Dan Coleman is well past the qualifying age for Social Security but still works 10-hour days running Zarsky Lumber Co., a 10-store operation that covers 300 miles down south Texas' Gulf coast and 200 miles up the Rio Grande Valley. Founded in 1928, Zarsky Lumber made much of its early income providing oil-field timbers and drilling mud for oil wells across south Texas. Coleman grew up in the business (his father was a partner of the founding Zarsky family), became president of the Victoria operation in 1976, then president of the entire company in 1985 when its six branches consolidated. Since then, Coleman has closed one store, opened five, and grew Zarsky Lumber to $81 million in sales, putting it 84th on this year's ProSales 100. It now gets 85% of its revenue from pros, mainly custom and small builders. Last year, Zarsky installed a computer system that, for the first time, tied together the financial reports of all 10 stores. Here's what Coleman looks for when he wants to know how Zarsky is doing, and why he relies on these yardsticks:
Gross exception report. "This tells me if we sold something too cheap. When sales get down to a low margin–5% or 6%, say–then you better start looking to see what happened. Every once in a while you'll see an error."
Inventory receipts. "I look at this daily. It's a sign of what's coming in. It also helps you to look for mistakes. For instance, if you see an order for 2,000 2x4s, that could be an entry error depending on which store placed the order."
Margins. "I try to watch 'em every day. This tells you what kind of trend you're in."
Salary and sales as percentage of revenues. "I look at these at the end of each month."
