In a huge and fragmented industry, the stories of the larger and established players often can eclipse reports of the debut of new supply houses. Two such companies—Spokane, Wash.–based Granite Building Products and Morrisville, N.C.–based Professional Builders Supply—have entered the industry since 2000 and have found success by focusing on high-service specialty products. Within several years, these suppliers have expanded into new markets, added up to 60 staffers, and blazed past the $30 million and $20 million revenue marks, respectively. To them, quick market moves and relentlessly out-servicing established suppliers are more important to succeeding in the business than just having a dollar and a dream.
In fact, a start-up takes hundreds of thousands of dollars, says Professional Builders Supply president Van Isley, who assembled a team of private investors in addition to securing $900,000 in equity and $500,000 in bank debt to launch Professional in August 2003. To minimize start-up expenses, Professional came out of the gate with a focus on windows and doors, interior trim, and siding—with plans to get into overhead-heavy commodity items like framing lumber as the company grew in profitability. “Our plan was to become a full-line operation three years down the road after we built the customer base and clientele,” Isley says. “And that's the way it has played out.”
Even with lumber in the mix, a staggering 45% of Professional's business last year came from special orders, which is exactly what he and several other Stock Building Supply veterans expected when they left the huge pro dealer to exploit what they felt was a custom home builder service void in the Raleigh metro area. “The way you manage special-order processes internally can pretty quickly differentiate you from the competition,” Isley says. “That includes takeoffs, orders, follow-up with vendors, identifying any errors at the point of receivables, and correcting everything before the package even ships to the customer.”
“It's an intensive process to go out and build all of that business,” McDonald says, “but the flexibility, agility, and aggressive sales focus of a start-up can provide customers with straight answers, a straightforward approach, and quick results. That has quickly brought us a reputation as go-to people for the products in our categories.”
Reputations like that also draw top personnel disaffected by the status quo at older and larger companies, McDonald says. At Granite, which now has locations in Spokane, Portland, Ore., and Kent, Wash., the sales philosophy is to “find the person and build the program around the person,” including empowering them to cut their own deals, he says. “Obviously there are some guidelines, but they have full discretionary ability to shake a guy's hand and make a deal—that makes a difference to them.”
Isley also credits personnel for the growth at Professional, a tall order given the long and relentless hours of dedication to get his company off the ground. All employees sign a two-page “Customer Commitment” that guarantees four-hour fill-in deliveries and 48-hour turnaround on credit returns, stock interior door deliveries, service and warranty requests, and requests for quotes and bids, among other service standouts.
“The start-up commitment is not for everybody,” Isley says, “but we have a team that is willing to do what it takes.”