On any Sunday, drug-sniffing dogs are carefully probing through the warehouse and trailer parking area at Florida Utility's Apopka location in search of illegal drugs. Police cars and K-9 units fill the grounds, which are frequented by Federal Drug Enforcement Agents.
But Florida Utility doesn't have any problems with law enforcement personnel. "Law enforcement personnel requested the use of our new facility because it's fully fenced and it is large enough to handle several hundred trailers and containers," says Kelly Stephens, president of Florida Utility Trailers in Apopka.
"The different agencies plant drugs in some of the trailers and then test the dogs' skill level in finding the illegal substances," says Stephens. "Donating the facilities for use by law enforcement is really great for us. Once during a practice night search, someone tried to break in and steal some trailers. It wasn't very successful."
Stephens has a nose for searching out new growth opportunities for his central Florida trailer dealerships. He has grown the business consistently for the past 23 years through acquisitions, expansion, and a strong belief in providing a focused and competitively priced service to his customers.
Capturing Growth Central Florida has grown tremendously during the past two decades, and Florida Utility has strategically acquired, launched, and improved facilities to match that growth trend.
Stephens was first exposed to the trailer business and the dealership he would eventually acquire many years later by assisting his brother, Royce Stephens, the owner of the Tampa, Florida, Utility Trailers location. Kelly Stephens was involved in the banking business when the Tampa dealership opened. He helped his brother with the corporate structuring of the dealership and other business related issues.
The purchase of the Tampa location from his brother was an excellent choice, Stephens says. "By fully acquiring this strategic location, we have improved our geographic marketing area, and we were able to purchase an existing cash flow without the time and fresh capital required to launch a new dealership."
Stephens' friendly acquisition of another dealership provided the opportunity for his company to become a dominant regional Utility trailer dealer through the strength of combining the two independent dealerships under one umbrella company.
"Growth through business or distributor acquisition will actually accelerate your earnings picture, if done correctly," says Gary Hull, president of Buffalo Ventures, an investment banking firm that specializes in equipment and distributor oriented companies.
Ideally, when the acquiring operator doesn't have to meet stringent equity requirements and can use leveraged dollars to acquire another location that has positive and adequate cash flow to pay down debt, the leveraged return to the acquiring operator can be significant. In many cases, that return can outweigh any benefits derived from the launching of a new location in that territory, even if a distributor's franchises were made available to the new venture.
"Remember that the return from an acquisition is based upon the amount of capital invested, the actual out-of-pocket dollar, not the amount that is on the purchase agreement," says Hull.
Midway Operations Kelly Stephens is adding to the company's market presence by launching the company's third location. "We've opened a store operation in Lakeland, Florida, midway between Tampa and our main facility in Apopka," says Stephens.
Launching a store from scratch takes a commitment of capital. "Everything you do when you launch a store starts from day one," he says. "It's hard to negotiate a long-term lease that also allows you to test the waters with a safe exit strategy if the perceived market hasn't materialized."
Long-term leases and other commitments aren't the only problems to handle when launching a new location. Gary Hull of Buffalo Ventures explains that acquired businesses add strength to the overall company because of the additional experienced managers and technically advanced technicians that usually stay at the acquired company.
"When starting from scratch, all of the technical expertise and the top level management comes from one of your existing locations," says Hull. "You immediately put the overall company under some stress for a short time, or longer, while the new location becomes operational."
"From Lakeland we serve the needs of our platform and dump buyers," says Stephens. "We opened the location in Lakeland because many independent haulers live in that area." Lakeland serves many of the parts needs of these haulers. The location also fits into the overall company strategy as a strong used trailer sales location.
"We really focus on Lakeland as a prime example of our marketing plan and its mission to serve the full central Florida region where we are located," he says.
Corporate Headquarters The Apopka store is in an industrial suburb just north of Orlando. Apopka serves as the main clearing, accounting, and management office for all three locations. "Our new facility in Apopka is perfect for organizing and operating the three stores," Stephens says. "When we built this facility in 1997, we planned it with an eye towards continued growth."
The building has 10,000 square feet of office space and a parts display area. It also has an open-design shop that looks very similar to an outdoor recreational facility, and that takes full advantage of the beautiful year-round Florida sunshine. "It's incredible to hear how the technicians like working in the shop," explains Stephens. "They tell us that the 16-bay open-area design is one of the largest attractions of being part of Florida Utility."
The store sits in the middle of America's largest indoor foliage, small plant, and flower bulb growing region. The region also is known for the production of ferns that are used in hanging baskets. "When we entered this market area, we didn't have a clue about the amount of foliage that would eventually be shipped from Apopka growers on a yearly basis," says Stephens.
The Apopka dealership caters to these growers. "Armellini is a perfect example of a large grower and transporter of plants," Stephens says. "A standard Utility spec for them is a 53' x 102" model VS2R refrigerated trailer with some very specialized tracking and interior finish-out.
In addition to expanding physical locations in the Florida market, the company is expanding its sales and marketing team. "About six months ago, and for the f irst time ever, we've brought in a sales manager to help organize and assist the different dealerships sales efforts," says Stephens.
Stephens brought in Phares Acuff, a 21-year veteran and district sales manager in the commercial truck tire industry. "We are excited about Phares because with his background, he's called on just about every company in Florida that runs on tires," Stephens says.
Acuff has launched a plan of action that broadens the mix of trailer products offered while still retaining the balance and focus that Florida Utility has established.
"If you look at the three stores, you see many different types of trailer buyers," says Acuff. "Florida Utility is first and foremost a Utility trailer dealer; however, our geographic area puts us in front of different types of trailer buyers. We are a competitive organization and want to offer buyers some products that are competitive with those from their current manufacturers."
In the six months that Acuff has been on the job, Florida Utility has negotiated sales and distribution agreements with Lufkin Trailers and R&S Dump Bodies. "We have shown some of the manufacturers that Florida Utility is serious in its desire to reach into the Florida market," Acuff says.
"For example, adding Lufkin Trailer to the mix is going to give us a citrus trailer," says Acuff. "That's a customer need that we can now serve." Eight of the ten original citrus trailers that Florida Utility ordered for stock inventory three months ago have been sold, he says.
"It took a lot of effort to create the Lufkin agreement. They designed this citrus trailer around our customers' needs. Lufkin sent engineers to meet our customers and to review their expectations for the trailer. Then they went back and designed a trailer for our market's needs.
"Our agreement with R&S Dump Bodies came about in much the same fashion," Acuff says. "We wanted to capitalize on the construction and road improvement activities in central Florida. Our Lakeland location is centrally located to a large population of owner-operators who haul dirt."
R&S arrived in central Florida and studied the needs of the market, Acuff says. R&S identified the main competitor in the region and the needs of customers who buy dump equipment. "R&S has brought several newly designed dump trailers into our market on a very competitive level to local dump product manufacturers. We're now an exclusive dealer for these dump products that were designed for this specific market."
Stephens' business and personal philosophy sets the tone for operations at Florida Utility. He emphasizes an aggressive and focused business environment with the belief that people skills have an equal role to play in making the business profitable.
"Much of the company philosophy has been learned from many years of practicing business and people skills," says Stephens. "Understanding the principles of both items is important; moreover, knowing how they will affect your business is most important."
Keeping a business balanced in terms of products and services is a key factor in obtaining healthy company growth, he says. "We focus on trailer sales and the services that can be offered in conjunction with the sales, leasing, and rental of trailers. We can't be everything to everyone."
Stephen's competitive spirit assures that Florida Utility is competitive in the marketplace. "I've been a competitive runner for many years, and I still play a lot of local league basketball," he says. "I believe that carries over into everything that I do." When Stephens received the opportunity to open the Apopka Utility dealership, he put many of his business and personal beliefs into practice. At that time Stephens visualized the importance of having long-term employee relationships.
Stephens emphasizes employee relations as an important part of the company's strength. Attracting and keeping good employees is the key to building and remaining a successful business. "You've got to letpeople know how important they are to the organization," he says.
"Florida attracts a great deal of qualified technicians," says Stephens. "But the key to low employee turnover and business continuity is to provide a work environment and pay structure that makes people want to stay."
That philosophy is working for Florida Utility. More than 50% of the employees have been with the company for more than 10 years. "Some of our key management people have been with me for a long time," says Stephens. "Carl Rainwater, our treasurer and operations manager, has been here for more than 20 years." Stephens credits Rainwater in helping to keep the company, now with three locations, focused and on track with much of the daily activities that are carried out in the business.
Positive Environment Providing a positive work environment is continually exhibited by promoting such activities as the monthly barbecues for each dealership's personnel. "It's good to have everyone eating and talking with each other," says Stephens. "That provides a positive atmosphere and helps build relationships among employees."
Fostering closeness within the service and parts personnel helps to reduce defective work or repair comebacks, he says. "No one wants to have a piece of work come back in front of their friends.
"We're not just resting on our past success," says Stephens. "One of the next big areas of growth for us will be the onsite storage business." Currently the company has approximately 1,300 rental storage units that consist of both onsite trailers and ground load containers.
"Along with the onsite storage business, we also have a long-term trailer leasing business that is experiencing continued growth," says Stephens. "We operate three tractors to deliver storage units or leased trailers to the customer's door." Stephens emphasizes that is just another example of Florida Utility following the best business practice of catering to the customer's needs.