FE&S 2010 Dealer of the Year: C&T Design and Equipment Company Indianapolis: Reputation by Design

Driving each transaction down to a personal detail allows C&T Design to keep earning the respect of customers one at a time.

Reputation by Design

Most companies spend their days trying to cultivate areputation their leadership would like to have. In contrast, C&T Design and Equipment spends its days reinforcing a reputation it built years ago.

With 90 employees working at 11 locations and an estimated $70 million in annual revenue, C&T Design ranks 19 on FE&S' 2010 Distribution Giants list.

While the company's revenues may place it among some of the higher profile foodservice equipment and supplies dealerships in the industry, C&T's still thrives on the humble entrepreneurial spirit on which Roger Carter and Norm Terapak founded the company 39 years ago. Instead of trying to be the biggest in the eyes of the foodservice industry, C&T's leadership would rather be seen as the best in the eyes of its growing customer base.

"We believe in taking a humble approach to doing business," says Gawain Guy, one of the Indianapolis-based dealership's principals. "By focusing on what we do best with the right people and the right resources, we will continue to grow our business."

This seemingly straightforward approach has generated a sustainable business model and has earned C&T the respect of its customers, channel partners and peers throughout the foodservice industry and recognition as FE&S' 2010 Dealer of the Year.

C&T's Leadership

A trio of relatively humble individuals forms C&T's cohesive management team: Guy, Mark Green and Mike Kennedy. And all are principals in the company.

Guy and Kennedy joined C&T in 1996 after working together as corporate bankers. Both started in the bank's credit department before Guy made a move to commercial banking and Kennedy entered the investment side of the business. The duo got to know Carter as a customer of the bank.

In addition to a common employer, the men shared a desire to work for a small business, which would allow them to be involved with multiple areas of the enterprise instead of concentrating on one aspect. "What was attractive to us was being able to join a company with a reputation for doing things the right way and treating people the right way," Guy says. "We wanted to help people grow and take the company to a point where it is a leader in its industry."

Upon joining the dealership, Guy and Kennedy teamed up with Green, who had been with C&T since 1989. Unlike Guy and Kennedy, who had no foodservice experience, Green's experience was almost exclusively within the industry. He got his first job with a foodservice equipment and supplies dealer in 1977 and worked for a couple of others before eventually landing with C&T.

Kennedy serves as C&T's chief financial officer, specializing in such areas as vendor programs and relations, IT, accounting and bank relationships. Contract sales tend to be Green's area of expertise, while Guy handles most of the private sales. The trio shares the responsibility of managing branch office, warehouse, installation and drafting components of the business. "We do things in the best interest of the overall business," Green says.

Transition of Ownership

When Guy and Kennedy joined the company, Carter knew he wanted to get out sooner rather than later — Terapak had retired in 1988 — but he didn't have a specific timetable. So over the next six years, the trio methodically bought chunks of the business from Carter. And in January 2002 Guy, Green and Kennedy took over the company and its day-to-day operations, allowing Carter to move to Florida. Carter remains connected to the business as an advisor.

"This approach allowed us to move along slowly and not put the company in a highly leveraged position," Kennedy says. The gradual approach also allowed Green, Guy and Kennedy to develop a trust that only comes from working together over an extended period of time.

"What kept us on the same track was the fact that we share a common purpose – that and the fact that we all had a lot of work to do," Green adds. "Roger had a lot of foresight and he allowed the company to continue by not waiting too long to transition the company. I have a lot of respect for Roger in that regard."

And from all accounts, some eight years after the transition was complete the three partners' passion for the business had not waned. "Doing what I am doing with the partners I have, I am living the dream," Guy says.

Branching Out

The dealership's Indianapolis headquarters supports 10 ten branch offices with services such as accounting, IT, engineering and design. C&T's branches are sales offices headed up by entrepreneurial types who tend to approach the company looking to make a career change. As a result, the client mix differs from branch to branch and reflects the relationships and the type of experience the individual salespeople bring with them. For example, where one branch might specialize in serving restaurant chains, another might focus more on noncommercial foodservice operators.

This type of customer diversity can be helpful. "If one operator segment is down, it does not hurt us too much," says Kennedy, who adds that is why C&T has made more of a conscious effort to diversify its client base during the past five years.

Much like the company's ownership transition, the evolution of C&T's branch offices has been gradual. "We have never approached our expansion by trying to find the right geographic market," Kennedy says. "For us, it has more to do with finding the right person.

"We view our branches as a business within a business," he adds. "We want people who will take responsibility and ownership for their business within our business. There are a lot of people who might do well in other dealerships but might not be as successful here. That's why we spend a lot of time up front trying to make sure the person is the right fit for our business."

When establishing a branch, C&T starts out with one or two salespeople and a support person. The dealership will add personnel as the branch's business grows. "There is not a hard plan in place for each branch," Kennedy says. "We invest time and money as required." For example, C&T's first branch opened in Cincinnati in 1988. Today, that location has 19 employees – including 16 salespeople – and a 20,000-square-foot warehouse.

While C&T provides a certain operational framework for each of its branches, the managers running these locations have the flexibility to meet customer needs when it comes to making brand decisions. "We trust them to make the right decisions for their customers," Kennedy adds. "So if a customer has a request for a specific vendor, we will certainly meet that request. We think that helps us get good people because they know we are not going to micromanage them by constantly looking over their shoulders."

That's not to say, of course, that the branches are not accountable back to the home office. C&T has measurement systems in place, including those that evaluate cash flow and profitability, to monitor branch performance. "Once they hit a certain threshold, the risk is reduced," Kennedy says. "So our need to interact with them daily reduces as they become more stable. We try to put them in a position to do what they are good at and make it easy for them".

The Power Is in the People

While some C&T sales consultants come with foodservice experience, the company also hires individuals new to the industry. "Regardless of the individual's professional background, C&T looks for people not interested in a job but those folks with a desire to grow their careers and who buy into C&T's vision," Guy says.

"Everyone has that entrepreneurial spirit, and our people are good business people," Green adds. "Our customers can feel that."

When someone does join the company with no foodservice experience, the individual takes on an apprentice-like role, working and learning from one of C&T's veteran salespeople. The new hires' educational experience generally covers three areas: foodservice equipment and supplies, sales, and project management. All in all, Kennedy estimates it takes roughly two years to get a new hire with no foodservice experience ready to work on their own. "The amount of information our people have to know is shocking," he says. "In the meantime, they are adding value by helping our existing people manage their projects."

Guy knows from experience that this approach works. "Coming from my previous background, getting up to speed was a huge undertaking," he recalls. Guy had a mentor in C&T's Larry Simonel to help ease the transition. "I was basically in his office every day. There was no school for me to attend other than the school of hard knocks."

But Guy is a firm believer that the process produces sales consultants who are ready to add value to their customer relationships. "Your customers know and understand when you have the confidence and ability to represent their interests," he says. "And once that person comes through the process, they will be able to deliver value to the client, and that earns you a seat at their table."

C&T's business is project oriented and primarily consists of two main components: contract sales and private sales. Contract sales tend to be bigger projects designed by someone outside of C&T, and the dealership is asked to bid on a predetermined equipment package, which can include installation and other services. When working with private sales, C&T tends to have a bigger role in the project, typically managing the entire process from design to writing the product specifications to procuring and installing the equipment.

The dealer's leadership feels C&T is at its best when the firm manages the entire project. That allows staff to break down the project into design, specification, engineering the job, procuring the equipment and installation. "Each of these categories has subcategories that can require a lot of time and expertise," Guy says. "But approaching it this way allows us to come in contact with a lot of people on a professional level and earn their trust."

Some design consultants are leery of working with dealers that offer design services, too. "We tend to get that more from the consultants that don't know us," Green says. "The consultants that know us also know that we don't want to replace them. If we don't design it, we don't want to disrupt what they have created. We wear a very different hat when we are in that role."

Other opportunities, such as replacement sales, come about as a result of the company previously having managed a project for a customer. For example, while traditional route sales are not a part of the dealership's mix, C&T will handle replacement orders for its customers. Still, the dealership's inventory mainly consists of items staged for specific jobs.

A Consultative Culture

The company will also act as a business consultant for its customers. "If they want to make a change but don't know what they want, we try to help them through the process," Kennedy says.

For instance, earlier this year a restaurant chain was trying to determine whether it could generate the same level of output using a smaller footprint. To help its customer decide what to do, C&T set up a prototype of the smaller unit in its warehouse, Guy says. This lead to the discovery that the prototype needed a few minor adjustments to be viable. "We invest the time and resources because we know doing so will provide a return," he adds.

The same philosophy applies to the dealership's test kitchen. "We can go through the pros and cons of a piece of equipment with our customer," Guy says. "It demonstrates that we are a consultant-driven culture."

That culture ties back to the company's beginning under Carter. "Driving each project and sale down to a personal level was his style," Green says.

Taking a consultative approach to sales allows C&T to further differentiate the dealership from those companies that are interested in selling a product for a price. "Knowing what makes a product different and knowing how to apply it in the operator's environment allows me to have a unique position – one that's based on knowledge," Guy says. "It all comes back to education and application."

And that's why C&T's commitment to educating its personnel is ongoing. Manufacturers and reps visit the dealership's locations for product demos, and employees take advantage of factory training. The company also participates in the training offered by its buying group, SEFA, and twice a month it holds lunch-and-learn sessions at its Indianapolis headquarters.

In addition, earlier this year another wave of C&T sales consultants earned their Certified Foodservice Professional (CFSP) accreditation, joining their colleagues who had already achieved this status. To prepare for the certification exam, each sales consultant took turns teaching a class during the prep period prior to the exam.

"You can learn something new in this business every day," Guy says. "And we seek that knowledge because it will help us serve our customers better, which ultimately leads to more sales."

When it comes to education, the dealership tries to take an all-inclusive approach, taking into account the perspective of its channel partners as well as its operator customers. "Everybody's perspective is different," Green says. "We are all in the same industry but we are not all in the same business. So you have to take yourself out of your business to understand their perspective. It is not easy to do sometimes, but you have to have an understanding and respect each other's businesses.

"You can't win every battle," Green adds. "And when you step back to understand their perspectives, you can learn a lot."

Like Green, Kennedy embraces the personal aspect of the business. "I like that there are so many personal relationships in this business, both on the customer side and the vendor side," Kennedy says. "We even have personal relationships with some of our competitors. We've learned that business is business, but you can still form friendships with people."

C&T forms positive relationships within the Indianapolis community as well, participating in numerous charitable causes. One such example is Oaks Academy, an inner city school that brings together students from various backgrounds. C&T sponsors Mannerism, a lunch that teaches students proper dining etiquette in a fine-dining atmosphere. C&T is also an active supporter of the Indianapolis Children's Museum,

working with its haunted house program, which funds the organization's operating budget.

Conclusion

Looking toward the future, C&T remains focused on growing each branch individually and expanding into new markets when the right opportunities present themselves.

Mostly, though, the organization remains focused on one specific metric: customer respect. "I am very proud of our reputation," Green says. "We have never sought the spotlight, but our solid reputation within our market is very rewarding."

"It is amazing how your customers refer you to their peers," Guy adds. "That is the most rewarding way to grow your business. We don't want to be the largest dealer in the industry. We want to be the best."