THE FIFTH OF A SERIES

Spending your time is as important as spending your money. . . especially when selling the consumer

I have found that any business which does nearly half a million volume a year can increase NET pRoFIT at least five percent by assigning one experienced man to full-time purchasing and inventory control.

It is surprising how many $ two-milliona-year lumber dealers do not have any purchasing or inventory control system at all !

Many who do have a system have built it on their prejudices and not on the facts of their operation.

By REED TAWTON

Monogemenl Consultonl

Every organization or business has some {orm of organization chart. This 'ochart" may not even be written down, it may be part o{ the tradition of the business, but functions and responsibilities do exist in every case , , . or nothing would ever get done. Certain vital functions and responsibilities are assigned to or assumed by someone and carried out in some fashion.

The functions inherent in any business or factory are: all these duties to a more or less efficient degree, every day you are in business. The only difierence between you and a giant aerospace corporation is that on your chart you have inserted your own name in most or all of the operational and administrative blocks. You wear many hats. Larger companies have hired one or more employees to perform the various functions.

You say you don't advertise. Do you have a sign in front? Is your name on your trucks? Do you belong to Kiwanis or Lions Club ?

If your annual gross volume exceeds $750,000 per year, you certainly owe it to yourself to have an advertising agency or sales promotion specialist available. I don't mean an agency necessarily. There are many good specialists and consultants available.

Don't sign a five year contract op. erate month-to-month for six months, then re-evaluate your program.

The problem is how to "Multiply Yourself." Use your attorney and accountant to keep yoa out of trouble, not jrst when you get in trouble.

You should use your other specialists in the same manner . . , not just for emergencies. Use them regularly and avoid emergency situations.

A MONG OTHER o'Sacred Cows" in the fl. 1u*6"r business. I seem to run into the most opposition when I tell the owner that his business is big enough for a fulltime purchasing department. If the hobby of talking old times with cronies who have an extra carload of warped six by's is worth five percent of your net profit, then you shouldn't waste your time with this article on The Manc,gement of Tirne.

The organization chart shown here may look to you like the chart we prepared for a major aerospace corporation, but it is an operational chart of your own lumber-building materials business.

I[hether you like it or not, you perform

Any firm with 25 or more employees should have a personnel or industrial relations consultant for advice. He can save you money.

The Small Business Administration has a group of retired executives available for part-time consultation as part of its "SCORE" Program. You may find them an economical way to meet your needs.

Some management consultant firms have on their staff a variety of consult. ants on whom you can call. You pay for them when you use them . . it's not r967 like adding to your payroll.

However you arrive ata solution you tnust accept the responsibilities of these varied functions and admit to yourself that in a more or less acceptable manner you are now handling every one of these activities. Sometimes very poorly. Sometimes tthandling" means leaving the problem on your desk, hoping it will go away!

A problem to be met will never go away. It may dissolve into another batch of problems, but it will not be resolved until you meet it head on with a solution.

The only way you can multiply your- self to resolve all the problems of doing business is to acquire a stable of advisors

Sfory d] q Glonce

Organization of your time and duties . . who should do what and when. Next month: setting uP to sell paint in a lumber yard.

and specialists. Sometimes the cheapest advisor turns out to be the most expensive in the long run.

As we have decided to continue this series, it seems appropriate that I ask you to take the opportunity to write this magazine, outlining specific problemsnot legal-which we have not covered. We will call on the experts available to The Merchant Magazine to reply in as direct a manner as possible. Of course, we prefer to limit questions to management and consumer-oriented sales problems.

Next issue we'll go into some depth in the steps required to set up and maintain a profitable paint operation in a lumberbuildine materials store.

Got cr Queslion?

Write Reed Lawton outline your specific problems (not legal please) andwe will attemPt to answer them. We Prefer management and consumer - oriented sales problems . . . lefs hear from you!

Summer is the time to sell decks and patios

Wood decks and patios are gaining popularity all over the West, and that means profitable opportunities for lumber and building materials dealers.

Outdoor ttfloors" are a low-cost way to enlarge living space, and the idea appeals to families who want to spend leisure time at home, not on crowded highways.

Dimension lumber, all stock yard items, is the chief ingredient. Active merchandising can produce a good volume with a profit, instead of merely sporadic sales with a slim profit, if any.

Along with promotion must go services such as these: detailed advice to the do-ityourselfer from both literature and in. formed sales persons, and building service to those who want to buy the unit installed, either with the dealer's own crew or through a selected builder.

One prefabricating idea that some deal. ers have found profitable is the parquetstyle patio. With prefab squares, the customer can create an outdoor floor of any size, simply by Iaying down the desired number of units. The idea appeals instantly even to a casual shopper.

At the same time, the retailer has found a great way to use short and low-grade pieces of lumber.

All material is 2x4' short pieces trimmed from lower grades of lodgepole pine mostly, with some Engelman spruce, hemlock and fir. The wood is dipped in a preservative containing redwood stain, which gives a uniform color.

WWPAns Economist Optimisfic

What's ahead for home building? Many people have expressed disappointment over the sluggish rise so far this year, and concern for the future is rising as interest rates turn up again and predictions of tight money conditions increase.

Home building is improving, according to Charles E. Young, Wcstern Wood Products Association economist.

One good reason for .expecting increased housing starts in the st'r:ond half of J967, Young said, is the recent restoration of accelerated depreciation for multi-family rental units. This is a highly important factor in the return on invcstment in rental properties. Coupled with the very good flows of funds into savings institutions in recent months and the rising tide of young married households needing apartmcnts, the stage is set for a rapid increase in construction of apartment building, .both low-rise and high-rise.

Average demand for housing in the thrt.e-year period from 1968 through 1970 will probably be 1,750.000 units per year, Young says. This could be accomplished by stt:ady increases from 1.550.000 units in 1968 to 1,950,000 in 1970, fifty pt'rcenr above f.300.000 in prospect {or this year. Although such-stcacly progression is most unlikely in the manic-depressive fields of home construction and mortgage financing, the undt'rlf ing demand clearly exists. according to Youne.

Housing Stqrts Inch Up

For the forrrth consecutive month, housing starts hate moved slightll uprvard. In June" tht: latest figures available. thev u't'rt' 0.3 pcrcent ahead oI the prcvious month. Futurt' r''nstruction permits were up lour perccnt from \{ay.

More encouraging was the 12 perct'nt increa-.t' from June last vear comDared u'ith this srlrrlmer.