Building a business that Warren Buffett would buy - R. C. Willey's expansion years

Bill Child looked for way to build profits of the 600 sq ft electrical store off a side road near Syracuse, Utah, that he had accidentally taken leadership of in 1954. In 1956 he hit on the idea of selling furniture – items, thankfully, without the burden of moving parts or onerous warrantees. At first, a few pieces were placed in Child’s personal double garage and customers in the main store were encouraged to take a 50-yard stroll to take a look.  In particular, the sofas were a great hit, selling out very quickly. So, a decision was made in 1957 to add 1,800 sq ft to the store’s footprint.
Bill really needed help in the showroom now. His 18-year old brother, Sheldon, enthusiastically accepted the offer to work part-time. When Sheldon went to college in Utah he would drive home to work Saturdays. This was mostly deliveries and installations with Roy Hudson, the recent hired deliveryman. Sheldon was superb at demonstrating the workings of the appliance. He moved into RC and Helen’s old home right next to the store, so he could work more hours at a job he loved.
The move into furniture worked; company revenue doubled in a year. Both a full-time and a part-time salesman were hired, and the store was extended again. Sheldon was approached to take on a salesman’s role. This he accepted to pay his way through college. But he too had retained ambitions to be a teacher. As his final year approached (fall 1959) Bill said to his brother “I’m not going to tell you what to do. But if you’re going to teach, then you ought to go back to school. But if you’re going to stay in the furniture business, I don’t think a degree will make a difference…You could spend a year working and then decide whether to go back to school” (Bill quoted in Benedict, Jeff (2009) How to build a business Warren Buffett would buy: the R.C. Willey story). Sheldon agreed.
That year was one a rapid expansion, with more product lines added, and more salesmen coming on board. It was exciting. Sheldon and his wife built their own home next to Bill’s and were starting to accept that Sheldon was unlikely to return to college.
More extensions to the store were added to make it, by 1965, the largest furniture store in Utah outside of Salt Lake City. The out of the way position was turned to an advantage with advertising slogans such as, “Lower overhead means lower prices because of our country location”.  People drive a long way to find a bargain.  Employee numbers rose to fifty full-timers.
Sadly, in Spring 1965, Bill’s wife Darline died aged 31 from a rare condition causing blood clots, leaving a devastated Bill and two boys and two girls. The whole family were rocked to the core, but found some strength from their Mormon faith, with a strong belief in families reuniting in heaven.  Bill kept himself extraordinarily busy to avoid thinking too much.
Diversification
Near to Syracuse was the Hill Air Force base employing more than 20,000 civilians and 3,000 military personnel.  Not only did R.C. Willey benefit from the wealth brought to the area via wages for civilians but air force people were moved around, and they tended to buy furniture and appliances when they set up home in Utah.
The base was a blessing, but also posed a threat. It was possible – and there were rumours to this effect – that the base could be downgraded resulting in fewer people. Bill saw that R.C. Willey’s income was over-concentrated in one place. As much as two-thirds of revenue could be linked to the base.
The solution was to replicate the low-price-excellent-service formula in another store sufficiently far away that it pulled in different customers.   A four-acre site at Murray south of Salt Lake City, 36 miles from Syracuse, seemed ideal. A successful TV campaign had already raised the company’s profile through the area, so the brand was well-known in Utah way beyond Syracuse.
It took until 1969 to open the 20,000 ………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1