128% sales growth at BAC Appliance Center, key growth insights Ken Jensen
As the business owner of Builders Appliance Center from 2005 -2015 and now Managing Director at Aspenwood Capital, Ken has a strong record of spearheading change, increasing revenue, and improving employee productivity and morale as well as navigating the challenges of the 2008 housing collapse. He is skillful in creating and implementing creative marketing strategies to solidify strong customer relationships. Ken Jensen has over 30 years of management and leadership experience. His career started in the financial industry as a Bank Manager and Loan Officer. Then, as General Manager of the largest branch of a large international company, his team had the highest sales and profit numbers in the industry.
- So about the time I was seven years old, I had a checkbook.
- The first job I had was I was on the phone calling, you know, smiling and dialing as they call it, and you’re just asking people for money left and right. That ended up being the big part of my career for a long time.
- But the funny thing that you learned about that is that, you know, most people they wanna pay, some people can’t. But if you’re patient and you work with them, and you don’t beat them over the head, and you build that relationship, more often than not you’re gonna get more bees with honey than being, you know, abusive or yelling at anybody or anything like that because most of the time, people care about what they’re trying to accomplish.
Going back to the basics, and I ran a route for a company by the name of GK Services, so that’s
- I work my way up at GK. Took me about five years to work my way up to being General Manager, and ran a very profitable and high growth business there. And I was their general manager for the next eight years after that. And then things kinda went sideways. And they decided they didn’t like me much anymore even though I was bringing in great numbers and everything, I guess, they wanted to make a change.
- I was booted, which was the best thing that ever happened to my life
- What do you think that you learn there that you brought to the appliance business?
- I learned a lot about budgeting because we were running a $25 million business at GK 25 cents at a time, or 50 cents at a time. So you are really ramping everything’s at a very low dollar amount, but we were doing 140,000 pounds of laundry every week to take back out to our customers. And I learned a lot about very specific budgeting around a large business, and how important that was
- Communication and sitting down with people and communicating with them, and help them see what was happening in other departments.
- “Well, these owners, what are they doing every day, you know, because they’re never around?” Well, I realize that very quickly that what they’re doing is they’re out there building those relationships and talking to people, and making sure that they’re answering the concerns that some clients may have, or making sure that they have a strong relationship.
- Meetings, I would have one every week and it would be the same exact time every week. We would have it on Tuesday morning, we’d have our sales meeting to where we had all the sales people together, we’d start that at 8:30. We’d have our staff meeting at 10 o’clock, and that would be my morning during that week.
- A lot of times, you know, reviewing financials was that one week of the month to where I’d take a couple days, and review it prior to the staff meeting. And then I would always share my financials with my staff. That was really, really important to me. I came to BAC, and they had this book to which was Jack Stack, it was called, “The Great Game of Business” and they wanted me to implement that.
- Taking the weaknesses, or the parts of your business that weren’t running really well, and really concentrating on those pieces to get those up to a level to where you were satisfied
- If you had high accounts receivable numbers, you may incentivize everybody to understand that accounts receivables is everybody’s job within the organization.
- You can have more of an impact on improving that within the business, and so you put little games around it, little incentives around it, you do profit sharing that is based on improvements in those areas, and you also work on helping people understand when things are good. You take really good care of them trough that profit sharing.
- Get everybody on the same page and trying to make sure that you’re always performing well and doing well.
- I didn’t do 100% disclosure, I wasn’t throwing salaries out there to where everybody know what everybody else was making, but I gave people enough understanding of the incentives that were in there and how that would impact our financials.
- The level of our pipeline really was the injection of new business going into that pipeline was really the responsibility of everybody. And then the next part of it was our profitability on the bottom line. Those were the two options or the two variables within that bonus program to where if we built up a great pipeline and we were paying attention to profit, and we had really strong profits on the bottom line, that’s the way that they would maximize their bonuses.
- How do you incentivize the people on the operation side? Well, had an incentive program to where we built a pool up for that profit sharing, and we split it evenly between all the employees in the company. The sales people still had their commission plans and all that kind of stuff, the operations people still have their salaries and all that. But this was that extra bonus that they got twice a year around July when they want to be on vacation and around Christmas time when they want to buy people presents. And it was a very successful for us.
- We’d send out a weekly email. Everybody understood it, they knew what it meant, and it would show everything was happen, the trending and everything, because you really have a buildup of that pool over a six-month period.
- I also kind of had this little flip of the switch around 40 years old to where I wasn’t really enjoying working for anybody anymore.
- “You need to move on,” that was one of the best things that ever happened to me. And I would actually recommend it for anybody in the word of jobs is that, you know, if a company and you don’t click and you move on, it’s not the end of the world.
- Could you really tell things were starting to happen in ’07?
- Ken: It was interesting because I never looked at permit numbers, things like that, that would have been so easy and accessible to me.
- Builder permits, you know, something that was the lifeblood of our business. Never looked at it, just never really gone involved with these different companies that do trends and looking at what’s happening in the market, and how that’s gonna affect, you know everything. I would just look at, you know, “Hey, there’s people coming in the door, and we’re doing pretty dang good.” But I’ll you, if I were to just done that, there were a couple a acquisitions that I made in 2008 and 2009 that I would have never done. And one was in the Aspen area, Colorado to where you…you have people that flying in every weekend, in their personal Lear jets, would you ever think that that business would stop
- There’s metro study, there’s different companies like that, there’s companies out there that…James Hardy does some studies as well. There’s a lot of companies around to where you can get a lot of great information. You can even go on to county websites, and know what the permit activity is, and what it’s related to whether it’s multifamily or single family, or, you know, whatever that is. So, you know, depending on how much you wanna dig, or if you wanna pay somebody that has more of a company based around that, you have very good access to those numbers.
- I had really had a clear understanding of that when I had a consultant come in and tell me what was going on with my management team.
- There was a lot of dysfunction, a lot of people that were more interested in themselves, than the team as a whole. And when I brought in these other individuals, we trued up that management team and made it stronger, and at the same time, hired in strong sales people because we had a very good reputation in the market
- And we went straight up, and we’ve had a nice incline, upward incline ever since that time about June of 2011 that’s when that happened. And it wasn’t just two closing, it’s that we’d actually had five stores so I had to close down four stores. And I went back to one location, which was this location. We had lost half of our revenues. We were at 25 million, we went down to 14 million. And when I sold the business, we were at 32 million in one location, which less overhead, less running appliances to different locations.
- So I took my experience from college, and I brought it in to BAC to make it the best place with the best food, with the best drinks and everything for everybody whoever came to one of our events. And we really turned in to an event center that just happened to sell appliances.
Oh, we probably had 20 a year
- Well, I think the most important thing is that, you have to take time to think through it. I don’t think that anybody has really paid a lot of attention to the people in that position in previous years. I’m trying to change that with Aspenwood, and with being part of this seller readiness advisory committee that I’m part of, and whether there’s other people around Denver that are involved in different ways in selling your business. But understanding that, it is emotional, and it is gonna affect you, it’s gonna affect your family, but it’s also gonna affect your employees
- When I ask for help during the recession from my vendors, from my people that just did things that I had no expectation of, but I asked, it’s a strength to ask for a help.
I would say that I’d always heard that nice guys finish last, and I’ve proved that wrong.
The Great Game of Business, Jack Stack