There's little doubt that dealers nationwide have been trimming their budgets in these difficult times. But there's one expense that LBM experts say deserves investment even when business is rough: going to roundtables.

"It's the most significant thing you can do in terms of learning and changing how you do business," Rod McLeod, CEO and president of Hilton Head, S.C.-based Espy Lumber, says of roundtables. For more than a decade, McLeod and Espy have attended two roundtables a year that are facilitated by the Southern Building Material Association (SBMA).

According to McLeod, he and other Espy employees return from roundtables and put into action ideas and best practices that they might not have thought of or implemented. This year, Espy tweaked its business hours during the winter months, shaving an hour at the end of each day. The move saved thousands of dollars that would have been spent on base pay and overtime hours. "It became a federal case if you wanted to work more than 40 hours," says McLeod.

Professional rountables help LBM managers learn different means of business, such as new ideas, methods to approach difficulties, and professional development. Photo-Illustration: Brian Walker The SBMA has been hosting roundtables since 1987, holding 15 types of roundtables at a rate of twice a year. The topic of each roundtable is designed specifically for operations, sales and purchasing managers, chief financial officers, and human resource directors.

"No. 1, you build peer relationships that lead to communication all year long between the meetings," says Larry Adams, SBMA president. Having a sounding board who can reply with valid insight might not be a bad idea during downtimes. But gaining a different view of how to run your business from someone else who knows your numbers almost as well as you also may prove to be insightful.

Roundtables often promote a level of trust about a dealer's inner workings. At roundtables hosted by the Northwestern Lumber Association (NLA), financial information is gathered anonymously and shared with peers in both numbers and percentages. The method allows for confidentiality. Within a short period of time, however, dealers find themselves disclosing who contributed which numbers.

"Ideas bounce around the room and grow, with off-the-wall ideas that no one might have thought of," says Paul Siewert, NLA president.

"The roundtable format is phenomenal for professionals," Siewert says. "Whether you are a business owner, a manager, or any level of professional, you gain so much insight when you can talk to your peers."

Ground Rules

All of the facilitators, hosts, and participants that ProSales talked to agree about the size of a roundtable: 10 participants. Six is too few and 12 could be too many. The ballpark cost for a participant to attend should run between $2,000 to $2,400 for two sessions a year. This includes the initial price to attend, the cost of setting up materials and documents used in the meeting, along with the facilitator's fee. Also included in this price are hotel costs, the facilitator's travel expenses, and food.

Jon Davis knows about roundtables from two perspectives. The 44-year industry veteran ran his own company for nearly 27 years, then sold out to Star Lumber in Wichita, Kan., where he remained a senior vice president for 17 years. He was active in roundtables then, and in the years since, he founded Davis Consulting and now facilitates the meetings.

Davis suggests dealers form a core group, consisting of similarly sized, similarly formatted operations.

"Without reinventing the wheel, you will improve sales, increase margins, but more importantly, over a period of time you will visit these companies and critique them, or they will critique you," Davis explains. "You'll get good feedback from people that don't pull any punches."

Over the years, Davis became acquainted with about 60 companies across the country. After one meeting, he came back to Star with the idea of drumming up even more customer-incentive reward funds from vendors. Star had been spending nearly $200,000 annually on its rewards program while receiving $40,000 from vendors.

In 1998, the first year of stepping up the process, Star raised $200,000 from vendors, growing the war chest to $600,000 upon Davis' retirement in 2007.

Siewert recalls a dealer who was having a difficult year both personally and professionally. Deer hunting season–a date viewed as sacred to many–was about to begin in Minnesota, but it conflicted with the opening of a roundtable. The dealer took a pass on the opening day of hunting season and opted for the roundtable, knowing he would return to work "encouraged and refreshed," Siewert says.

Patricia Jones is co-owner of Jones Lumber, a $4 million yard in Henderson, Tenn., about 30 miles east of Memphis. She and husband Randall Jones took over the yard in 1989. At the time, Patricia only had some experience as an accountant, and Randall had been involved in utility and gas lines. Their sole LBM expertise came from building a house just before they bought the yard. "The only thing I knew was about the hand of a door, which way it swung," she says.

Jones Lumber struggled for years before Patricia and Randall joined the SBMA's roundtables in 1998. She says they were "a lifesaver for us. After we joined and did the financials, our gross profits shot up. Then it was 17%. Our gross profit this year to date is 31%.

"Years ago, mom and pop could open a shop and make a living," she says. "Now you need to know the business. You have to seek out peers who can help educate you."

–Andy Carlo