With a 41.3 percent jump in gross sales, six-unit Winter Haven, Fla.–based Adams Building Materials was at the head of the pro dealer pack in 2003 when it came to organic growth. With 92 percent of its business fueled by national and regional production builders, Adams raked in $72.2 million in 2003 pro sales, besting the firm's 2002 numbers by more than $20 million in revenue. Adams is by no means a newcomer to high growth—the company also ranked 16th in national growth in 2002 (14.9 percent) and fourth in national growth in 2001 (28.2 percent). According to company vice president Aaron Adams, the pro dealer has invested heavily in facilities and equipment in the last several years to grow in tandem with production builder expansion in central Florida. Here's Adams' take on the philosophy behind smart growth and the value-added business strategies necessary to profitably serve the big builder market:
On remaining proactive as part of an organic smart-growth strategy: "Actually, our willingness to grow has helped fuel our success. Large production builders need to partner with companies, such as ourselves, who can service their high volume and can take on their increased demands at a moments notice. By increasing our production and distribution capacity over the last several years, we have been able to say "yes" when given the opportunity without letting our customers down. That has given us an excellent reputation among our customers, which we have leveraged into new customers and increased sales."
Manufacturing as a vital value-added business component: "Component manufacturing has been and will continue to be an area of focus in our overall business plan. In the past seven years, we've grown from a single truss plant and door plant to four truss facilities, two door plants, and a wall panel plant. This expansion of our manufacturing lines has allowed us to maintain a roughly 50/50 balance with our lumber distribution sales. The advantage of having a high volume of manufacturing is the greater margin stability it provides during times of unpredictable volatility in the lumber market."
The importance of inventory management: "Inventory management is critical in our company. Because of our high consumption and storage constraints, high turns are a must. Well-timed purchases as well as proper inventory levels help drive profitability and customer retention. When supply and demand issues arise, such as OSB, we can ill-afford to tell any customer that we can't service their needs due to shortages in the marketplace. Excellent purchasing decisions have insulated us from those situations and have given us a high level of credibility among our customers."
On the continued strength of the production builder market: "I think partnering with production builders is going to be a key factor in our continued growth and success. While Tampa and Orlando are major targets for production builders, they are constantly moving into smaller, emerging areas to expand their business. As they expand, smaller builders end up being acquired, find a custom niche, or get displaced because they simply can't compete with [big builders'] strong marketing efforts. Tapping into the expansion of the production builders is what will fuel our growth in both the short and long term."