs. the box mentality, where you ask a question and the guy's eyes fog over as you distract him from thoughts of his next paid holiday."

In contrast, Stone's troopers walk the talk. "They've all built the stuff. And they're truly involved in every facet of a builder's business. They'll visit the jobsite and if they see something that isn't going to work, they'll tell him, 'You might think of trying this....' This is where we shine: We know what we're talking about and we partner with our pros," because that's where the bread is buttered: "The contractor is the salvation of our business," Roger knows full welland cares.

"[The big boxes]

can squash the best yard in the beginning, but over time, they need to show a profit and can't sell below cost."

Word gets out. Builders come knocking, saying, "Company X didn't work out." Roger rises to the challenge: "Okay, we'll do a take-off at no charge and see if we can help you better."

The personal interest he takes in folks pays off, too. Roger likes to tell the story of a stranger who ambled in. "Just browsing," he said when Roger offered help. But Roger kept the conversation going. Three weeks later he was back with a blueprint and an order for the whole house. "Let me tell you something, Roger," the man explained. "I shopped every major yard in Idaho, and you're the only one who took an interest in me."

This practice drives as much busi- ness Stone's way as it can handle, so the outfit doesn't go trolling: "We don't want to overbook the plane," Roger notes. "We want return clients, so it's not 'Hey, they're new, so we can take advantage of them.' Our philosophy's simple: Treat people honestly and fairly, as if you were them."

Ask Roger how he gets his staff to buy into his credo and he comes back with the usual sidebar stats: medical insurance, 401-k plan, profit-sharing bonuses, commissions.

Nice, very nice, but not the whole picture. "My greatest fault," he says, "is that I'm not strict enough; this isn't Camp Pendleton Induction Center. I'm a little more flexible than the average owner. If there's a marital problem, we'll work through it, not fire 'em on the spot. If they want to go to college, we'll work around their schedules. I always want people to better themselves," he documents, "the way I was able [to]."

A quick dip into Roger's work history, which has burnished his management style and capabilities. Remember the kid with the young wife, new baby and college degree? They'd seen the bright lights of the big city but preferred the stars above their home town. So Roger asked his father-in-law, Stone's owner-for whom he'd driven trucks in high school-about a job.

Salesman's clipboard, car allowance, nameplate on an office? Sorry. He was welcome to begin at the bottom (again) as a driver at$425 a month. Mulling over his prospects, Roger figured. "He's giving me a chance; I'll take it."

The older man must have seen a future in the kid, for that first Christmas he gave him a $2,000 bonus (right: four times his monthly pay) and started advancing him through the ranks-inside sales, commodities buyer, on up the ropes.

Boot camp paid off. "Now if a truck driver phones in having trouble with the hydraulics, there's a good chance I can solve it because I'd been there," Roger states. "I'm a hands-on type guy: never ask somebody to do something-deliver sheetrock, whatever-that I'm not willing to do."

By the '80s, when the boss was ready to retire, his son, Monte Schlerf, and Roger bought the business. Today Monte oversees the administrative side and hardware department, while Roger manages the outside sales staff and lumber operations. "We work really well together," Roger declares, which is particularly fortunate because they're now related. Each man married the other's sister. "The kids are double cousins," the fellows laugh.

They've weathered the bad times along with the good. In 1994, arson struck-"the second-worst fire in the history of the city"-destroying the better part of the square block that Stone occupied. The next morning Roger met with employees, voicing his determination not to let anyone go ("The payroll," he admits, "presented a little bit of a challenge.") He called his wholesalers, arranging to buy units-not caseloads-of replacement lumber, and they helped out. Thanks to the SBA ("our lifeblood"), he secured a bank loan and started rebuilding, using employees' labor to keep them occupied.

The glass, it turns out, was half full. Stone had the opportunity to scout a new location. "After looking at eight sites, we came back to the most expensive," Roger has to laugh. "We put our homes on the block."

The risk paid off. "We're now on the most prominent street in Nampa. With 14,400 sq. ft., we've expanded our choices of material, added paint, power tools. We doubled our outside sales staff and bought more trucks (we now have 22 vehicles). The store is bright and clean and wide open, with a finished ceiling rather than exposed trusses like a Home Depotthe kind of a store that makes women customers feel comfortable. "

And Home Depot maybe not so comfy. "People have to drive past us to get to the boxes," Roger can smirk. Since those chains have come to town, Stone has remodeled its exterior, updated the landscaping, installed an electronic sign in front and updated its Web site with an "Ask the Experts" page and links to brandname manufacturers. Presently the company is building another storage facility across the street.

Stone also has opened new avenues for partnering with its pros. "If they're featured in the Parade of Homes, we give them $1,000," Roger reports. "We also do TV ads for them, filming the insides of their homes. We just bought a Reader Board and use it for digital photos of their homes to honor a Builder of the Week: free advertising for them. And if a retail customer walks in and comes to realize he's in over his depth, we refer them directly to a builder. (This pays big dividends.) We work together. When you get too big to do that, you forget what got you there, and you're in trouble.

"We have no mid-management here-Monte and I run the show. There are no doors on our offices. We're doing $12 million a year and could get a whole lot bigger, but we're not after making multi-million dollars if it means that you have to look down at the ground when people walk toward you. We're fair and honest, and if something's wrong, we'll fix it.

"For instance," Roger demonstrates, "we did a duplex for a builder within $500 of the estimate. 'Can you do it again?' he asked us. This time he came back, saying we were $1,867 over. I wrote him a check on the spot, saying, 'You and I agreed on a price.' (Turned out his neighbor had 'bor- rowed' some lumber and built a garage at our expense, but we kept our word. That's how we operate.)"

Roger's no softie; don't get him wrong. He's grown the business by keeping an astute eye on the bottom line. "I myself buy the larger items, the dimensional lumber, and I watch things closely," he indicates. "We have bid sheets for our outside salespeople, but I also give them latitude with a new customer, to be more aggressive and get the horse headed in our direction. Then, on his next house, once you've developed that trust, you can start a little higher. Now, many builders come to us and don't even ask for a quote; they know from the experience between us that we're honest." For such qualities and achievements, Roger was named Businessmen of the Year for the State of Idaho in 2000, resulting in a trip to Washington, D.C.

Roger reflects on his history. "Above all else, it's permitted my wife to stay home with our five children." None will carry the torch. "I chose not to transfer the business down the line; there's so much pressure on small businesses today. They're the endangered species, not the spotted owl," he exclaims. "Very few people can do startups anymore." Yet, Roger cannot imagine doing anything else. "It's been a great ride."