Surviving the startup phase and building a successful business is an incredible accomplishment. Investing time and sweat equity—apart from money—are key components of growing any business, as many entrepreneurs know. So what do you do if you want to take your business to the next level through expansion? Perhaps you have considered opening up another location or acquiring another successful business.
The best approach to business growth goes beyond the resources and kind of business you have, according to Paul Bronfman, chairman and CEO of Comweb / William F. White (Whites), and Paul Potvin, president of Whites Location Equipment Supply Inc. (Whites LES).
Comweb / Whites has rapidly expanded its services, becoming Canada’s only national single-source solution for film equipment and location support services. The company recently announced its acquisition of Vancouver’s Parallel Rentals Inc., now renamed Whites Parallel. This development follows Comweb / Whites’ recent $1-million investment in the new Calgary Film Centre; and expansion into Sudbury, Ontario; in addition to the acquisition of Vancouver’s Telescopic Camera Cranes Inc., now part of Whites LES.
Last year, Bronfman and Potvin, too, sat across from each other in negotiation after Bronfman cold-called Potvin and offered to purchase his 22-year old business, Location Equipment Supply Inc. (LES), which Potvin grew from his Toronto garage. Potvin now sits as a key member of the overall Whites management team and in turn, led the successful acquisition of Parallel in Vancouver.
For those aspiring to take the first steps in growing a business, Bronfman and Potvin share their top six business tips on how to expand successfully and what to expect from the process.
1. The right people for the right job
“I once read in a business book years ago that it’s about getting the right people on the right bus, and in the right seats in that right bus,” says Potvin.
As in the case of the Parallel acquisition, Bronfman entrusted Potvin as the right man for the job. “Frankly we would not have done the Parallel acquisition without Whites LES president Paul Potvin because this man has the expertise in that area of the business. So it was a logical, almost no brainer thing for us to do,” says Bronfman.
“You’ve got to have the right people internally to manage that growth and expansion,” adds Bronfman. “Just buying the equipment and buying capital without the right people is a waste of time, you’ve got to have the right group of people that take you to expand the company.”
2. The right kind of growth
According to Bronfman and Potvin, ensuring that the company grows in a manner that continues to appeal to current customers is key. Otherwise, customers might question your commitment to their needs.
“I think the company should grow from the core out. Build on your strengths. I’m into horizontal integration as opposed to vertical. Our route at Whites is to expand horizontally. In other words, we are appealing to the same clients but offering more goods, more services, more opportunities and incentives for the customers to do business with us,” says Bronfman.
“So it’s got to be controlled growth, organic growth, and growth not just for the sake of making it bigger, because bigger isn’t necessarily better as has been proven time and again.”
Potvin agrees, “Focusing on how best to serve customers is important and that’s what Whites LES and Whites Parallel continues to be about. It’s about doing what we can to keep the customer happy.”
Adds Bronfman: “Over and above just being a supplier, adding value to the relationship that may seem intangible, but over the long run, it means a lot to the client. Trust, integrity, reliability and no surprises.”
3. Put your employees first
“The employee comes first and then the customers. If you have happy, motivated, incentivized employees, then the customers will follow suit,” says Bronfman. “So we treat our employees like gold because they are the gold of the company.”
Bronfman advocates talking to employees and asking them: "What concerns do you have? Tell me what's on your mind? What’s bothering you? What do you suggest is going to make this transaction and this transition easier for you and ultimately the client?”
“We operate this company in a very open style, transparent management way. It’s a very, great feeling to have openness and transparency and that’s the way we’ve approached Parallel. And with Paul Potvin’s style, instead of everyone worrying about losing their jobs, they’re all excited that Parallel is becoming part of Whites LES.”
4. Champion the entrepreneurial spirit
As in the case of Whites’ acquisition of Parallel Rentals, founders and principals Andrew and Linda McLean will continue in their leadership roles with the company, which will remain at its existing location, conveniently located just a ten minute drive from Whites Vancouver.
“One of the key things about the Whites LES and Whites Parallel acquisitions is to encourage the entrepreneurial spirit of the original owners. You want to have that entrepreneurial spirit and you want to have financial incentives as well so that they do still feel like owners,” says Bronfman.
"We very much have financial incentives in place such as profit sharing. You can see Paul Potvin hasn't lost any of his zest or any of the great skills that he’s had from when he built LES.”
According to Potvin, his role in the company has changed dramatically."I’m still a little bit involved with the day to day stuff but Paul wants me to look at the bigger picture. People tell me, ‘Since you sold your business, you must be stepping back, working half days' When in fact, I’ve been working twice as much and I still run the business. Sometimes I have to remind myself that I don’t own the business anymore.”
5. Use a soft-handed approach
Bronfman and Potvin recommend a soft-handed approach that respects the company position and values.
“When I contacted my lawyer and told him that I have been approached to sell and I wanted him to help me broker the deal, he told me that for the next year, in terms of how long it’s going to get ink to paper, I will have two full time jobs: one is running my business and the other is selling my business,” says Potvin.
According to Potvin: “Most people think, ‘Hey, we’re just going to sit down and then maybe have a bit of back and forth,’ like buying a car where in the end you go get the vehicle, exchange money and that’s it,”
"That’s not how it works because it’s extremely complicated and everyone wants to protect their best interest. And no truer words were spoken than what my lawyer told me, which I told the owners of Parallel. At the time I don’t think they understood but I guess I can say that to other people as well who are considering selling their business. It’s quite the endeavour.”
Bronfman agrees with Potvin. “You put it right, managing your business and selling your business are two full time jobs. It was a tough emotional experience for Andrew and Linda McLean of Parallel because the business is their baby, so we tried to make it as easy and gentle-handed as we could. We don’t come in with our guns blazing. That’s not the way we are.”
6. Shared values
According to Bronfman and Potvin, business growth needs to start with finding a company that shares your business principles and personal values.
“In our niche side of the business, anybody can go out and buy the equipment. You just have to have a lot of money,” says Potvin. “You can buy tables and chairs and all that, but what you need is the right people, attitude and service.”
Bronfman notes that it was a logical, easy decision to acquire Parallel." We bought out two very great operators, Andrew and Linda McLean, who also decided that it may be time to move their company into the next phase of growth."
And of his relationship to Potvin, Bronfman comments: "Paul and I started with very similar business and personal values. From day one, we weren't trying to change each other. The more we got to talk about how we operate the business, we both realized how very similar we were in terms of our styles and how we approach to employees and clients.
"So it’s worked out. Usually when you plan something out on paper, it doesn't work out as planned, but in this case, one plus one has really made three. It’s very synergistic.”