Bennett Truck Equipment Gains---From Management Studies

Aug. 1, 2000
THE owners of Bennett Truck Equipment (BTE) did what many smart company owners have done - they sought outside help from a consultant who specializes

THE owners of Bennett Truck Equipment (BTE) did what many smart company owners have done - they sought outside help from a consultant who specializes in business practices. That has provided them with a solid financial base from which to continue the growth that the company's founder envisioned.

BTE ascended from a small blacksmith's shop to one of Orlando, Florida's oldest specialized body distributors. The business is now successfully owned and managed by the founder's siblings and is experiencing growth based on the philosophy of focused niche marketing. This feat couldn't have been accomplished without the successful transfer of the business between the generations.

It's been seven years since Ray Bennett passed away. But his blacksmith shop still stands, at least in a sense. His two sons, Randy and Glenn, have carried on the family business. "We've experienced a lot of changes since Dad passed away," says Randy Bennett co-owner and general manager of BTE. "The changes have come from the transformation of the body distribution business, and how my brother and I manage a family business that has been passed down from the previous generation."

But Randy and Glenn both realized that change is a natural part of the business cycle. They have successfully transitioned a family-owned and operated business through management changes and company succession issues. And they are meeting future industry changes by taking a page out of their Dad's blacksmithing manual - to focus on the local niche market.

Blacksmith Shop Days After a successful career, Ray Bennett retired from running BTE in 1988, leaving Randy and Glenn to harmonize their management skills to the benefit of the company. "We always had Dad to place us on projects," says Randy. "After his retirement, we no longer had a coordinator to decide what project needed whose energy."

The Bennetts sought an outsider to review their management and financial-tracking operations and to help transition the company from a very centralized management style to a more work-flow-oriented system.

The Bennetts contracted with Bob Blackburn, a business-practices specialist, to review some of the practices at BTE. "The great news for a consultant is that going into a healthy company affords everyone more options, and BTE was very healthy," says Blackburn. "Nevertheless, BTE wasn't growing or focusing on its best business. That's where an outsider can really be advantageous to a company."

The first item on Blackburn's agenda was to formulate a revenue and expense forecast for the business. The next item was to study the strengths and styles of the two main managers. Blackburn then recommended a management system that allowed the two siblings to comanage the business on a day-to-day level, but still directs them to focus on the overall company direction.

Tracking Revenue and Expenses Blackburn looked at past revenue and expense items to help set up a detailed budget for the company. "Lots of companies know how much they spend, but not where they spend it," says Blackburn. "To get some idea of what the expense projections will be for the upcoming year, we looked at previous costs by specific category."

Detailed budget categories were created to trace specific cost patterns. Methods of accounting for the operating cost were detailed and implemented. Once these items were put in place, Blackburn then looked at the revenue side of the business.

"After we knew where the costs were incurred, I asked Randy and Glenn to locate the sources of revenue," Blackburn says. "Focusing on revenue sources can be a daunting task for many businesses. Owners know that it will come - they just aren't really certain about what product line will generate those sales."

Blackburn then recommended focusing on the operating budget as a tool for providing the input in making the day-to-day and big picture business decisions. "Once we can get a budget together with pretty strong predictions, then we can also start using the categorized expenses to tell us if performing a certain business task is profitable."

Organizational Restructuring After Blackburn prepared a financial plan, he then looked for ways to improve the company's internal organization. What he found was a management system that was highly dependent upon a strong central leader. Such a system works very well as long as that central authoritative figure is in place. "Outside consulting helped us realize our full management ability by developing specific tools to help both of us focus on certain aspects of the business," says Glenn Bennett, co-owner and general manager of BTE.

"Blackburn also helped us to put systems into place that made us focus on the big-picture items as well as running the day-to-day business," Bennett says. "We are now able to pinpoint areas of weakness in the fabric of the business from employee morale to cash-flow analysis."

The company realized significant financial benefits from the new organizational structuring. Sales were stagnant from 1991 to 1995, Bennett says. "After the first series of consulting studies, our sales volume and profit margins began to move forward."

BTE has asked Blackburn to do another series of studies that will help the company maximize both the growth and the profitability margins through greater efficiency.

According to Blackburn, BTE has successfully transitioned through many of the problems that naturally go along with company and leadership succession issues. "Now the issue is making the company more efficient to capture some of the growth of the Florida economy," says Blackburn.

Managing Growth Central Florida's growth has placed money into the local economy, adds Blackburn, but managing a company's growth can be equally important for its continued success.

"One of the things that has powered our growth has been the great economic growth of companies in central and southern Florida," says Randy Bennett. "Florida has been the home of strong economic growth over the last several years, with several cities doubling their populations in the past ten years alone."

In 1961 the company needed more land. "Dad came out and looked for land that was close to town but still convenient for customers," says Randy. "He settled for this tract on Old Winter Garden Road." The tract had an office with a large five-bay garage and a separate utility building.

BTE rapidly outgrew the original building as the volume of work increased. The company now has three buildings that provide 20 bays of installation truck and equipment repair, paint, and fabrication space. There is a stand-alone paint facility that can handle two trucks at a time. But the company could use some more space, remarks Glenn, as he looks around the location. "It really is pretty tight, and fortunately, business has been good enough to keep it that way."

Refocusing Efforts With the stronger financial results gained from streamlining management, BTE stepped into a role that more closely mirrored their father's business plan. BTE has refocused body building efforts on serving the niche markets that exist in central Florida.

"We are returning to our bread and butter work - the building of commercial work trucks," Glenn says. "When Dad started this business, any farmer, rancher, or business owner could come in here with an idea of what they needed in a truck to make it more efficient for their business. He could produce it. We've gone full circle and found ourselves just about doing the same thing."

Today's business at BTE is centered on building working trucks. The product mix distributed from BTE is designed to please the companies that use their trucks as work tools. "We aren't a place that just handles mostly one product. We build custom working trucks from the frame up," says Randy.

The customer-ready pick-up yard is lined with service bodies installed on cab and chassis units, vans that are upfitted with racks and shelving, and platform beds set up in western worker fashion with above-the-bed long toolboxes on both sides.

On the other side of the lot is a special platform body with a mesh cage structure built on top of the bed. The unit is used to lift workers into the heights of several orange trees at the same time so that workers can prune or repair any damaged limbs before the tree enters its growth period.

"Everything we do is somewhat customized," says Glenn. "You'll see mobile fueling trucks or welding supply trucks with special hoists for lifting tanks, all the way to a few very special bodies that we install for theme parks in Orlando. Even the service bodies that are placed on cab and chassis can have some special overhead racking installed to carry product. We do a lot of business with fire sprinkler companies, plumbers, and electricians. Those are the folks that really use their truck as a tool to accomplish their work."

Being known as an upfitter of working trucks does pay some dividends. Once a distributor is known to fill that niche market, the company can become recognized as a leader in the distribution business for installing the latest equipment and bodies.

"Bennett was one of the first dealers to install our production Slideaway Field Service Work Station," says David Osborne, a TESCO Hi-Lift representative. "They were really able to prove to their customer base that the work station concept would be more efficient and improve productivity. That requires experience and gaining some trust with the customer."

Glenn and Randy learned about developing customer trust from the perfect role model - their father.

Building a Reputation "Dad was really good at what he did," says Randy Bennett. "Dad learned how to be a blacksmith while working for Lester West mostly by doing the work and getting input from other professionals. But he already knew how to build something that was just a concept in somebody's mind."

"What Dad did was to go from the blacksmithing to some small assembly manufacturing when he first got started in his own business. He manufactured outdoor clothesline poles for people. By doing a good job, Ray expanded the business to the point where we had an infrastructure to work with."

Ray performed all of the tasks that people envision a blacksmith doing. "There was forge work and even some vehicle repair work done for the agricultural customers that lived on the outskirts of Orlando," Bennett says.

In one specific case, BTE played an important part of Orlando's downtown growth. "We had a contract to bend the rail steel to certain radii so that the construction cranes could go downtown and get around a building foundation," Bennett says. "In the late 1950s, the methodology for working with metal was still pretty crude compared with what we know today. It really was a hands-on business during my father's early career.

"Dad was successful because he built a reputation for helping the farmers, ranchers, and local businessmen turn their truck or trailer ideas into working tools. He always built from the concept up. You told him what you wanted and what it needed to do, and he would put it together for you."

Ray's blacksmithing techniques worked well into the following years. He did castings and forging for local buyers in need of a part to repair their tractors and other machinery. He then progressed into more complicated forms of welding as the metallurgical sciences moved forward. By improving his techniques and trade tools, he grew the business into a body distributorship that today, under the guidance of his sons, serves much of the central Florida marketplace. o

About the Author

John Nahas