Boom time for North Dakota lumberyard

l\ficKeuzre Burlorr,rc CsNrsn, founded in 1934 in IVlWatford Citv. N.D.. for untold vears snoozed alons on the windswept-Dakota prairie as the decades rolled b! unnoticed. Why bother to change things up? There was no competition... and also not much in the way of business in the tiny town.

That all changed overnight. Oil was discovered on those very North Dakota plains (it's called the Bakken Field). Three years ago, the town grew from1,200 to 8000 virtually overnight. "There was only one car dealership, one caf6-not even a McDonalds, no Walmart," recalls Andy Jensen of Sterling Cooper, the public relations arm for McKenzie. And... only that one lumberyard.

Rather than reboot to face the surge in demand for services, its owner decided to retire. Enter an investment firm that saw opportunity looming and purchased the place with plans to bring it into the 2lst century, and then some. (The company is looking at several other yards in the Upper Midwest with the same idea, hoping to gain power in numbers: better buying terms, sharing of best practices, fewer overlaps in personnel, and other savings.)

The new owners kept on most of the former employees but wisely hired two new outside salespeople plus-even more vital-seasoned industry officers from nearby Minnesota and Wisconsin yards who had suffered from stiff economic challenges and were excited to begin anew in Watford City.

What they found was-a mess. Says Andy, "There were no systems in place. Nobody knew what deliveries had been made, and ifthose deliveries were even correct and up to spec, nor what was lying around ininventory'Sheetrock? Yeah, I think we got some somewhere...'what SKUs were selling (and which weren't), and who'd paid what and when (or maybe not). So, first thing on the to-do list: a modern computer system, thanks to Spruce.

The company then bought a boom truck-the first in the

BOOM TRUCK has been a key component of serving local builders, area-to aid its many stressed and busy contractor customers. It added new lines-plumbing, electrical-and joined a new buying group, Hardware Hank, to in-fill items and purchase stock at a better price. It fired some past vendors, hired new ones with better terms ("cash flow is everything") and more favorable delivery practices. And delivery is no small deal here in the middle of nowhere. Trucks arrive fully loaded but leave empty, which is hardly cosr effective. (The only item to leave here is, ahem, oil, and plenty of it.)

Those pro customers provided over 707o of McKenzie's business, but that's changing, too. The goal is a 50/50 split between pros and retail trade-which meant hiring and training new personnel to handle this different, walk-in, breed of cat. Homeowners represented a big slice of business that had been overlooked, and who wants to turn away trade? "Homeowners had nowhere to go for hundred of miles for things like carpeting and flooring, either, so we added those lines," says Andy. Plus appliances, paint, fencing, cabinets, you name it. And there's a vibrant, 2,500-sq.ft. showroom acting as kitchen-and-bath center with free design aid to guide them.

Want it installed? No problem. McKenzie has instituted a network of trusted subs (a.k.a. their own contractor customers-a practice that's proved win-win) to work "in a network for us, like Sears does" as installers, too. And it listened to its pros and added lots of items they said they needed, like power tools. It converted its yard to a covered space that stores lumber sans warping and rot. Free delivery 24/7 also-including into neighboring Montana ("We deliver anywhere" boasts the website.). There's also a brand-new commercial customer center to specifically help builders, developers and oil-field contractors: the whole nine yards. In other words, the operation now offers onestop-shopping.

For consumers and pros alike, simple awareness was a major hurdle. "The store still looked like it did in the Seventies," Andy moans, "with the same dusty sign outside that has had the wrong phone number for 20 years." So he and his crew launched a major publicity campaign, with print and TV ads and promotions that sound almost too good to be true, such as a drawing not only for mega-TVs, but a complete mobile home (in high demand in this city with more No Vacancy signs than dandelions).

Speaking of mobile homes, McKenzie has restructured its lot and set up a subsidiary company, Watford City Homes Inc., to offer them for sale-and, going one step further, to add manufactured homes as well-shipped in in modules, ready to be set up. The Park Model, says Andy, rings in at 900 sq. ft.-"a beautiful little home that has the same features of a standard home," with this exception: It's instant. Andthat's what the hordes of new-in-town oil workers desperately need. Yes, they've been buying or renting mobile homes (what we used to calls trailers back in the day, but far nicer), but the city is cracking down on parking them in other folks' driveways, for which those homeowners charge their tenants $1,500 (l) a month.

Workers in these Park Models are clustered in man camps, as Andy calls them-just like in the good old Gold Rush days-living there together weekdays, or for weeks at a stretch, then driving back home for a quick visit with their families before returning to life on the frontier.

Contractors are working around the clock, too, building new perrnanent homes as fast as they can, so families can join their breadwinners-but again the city is imposing new, stricter zoning rules as to, say, lot size (think five acres). Those coveted lots have zoomed in price, Andy says, from $500 to $15000-a significant part of the asking price of a new house. The nation's large tract builders are moving in, too, and have no other yard within miles and miles to serve them. Thus, McKenzie's business rose 307o last year and is up another 4OVo to 507o so far in2Ol2.

The company is aiding contractors in other immediate ways, such as initiating a new company credit card with up to $l million available to qualified applicants-acting, in fact, like their banker when that kind of loan isfar from easy to come by via standard lending institutions. It's also launched contractor breakfast sessions, to roll out new products and act as a networking op for participants-and in time will start offering classes in such vital business skills as financial management and computer training.

Sure, there's no competition...yet. Butthat doesn't mean there won't be, so McKenzie's new owners are conscious not to rest on its status as the only act in town. "We've got to be good, or somebody will step up," they realize. (Andy mentions Amazon, of all vehicles, talking about delivering building products.) So the company is determined to keep on improving, z listening to customers, and adding what they say they need. Sounds like a pretty darn good business lesson for anyone to heed.

Carla Waldemar cwaldemar@comcast.net

By fames Olsen