College roommates bring CE-DFW from a game room to an industry leader
By Steve Guglielmo
Some companies talk of “humble beginnings” or “going from rags to riches.” If any company truly embodies that spirit, it’s CE-DFW Warehouse Solutions, which was founded in March of 1998 by Rene Verstraete in a game room in Dallas/Fort Worth. Sixteen years later, CE-DFW occupies 36,000 sq. ft. on three acres of land at the DFW Airport. This growth, all organic, comes in large part from the vision of co-owners Brian Hoffmann and Bobby Barr.
But Brian and Bobby’s journey doesn’t begin in Rene’s game room. It doesn’t begin at CE-DFW at all. This journey begins in a dorm room at the University of North Texas.
“Bobby and I were college roommates, we had known each other for a long time,” says Hoffmann. “Our goal had always been to own our own business.”
Both men came out of college and worked together for a large forklift dealer in Fort Worth.
“I was working at another dealer and I wasn’t happy,” says Hoffmann. “I had gone to school with Rene’s son-in-law who had mentioned that his father-in-law had opened his own business and was trying to grow it. It was just him and three technicians. I decided to go interview with him and in June of 2000 I officially left my job at this huge dealership to go work with four people in a game room.”
It was this kind of calculated risk and vision that would come to mark Hoffmann and Barr’s tenure as owners and lead to such startling growth.
After Hoffmann joined the company, CE-DFW began to grow. It added some technicians and moved to a proper office with a parts and service area. Throughout this period of growth, Brian and Bobby stayed in touch. In October 2001, Bobby decided to leave his job and join Brian and Rene at CE-DFW.
“When I joined the company, Brian and I acquired 50% of the business from Rene,” says Barr. “It was a good company, and a great opportunity to pursue our goal of owning our own business.”
He adds, “We were both young salesmen and we were doing very well financially. We took a huge pay cut to do what we did. It probably took us three or four years just to get back to what we had been earning at the other dealership.”
What makes CE-DFW’s steady, relentless growth even more surprising is that it was done solely through parts and service.
“When people ask me how we grew, the first thing that comes to mind for me is that most of our competitors start with an equipment line or logo of some sort. We didn’t do that,” says Barr. “It wasn’t because we didn’t think it was necessary, it was just that all of the manufacturers were taken. We had opportunities to move into other markets with manufacturers but we didn’t want to move. Dallas/Fort Worth was home and we thought we could grow a good service business right here.”
In December 2000, the company moved into its first office. In 2005, the company moved again into a 12,000 sq. ft. facility. Then again in 2008 into a 22,000 sq. ft. facility. All of the growth was organic and all of it was done without representing a specific forklift line.
“We consider ‘service’ to be everything that goes on from the time we answer the phone to the point we send the invoice,” says Hoffmann. “We grew to 26 technicians and more than $6 million in revenue with no major equipment line. We are better at service because we had to be.”
In 2007 Rene made the decision to retire from the business. Hoffmann and Barr agreed to buy the remaining 50% of the company to fulfill their dreams of owning their own business. Of course, as luck would have it, their dream was fulfilled as the economy began to turn sour. And with those lemons, Barr and Hoffmann decided to make lemonade.
“As funny as it sounds, that actually helped us tremendously,” says Barr. “We were a young company with not enough technicians. Good technicians in our industry are hard to come by. During that downturn, a lot of our competitors were laying off good technicians.”
During the recession, companies were doing everything they could to save money.
“We were slightly less expensive than the OEMs,” says Hoffmann. “We didn’t have a forklift brand to represent so with aftermarket parts suppliers and lower labor costs, we grew quite a bit. We were also very small, so where big companies had to start cutting heads, we were already very lean.”
Another thing that benefited the new owners tremendously was the lack of debt the company had.
“Rene was very conservative and wanted very little debt or risk,” Hoffmann says. “Because of that, combined with our willingness to take on debt or risk after we assumed control of the company, we were in a prime position to buy a lot of good used forklifts when the market was down. We went from having four trucks in our rental fleet to having more than 100 in the span of 12- to 18-months. Now we have more than 220.”
Adding a Line
By 2010, as companies were beginning to come out of the recession, Hoffmann and Barr noticed that many had neglected their equipment and needed a viable option for replacement.
“One person who has been instrumental in our growth and success is John Faulkner from FMH Material Handling Solutions,” says Barr. “He put us in contact with Lyndle McCurley from Doosan and we began discussing a strategic partnership. We are so grateful for that help and don’t take that lightly. Both John and Doosan took a chance on two younger guys and it has turned into a wonderful partnership for both of us.”
Having hired mechanics, expanded the company’s rental and used fleet, and added a forklift line kicked CE-DFW’s steady growth into overdrive. Two years ago the company moved into its 36,000 sq. ft. location at DFW airport. Last year, the company saw 70% growth. This year, the company is on track to see 45% growth.
“The other thing that I think fueled our growth was the willingness to allow people that we’ve hired to take on more responsibility and ownership for their role in the company,” says Barr. “During the downturn we were able to maintain good growth and we had good employees coming in the door and asking for work and we were able to put them to work.”
CE-DFW has certain tenets that are imbued to everybody in the entire company. The first is, ‘Treat people as you would want to be treated.’
“If you treat people with respect, generally you get that back. That goes for customers, coworkers and vendors,” says Hoffmann.
The second is, ‘You don’t eat the cow; you milk the cow.’
“Sometimes we have to explain that one a little. You can make a lot of money on one forklift deal or one dock and door project but if you do and the customer finds out, they won’t use you anymore,” says Hoffmann. “We believe in good, fair pricing. That’s how we’ve organically grown every year, with the exception of 2009, by 25% or more.”
Hoffmann and Barr sit down with every new hire and put them through a kind of company orientation making it clear what CE-DFW’s culture and values are and what will be expected of them.
“We show them where we started, where we think we’re going and what Brian and I stand for,” says Barr. “It was kind of born out of necessity. As we were growing rapidly, I began to notice that the level of service we were accustomed to delivering had slipped. I sat down our service department and basically threw down the gauntlet. I said, ‘Our sales guys are promoting our service at a much higher level than we are performing, and I’m hearing it from our customers. This simply isn’t acceptable.”
Since then, the cultural orientation has become a staple of the company. And it shows. This year, CE-DFW was named the 2014 Small Business of the Year by the Fort Worth Chamber of Commerce.
“The representatives from the Chamber of Commerce came to our facility and talked to our people,” says Hoffmann. “We’re very fortunate to have great people working for us. We try to hire good people and get out of their way. We monitor their progress but you’ll never hear us say that anybody works for us. They work with us and are a huge reason for our continued success as a company.”
Adds Barr, “It’s easy for either of us to sit here and say that we do the right thing or that we want to do the right thing. But you can ask any of our 100 plus employees and they would agree, that what we, as a company, strive for is to do what’s right 100% of the time. And I truly believe that helps fuel our growth.”
The rise of the Internet has become a major factor in our industry and CE-DFW is well-positioned to capitalize on this trend. In addition to its social media presence, CE-DFW’s website features an interactive chat function that customers have really enjoyed.
“A lot of people don’t want to take the time to call,” says Hoffmann. “There’s less verbal communication today than ever and adding the chat function on our website has been great in that regard. We get several conversations every day. And these are real employees right here in DFW that you’re talking to. I also get a copy of each transcript. It’s another step in the evolution.”
“Our arrow is still pointing up,” says Barr. “There’s a lot of growth left to be had in this market and ultimately in other markets.”
Adds Hoffmann, “In five years I would imagine we’ll have a couple of different locations. But if we don’t, I’m not going to say we didn’t reach our goal. If we can continue to have a 25-35% growth rate over the next five years, I think we should all be happy. We have definitely come a long way from a game room in a garage.”