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In the Studio

HATTIE: Hi. I'm Hattie Bryant. Our goal here is to teach by example; to provide you with the best role models; to show you that there are millions of good people in this country running good companies These men and women try every day to do the right thing and over time, their customers reward them with undying loyalty.

According to research done by the USC Marshall School of Business, the average life of a family-owned business is 24 years. Today you will meet two men who have passed that bench mark and they defy that fact 70% of all family business fail when the attempt is made to pass the business to the second generation.

(Voiceover) Rick and Jeff Presant are brothers who are building on what their father started.

When your washing machine or refrigerator break down, where do the repair people get the parts to fix it? In Mt. Ephraim, New Jersey they will likely go to All Brand Appliance.

Unidentified Man #1: All right. How much is this?

RUTH (Employee): Eight sixty-nine plus the tax.

Man #1: That's actually pretty good. The other guy wanted $12.

RUTH: OK.

HATTIE:

(Voiceover) All Brand sells parts, 13,000 different parts, both retail and wholesale.

RICK PRESANT (Co-Owner, All Brand Appliance): We have our counter area divided up. That's for the consumers, do-it-yourselfers. And this is our wholesale counter. And basically, the reason we divide it up is we're mostly a wholesale business. These guys are the reason we're in business, and we want to get them in and out so they can get back out on the road.

Unidentified Man #2: When you call, you get a person, you don't get an automated machine. And they always tend to help you, they bend over backwards. And they're local enough for me to come and get stuff. I can just make a phone call, `Hey, I need this,' and `OK, we'll get it for you,' and they go out of their way to get stuff for you, also.

HATTIE: OK.

RUTH: George, is it a double-wall oven?

GEORGE (Customer): I don't know.

RICK: Things get busy enough, we pull everybody in the store out to the counter.

HATTIE: So all 13 people who work for All Brand could possibly be back here helping customers at once.

RICK: They could. It would be nice if we needed all 13. We haven't gotten to that point yet, but...

These are where most of the appliance parts are. The exception is th--are the maintenance items, which...

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RICK: This is the bulk merchandise...

HATTIE:(Voiceover) Rick and Jeff Presant are buying the business from their father, who was a repairman himself. He got tired of driving long distances to pick up parts, and so All Brand was born. Older brother Rick talked about the beginnings of All Brand and how he joined the business.

'Cause I was born in the Bronx, and we moved out. He wanted to make a better life for his kids, and he was a hustler. At one point, when he first started his service business, to supplement his income he drove a school bus, he worked on the railroad. I mean, he did what he had to. Basically, I guess it was about the early '70s, the repair business was going well, but there was only one store in which to buy appliance parts in the entire county. And they basically had a take-it-or-leave-it attitude, `We're the only show in town.' And he knew another business could be successful. What he needed, though--I mean, he had the idea, he had the financing--but he needed somebody who knew the business. And he eventually talked the manager of that store to go into business with him.

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HATTIE: He recruited his competitor.

RICK: His competitor, who was one of the most knowledgeable men in the industry, and had a following of repairmen who really enjoyed and liked dealing with this man.

And when I got out of college, reality hit. And there...

HATTIE: What do you mean, you had to pay your bills?

RICK: I had to pay my bills. Somebody once said to me--he asked me what I did, and, you know, I said, `Well, I'm majoring in political philosophy.' And he said `What, follow flies?' And I think that man said more than he realized, and it opened my eyes.

HATTIE: And you decided to learn about parts instead of politics.

RICK: Yes. With what I had a degree in, I could either continue my education or I had to get a job. And I think I actually did, I cut lawns one summer, you know, just to have money, and I gave things a lot of thought. And I realized I had an opportunity here; I had to take advantage of it.

HATTIE: Did your father say, `Whenever you want to work in this business, Rick, we've got a job for you,' or did he say, `I expect you there,' or--you know, what was his point of view on it?

RICK: Well, it was pretty much like he's handled everything with us. He let me know there was an opportunity, but it was my life, I could do what I want with it.

HATTIE: So there was not a lot of pressure.

RICK: No pressure at all. And because I couldn't use my education, I almost, in some ways, felt like I had failed. And I went in there determined to do something, to make my mark somehow.

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There were some basic disagreements between myself and his partner and his family, more in, you know, our attitudes towards people and maybe our work ethic. I was content with learning, but at some point I had to do more. And I guess it was after about five years is when I left to open my own business. You know, besides the challenge, I wanted to be in control of my destiny.

HATTIE: Did you do the same kinda business?

RICK: Same kinda business. I was about two hours away, so we weren't competitors.

HATTIE: So no one was angry. Your dad said, `Go.' You know, did he bless you and say, `Go' and...

RICK: Yes, exactly. He gave me--in fact, they helped me get started. I bought my initial inventory from them. All my vendor contacts, everything was through them.

So I'm on the go 18 hours a day, and comes time for the grand opening. I send out flyers and everything and I opened the doors, and nothing. I sat and sat. The phone book hadn't come out, so the consumers, the homeowners didn't know I existed, and the wholesale--you know, people were buying parts elsewhere already. So it's not as if they're gonna come flocking to me. Plus, what I also miscalculated--I got done work, went home and sat 'cause I was in a strange area, I didn't have friends or family.

So, from going 18 hours a day on the go, I was down to doing nothing, at the beginning. And I started to get sick. I start, `Oh, my stomach, my head, what am I doing to myself?' And, miraculously, when the phone book came out, all my ailments healed. I...

HATTIE: When the customers called, your pains went away.

RICK: Yeah, they went away. After a month, I hit the break-even point and the business started to grow.

HATTIE: So really, there was a lot of fear.

RICK: Yes, I did, I learned a lot about myself.

HATTIE: Because look what you had done. Yeah. Look what you had done. You had told your fa--your father, his partner, that son, `I'm outta here, I'm doing my own deal.' And now you're doing it, and no customers.

RICK: Nothing. And I was, I was afraid, and like I said, especially after--when I got done work, I had no one to turn to. You know, it was--I mentioned earlier about, you know, today my family is very important. There's someone for me to go home to, to talk to and just confirm that everything you're doing is worth it. So it was really a learning experience.

The industry had changed a lot. It had become a lot more competitive. There was a lot of price-cutting going on in this area, back home. And my father was starting to have his fill of things, and there was--you know, some basic disagreement started to arise between him and his partner. And there wa--and he was--there was talk of a split. At that point, I told him if things were divided up, I would come back. And that's what took place.

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The first thing, unfortunately, is I had to cut a lot of prices. One of the reasons my father started to get disgusted with this business is the price-cutting. Major competition had moved in, and the price--bottom was dropping out of the prices. He was from the old school, you know? We supply a good service at a fair price, and he was slow to react. He was like, `Well, you know, I can't do that.'

I guess when I came back, I wanted everybody; I wanted the opportunity. Let me just see how low I have to go with the pricing, see where the margins are and see if we can go from there. And I met with a lot of the people individually. They had known me from, you know, my first time at All Brand, and they knew how I felt toward them, and I adjusted the price structure and we got things going.

Our core group of people have been here anywhere from eight to 18 years.

HATTIE: That's fantastic.

RICK: And again--and they have learned. Ruth, the woman on the counter there, she is one of the best parts people in the industry. I have kept customers because of her.

RUTH: George, is it a double-wall oven?

Unidentified Man #3: Then there's a gasket right here; that gasket.

RUTH: That one there?

Man #3: Yeah, that one there.

RICK: There's desire to help, do the extra step, there's energy. It has to be there. And, basically, the same with Denise, who is in the purchasing office.

DENISE: I take the order, I process it, I research it, I see if--you know, what needs to be picked up. I schedule the delivery of it, make...

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HATTIE: (Voiceover) I hear this often, but never more enthusiastically than from Rick: `Our employees are the best.'

RICK: Well, I think we have the most knowledgeable people in this area, maybe in the industry.

HATTIE: Hey!

RICK: We have great people here.

There's something that makes you want to come back and deal with somebody. It's what basically separates--you know, everything is so competitive. We all have similar pricing, similar inventory, similar service. What is gonna make you different? And it's your people. It's like I had mentioned earlier, the people I have here--people want to deal with Ruth. They want to deal with Denise. Jeff, my salesman, he's out there on the front lines. When we got into the apartment business, every customer was dealing somewhere else. He had to get them to say, `Well, let me try All Brand, let me see what they could do.' And then from there, it's up to the other people here to maintain it. It's what separates you, sets you apart from your competition.

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HATTIE: You were 22.

JEFF PRESANT (Co-Owner, All Brand Appliance): Right.

HATTIE: (Voiceover) Jeff joined the business in 1984.

JEFF PRESANT: My father insisted upon me getting a job doing something else before I came here full time. And I did it for a summer, and I found out--I got to see what it was like, you know, on the other side. And it was interesting. I wanted to own my own business because I wanted to be able to control my own destiny. I wanted to be able to feel like, `This is mine.'

RICK: He pretty much came into the business and, again, there was that new energy, also. And we just started working and cleaning up this place.

JEFF PRESANT: My brother and I always had a great relationship. There was a 10-year difference , but I was always able to talk with him, communicate with him. You know, he was always there for me. And our relationship, fortunately, hasn't changed, even in business.

RICK: My brother and I both had a love and a respect for each other before we went into business. Now, of course, there's always gonna be disagreements and problems, and you have to communicate them and work them out. The--but if you have this respect for each other, it's an additional reason to want to solve your problem and move on. You don't want to hurt that person, you don't want to hurt your family.

JEFF PRESANT: I really watched my father. I watched the way he did things, and he was gruff at times, but he was up front and honest with people.

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RICK: And we have our disagreements, I mean, believe me, but it--and I tell that to the people here. You know, communication is so important. You're here more than you're with your families. You know, any advice--they would say in a family, if something's bothering you, talk about it before it becomes an all-out fight. I tell ever--we tell everybody that: There are gonna be problems, let's discuss them early, get them out, and then move on. And it's worked very well for us. It's one of the reasons people have been here so long, I think.

HATTIE: And with only 13 people, that's very critical.

RICK: It's very critical.

HATTIE: Have you had someone come to work here who did not fit into this culture of respect? I'm feeling like that's a big word to you.

RICK: It is. Yes, and that's one of the harder things in business, is cutting loose, you know, it's--if people don't work out. And you have to get the right people, and for that reason, how they treat people, their work ethic--there are a variety of reasons. But yeah, it--you have to respect not only your fellow employees, your customers--your good customers, just whoever--whatever people we deal with, vendors...

HATTIE: Whoever walks in this door.

RICK: Yes.

HATTIE: You expect everyone here to treat every person who walks in this door with respect.

RICK: Yes, that's a requirement.

HATTIE: OK.

RICK: And, you know, it's how I feel about people, and it's also, I think, good for business. We've had people, `Oh, he's a good customer, let's take care of him.' Well, this person isn't, so uh, who cares? But that person turns out five years later, gets a job somewhere and, all of a sudden, he's a purchaser for a large company; you treated him with respect, he remembers you. So besides, this is a good philosophy in life, it's good business. Treat everybody well. You don't know when, you know--or another way--they say--about `Don't burn bridges.'

HATTIE: Yeah.

RICK: And it's very true.

9 LB

In the Studio

HATTIE: What can you live with over the long haul? The success of this business today is based on Rick's willingness to stop and make some changes that would enable Rick and Jeff to go forward. Rick was not willing to partner with someone who did not share his same outlook on people. You may need partners, you think, because they have information or even money to help move your business forward, but you'll only create problems for yourself if you don't find a partner who shares your same values. Rick and Jeff's people philosophy is based on the word, `respect.' Every human being who walks into All Brand supply is treated with respect. That means strangers or long-term customers. JOE (Customer): I'm here every day, just about. I spend a lot of money.

HATTIE: So is Ruth the person who usually helps you?

JOE: Ruth or Jeff or Mike. Sometimes Rick is down on the counter.

HATTIE: OK.

(Voiceover) No wonder Joe has been coming into All Brand for 18 years.

JOE: They probably stock, you know, all the fast-moving stuff and a lot of the things that--you know, some of the stuff I'm sure on their shelves hasn't moved in a year or so, but they have quite an inventory.

HATTIE: And if they don't have it, they'll get it for you?

JOE: Usually, yes, they can, if it's available.

HATTIE: (n the Studio) Learn from Rick and Jeff Presant: When you treat people with respect, you'll build long-term relationships, and that's how you build a long-term business.

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HATTIE: Part of All Brand's success is based on location. They're easy to find and they've been in the same place for years.

Unidentified Man #4: And you know what else I need, Rick? I need a washer belt.

RICK: You need a washer belt?

HATTIE:

(Voiceover) Small-business owners often make many mistakes on the path to growth. And Rick confesses when he tried to automate the business, he had headaches until he found the right supplier.

RICK: OK, we got five items altogether.

(Voiceover) And as we grew and I found I needed some information on my customers, some sales history, that it just didn't give me is when I decided to purchase a new system. I had downtime where I was down two, three days at a time without a computer. And one day I just decided, you know, I can't afford another computer right now, but I can't afford not to buy another computer right now. The immediate benefit: It reduced the accounting bills and it also gave me more insight, you know? I was looking at reports, the financial statements from my accountant. I thought I was reading them. But when you sit down and you're making the entries and you format it, I saw things that I was missing when they were doing it.

HATTIE: OK. So it gave you some insight....

RICK: Yes.

HATTIE: ...that, you kinda thought you understood what was going on, but now you really know.

RICK: Now I do.

HATTIE: So do you lean on the information that the reports print out for you, or do you do this from instinctive 20-something years of doing this business?

RICK: Well, the below-order reports are a guideline. There is a feature where--it's autopoint calculation. They can tell you when to buy more or less, but I rely on myself for that.

HATTIE: So what would your business be like today if you were still using this original accounting system or inventory system that your father started with? This looks like a library card.

RICK: That's right. I can't imagine. I know I would need twice as many people to do what I'm doing now. It basically would be impossible. And whoever was pulling the order, if they saw they had one left and it said to reorder when you get to one, they would take it, put it in a box up front. And every night, you came up and took the cards out, and you sat down and you had 10 purchase orders and GE, and you wrote down, Frigidaire, and this goes here. And that was the way you did the ordering.

HATTIE: And now you just type into your terminal upstairs.

RICK: That's right. How'd I ever do without it? When, you know, we're doing changes and the computer is down the few times that it is, we're in trouble down here.

HATTIE: It's like, `Wait a minute. We're hooked. We're stuck. We have to have it.'

RICK: Having to go to the price list even to find a price, just that act alone...

Unidentified Man #5: OK, 459211, is that thermostat knob in that kit?

RUTH: Right. Right.

RICK: We run out invoices with 40, 50 items on it with different price structures, quantity breaks. If it took one person, it would take them four hours to do what they're doing in maybe, you know, 10 minutes.

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HATTIE: (Voiceover) Rick and Jeff are proactive about building the business and anticipating change.

RICK: We had steady growth through the '80s, but the industry itself was changing. It was a mature industry by then. There were parts stores wherever there should be a parts store. There were more distributors than ever fighting over the same customer base or a smaller base. So there really wasn't gonna be any more growth in the appliance parts business and, you know, we were looking for something else--you know, what could we do? Which way could we turn? And we really didn't know. That's when we met Jeff Stafford.

JEFF STAFFORD (Salesman, All Brand Appliance): OK, you got our fax, Steve?

STEVE: Yep. Yep.

JEFF STAFFORD: And did you get a release on the order?

STEVE: Yep. Good to go.

JEFF STAFFORD: OK, we're OK to ship that order?

STEVE: Yeah.

JEFF STAFFORD: And how about the calcium chloride...

RICK: Jeff had worked for an apartment supply firm. He had an inside job, and he was looking for a career change. And we became friends and, you know, I was telling him some of, you know, my problems and what I was looking for, and we decided to give it a try. We got into the multifamily housing business. We started calling on apartments.

JEFF STAFFORD: I felt that I wanted to get back to a smaller company and a more personal service. There's a strange sense of just satisfying a customer's need, whatever it is. If it's a small $2 part, it doesn't mean too much to us, but to that customer, it's very important. And we get it and get it shipped out to 'em, and they're very happy.

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HATTIE: (Voiceover) One of the ways Rick keeps their name in front of customers is by producing a newsletter.

RICK: We started, I guess, about three years ago.

HATTIE: And who gets it? Who receives this?

RICK: Wholesale accounts--the, you know, apartments and the services. There'll be some items, maintenance, I put appliance parts, and then I put I guess you would call 'em crossover parts.

HATTIE: (Voiceover) Rick developed a catalog which makes it easier for customers to do business with All Brand.

RICK: Jeff, our salesman, told us from the beginning eventually we're gonna need a catalog. But, you know, I kept running into these financial roadblocks, I couldn't afford one. So our first plan was to buy a stock catalog and put our name on it. And that did absolutely nothing. We tried that a couple of times.

HATTIE: You did that.

RICK: Yeah.

HATTIE: But no one responded.

RICK: Nothing, because it really wasn't laid out right and it didn't have the maintenance supplies in it. Finally, I just woke up one morning and said, `I'm doing the catalog. I'm gonna do this maintenance section, and that'll be it, and I'll get what I want.' Well, at that point, I started working--it was seven days a week, I guess it was 80 to 90 hours a week. I lost track. But when we got the first few pages back and the proofs, we were really excited. It was what we wanted and it was clean, it looked good, and I became possessed.

HATTIE: You didn't know how talented you really were.

RICK: Well, I was happy. It was satisfying, but, you know, all the hours you're sitting there, you're saying to yourself, `Is this really gonna work? This better do what I want it to.' It was gonna be tough meeting the deadline, though. I mean, we wound up adding a lot more because it looked so good. I wound up getting a little help, though, from good old Mother Nature. We...

HATTIE: The weather?

RICK: The weather. I guess it was the first Saturday in January that they were talking about a major winter storm. So I called my wife and I said, `Look, I think I'm gonna spend the night in the store. There's this major storm coming and I gotta make sure, you know, I get in here Sunday.' Well, that major storm turned out to be the blizzard of the century. We got 30 inches of snow, the all-time record, and one night at the store turned into four nights at the store. But I worked 18 to 20 hours a day, uninterrupted, and we were able to meet the deadline. You know, it worked.

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HATTIE: So the bottom line that everybody wants to know is, is this making you money now?

RICK: Well, that's what's nice. Rarely does something start out and end like you planned it. I guess it's been on the street about eight months now, and we're up 20 percent over the same eight-month period last year.

JEFF PRESANT: There are challenges here day in and day out, and I enjoy it. And, you know, on one hand the challenges can pose problems, but it's the idea that there's a challenge and it keeps you on your toes, and I love it.

RICK: Yeah.

HATTIE: So what do you see for the future? Do you see yourself together in business 20, 30 years from now?

JEFF PRESANT: I see our kids doing it and sending us the checks in Florida, right? Won't that be fun.

(Voiceover) After meeting Rick and Jeff Presant and watching them run their business, I decided one thing for sure: Their dad must be proud.

In the Studio

Stop now and prepare to pass your business on to family, employees or even customers. It's succession means success.