Thursday, November 5, 2009
Business climate calls for new strategies
By SUE WATSON
Local builder and supplier Roy Ray is adjusting his business plan for the new economic realities in order to stay competitive in the housing and commercial construction market.
Ray said the downturn in the economy of the last two years required his companies - Marshall County Lumber, Southern Homes and Southern Commercial - to make changes in business focus. Part of the plan calls for an orderly transition of Ray, now president, to retirement and turning the companies over to his son Barry Ray and a new CEO Gary Meter.
“In the lumber company, we are changing our focus to a regional wholesale-like business to offer better prices of materials to large regional contractors and local contractors,” Ray said. “We now have doorknobs, screws, plexiglass, paint and screwdriver type products. We’re getting out of that business.”
About 85 percent of Marshall County Lumber's business has been in lumber, windows, doors, trim and special construction products, anyway, Ray said. They will keep less of the hardware store type products but not do away with them entirely.
“Our strategy is to be bidding large projects, very large lumber orders,” he said. “We stumbled into that over the last few years but now we are going to do it by design.”
Southern Homes will continue to focus on quality custom-built homes and Southern Commercial will continue evolving to a new level in the commercial markets, he said.
Over the last three years or so, Southern Commercial has finished over 10 large projects and the company intends to continue to expand that business segment.
“In a nutshell, we will continue what Southern Homes has been doing and expand Southern Commercial to larger projects and the lumber company will expand to fit a regional price-competitive basis,” Ray said.
To help steer the three businesses in new directions, Ray said he is bringing in Meter, an experienced large project builder from Memphis and retired U.S. Army colonel who worked for one major construction company out of Memphis for 12 years. Meter now lives in Benton County.
Ray will remain as chairman of the board of directors while Meter will manage all three companies with the intention of filling his shoes as he relinquishes daily control, but remains involved in a general oversight role.
“Basically, this overall change is a succession plan to bring in this new man to work with my son Barry to run these businesses, as I gradually hand it off to them in the next few years,” Ray said. “You have to plan in detail for a business to continue once you get too old to run it.”
Ray said he is saddened his company had to lay off so many good employees due to the downturn in the business cycle which just about swallowed half his business the last two years.
“Even though the economy is tough right now, we have a lot of satisfied customers and good contractors, and we have good local banking business partners as well as regional banking partners,” he said. “And we still have some good people, as well as lots of good subcontractors, working with us. We are probably a bigger operator than most people realize when we put all three companies together.”
Ray said the changing strategies is more of a streamlining of the operations, consolidation of functions and standardizing of service so the companies will be positioned when business picks up.
“The diversity we’ve enjoyed through the three companies has served us well to get through these difficult times,” he said. “It’s no magic. You’ve got to work hard at it. You have to make timely adjustments, make hard decisions, and stay focused on serving customers at a reasonable profit.”
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