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| Eoff Electric Supply Company: The Demonstrated Difference |
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| Written by Amanda Gaines | ||
| Sunday, 30 November 2008 23:00 | ||
“It’s managing your assets and expenses to line up with your growth,” said Les Williamson, president. “The bottom line is about our profit before interest and taxes, and that means we have to be quick on our feet.” Founded in 1919, Eoff was a family-owned business until 1999 when owner Joe Eoff sold the business to his employees. The company functioned as an ESOP from that point until 2002 when it was sold to Paris-based Sonepar, a privately owned electrical distribution group. “Within six months of buying it from Joe, the overall market in electrical distribution and construction, especially industrial, tanked,” Williamson said. “When you’re employee owned, it’s not unusual to be viewed as a higher risk with your financial institution, so we had a higher interest rate than we should have had.”  In addition, to complete the buy-out, Eoff did a one-time stock option rollover for employees to rollover 401k funds to buy and acquire stock. During that time, many employees lost 30% to 40% of their 401k funds. The company’s hands were also tied in regard to growth, and leadership was looking at dramatically shrinking the business and closing locations. Under the ownership of Sonepar, Eoff has added three locations and come close to doubling its sales revenues. “Sonepar is our bank, and our interest expense is considerably lower,” said Williamson. “We have more stability and support to grow, which has been good for our people, giving them opportunities to grow in our industry with career paths they wouldn’t have had under the ESOP.” The professional difference What Williamson especially likes about Sonepar is that when it acquires a company, it’s not to take over the culture and reputation but rather to help strengthen the company. “When Sonepar acquired us in 2002, the company wanted us to continue to have a local feel, and it wants our employees to feel like they’re part of a local family business,” Williamson said. In the years since the acquisition, Eoff has continued to build on its strengths, and under Williamson’s guidance, the company has continued to differentiate itself with the implementation of PDI—the Professional Difference Initiative. “Electrical distribution is not a sexy business,”’ said Williamson. “Separating yourself from the other distributors in your marketplace is vital to your growth and your ongoing reputation in the marketplace, especially in a down market.” From business cards to line cards, Eoff has branded itself with the guarantee of the professional difference. Williamson said in many instances, the electrical distribution field is not as professional as it could be, but that hasn’t deterred the company from raising the bar in simple ways. Eoff trucks must be scratch-free and appear in good shape. The company updated its facilities and buildings, developed a mandatory dress code for its employees, and trained employees to uniformly answer the phones. This consistency, Williamson said, is a good way to present a united and experienced front to customers who are used to the exact opposite when dealing with this industry. “If you do those things consistently, people recognize it, and word spreads,” Williamson said. “Our challenge continues to be driving that understanding down to the new employees driving our trucks or coming into our warehouses.” Staying nimble Eoff is also looked at as an industry leader in project management. From hospitals and wastewater treatment plans to hospitals, schools, and colleges, roughly 45% of Eoff’s business is from commercial construction projects. Because it’s considered an international company, Eoff attracts the best in the industry. In the last five years, as the competition has crumbled, Eoff has gained marketshare and project managers who were nervous about their futures. Williamson said roughly two-thirds of Eoff’s project managers contacted the company after their previous employer struggled or went out of business. As such, Eoff often gets the first right of refusal for potential employees who don’t meet up to the company’s standards of professionalism and expertise. “We can manage and equip our projects because we have the expertise to value engineer and help owners, principals, and general contractors get their numbers in line so the projects move forward,” Williamson said. “We have the inhouse expertise that many distributors don’t.” Eoff also has a department that works closely with government agencies, private industries, and electrical contractors for retrofit opportunities for commercial and industrial projects. The company received an award from the energy trust for providing the greatest amount of kilowatt-hours saved by a lighting retrofitting initiative for each of the past three years. But whether it’s management best practices or looking for greater energy efficiencies, the key to Eoff’s overall success is staying nimble and realizing the old ways aren’t necessarily the best ones. With the downturn in the market, Williamson has changed the company’s inventory management from a six-month average to a three-month average, which means the company is buying less but not impacting its customers. Williamson also sits with his HR director and credit manager every Friday morning rather than once a month for review and assessment. The company is tightening up its processes and tracking of its salespeople, and Williamson reviews sales reports by employee, outside salesperson, and inside salesperson on a monthly rather than quarterly basis. “Our strategic plan now as we go to market is no longer the annual plan that we’ve rolled out for years,” he said. “That plan is reviewed and adjusted on a quarterly basis, and we’ll continue to adjust our processes until we feel we’re running our business as efficiently as possible.” |