20/06/2012 - 10:22

Quality service just keeps on delivering for mature industries

20/06/2012 - 10:22

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It may seem cliched and hackneyed to sceptical consumers, but many of this year’s top entrepreneurs genuinely believe that quality service is the key to their business success.

That is especially the case for people operating in mature industries like homebuilding, equipment hire and contracting.

There is always room for some innovation in these industries but people like Dale Alcock, Emanuel Dillon and Steve Versteegen highlight customer service when asked to explain their point of difference.

“It’s the focus we put on ensuring we deliver the right outcomes,” Mr Alcock said. 

“We are builders at one level but we’re also retailers and we understand people need to be happy, not just with the end product, the house, but how it’s delivered.

“It would be wrong us to say, ‘nothing will go wrong’. We’re better off to say, ‘it won’t all go according to plan but we’ve got the right structure and people and culture to deal with that’.”

Mr Alcock started his career as a bricklayer in 1979 and eight years later launched Dale Alcock Homes with partner Garry Brown-Neaves.

Mr Alcock said this move, followed by the launch of The Homebuyers Centre in 1991, was pivotal to the growth of the ABN Group, which now has 20 different businesses.

“We learnt that we could operate in different market segments,” he said.

Mr Alcock said all parts of the group needed to share the service culture.

“Culture is really important for us. If you’ve got it wrong, it needs to be fixed. If you’ve got it right, you run it as hard as you can,” he said.

ABN spreads its culture to new businesses by transferring key people from the existing businesses.

It has also discovered the difficulty of transplanting its corporate culture into an acquired business, as occurred after its purchase of Boutique Homes in Melbourne.

“They had different systems and processes, and they had different culture. We ended up having to turn over most staff until we got the right people,” he said.

That experience has not put Mr Alcock off interstate expansion. He sees “dramatic growth opportunities” in Melbourne, where ABN expects to be the fifth-largest homebuilder within two years.

He is also determined to hold the group’s position in Western Australia, where it is a market leader alongside Len Buckeridge’s BGC.

Starting at the bottom

Steve Versteegen also started his career as an apprentice. He worked his way up to being a plant manager for a small hire company, when he saw the potential to hire out rebuilt underground mining equipment. 

Mr Versteegen saw that this equipment was often replaced after the first lifespan but knew it could be refurbished. 

Established nearly 10 years ago, his business Pit N Portal has grown to have 70 staff, including 17 apprentices. It has also expanded from Kalgoorlie to a second workshop at Maddington.

Mr Versteegen said that delivering on its service promise meant having the workshops, the right people and the stock holdings to deliver what clients needed.

He believes its small size has also made it fairly nimble compared to the big manufacturers, which are the main competition.

The business is focused on WA but Mr Versteegen said its policies and procedures were being updated so it had a template that could be applied in other markets. 

“If you don’t have your policies and procedures right, you can bring in all the work you like but you’ll let people down and lose jobs as quick as you get them,” he said.

Emanuel Dillon set up his business, Complete Hire & Sales, in what was called a ‘dirty’ industry – the hire of portable toilets.

He set about changing the service standard in the industry, through initiatives like putting staff in uniforms, branding all of its gear and introducing training.

Complete currently has 70 staff and 200 contractors and Mr Dillon works hard to ensure everyone one of them is a good representative for the business.

That’s one reason why Complete does everything from manufacture to haulage and installation.

The biggest challenge for Mr Dillon is getting major resources companies to understand that Complete can deliver, on time, on budget and safely.

“You can spend all you want on branding and marketing but until they actually buy something from you, they are reluctant, so it’s a catch-22,” he said.

A recent breakthrough was winning work on Chevron’s Wheatstone gas project at Onslow.

Riding the wave

Geoff Backshall is another Perth entrepreneur who is highly protective of his brand.

Surfwear brand Rusty has global wholesale turnover of about $80 million, with about half its sales in Australia.

That makes it a lot smaller than competitors like Billabong, Quicksilver and Rip Curl but Mr Backshall reckons his business is in a much better space. 

“We’re a core brand and we’re the only one with a strong fashion bent that doesn’t rely on heavily branded product,” he said.

Mr Backshall said the low-key branding gave credit to Rusty’s market.

“We’re a surfboard manufacturer, that’s how we started, and we’re still one of the biggest surfboard manufacturers on the globe,” he said.

“People know that Rusty is a core brand but a cool brand.”

Mr Backshall believes Rusty is well placed because, unlike its competitors, it has not invested in bricks-and-mortar retail.

“Our number one growth strategy right now is shifting our key focus to online retailers,” he said. 

“Bricks and mortar is continuing to shrink and online is going to grow.”

He also has a strict policy of not allowing Rusty products to be sold at knocked down prices online. 

“Always be careful of your brand,’’ Mr Backshall said. 

“We don’t let anyone sell our stuff online off-price.” 

Rusty has many licensees around the world and Mr Backshall is looking forward to the next deal, with a licensee in China.

While Mr Backshall is working to protect an established brand, Sasha de Bretton is rapidly building a new brand, Million Dollar Makeovers.

Ms de Bretton spent 15 years combining paid employment with house renovations in her spare time and holidays and over that time pioneered a way to complete renovations in a fraction of the time.

“Very high-quality renovations in record time frames, that’s our point of difference,” Ms de Bretton said.

Her business promises a four-week turnaround, from design to final fitout, compared to 6 to 12 months for a traditional renovation

Ms de Bretton said she saw a gap in the market, because builders did not offer a turnkey solution.

“When the GFC hit, I knew that I could help people add value to their homes through rapid renovations. It’s increasing equity for my clients,” she said.

She faced many early challenges, including getting building licences and being recognised by councils.

She was a single mum and working full-time when she started the business, which took off very quickly, completing 34 renovations in the first year.

Ms de Bretton has shifted to doing larger renovations, completing about 20 per year. She now employs five in-house staff and 30 to 50 trades every day.

The business has also moved from just cosmetic renovations to now doing structural additions.

Ms de Bretton is keen to expand, with the development of a furniture and soft-furnishings collection and production of a television series.

She hopes that will give her a platform to take the brand to the east coast and allow the business to be franchised.

Overcoming adversity

While this year’s crop of Entrepreneur of the Year finalists each has a record of success, many of them have come close to the brink.

Rusty director Mr Backshall remembers being in the final stages of a capital raising in 2008, with three short-listed bidders getting ready to make their final pitch.

“And then Lehman Bros collapsed,” he recalled, plunging the world into the GFC.

“The risk appetite changed overnight and we were advised: ‘the offers were all off the table and good luck boys’.”

Mr Backshall turned to the group’s Chinese manufacturers, which had offered some years earlier to invest in the business. 

He called them and one eventually agreed, though it was hard work, with orders plummeting.

“That was pretty challenging still to get that deal done,” Mr Backshall told WA Business News.

“We took a huge haircut and, through that capital raising, actually lost control of the business. He got the controlling share but we saved the business.”

APTS managing director Paul Newbound is currently enjoying great success with his specialised pressure testing business. 

It has grown to have 140 staff and turnover of nearly $40 million.

Yet, as recently as 2010, he was forced to tie up all his personal assets as security, after being given one week by his bank to find alternative funding. 

AMS Tugs & Barges founder Alan Yeo faced a similar challenge and had to sell his personal assets to fund and sustain the company during a downturn. 

Having survived that scare, he plans to build the business to a fleet of between 25 to 30 vessels, with a view to an initial public offering in the next three to five years.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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