United States, Ut... "BUSINESS: Software and e-commerce solutions for the residential building materials industry. PROBLEM: “I ordered some specific building materials from my sales representative. Three days later than promised, I received the wrong materials. The sales representative didn’t understand what I was asking for. It’s going to cost me another three days to get the right materials.” “The building inspector insisted I use Douglas fir lumber instead of the regular Hemlock fir that I normally use. I faxed my order in to the supplier with the request plainly indicated. I discovered later that the supplier had delivered the Hemlock fir. The carpenters didn’t know any better, so they used it to build the house, costing me a great deal of time and money. It turns out that a $6 an hour yard worker thought he was doing me a favor by sending substitute materials for the out-of-stock Douglas fir I wanted. Had I known they didn’t have any, I would have ordered from a different supplier.” “Our customers are demanding an easier way to do business with us. Surprisingly, it’s not just the big builder, but small and medium sized builders as well. We have as many sales representatives as we can afford. How can we increase our response to our customer’s needs without breaking the bank?” “With the market slowing down, every penny I spend over the budget comes right our of my pocket. I have to stay lean to stay competitive. I need the best price for materials, and I need to keep up with the market to adjust to pricing changes. My suppliers will only provide me with pricing lists once a month, yet many items, especially lumber, change price every couple of days. There has to be a better way, or I’m going to lose my edge.” “Our store wants to offer e-commerce, but we’re a lumber company, not an Internet company. We can’t afford to hire web developers and Internet database technicians and graphic artists. We’d gladly pay a company that understood our business to do it for us.” SUMMARY: Professional builders are increasingly pressed to make a profit. Relationships with materials suppliers are crucial to success. Mistakes and delays can cost thousands of dollars and valuable time. Suppliers want to meet the needs of their customers, but lack crucial technical skills and resources. ProCOUNTRY was established by a group of individuals working in the construction industry. The company has developed e-commerce applications that are easy to use for the professional builder and the supplier, increasing accuracy and timeliness, ultimately leading to greater profits for both. Revenue is earned from several sources, including initial sales to suppliers, monthly service and support contracts, advertising and resale margins. OVERVIEW: ProCOUNTRY was established to develop affordable and usable software solutions combined with powerful business-to-business e-commerce solutions for traditional building materials vendors wishing to migrate from paper and phone based materials ordering to world class electronic commerce. These solutions have been designed with the building professional in mind. This demand side focus has allowed the company to produce a product that the average building professional will find useful and, more importantly, usable, thereby ensuring that the investment made by the client supplier will produce a significant return. The company has developed a pre-release product for Microsoft Windows NT (Unix and Linux will be available shortly) that has been shown to potential clients, receiving firm orders from three clients and verbal commitments from others. Along with smaller suppliers, ProCOUNTRY has received a verbal commitment from Burton Lumber, a Utah lumber supplier, with annual sales of $100 million. Anderson Lumber, a Utah-based lumber company with 35 locations and $490 million in sales per year, has requested information on the company’s products. Additionally, the company’s products have been evaluated by BMC West, headquartered in Boise, Idaho, a major materials vendor with almost $1 billion in sales in 1999. The company’s product, called ProLUMBERä, is a full-scale solution for the medium or large building materials supplier. It contains various modules that can be unbundled and sold separately to smaller suppliers that may carry a limited type of building material, such as vinyl siding vendors. Using a unique interface, OrderPointä, even a complete computer novice using a common Internet web browser can quickly migrate through thousands of building materials, selecting just the desired products. By placing the building professional in the driver’s seat, he can be assured of receiving exactly what was ordered, know if it is in stock, and keep track of price changes. The company believes that it can quickly capture significant market share of a $350 billion segment of the construction industry. Many small and middle-sized suppliers, as well as some large ones, are unable or unwilling to develop solutions in-house and require a solution such as the one offered by ProCOUNTRY. With electronic commerce poised to explode over the next months, the company feels the time is ripe to capture these clients. The company believes its products to be superior to any currently available. The products are competitively priced. The ProLUMBERä product is available for $14,995.00 plus a monthly subscription fee based on the number of transactions processed for the client. In addition, a monthly support fee is charged based on the amount of on-going support required by the client. This fee system is customary in the building supply industry, having been established by major vendors of custom back office software systems. Unbundled modules are priced accordingly. Clients will use Internet hosting services offered by the company. This serves two purposes. First, the client can expect the highest level of service from the company’s planned hosting center, including emergency power and critical 24 hour 7 day support. Second, the client is “captured” by ProCOUNTRY, making it difficult to change solution providers. As a result, client retention will remain very high. PRODUCT: ProCOUNTRY will start by offering the ProLUMBERä product, along with unbundled modules, to the residential building supply industry. This product is comprised of a highly scalable database, electronic commerce tools and unique interfaces allowing both novices and experts a simple, fast and effective purchasing experience. Various add-on modules are available to take advantage of real-time credit card processing, track proper sales tax rates, and use powerful one-to-one marketing tools. ProLUMBERä offers either live interconnection to the back office software system of the client or a virtual system using daily import/export of data. This choice allows the client control over access to critical data. The orders submitted by building professionals can either be input directly into the host system, or reviewed by sales representatives and entered by trained staff. After the company grows and begins to mature, other services will be incorporated into the product as added features. These include: links to electronic catalogs of manufacturers, effectively increasing the number of products offered by the vendor; “community” resources such as contractor listings, construction loans and building inspection requests; and technical resources like the International Building Code, recommended product installation instructions and warranty information. A wireless application of the company’s product will be developed to enable the use of Palm Pilot or Windows CE wireless devices. COMPETITON: ProCOUNTRY has identified several potential competitors. The company believes it has a superior product, better understanding of the market and a more aggressive marketing program. ProBuild is a company in Wisconsin that owns a chain of lumber companies. Their product establishes an invitation-only site where its best customers can order materials electronically. They are selling this to other lumber companies. They have received a great deal of press, but don’t appear to have a working product yet. BuildNet is a new division of BuildSoft, producer of the popular contractor accounting packages. It has received a sizeable investment of over $140 million from GE Capital, BankBoston and others. It offers a purchasing club to subscribing members. For example, a contractor would send in a materials request to BuildNet, who would aggregate that request with many others and submit a request for bid to participating vendors. This eliminates all service from the supply chain. It also requires a great deal of planning by builders, something that isn’t common. Channelinx is a spin-off of Enterprise Computer Systems, a large provider of back office solutions to the materials industry. The company has access to a huge customer base, but charges a very high price for the product and offers no Internet interface, further raising the actual price of implementation. The company has been successful in getting companies like Kohler to sign on, but has had no success to date in signing up any vendors. FUND REQUEST: $3.5 to $5.0 million COLLATERAL: Equity, Stock Options, Warrants, or other Financial Instruments. FUND USE: The funds will be used to complete all company products; hire sales, technical and administrative staff; develop and produce sales literature; design, implement and fund an advertising campaign; acquire computer and networking hardware and software; purchase intellectual property from Bristlecone Valley Homes, current owner of the OrderPointä system; vehicle leases for the sales staff; travel and entertainment for sales and mark...
Papua New Guinea
Chief Executive Officer