Fountain Fantastic

Fountain Fantastic

strategy by Mark Gordon | Managing Editor

Going from $6 million in annual revenues to a projected $30 million in two years - even in this economy - can be done. Rigorous employee training is essential.

Jeff Horvath has latched on to a pair of business principles over the past year that can be as overlooked as they are simple.

And while Horvath modestly admits he's not a genius, the realization and execution of these principles has led to a total Mensa-like transformation of his business, which manufactures and installs artistic water fountains in sites from hotel lobbies to casinos to community parks.

Horvath's company, Venice-based Wesco Fountains, doubled its revenues in 2007, from $6 million in 2006 to $12 million last year. Even more eye-popping: It's projecting at least 150% growth in 2008, to $30 million in annual revenues. The company has also hired 12 employees over the past few months, bringing the total to 40.

Astounding growth for any small business, but for one with most of its fortunes previously tied to the housing market, it's even more remarkable.

Indeed, according to Kathy Baylis, president of the Economic Development Corp. of Sarasota County, companies in real estate feeder industries in Greater Sarasota, such as cabinetmakers and door installers, are suffering significantly in 2008. Layoffs and revenue decreases are standard.

"But there are some companies doing extremely well," Bayliss says, citing Tervis Tumbler, the Venice-based drink ware manufacturer and retailer, as an example, in addition to Wesco. The two company's headquarters, coincidentally, are in the same North Venice industrial park.

Tervis Tumbler's growth, while substantial, has been a systematic and steady five-year building process. The Wesco growth, however, has been of the shot out of a cannon variety.

Horvath's principles for the growth are based on a two-step formula: The first step was realizing that all business booms, no matter how big, will end some day and it's best to have a diversified customer base before things turn sour. For Horvath's purposes, that boom and bust is the Gulf Coast residential housing market.

The second principle is the concept of cross-training employees to know other aspects of the business. This has long been an entrepreneurial paradox for many small business owners: A growing company usually needs its entire staff out doing company stuff, not stuck in a training room learning other people's jobs. But then the lack of trained employees usually prevents a company, especially one with a limited staff, from growing.

Starting late last year though, Horvath began looking at the training program as a must-do, especially considering the company was growing so quickly due to successfully seeking business outside of its old niche of residential communities.

The training program for all new employees includes daily morning briefings for the first month, where a customer service rep might learn about how a fountain design technician goes about his job and vice versa.

What's more, Horvath learned from observing other businesses that the bigger a company gets, the more essential it becomes to have company-wide consistency, from order forms to customer surveys. That consistency runs deep at Wesco, which keeps a packed file filled with pictures, diagrams and reports for every order.

Says Horvath: "It is important that everyone do things the same way."

Picasso and Chagall

To steer his employees into doing things the same way, in addition to growing so substantially, Horvath has had to rely mostly on his business instincts - there are only a few other companies in Florida that do something similar to Wesco, which is an acronym for water engineered systems company.

Horvath says the company sells concepts, not just simple water fountains, when it takes on a project. Wesco's product list runs the gamut of the industry, including floating fountains for ponds, architectural fountains, rockscapes and waterfalls. Clients include Bally's Park Place Casinos, Sea World and Universal Studios. Wesco fountains have also been used at dozens of sporting event sites, including Ryder Cup golf tournaments, NASCAR races and college football bowl games.

In addition to the sale, the company also manufactures and installs the entire fountain, from the underground engineering components to the gushing sprouts. On the latter, the company sells a series of nearly a dozen floating fountains in various heights and water speeds under a line named after famous artists. The Picasso and Chagall are two popular models.

Other projects are custom-made for an individual client, such as the Frank Lloyd Wright Water Dome, a 45-foot high fountain on the campus of Florida Southern College in Lakeland. The fountain, which opened late last year after a 15-month construction cycle, is also about two-thirds the length of a football field and cost about $450,000.

Another unique project the company is currently working on involves building a 10-foot high pineapple for a fountain project for the Gaylord Palms Resort in Washington D.C.

"Because we manufacture and engineer all our pieces on site," says Karen Elliott, Wesco's director of marketing, "we can do anything."

Wesco has been doing everything fountains since 1984, a start actually embedded in a mistake: Horvath initially bought an irrigation company after he and his wife first moved to the Venice-area in 1979 from South Bend, Ind. Back in South Bend, Horvath had worked in the tool and die industry.

"Two weeks later I realized that was the wrong thing to do," says Horvath, regarding the irrigation company he bought. "Not too many people want to dig ditches the rest of their lives."

But a client from the irrigation business had previously asked Horvath to build a fountain, and he found that he liked the work. Horvath quickly began building some prototypes of other fountains and after testing them for other clients across Florida, he thought he might be on to something.

The 2008 version of Wesco is considerably different from the one Horvath founded almost 25 years ago, beyond sheer growth in revenue and employee numbers.

The geographic focus has actually shrunk over the years, not expanded, as Horvath says he realized the company's focus would be heightened if travel was limited. So instead of working just about anywhere in the United States, as the company used to do, it now sticks to jobs that are east of the Mississippi River.

Rigorous training

The geographic focus has also helped Horvath and the company stick to one of the key strategies of the training program: Consistency. The lesson of what can happen when things aren't done the same and the right way recently hit Horvath, as some orders over the last six months of 2007 fell well short of his standards.

"There are things that we didn't do very good last year," Horvath says. "We made mistakes, but we went back and corrected them."

For example, some fountains didn't work properly due to slip-ups in the testing and monitoring process, a byproduct of trying to do too much with too little. Other problems involved mistakes on engineering blueprints.

The hiring binge combined with the intricate training program was Horvath's solution to the problem. Some hires were add-ons to departments that were light, such as sales and engineering. And while those two divisions clearly have different missions, the company's cross-training program calls for engineers to be more involved in the sales process, to eliminate customer surprises in terms of costs.

Other new Wesco hires were new positions, such as Elliott, who was brought on to run the marketing department, which includes rebuilding the company's Web site www.wescofountains.com. Horvath also recently hired a quality control manager who worked in a similar role at Venice-based window manufacturer PGT Industries for the past seven years.

The hires are only one half of the equation though, Horvath says. The rigorous training program is the other half. And he knows the program works because he sees the results in less mistakes and more sales.

But Horvath knows it's working for another reason, too: Imitation. Says Horvath: "Everybody in the fountain industry tries to steal our employees because of our training program."

REVIEW SUMMARY

Business: Wesco Fountains, Venice

Industry. Construction, manufacturing

Key. The company has achieved multimillion-dollar annual revenue growth partially by setting up intricate employee-training programs.