Framing Square Lumber: Russell Jones, chairman and CEO
For Russell Jones, selling building products in a boom-and-bust market is all about being conservative. That starts with how he pays his team. “If you give everybody a $5-per-hour raise to get everybody away from the oil field and the oil field needs people, they’ll give them $10,” he says. Instead, he uses an hourly production bonus under which employees who meet their numbers can pick up anywhere from $1 to $9, for every hour they worked that month. “Everybody has skin in the game,” he says. So far it’s worked. His single-yard operation posted 15% growth in 2012 compared with 2008. A nonbeliever in debt, Jones’ cost of business is about the same during the market’s peak as it is at its trough. “We run like hell,” he says. “We push it and push it out the gate.”
Builders & Homeowners Supply: Ray Sale, president and CEO
Ray Sale doesn’t try to forecast the next cycle, but in the 42 years he’s been at the helm of the single-location dealer and hardware wholesaler, he’s learned that the two always come together. During the last big bust—when oil prices tanked in the early 1980s—Sale absorbed a $200,000 loss without laying off employees. The next year he lost $80,000, and a year later he broke even. “When business goes down, it’s not going to quit,” he says. “It just slows down and we go with the flow.” Like many local independents, Sale saves on the way up so he has cash to grease the wheels when business starts to slacken. His sales, $5 million in 2012, have doubled since 2009.
McCoy’s Building Supply: Mike Trant, store manager
Regional chain McCoy’s is able to leverage its corporate backing to stay nimble despite the market’s ups and down—enough that Midland store manager Mike Trant spends when business is good. “If I was a smaller company—if I wasn’t with the corporate backing—I would manage that differently,” he says. Sales at Trant’s store have been up 25% every year for the past three years, posting $18 million in 2012. That year and the year prior, the yard’s net profit was the most of all McCoy branches. In 2009, the location logged the highest sales company-wide. Spurred by the growth, the store is putting in a 10-acre addition to make room for more inventory and plans to expand the yard by 400 feet, widening the parking lot to handle the growing line of trucks and trailers idling outside the yard gate.
Related Article:Riding the Roller Coaster