Self starters: combining minimal capital investment with major outreach to underserved customers, Barr Lumber proves that you don't have to overextend to get into the components market and stay there profitably

Prosales, July, 2005 by Chris Wood

Buck Byers and John Shirley claim they barely knew the first thing about component manufacturing when they started out. The co-owners of San Bernardino, Calif.-based Barr Lumber are resolute that patience and a low profile within a booming construction market--and not any blue sky boardroom business strategies or operational tricks of the trade--have powered $4 million a year in roof tress business from Barr's single wooden assembly table. "I'd worked in lumberyards for 30 years and didn't really know anything about the tress business," says Byers, who also handles operations as vice president for Barr's six locations east of Los Angeles. "I've even worked for some big companies that had truss plants, but I was never involved in those operations. I can't say even today that I am an expert--I tell the crew what I want done and they provide results."

Still, since Barr bought into the components game in 1995 the company has been through it all, including struggling with equipment costs and sales-complacent truss managers, juggling quality-control issues while competing with specialty components shops, fighting for labor and design talent, and even physically relocating truss operations from one market to another before finding a profitable groove among Southern California custom home builders. "It's really a nice fit, and I'm surprised that more lumber companies don't do it--especially companies that focus on custom homes," Byers says.

In an era where it seems cost prohibitive for many independent yards to consider manufacturing components, Barr stands as a perfect example of how starting small, focusing on achievable niche markets, fostering internal talent, and growing incrementally can put the middle-market pro dealer in a strategically and financially lucrative position. Barr's eventual success, however, was hard-earned, and company executives caution other independents that might think otherwise. "I know that as we grew into it, we fumbled badly," admits Byers. "And one of the reasons for that is the fear that you don't know what you are doing, because [component manufacturing] is not lumber. It is way harder than the lumber business, and we spent years standing in one spot until we found a place for ourselves."

Modest Beginnings

Barr entered the truss business in 1995 with the purchase of C&C Truss in Yucca Valley, Calif., primarily a new market penetration move by then-president and third-generation owner George Barr. While Ban" established a solid market presence in the rocky desert east of San Bernardino with the acquisition, Yucca Valley's nearest neighbors--Joshua Tree National Park and the U.S. military's missile testing range at Twentynine Palms--were not exactly a component supplier's builder oasis.

"The truss plant then was really just a way for us to get rid of lumber by using it for web stock, it was not a major part of the business strategy," recalls current company president Shirley. "We could cut up wood and get rid of it, and it kind of operated like that for four years doing about $50,000 a month. We had a guy who facilitated that and was comfortable and good with that level of business."

At that point, the truss facility was far from achieving a solid production volume, and was equally far from reaching flawless quality control of the manufactured product. "[Component manufacturing] really is more difficult--it takes a lot more preparation than loading lumber on a truck and dropping it off and saying 'Thank you,'" explains Byers, who recalls a low point when management was called out to a jobsite by grumbling customers to find Barr trusses that had been manufactured with treated lumber used as studs within the truss web. There was nothing to do but apologize and correct the situation, Byers says. "It was really bad."

By 1998, George Barr was ready to sell the company, and Ban Lumber was effectively split into two: Anaheim, Calif.-based Ganahl Lumber purchased four yards close to the Los Angeles metro area and Shirley and Byers--along with a partner who has since liquidated--purchased the remaining four locations in an asset sale, including the Yucca Valley yard and truss plant. "When we bought the company, we decided immediately that we no longer wanted the truss plant [to be] 50 miles away from headquarters," says Shirley. "We wanted to move it, we wanted to get it bigger, and we wanted to manage it more professionally."

Find Your Niche

Ripe with demand, San Bernardino was the logical spot for relocation. The suburban California market has evolved to the point where conventionally framed roofs are "almost nonexistent," Byers says. "It isn't even one in 10. It's more like one out of 50--so there is a huge demand for trusses. Especially on the tract side, the biggest component yards are two months out." Unbolting Yucca Valley's truss assembly table and hauling the component saw down the San Bernardino Mountains on a fiat-bed proved to be the easy part. All told, the operation cost a relatively cheap $100,000 in new and used equipment and transport, compared to the $1.5 million that Shirley says is typical for organic component start-ups.